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UNIVERSITY OF MUMBAI
PROJECT ON
A STUDY INTO THE CONSUMER PREFERENCE TOWARDS CROMA
MASTERS OF COMMERCE (BUSINESS MANAGEMENT)
SUBJECT: RESEARCH METHODOLOGY
SEMESTER III 2013-14
IN PARTIAL FULFILLMENT OF THE REQUIREMENT UNDER SEMESTER BASED
CREDIT AND GRADING SYSTEM FOR POST GRADUATE (PG) PROGRAMME
UNDER FACULTY OF COMMERCE
SUBMTTED BY
ALI JAMAL
ROLL NO. 24
PROJECT GUIDE
DR. MS RAJESHWARY G.
K.P.B. HINDUJA COLLEGE OF COMMERCE 315 NEW CHARNI ROAD MUMBAI
400004
M.Com (BUSINESS MANAGEMENT)
3rd SEMESTER
A STUDY INTO THE CONSUMER PREFERENCE TOWARDS CROMA
SUBMITED BY
ALI JAMAL
ROLL NO. 24
CERTIFICATE
This is to certify Mr. ALI JAMAL of M.Com Business Management semester 3rd 2013-2014 has
successfully completed the project on “A Study into the Consumer Preference towards Croma” under the
guidance of Dr. Ms Rajeshwary G.
Project Guide _________________________
Course Coordinator _________________________
Internal Examiner _________________________
External Examiner _________________________
Principal _________________________
Date: ________
Place: Mumbai
DECLARATION
I Mr. ALI JAMAL the student of M.Com Business Management 3 rd Semester (2013-2014) hereby declare
that I have completed the project on “A Study into the Consumer Preference towards Croma”
The information submitted is true and original to the best of my knowledge.
Mohammed Raza Merchant
(Signature)
ACKNOWLEDGMENT
My sincere Thanks to Dr. Ms Rajeshwary G, K.P.B. Hinduja College of Commerce, Mumbai
for her valuable guidance and support at all time.
Also, I would like to thank and remember my neighbours & friends for their effort and helping
hand.
Every effort has been made to enhance the quality of work. However, I owe the sole
responsibility of the shortcoming, if any, in the study.
ALI JAMAL
Roll No. 24
M. Com - III Semester
TABLE OF CONTENT
Sr. No TOPIC PAGE
1 Introduction 1
2 History & Background 4
3 Mission ,Vision & Values 5
4 Objectives of the Study 6
5 Significance of the study 8
6 SWOT Analysis 9
7 Initiatives towards the Customers 13
8 Factors Behind the Success of Croma 20
9 Competitors of Croma 27
10 Industrial Growth Of Croma 31
11 Conclusion 33
12 Questionnare & Bibliography 35
INTRODUCTION
Tata croma, they help you buy..It is cromas’s motto.. Croma is promoted by Infiniti Retail Ltd, a
100% subsidiary of Tata Sons. Woolworths, one of the world’s leading retailers, provides
technical and strategic sourcing support, ensuring that you buy nothing but the best.
Croma's first store opened on October 9, 2006 at Juhu in Mumbai, and it's rolling out many more
stores across India. So, no matter where you are, if you want high-quality products, backed by
advice you can trust, head for the nearest Croma.
Infiniti Retail Limited is a 100% subsidiary of Tata Sons. The company has launched Croma, a
national chain of mega stores of consumer electronics and durables. Infiniti Retail Ltd., owns and
runs Croma's retail operations in India, while Woolworths provides technical support and
strategic sourcing facilities from its global network.
Croma has stores in 7 places in india,namely gujarat,delhi ncr,pune,mumbai,chennai,hyderabad
and bengaluru..the total numbers of stores it has is approximately 50 across india.croma has also
opened croma zip stores in many airports of the country ex.mumbai. You can shop for 6000
products across eight categories in a world-class ambience.at croma Friendly, theyll-trained and
knowledgeable store advisors will give you sound and personalised advice so that you can make
informed buying decisions about any technology or consumer electronics product.
The Croma chain of stores offers, in different cities of India, a wide range of consumer
electronics products across categories and brands. The stores are spread over 12,000 to 20,000 sq
ft and have more than 6,000 products and 180 brands in eight categories: home entertainment,
small appliances, white goods, computers, communication, music, imaging and gaming software
CROMA SO FAR
Croma’s first store came up in 9th October, 2006. At Mumbai, within 6 month second store came
up at Malad in Mumbai. The store has wide display provided detailed information of the product
which made decision quicker for the customer and reduced service time. Infiniti Retail has
decide to open 28 stores by the end of 2007. Croma wanted to be the best in the business of retail
by providing everyday best price and deep discounting because they don’t want to lose any
customer. Croma took the help of durables from Woolworth because Croma didn’t had it and it
was trying to establish Croma wanted to provide a wide range of variety to its customers.
Tata invested Rs. 320 Crore in Croma to increase it retail stores into Bangalore and Delhi by
December 2007. In March 2008, Dell ties up with Croma. With increasing inflation, Croma has
decided to improve its logistics efficiencies. Croma outsourced its product through Woolworth
so during recession, they decide to get the products from the local vendors like LG, Samsung,
Sony abd HP. This saved the cost in the supply chain and increased their bottom-line.
In 2009, Croma started selling the application forms for Tata Nano; they will give discount of
Rs. 300 in selected products across any range for every purchase of application form. Nano will
also be find space in the retail store. It was decide to open 52 retail store by FY 10 and 100 retail
stores by FY12. Tata group invested Rs. 150 Cr for the brand expansion of Croma. In September
2009 Tata sons decide to dilute its stake by selling some percentage of stake to the Private Equity
investors because it wanted to focus on its own brand and product categories.
In 2010, Croma launched its own brand of LED and LCD TVs to increase their sales to 20%. By
June 2010, the marginal issues have come up bettheyen the local vendors, because they have
include the local vendors in their supply chain.
From the start of Croma in 2006 till today, Croma has registered two digit growths. It has also
included the local vendors which has saved their cost but increased their profits. Croma has took
the help of Woolworth for sourcing, strategies and technical support. Croma has expanded
throughout the country and is still expanding with megastores and zip stores formats. It has also
started his own brand has established itself in the country.
Market Share
Croma holds a good market position of about 18% in consumer durable and electronic retail
segment. The biggest competitor is eZone which is 37% strong follotheyd by NEXT with 27%,
reliance digital has 13% and others at about 5%.
STORES
Tata Croma is operating in two formats, the Megastore and the Zip store. The Zip stores are
found in airports also.Megastores are large format stores, the store size ranges from 15000 –
20000sq. ft, is theyll planned and designed for world class in store experience and backed by
robust after sales service. The stores are in Mumbai, Pune, Bangalore, Chennai, Aurangabad,
Delhi NCR, Hyderabad, Punjab and Gujarat. The stores in Mumbai ranges from 15000-22000 sq.
ft in area, in Bangalore the size is 22.000 sq. ft. the Croma Zip stores has size ranges of 2500 –
6000 sq. ft.
There are total 62 stores consisting of 38 stores in the high streets and 24 stores in the malls
spread over 7 cities and 2 states in India. There are 6 Zip stores; 1 in Santacruz airport, Vashi and
Fort in Mumbai, 1 in Delhi airport, 1 in T3 Domestic airline and T3 international airline.
DISRTIBUTION OF STORES ACROSS INDIA.
CITIES/STATES HIGHSTREETS MALLS ZIPSTORES
MUMBAI 6 8 3(Santacruz
Airport,Fort,And
Vashi)
PUNE 4 2 -
BENGALURU 10 2 -
CHENNAI 4 - -
HYDERABAD 3 - -
AURANGABAD - 1 -
DELHI NCR 9 5 3(Delhi Airport, T3
domestic and T3
international)
PUNJAB (Jalandhar
and Amritsar)
2 - -
MISSION
The mission pf the enterprise is to create unique customer satisfaction thorough
innovation , quality , productivity,human resource development continuously
strivingf o r e x c e l l e n c e w i t h p r i d e i n o u r v a l u e s a n d confidence in
our approach.|
The overall mission of Croma is to be the first choice of the customers
VISION
The vision of CROMA is to be the number onein the retail in electronics and durablesproducts in India,
through quality productsand delivery services (for larger products e.g..Washing machine, refrigerator etc )
CROMAshould imbibe a world class system to bringin delight to all our associates and the societyat large.
VALUES
Leadership With Trust
As any 'Tata person' will tell you, there's something positively distinctive, something less than
completely explainable, about working for the group — the experience is cast in a hue quite
different from the ordinary
The Tata name in itself is a unique asset representing leadership with trust.
By developing a structure, systems and a workplace culture that provides challenging jobs,
rewards performance and delivers opportunities continuously, we are striving to get the best
outof,our,most,valuable,asset—ourpeople.
Powering that quest is an entire range of human resource initiatives aimed at realizing the
potential of and, consequently, maximizing the returns from Tata employees. Robust leadership-
development systems that accelerate the development of current and potential leaders, a
performance culture that's calibrated through rigorous processes, and reward mechanisms that are
amongthebestinthecorporate world.
Our relationship with our employees is a bond that continues to be nourished with compassion
and care. The richness of this relationship, fashioned by a tradition of compassion and empathy,
represents a workplace culture that goes way beyond work. As an example we can cite that long
before many western industrial nations followed suit, this company introduced the eight-hour
working day (1912), maternity leave (1928) and even profit sharing for its employees (1934).
The Tatas have implemented many such “firsts” - the list is long and still growing. As a part of
the TATA group we are committed to the tradition of always being fair and benevolent to our
people.
Expansion Plans
Tata Croma is the India's first national, large format, retail chain for consumer electronics and
durables.Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons.
Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing
facilities from its global network.
Brand Philosophy
If service wasn't important.
If technology wasn't complex.
If variety wasn't confusing.
We would have no reason to be in business.
We help you buy.
At Croma, shoppers are offered one of widest ranges of products and brands in consumer
electronics and durables and a shopping experience that's truly world-class. Shoppers can choose
from a number of products across eight categories which are
1.Own brand of Tata Croma 2.Computer 3. Home Entertainment 4.Communication
5.Large Appliances 6.Small Appliances 7.Gaming 8. Imaging
Apart from that Croma, plans to launch new products in niche categories such as jewellery
cleaners, renegotiate rentals with owners and increase its presence in metros to boost revenues.
The chain is planning to launch 10 to 15 new products in smaller home appliances and
specialized wellness products and expand the current private label portfolio under the ‘Croma’
brand.
Reason for selecting Tata Croma
Currently, India’s consumer durable market is estimated at Rs 32,000 crore. There is growing
interest for new age products such as LCD-TVs and DVD players. Meanwhile, the penetration of
the basic, largest dollar items such as ovens, washing machines and refrigerators is also
increasing. India too, has witnessed a similar phenomenon, with the urban consumer durables
market growing at almost 10 %p.a., andthe rural durables market growing at 25% p.a.
Tata Croma is a dominating player in this space. These retail chain are seeing sales growth of
15% month-on-month. The company’s turnover is around Rs 1,000 crores. To make their
presence in all over India Tata Croma has announced to open 100 croma stores within three years
including 22 stores in the current financial year. This expansion plan is exclusively for the Class
II and III towns. As Ranchi comes in the Class II towns & devoid of such type of Electronic
retail chain, so we can plan to open the store in Ranchi.
They help you buy TATA CROMA, first store came up on October 9th, 2006. Infiniti Retail operates a
national chain of multi-brand electronics stores under the brand name Croma. It is a wholly owned
subsidiary of Tata Sons, the holding company of the Tata Group.
The company, headquartered in Mumbai, has a technical and sourcing agreement with Australian
retail giant Woolworths until October, 2011 when they parted. Under the arrangement Infiniti
Retail owns and runs retail operations in India while Woolworths provides technical support and
strategic sourcing facilities through its global network.
EXECUTIVE SUMMARY
Retailing
Definition
Philip Kotler
“Retail includes all the activities involved in selling goods or services to the final
consumers for personal or non-business use.”
Meaning
The word retail is derived from the French word ‘retaillier’ which means to cut off or to
break bulk.Retailing is the set of business activities that add values to the products and servicessold to consumers
for their personal or family use All retailing is not done in stores.Example of non-store retailing include
internet sales or direct sales or catalog sales.
OBJECTIVE OF THE STUDY
After almost five years of its inception the company isventuring into online retailing space. The
company calls it a new strategy to tap the large number of net savvy customers and plans to cash
on online retail space that is getting hotter with each passing day. A source from the company
puts that it is eyeing on implementing some unique features like cash on delivery to its upcoming
online shop so as to suit customers of all types.
Tata Croma is also planning on adding 10 more stores to take the total count of its stores to 75 all
over India. Already Tata Sons has allocated Rs. 200 crore for this exercise. Also, a dedicated
after sales service facility is in the offing for its customers. For the first phase, the service centers
would be opened at Delhi, Mumbai and Bangalore and cater to Croma branded products
Competition
But the going may not be easy for Tata Croma as there are established players in the space. For
instance, the Future Group, with its online retail portal FutureBazaar.com is eyeing on having at
least 10% of its total retail sales from this medium. Probably, they may have bigger plans for that
to happen
And other players including eBay, FlipKart etc. may also give a big competition to the upcoming
Tata Croma online store. While eBay needs no introduction further in terms of its share of the
cake, Flipkart, an upstart in this segment, is gaining much popularity these days owing to its
dedicated services and support. There are others too that have established themselves quite theyll
in online retailing.
Product
6000 products, 180 brands, 50 categories
31% revenues from computer and laptops
6-8% from ‘Croma’ label goods
Consumer durables and electronics include – Televisions, Refrigerators, Air conditioners,
washing machines, Kitchen appliances, Gaming devices, Computers and laptops, Mobiles and
accessories, cameras, etc.
Target Segment
Value for money – best products with reasonable pricing, Best discounts and offers, Warranties
and guaranties,
FINANCIAL POSITION OF CROMA
Croma has generated 657 crore of 2008-09. Croma has generated around 1000 crore revenue at
the end of 2009. Tata Group has invested around 50 crores capex in year 2009 into Croma.
Company has recently received 200 crore from Tata group to fund network expansion and other
activites.
For Year 2010-11, Total Revenue for Infiniti Retail’s total revenue stood at Rs. 1549 Crore. But
Company has not break even yet, althoughsince the last five years, Infiniti has managed to grow
by over 50% annually.
Turnover
Year Revenue
2007-08 Rs 667 Cr
2008-09 Rs 1000 Cr
2009-10 Rs 1021 Cr
2010-11 Rs 1700 Cr
IMAPCT OF SLOWDOWN
During the slowdown, Croma decided to go for revenue sharing because the rentals are and it
constitutes 30% - 40% of the total cost per store. Croma also changed their supply chain by tying
up with the local customers. The last slowdown has made all the retailers to work faster and also
made Croma to act faster. Croma renegotiated, increased the retail size and revenue sharing
during the slow down.
During the recent recession, Croma decided to renegotiate the rental, controlling administrative
expenses and investing in the IT firms to increase profits. At present, Croma has negotiated
rental for 70% of its properties and is implementing ERP solutions by investing in IT which will
not only save cost but also increase their profits.
DIFFERNECE BETTHEYEN TATA CROMA AND WOOLWORTH
The 5 year old agreement bettheyen Tata Croma and Woolworth has come to an end and has lead
to parting of the alliance. The Australian based company wanted to deepen the die-up if the
Indian government allotheyd direct investment in the retail market. The Woolworths view this
agreement in a big picture and they wanted to be as a sourcing company. The disagreement by
the Croma has taken the Woolworths by surprise because they didn’t find the reason as time
bound. The reason for separation was not the investment or money matter. Croma has started
building its warehouses in Mumbai, Bengaluru and Chennai though Infiniti Retail has been using
the warehouses of the Woolworth for the retail business, Woolworth has been in the retail
business for last 85 years and they have been providing strategy and technical help in the retail
business for the development of Croma. Croma has been making business relation with large and
small companies to carry on their business in the country. After having all the information
gathered, both the companies decide to split.
The split will effect Croma because till now they haven’t been established properly and they are
making warehouse throughout the country for the supplies of the products. Woolworth has been
providing them the retail strategy and technical support which Croma lacked and they will be
still lacking. Croma is still developing so strategy is required to enter into every corners of the
country which the Croma will lack and also the technical support.
Brand Philosophy
If service wasn't important, If technology wasn't complex, If variety wasn't confusing, They
would have no reason to be in business,they help you buy.
The reason why people could choose croma over other stores are many and a few stated by
company are stated below:::
Widest range of products
Choose from 6000 products across eight categories
They help you buy
Sound and knowledgeable advice from theyll-trained advisors to help you make informed buying
decisions.
A name you can trust
Croma is promoted by Infiniti Retail Ltd, an initiative of the Tata group, a brand that stands for
trust and reliability globally.
Customer commitment
Croma not only gives you a world-class shopping experience, but also backs it with great after-
sales service.
Great deals and offers
Croma periodically offers exciting deals on all your favorite products.
A first of its kind
Consumer electronics and durable retail is a fragmented segment and has been largely catered to
by regional players.
Croma is the first of its kind
Large-format, specialist and pan-Indian
After information technology & outsourcing, retail is going to be the next big thing . Experts are
predicting a gigantic shift from unorganized to organized retail.
So, Indian retail is sitting at the threshold of a complete metamorphosis. Currently organised
retail is only 3 to 6 per cent whereas the total retail turnover in India was 250 million dollars last
year. But organised retail is growing at a speed of 40 per cent. The pie is large enough." At
croma the buyer is spoiled for choice, with nearly 6,000 products and 180 brands to choose from.
RETAILING.
Retailing includes all the activities selling goods or services directly to final consumers for
personal ,non business use.CROMA IS A SPECIALITY STORE SELLING ELECTRONICS.
SEGMENTATION.
THE croma stores directly SEGMENTED the areas they wanted to work upon i.e cities with high
per capita income or simply metro cities..the stores are designed in a contemporary fashion with
state of the art architecture to give you the best experience while you shop.The plan was only
made after realizing that every class needs a product which can deliver that required economy of
scale in terms of price and quality.
TARGETTING.
Marketers in Woolworths,then decided to target people with disposable incomes in middle class
and classes above them who have a sense of indulgence while shopping and are looking for the
right price with quality and which can be tested physically with live demos. The value-based
retail business has received a
phenomenal acceptance from the customers
POSITIONING:
As it was a tata enterprise concern people wanted to believe it and as per the deals and the type
of aggressive marketing they did with introducing low prices with combo deals and seasonal
sales .basically,their concept and style worked for them.In the beginning only it got a huge
customer base and if they look at the facts margin in durables retail is wafer-thin and hence scale
is the single-most important thing.
COMPETITORS NOW
Next,a venture by VIDEOCON group did a business of Rs 1,100 crore in FY 2010 and expects
around Rs 1800 crore business this year. Croma, hotheyver, did much more business per store
with its turnover touching Rs 1,000 crore in FY 10. Ajit Joshi, managing director and chief
executive of Infiniti Retail, which runs Croma Stores, wants to double the turnover in this
financial year. Next, the consumer durable and electronic chain promoted by the Videocon
Group, is the largest player in the market and has 526 stores already – over 10 times than
Croma’s. Next plans to add 300 more stores by the end of this fiscal. The other leading players in
this segment are Kishore Biyani's Future Group which runs 36 standalone stores of eZone and 16
shop-in-shops, and Reliance Digital with 39 stores. Tatas have so far invested Rs 280 crore in the
business.
SWOT ANALYSIS
Strengths: Being a tata concern it already had consumer trust and a huge capital.best marketers
theyre taking up the task of marketing it.ex.ajit joshi.also On an average, a Croma store costs
bettheyen Rs 3.5 crore and Rs 5 crore, including infrastructure and the inventory. “that means
foreseeing the market share tata could easily venture and succeed,
the weakness:it was heading into a market which was already being dominated by next{videocon
group},which plans to open another 300 stores soon ,reliance digital. the strategy had to be full
proof .
OPPORTUNITIES:
CROMA had a large opportunity ahead because of the increasing retail business.the sector is
growing tremendously at a fast rate.
THREATS:
THREATS theyre the players in the market which had already invested huge in retailing and
theyre having a good market share already..threats theyre also the local dealers and distributors
which theyre blooming because of personal factors like loyalty etc.
Croma has also got another Tata firm TCS to implement the SAP system in its back end
operations. Earlier it was using the software of its back-end partner Woolworths.
The Indian consumer durable and electronics market is estimated to be around Rs 80,000 crore
and is expected to grow at 10-12 per cent this year.
Croma is growing in terms of size, reach and turnover. Croma’s growth rate so far is more than
50 per cent in terms of turnover and it has aggressive plan for the coming years. The company’s
strategy is to penetrate deeper in the cities it is operating in. This will aid operational efficiency
and allow Croma to garner higher market share.
electronics retail has not been impacted and has been growing at an impressive rate right through
the festive period. Year 2010 will establish us as a leader in the electronics retail category.
BEHAVIOUR OF CONSUMERS:CONSUMER BEHAVIOUR
As even I visited croma and analysed there for an hour .I found out dat customers when they
enter get to see a lot of products and variations,they feel delighted because of the neat and good
ambience and most of them do find a product which suits there need.And a salesman told me that
most of customers look for products ranging bettheyen 15000-20000.they have over 6ooo types
of products.consumers are accepting it and buying from it.it has increased its market share
rapidly and croma intents to reach 100 store mark by 2012..
PRODUCTS:
Apart from there in house products like lcd tv, led tv,washing machines,sofas,refrigerators, table
fans etc. You can choose from a number of products across eight categories. Croma has over180
brands and 6000 products for you to choose from. Plush stores, spread over nearly 20,000 sq
feet, with strategically planned products and category lay outs allow you to make hassle-free
purchases.There are deals all the time that people go for.. Mother’s day, Father’s day, Diwali,
Christmas, they celebrate all occasions with offers that make them special for you. now it has
over 100 consumer electronic products under its portfolio ranging from accessories like head
phones, pen-drives to high-end products like LCD and plasma screen TVs..
ABOUT CONSUMER DURABLE GOODS INDUSTRY
Durable goods are those which don’t wear out quickly, yielding utility over time rather than at
once. Examples of consumer durable goods include electronic equipment, home furnishings and
fixtures, photographic equipment, leisure equipment and kitchen appliances. They can be further
classified as either white goods, such as refrigerators, washing machines and air conditioners or
brown goods such as blenders, cooking ranges and microwaves or consumer electronics such as
televisions and DVD players. Such big-ticket items typically continue to be serviceable for three
years at least and are characterized by long inter-purchase times.
Performance
In the past 10 years, the global market has witnessed a surge in demand as economies such as
Brazil, Mexico, India and China have opened up and begun rapid development, welcoming
globalization with élan. The consumer durables industry has always exhibited impressive growth
despite strong competition and constant price cutting, and the first contraction since the 2001
dot-com bust has been due to the global recession. Given the strong correlation between demand
for durables (both new and replacements) and income, the industry naturally suffered during the
2008-2009 period. However, projections for current year going forward are very optimistic, as
consumers resume spending, and producers launch new enticing variants to grab new customers.
Leading players include Sony Corporation, Toshiba Corporation, Whirlpool Corporation and
Panasonic Corporation.
Developing countries such as India and China have largely been shielded from the backlash of
the recession, as consumers continued to buy basic appliances. In fact, China has been ranked the
second-biggest market in the world for consumer electronics. Despite the recession, their strong
domestic economy and growing high-income population have buoyed demand leading to
aggressive market growth.
There is growing interest for new age products such as LCD-TVs and DVD players. Meanwhile,
the penetration of the basic, largest dollar items such as ovens, washing machines and
refrigerators is also increasing. India too, has witnessed a similar phenomenon, with the urban
consumer durables market growing at almost 10 %p.a., and the rural durables market growing at
25% p.a. Some high-growth categories within this segment include mobile phones, TVs and
music systems.
The Indian consumer durables industry has witnessed a considerable change in the past couple of
years. Changing lifestyle, higher disposable income coupled with greater affordability and a
surge in advertising has been instrumental in bringing about a sea change in the consumer
behavior pattern. Apart from steady income gains, consumer financing and hire-purchase
schemes have become a major driver in the consumer durables industry.
In the case of more expensive consumer goods, such as refrigerators, washing machines, color
televisions and personal computers, retailers are joining forces with banks and finance
companies to market their goods more aggressively. In addition, change in policy, such as the
WTO FTA in 2005 resulted in zero customs duty on imports of all telecom equipment, thereby
improving the pricing and affordability of imported goods.
Challenges
The biggest threats to the local industry going forward are supply-related issues pertaining to
distribution and infrastructure, as well as demand issues due to competition from imported
goods. The lack of well developed distribution networks makes it especially challenging to
penetrate the fastest growing rural areas economically. In addition, regular power cuts and poor
road linkages make systematic production, assembly and delivery problematic.
On the demand side, customers have increasing choice from both domestically produced and
imported goods, with similar features. This homogeneity makes it difficult for players to remain
ahead of the competition.
MNCs hold an edge over their Indian counterparts in terms of superior technology combined
with a steady flow of capital, while domestic companies compete on the basis of their well-
acknowledged brands, an extensive distribution network and an insight in local market
conditions. The largest MNCs incorporated in India are Whirlpool India, LG India, Samsung
India and Sony India and homegrown brands are Videocon, Godrej Industries and IFB.
Future Prospects
Overall, the industry’s future remains robust, and interested applicants will benefit from a
holistic learning experience; Many of the research, sales, marketing and advertising related roles
will necessitate a good on-the-job learning of target audiences, who may well be a totally new
segment, based in never-before visited Class II and III towns. In addition, those with technical
backgrounds will be able to leverage their knowledge and experience to constantly develop and
innovate the product variants. With more MNCs growing their Indian businesses, there is great
potential to also learn best-in-class systems and management skills.
During FY07, volume share of the single largest consumer durable was colour TVs at 30%,
followed by refrigerators and air conditioners at 18% and 13% respectively. Washing machines
and other assorted consumer durables captured a share in the total volume by 5% and 34%
respectively.
FY07 witnessed the highest number of TV sets being sold when compared to the previous two
corresponding years. As per CMIE, growth in sale of TV sets was slower at 14.3% during FY07
when compared to a 21% growth in the previous year. On the demand side, domestic
consumption of refrigerators declined by almost 4% between FY05 and FY08, while imports
climbed. The imposition of anti-dumping duties on import of colour picture tubes will hit the
manufacturing costs of CTVs produced in India. Further, the reduction in the general rate of
excise duty (CENVAT) from 16% to 14% as proposed in the Union Budget for FY09 will not
have any effect on the selling price of colour TVs. This is because the combined effect of rising
input costs and a higher interest burden will negate the effect of such reduction.
The key growth drivers for the Indian consumer durables industry:
Rise in disposable income: The demand for consumer electronics has been rising with the
increase in disposable income coupled with more and more consumers falling under the
double income families. The growing Indian middle class is an attraction for companies
who are out there to woo them.
Availability of newer variants of a product: Consumers are spoilt for choice when it
comes to choosing products. Newer variants of a product will help a company in getting
the attention of consumers who look for innovation in products.
Product pricing: The consumer durables industry is highly price sensitive, making price
the determining factor in increasing volumes, at least for lower range consumers. For
middle and upper range consumers, it is the brand name, technology and product features
that are important.
Availability of financing schemes: Availability of credit and the structure of the loan
determine the affordability of the product. Sale of a particular product is determined by
the cost of credit as much as the flexibility of the scheme.
Rise in the share of organised retail: Rise in organised retail will set the growth pace of
the Indian consumer durables industry. According to a working paper released by the
Indian Council for Research on International Economic Relations (ICRIER), organised
retail which constituted a mere four percent of the retail sector in FY07 is likely to grow
at 45-50% per annum and quadruple its share in the total retail pie 16% by 2011-2012.
The share will grow with bigger players entering the market.
Innovative advertising and brand promotion: Sales promotion measures such as
discounts, free gifts and exchange offers help a company in distinguishing itself from
others.
Festive season sales: Demand for colour TVs usually pick up during the festive seasons.
As a result most companies come out with offers during this period to cash in on the
festive mood. This period will continue to be the growth driver for consumer durable
companies.
Major hurdles and challenges plaguing the Indian consumer durables sector:
Threat from new entrants, especially global companies: The domestic consumer durables sector
faces threat from newer companies, especially from global ones who have technologically
advaced products to offer.
Rivalry and competition: Presence of a large number of players in the domestic consumer
durables industry leads to competition and rivalry among companies. Threat from rivalry and
competition poses a threat to domestic companies.
Potential markets remaining yet untapped: A large segment of the domestic market, mostly the
rural market is yet to be tapped. Tapping this yet untapped and unorganised market is a major
challenge for the Indian consumer durables sector.
Threat from substitute products/services: The domestic consumer durables industry is plagued by
threats from substitute products. Easy accessibility to theatres/multiplexes, especially in urban
areas has turned off the viewership from TV to a large extent. With the advent of a horde of FM
radio stations, radio sets have now substituted TVs.
Customer power with respect to availability of choice: The availability of a wide product line on
account of most products being homogeneous, poses a threat for companies operating in the
consumer durables sector. Customers have the choice of both domestically produced and
imported goods, with similar features.
According to CMIE statistics, domestic consumption of refrigerators witnessed a decline
between FY05 and FY08, while exports grew. From 3% of the total consumption in FY05,
exports grew to7% of the total consumption in FY08. On the supply side, domestic production of
refrigerators in the total supply remained at the same levels in the past three years ended FY08.
At 99% each in FY06-08, the share of production reported a mere 100 basis point increase over
FY05, as imports slided. The refrigerator industry posted a sluggish performance since the
beginning of FY09 on the back of volatile steel prices. The first quarter saw a production growth
of a mere 50 basis points to 2.18 mn units, as per CMIE.
Sales of Consumer Electronics Companies
The consumer electronic goods industry underwent a slowdown during the last quarter of FY08.
According to CMIE, the industry witnessed a slower 10.5% growth in the Mar 08 quarter
compared to a substantial 17.4% growth in the previous corresponding quarter. Domestic
consumer electronic companies together reported a subdued sales growth of almost 17% in
FY07, on the back of a robust 40.5% growth in FY06. While the larger companies reported
robust growth in sales, it was the smaller ones whose sales were negatively affected that
eventually brought down the industry sales growth.
INDUSTRIAL GROWTH
The industrial sector grew in moderation during FY08 at 8.5% on the back of a comparatively
higher growth of 11.5% during the previous fiscal. The country’s real GDP grew by 9% during
FY08; a tad lower than 9.6% in the previous fiscal. The consumer durables segment witnessed a
fall in production particularly for items where consumer preferences have shifted towards newer
products. Shifting in the consumption pattern coupled with rising input costs of steel, iron ore
etc, may further affect the production levels of these goods. On the supply side newer variants of
consumer durables on the back of technological advancements have flooded the market, whereas
on the demand side it is the prospering middle class and consumerism which have led to
changing demand patterns.
CONCLUSION
Most of the customers before purchasing compared the
products with some other stores.
Croma is the store where customers believe that the price of the
product is moderate.
Proximity to house or office is the major reason why people
prefer croma which is situated off the Air Port road Yerwada,
and the other reason is that the price of the products is
moderate as compared with other store.
Overall quality of croma is good. But there is scope to improve
it more.
The Product offering according to the customers was good.
The customers of croma said that the physical aspect of croma
was excellent. They liked the layout the spacing of the store and
the ambience.
Most of the customers agree to the tag line of croma “Croma
Helps You Buy”
QUESTIONARE
The following topics or issues will also be considered in the project
1) How is Vendor Management carried out in a Retail Store?
2) How is merchandising carried out?
3) What are the retailing strategies used by Croma Retail?
4) What are the pricing adjustments and strategies undertaken by Croma Retail?
5) Method followed to assemble the data.
6) Sources used to get the information.
7) Tools used during collection of data
BIBLIOGRAPHY
http://www.watblog.com/2011/08/02/tata-croma-to-launch-an-online-store/
http://www.tata.com/company/profile.aspx?sectid=oH90Rc8X7Dg=
http://in.finance.yahoo.com/news/Tata-Group-Infiniti-Retail-contifyinvestment-
115097139.html?x=0
http://articles.economictimes.indiatimes.com/2010-01-27/news/27597485_1_formats-croma-
vineet-kapila
http://articles.economictimes.indiatimes.com/2009-05-10/news/27646997_1_croma-rentals-erp-
solutions
http://articles.economictimes.indiatimes.com/keyword/croma/recent/2