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UNIVERSAL BUSINESS
SCHOOL
Karjat, Mumbai
Program name: Individual Retail Visit Report
Professor and Tutor: Prof. Bibhas Sir
Student Name: Surbhi Jindal
Roll Number: 1416
Batch: PGDM1
Date of Submission: 10th April, 2015
Assignment: Research Report on
Observation and Analysis of the Retail
Store Spencer the Hypermarket.
Brand Philosophy
Spencer’s has continually helped reshape the retail landscape in India,
introducing a host of innovations to make shopping an even more
convenient and enjoyable activity for the consumer, by creating an
ambience that the consumer appreciates.
Spencer’s brand positioning – Makes Fine Living Affordable –
embodies its philosophy of delighting shoppers with the best products and
services that
Enable a fine living at reasonable prices,
While providing them with a warm, friendly
And educational retail environment.
Socio-Economic Importance of Spencer Hypermarket in Dahisar
West, Mumbai
Spencer’s offers the widest assortment of food and lifestyle (fashion, home,
entertainment), dealing both, with brands and private labels. It has
different special sections within its hypermarkets to delight the customer.
Spencer’s stores have contemporary and international interiors, and it's
extensively trained staff strive to make customers feel at home while they
shop, with a welcoming and trusted attitude. There are some advantages
and disadvantages of this located.
Advantages
Single hypermarket inside the mall.
Owning huge space for retail.
Good transportation availability.
You can get everything at one place, saving time, energy and
money in searching.
Big parking space are available.
Specific facilities are available.
Disadvantages
Location.
High competition with other hypermarkets.
Low advertising.
High rental costs.
Less control over pilfering.
Most of the customers believe that stock is not updated and no offer
schemes are provided by Spencer’s on the old stock. Same price is charged
for both the fresh stock and old stock. Respondents feel offers should be
provided on the old stock, as is done in other retail stores.
Product Range available to Customers
Shopping in enormous hypermarkets is ordinary nowadays. Various
concerns build their shops in every town. They seem to have become the
most popular place for shopping. Although hypermarkets certainly make
our lives easier, there are also some obvious drawbacks involved.
The main advantage of hypermarkets is the price of products which
customers can buy. Not only can we find the cheaper food or
cosmetics there but also we are offered many attractive promotions.
Out of 400 respondents who answered the questionnaire, 57.75% respondents give their view regarding Convenience of Parking somewhat important, 26% respondents extremely important, 5.57% respondents neutral during selecting a Supermarket.
Spencer’s
Big Bazaar
Vishal MegaMart
Identifying the Retail Type and its Product /Private Labels
Spencer is a multi-format retailer providing a wide range of quality products across
categories such as food, personal care, fashion, home essentials, electrical and
electronics to its key consumers.
Spencer’s own brands, commonly referred to as private label, offer a wide range
of products ranging from food to personal care to fashion to home utility items.
Spencer- The Hypermarket Store
Big Box Multi Format Retailer
Food
Personal Care
Home
Electronics
Fashion
Speciality
Differently they do:-
Patisserie
Gourmet
Wine & Liquor
Fruits & Vegetables, Staples, Beverages,
Processed Food, Dairy, Fish & Meat, Spices &
Condiments.
Beauty, Skin care, Hair Care, Oral Care, Baby
Care, Men’s Groom
ing, Personal Hygiene.
Fruits & Vegetables, Staples, Beverages,
Processed Food, Dairy, Fish & Meat, Spices & Condiments.
Home Décor, Home Furnishings, Bathroom
Essentials, Kitchen Essentials, Dining
essentials, Travel Needs, Toys & Stationary.
Home Appliances, Kitchen Appliances,
Electrical Fitting & Accessories, Digital
Equipment & Accessories.
Men’s Casual, Men’s Office Wear, Women’s
Casual, Women’s ethnic, Inner Wear,
Accessories, Footwear
Organic Food, Diet Food, Pet Food, Baby Food,
Nuts & Dry Fruits, Party Delights.
Tobacconist
Epicuisine
Nutty Delights
Spencer’s operates 2 distinct retail formats:
1. Convenience stores: These are neighbourhood stores that cater to the
daily and weekly top-up shopping needs of consumers. Ranging from 1,500
to 15,000 sq. ft. in size, they stock an assortment of fruits and vegetables,
food and non-food FMCG products, staples and frozen foods. The larger of
these stores, having a floor area of more than 10,000 sq., usually also offer
a selected range of baked goodies, frozen foods, personal and home care
products, baby care essentials, basic wear, and electrical equipment.
2. Hypermarkets: Spencer's hypermarkets are megastores that combine
a supermarket with a department store. Ranging from 15,000 sq. ft to over
50,000 sq. ft. in size, they stock a wide and deep assortment of food,
fashion, home and personal care, general merchandise, electrical and
electronics, staples, frozen foods, and specialty sections, all under one
roof.
Revenue generated by Different Departments
Findings
Wide Range of Glass made and metal products.
Stock is sufficient to satisfy the customers.
Exclusively for certain income level.
Maximum products are unreachable.
Very Low CD’s/DVD’s Like Moser Bear.
Gaining the Competition Business at the age of Piracy.
Good Collection of Games at a Low Price range.
Suggestions
Should introduce affordable Product Range for the medium level
income Group.
Earning more revenue by its Music Section.
Demand for educational and Movies of CD-DVD’s.
Rupees
Garment Department Gifts Department Music Department Total
Strategic Drivers for Spencer
Strategies are shaped by both external and internal forces. External drivers
include competition, markets, laws, taxes, customer needs and
technological change. Internal drivers include profit goals, mission and
office politics.
Core Values
Execution Excellence Put your Heart and Soul
Into your actions
Customer Happiness Bring a smile on the face of
Your customer.
Credibility
Instil trust and confidence
With your actions.
Strategic Driver
Change A chain of DVD rental shops must adapt to digital
media formats.
Profits Profit currently is going down but Earning per
share is going good, which is healthy for the
company.
People Job of the customer is to know what the consumer
wants and to provide the customer with the
product of his/her choice.
Planet An energy company faces pressure from
employees, customers, partners and regulators to
move towards sustainable.
Mission Spencer’s has been a consumer-centric brand,
constantly innovating, pioneering formats,
evolving over time but always keeping consumer
needs and satisfaction centre-stage.
Ethics An organic food company establishes a set
of sustainability principles that drives its strategy.
Politics Spencer has a culture of intense office politics that
are the primary force that shapes its strategy.
Corporate
Culture
Corporate culture is rooted in an organization's
goals, strategies, structure, and approaches to
labour, customers, investors, and the greater
community.
Rewards &
Incentives
The executive management team of a software
company seek strategies that maximize their
incentive bonuses.
Regulations &
Taxes
New regulations force an energy company to
improve risk management practices.
Markets The unique style of promoting and advertising for
discounts, free gifts and exchange offers from
your competitors.
Competitive
Forces
An electronics manufacturer ensures that its
strategy prioritizes research & development to
keep pace with the competition.
New Technology Spencer adjusts its strategy when a competitor
reveals new energy efficient technologies.
Customer Needs Spencer keeps a pulse on ever changing fashion
trends.
Opportunities &
Risks
Spencer identifies a new type of investment
product with significant market potential
The following characteristics distinguish the Spencer's brand and create
memorable 360 Degree shopping experiences for consumers:
Products - we offer the widest range of food and lifestyle (fashion,
home, entertainment) brands, with a special expertise in food
Quality - we lay a huge emphasis on all-round quality: in products,
stores, service standards, and customer engagement programs and
that too since our inception at 1863
Heritage - we are India's oldest retailer, with many firsts to our
credit
Multiple Formats - from daily to weekly and specialty shopping,
we fulfil every need and provide maximum convenience
Promotions - we seek to offer the right products at the right time
at the right price, with promotions carefully designed to suit the
buying cycle and shopping basket of the consumers
Brand Imagery - our stores and staff seek to make our customers
feel right at home, being international, contemporary, accessible,
empathetic and trusted
Technology in Retail adopted by Spencer Hypermarket
The ERP Initiative at Spencer’s Retail Ltd. Over the years, during the turn
of twentieth century as the consumer demand increased and the retailers
geared up to meet this increase world over, technology evolved rapidly to
support this growth. The hardware and software tools that have now
become almost essential for retailing can be classified into 3 broad
categories:
Customer Interfacing Systems
1. Bar Coding and Scanners
Point of Sale (POS) systems use scanners and bar coding to identify an
item, use pre- stored data to calculate the cost and generate the total bill
for a client.
2. Payment
Payment through credit cards has become quite widespread and this
enables a fast and easy payment process. Electronic cheque conversion, a
recent development in this area, processes a cheque electronically by
transmitting transaction information to the retailer and consumers bank.
Internet
Internet is also rapidly evolving as a customer interface, removing the need
of a customer physically visiting the store.
Operation Support Systems
1. ERP System
Various Enterprise Resource Planning (ERP) vendors have developed retail-
specific systems which help in integrating all the functions from
warehousing to distribution, front and back office store systems and
merchandising. An integrated supply chain helps the retailer in maintaining
his stocks, getting his supplies on time, preventing stock-outs and thus
reducing his costs, while servicing the customer better.
2. CRM Systems
The rise of loyalty programs, mail order and the Internet has provided
retailers with real access to consumer data. Data warehousing and mining
technologies offers retailers the tools they need to make sense of their
consumer data and apply it to business.
3. Advanced Planning and Scheduling Systems
APS systems can provide improved control across the supply chain, all
the way from raw material suppliers, right through to the retail shelf.
They enable consolidation of activities such as long term budgeting,
monthly forecasting, weekly factory scheduling and daily distribution
scheduling into one overall planning process using a single set of data.
Strategic Decision Support Systems
1. Store Site Location
Demographics and buying patterns of residents of an area can be used to
compare various possible sites for opening new stores. Today, software
packages are helping retailers not only in their locational decisions but in
decisions regarding store sizing and floor-spaces as well.
2. Visual Merchandising
The decision on how to place and stack items in a store is no more taken
on the gut feel of the store manager. A larger number of visual
merchandising tools are available to him to evaluate the impact of his
stacking options
Marketing Mix Strategy applied by Spencer
Product:
Spencer offers a wide range of products which range from apparels, food,
farm products, furniture, child care, toys, etc. of various brands like
Levis, Allen Solly, Pepsi, Coca- Cola, HUL, ITC, P&G, LG, Samsung, Nokia,
HP etc.
Spencer also promotes a number of in house brands like:
DJ & C
Tasty Treat
Clean Mate
Sensei
Care Mat Koryo and 44 other brands.
Pricing:
The pricing objective at Spencer is to get “Maximum Market Share”.
Pricing at Spencer is based on the following techniques:
Value Pricing (EDLP – Every Day Low pricing): Spencer
promises consumers the lowest available price without coupon
clipping, waiting for discount promotions, or comparison shopping.
Promotional Pricing: Spencer offers financing at low interest rate.
The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is
also used to attract customers. Spencer also caters on Special Event
Pricing (Close to Diwali, Gudi Padva, and Durga Pooja).
Differentiated Pricing: Differentiated pricing i.e. difference in rate
based on peak and non-peak hours or days of shopping is also a
pricing technique used in Indian retail, which is aggressively used by
Spencer.
Bundling: It refers to selling combo-packs and offering discount to
customers. The combo-packs add value to customer and lead to
increased sales. Spencer lays a lot of importance on bundling.
e.g. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22)
5kg oil + 5kg rice + 5kg sugar for Rs 599
Place:
The Spencer stores are operational across three formats — hypermarkets
spread over 40,000-45,000 sq. ft., the Express format over 15,000-20,000
sq. ft. and the Super Centres set up over 1 lakh sq. ft. Currently Spencer
operates in over 34 cities and towns across India with 116 stores. Apart
from the Metros these stores are also doing well in the tier II cities. These
stores are normally located in high traffic areas. Spencer aims at starting
stores in developing areas to take an early advantage before the real estate
value booms. RPG is planning to invest around Rs 350 crore over the next
one year expansion of Spencer. In order to gain a competitive advantage
Spencer has also launched a website www.spencer.com, which helps
customers to orders products online which will be delivered to their
doorstep. This helps in saving a lot of time of its customers.
Promotion:
The various promotion schemes used at Spencer include:
Exchange Offers “Junk swap offer”
Future card(3% discount)
Shakti card
Advertisement (print ad, TV ad, radio)
Brand endorsement
FOR EVERY RS.100 YOU SPEND AT SPENCER'S, YOU EARN 10
POINTS.
People:
Well trained staff at stores to help people with their purchases
Employ close to 10,000 people and employ around 500 more per
month.
Well-dressed staff improves the overall appearance of store.
Use scenario planning as a tool for quick decision making multiple
counters for payment, staff at store to keep baggage and security
guards at every gate, makes for a customer-friendly atmosphere.
Process:
Spencer places a lot of importance on the process right from the purchase
to the delivery of goods. When customers enter the stores they can add
the products they which to purchase in their trolley from the racks. There
are multiple counters where bill can be generated for purchases made.
Spencer also provides delivery of products over purchases of Rs. 1000.
Physical Evidence:
Products in Spencer are properly stacked in appropriate racks. There are
different departments in the store which display similar kind of products.
Throughout the store there are boards/written displays put up which help
in identifying the location of a product. Moreover boards are put up above
the products which give information about the products, its price and
offers. Spencer stores are normally ‘U shaped’ and well planned &
designed.
Conclusion
1. I have found that Spencer need to address a few problems before
opening chains in international grounds.
2. They need to fully address ‘Plan A’ in order to achieve maximum
efficiency within the UK.
3. In addition, Mintel, (2013) suggests that there is a new age sector
emerging within the market. This age group will be the sector to be
setting trends as the under 25 age group is squeezed on finance.
4. And to gain back investor trust classical methods can be employed to
get back lost share price.
5. Moreover, Spencer need to use Ansoff’s Matrix to their advantage so
they can see what areas need improving.
6. After careful analysis, the report has found that there is a need for
market development as well as product development as new age
segmentations are found.
7. Furthermore, Investors, (2013) states that ‘we need to see clear
progress in clothing, store layouts and customer service before we
upgrade our recommendation’.
This implies that major work needs to be done within the non-food
section of Spencer as well as customer service section.
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