Spencer's summer internship project report

The Study of Market Potential The Study of Market Potential and Customer Preferences at and Customer Preferences at

Dr. A.S. Rao Nagar with Dr. A.S. Rao Nagar with reference to RPG Giant reference to RPG Giant Spencer’s Retail Ltd.Spencer’s Retail Ltd.

PRESENTED BY

AJAY KUMAR GUPTA (Registration No.: 08/06)

PGDM (2008-10)

CONTENTS Introduction Objectives of Study Research Methodology and Scope of the Study Retail Sector and its Scope in India Company Profile Data Analysis and Interpretation Findings of the Study Suggestions and Recommendations Limitation of Study Conclusion

Presented By Ajay Kumar Gupta, ICBM-School

of Business Excellence, Hyderabad, Contact – 09291592309, [email protected]

21thJune, 2009 2

Introduction The word retail has its origin in French word retaillier and means “to cut

a piece off’’ or “to break bulk”. The term Retailing is defined as “All activities involved in selling goods

and services directly to final consumers for their personal and non-business use”. In simple terms, it implies a first-hand transaction with customer.

Retailing in its present form started in the latter half of 20th century in USA and Europe.

In Hyderabad, Spencer’s Retail came up as the organized retail outlet in the form of a Hypermarket in the year 2001, with its inception in Hyderabad.

With more than 9 outlets per 1000 people, India has the largest number of outlets in the world and Almost 95% of these retail outlets are less than 500 sq. ft. In size, the per capita retail space in India being 2 sq. ft. compared to the US figure of 16 sq. ft. Thus India’s per capita retailing space is the lowest in the world.

21thJune, 2009 Presented By Ajay Kumar Gupta, ICBM-School of Business Excellence, Hyderabad

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Objectives of Study To study Dr. A.S. Rao Nagar area demographic wise. To study about the perception of customers with

reference to availability of products and services in supermarket/Spencer’s.

To study about customer preferences and frequency of shopping.

To know the target customer’s of Spencer’s Retail/Supermarket at Dr. A.S. Rao Nagar.

To understand the customer’s expectation from retail service provider.


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Research Methodology The study is relied on primary as well as secondary data. The primary data is collected through personal interviews

using structured Questionnaire. The Secondary is collected from management of the

Spencer’s Retail Ltd, various books, journals and Internet. Sampling Methods:- Probability sampling method or

simple random sampling Universe: - Dr. A.S. Rao Nagar Sample Size: - Sample size was 400. Research Instrument: - questionnaire and observation


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Retail Sector and its Scope in India

Retail Sector is divided in to 2 part- Organized and Unorganized.

Over 12 million outlets operate in the country and only 5% of them being larger than 500 sq ft (46 m²) in size. Organized retailing in India is projected to grow at the rate of 25-30% p.a., is estimated to grow from the US $ 330 billion in 2007 to US $ 427 billion by 2010 and US $ 637 billion by 2015.

Retailing is emerging as a sunrise industry in India and is presently largest employer after agriculture. Some economists say that Retailing is one of the pillars of the economy in India, and some say it is gold mine of Indian economy.


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Continued……. Organized retail formats prevalent globally:-Malls,

Supermarkets, Hypermarkets, Discount Stores, Department Stores, Specialty Stores, Internet Retailing, Convenience Stores, MBO etc.

The Indian retail market, which is the fifth largest retail destination globally, has been ranked the 2nd most attractive emerging market for investment after Vietnam in the retail sector by AT Kearney’s seventh annual Global Retail Development Index (GDRI), in 2008. The share of retail trade in the country’s gross domestic product (GDP) was between 8-10% in 2007. It is currently 12%, and is likely to reach 22% by 2010.


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Company Profile- RPG Enterprise Type: - Private Conglomerate Founded: - Mumbai, India (1979) Founder(s):- RP Goenka Headquarters: - Mumbai, India Key People: - RP Goenka (Chairman Emeritus) Harsh Goenka (Chairman) Sanjeev Goenka (Vice Chairman) Industry: - Power, Retail, Tyres/Tires, Transmission, Technology, Entertainment and other Revenue: - US$3.25 billion


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About RPG Giant Spencer’s Retail Ltd.

Spencer’s Retail Limited, part of the Rs 13,500 crores RPG group, is one of India’s largest and fastest growing multi-format retailer and retailing food, apparel, fashion, electronics, lifestyle products, music and books. with 350 stores, including 35 large format stores across 60 cities in India.

Established in 1996 and headquarter is in Chennai. Spencer’s Retail has a loyalty program. They offer a co-

branded credit card with HSBC bank (HSBC Spencer's Retail Credit Card).


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Continued………. Spencer's Retail Limited has been awarded the Coca Cola

Golden Spoon "Most Admired Food & Grocery Retailer for Convenience and Express formats" Award at the Food Forum of India, 2009 held in Mumbai and this is the third award that the organization has received, three years in a row. Spencer’s was awarded the Turnaround Retailer of the year 2006 at the India Retailers Forum, 2007 in Mumbai. And Most Evolved Retailer of the year 2007 at the India Retail Forum, 2008.


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New Ventures

Spencer’s retail has announced a tie-up with British retailer Woolworths Plc for exclusively selling its famous toy brand Chad Valley through its outlets.

Besides the Chad Valley range of toys (available at prices Rs. 49 upwards), Woolworths is also planning to introduce the Ladybird range of kids wear.


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Vision

To “build Spencer’s as the most professionally managed retail business in the country through:-

Excellence in all operating processes; Nurturing and facilitating a learning and growth

culture; Building a unique retail experience for the customers;


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MissionStrives to exceed the aspirations of its customers for a

healthy and fulfilling lifestyle by providing:- The most innovative consumer goods and delectable taste

experience. The ultimate shopping experience. Unsurpassed customer service. Unbeatable value The ‘next’ place away from home or office to relax and

indulge themselves.


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Major Future Plan It will be going in for public issue within the next 12

months to raise capital for expansion. In every financial year, Spencer’s is increasing its stores

from 150 to 250 with a target of expanding by 400 more in the next two years.

The company had last year announced a Rs 1,500 crore investment plan to expand its business across the country.

Spencer’s has announced that it will very soon launch CRT TVs under the brand name Yashika.

Spencer’s is all set to enter the standalone Lifestyle Retailing segment by opening American Lifestyle Brand stores in India - Beverly Hills Polo Club [BHPC].


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Formats of Spencer’s Outlets

The company operates through the following formats:- Spencer’s Hyper:- A fast growing retail network of

hypermarkets with large format stores in 35 cities of India. Spencer’s super:- One of the largest supermarket chains in

the food and grocery segment in India. Spencer’s Daily:- Small format stores conveniently located

with a range of products to meet daily household needs. Spencer’s Express:- Food and grocery store next door. Spencer’s Fresh:- Spencer’s Fresh stores provide with an

enjoyable convenient shopping environment in very own neighborhood.


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Data Analysis and InterpretationTarget Customers- Age Wise

SEC Category of Family at Dr. A.S. Rao Nagar


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No. of family member’s of the Respondents


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Target Customer- Education Wise


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Occupation of Respondents


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Monthly Income of Respondents


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Regular shopping place of Respondents


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Shopping place of Respondents is Spencer’s or

not


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No. of times in a week shopping at Spencer’s by the

Respondents


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Respondents View in reasons for visiting Supermarket's


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Respondents View in selecting a Supermarket


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Customers Expectation with respect to Services


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Findings of the Study Consumer life style and spending pattern are changing,

more and more customers are visiting supermarket. Dr. A.S. Rao Nagar is a developing area of Hyderabad

and it consists of all classes of families. Most of the families belong to Socio Economy Class (SEC) A & B. Most of the residents fall in to age group 18-25 and 26-35. Most of the families have 4 to 5 members in their families. Residents are well educated and holding jobs. Their monthly incomes are ranging from 10,000-20,000 and above. Approximately 86.5% people visit Supermarket for shopping and 50.75% people visit to Spencer’s Daily Supermarket. From the above data it can be observed that there is a potential for good market opportunities for retail Supermarket.


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Continued…….. Despite high footfalls, the conversion ratio has been not

good in the Spencer's Daily. More is creating intense competition before Spencer’s

with the help of MORE @ YOUR DOOR. On the basis of customer’s preferences, Ushodya

Supermarket is having several varieties of products with deep assortment and Ushodya has covered more market at Dr. A.S. Rao Nagar.

Most of Dr. A.S. Rao Nagar people are educated and job holder, Spencer’s can do better promotion through pamphlets about facilities and services of Spencer’s.


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Continued…….. In Dr. A.S. Rao Nagar, 50.75% people go to Spencer’s

for shopping and 49.25% people don’t go. In 50.75% people, 19% people shop at Spencer’s once in a week, 24.5% people shop at Spencer’s twice in a week, 5% people shop at Spencer’s thrice in a week and 2.25% people shop at Spencer’s several times in a week.

The reasons for visiting super markets as mentioned by the respondents varied from better services to pricing to variety of products available in the super markets. 44.75% respondents visit super markets for the prices offered by the super markets and 46.75% mentioned that the quality of product provided by the super markets is the reason for their visit to super markets.


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Continued…….. The other factors which attract the respondents to various

super markets are variety of products offered, fresh products like fruits and vegetables, availability of dairy products, home delivery, parking facilities, accepting debit/ credit cards, fast billing, booking counters, customer service, courteous and friendly behavior and ambience.

Most of the customers complained regarding customer service, variety of product with deep assortment, store image, arrangement of products, pricing, product knowledge of employee, quality of products, parking space, product updation, closing time at Dr. A.S. Rao Nagar with reference to Spencer’s Daily.


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Suggestions and Recommendation

Customers are very eager to know about offers, discount schemes provided by Supermarket’s/Spencer’s then Spencer’s should do better promotion for creating awareness about all offers with the help of pamphlets, marketing gimmick using customer database.

As the majority of population at Dr. A. S. Rao Nagar area are falling into the age group of 26-35 and 18-25. Company should concentrate on the need of people falling into that category.

Complained and feedback should be taken care in well manner to create the loyalty and goodwill.


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Continued……..

Fast moving consumer goods (FMCG) or daily used items should be available in more number of varieties because customers of Dr. A.S. Rao Nagar complain regarding this and FMCG product should be placed near exit door as customers can purchase the daily use items at the time of exit, which can directly increase the sales of Spencer’s as done in other retail outlets.

People of Dr. A.S. Rao Nagar, say that Spencer’s should employ experienced sales staff so that they can better explain the quality and features of the products.


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Continued…….. At Dr. A.S Rao Nagar area, the percentage of family

member group 5 and 4 is more. Therefore company should try to attract that family by providing family pack apparels offer at discount rate.

Store layout should be redesigned that a customer can have easy access to the product.

Spencer’s should provide club Spencer’s membership card (apart from HSBC Loyalty card), on that card one unique no. should be there and offer some point system on every purchase that will attract the customers, through that Spencer’s can increase its sales.


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Continued…….. People generally search for the product on offer so the high

margin product should be up fronted that mean those item should be in the eye height so that it easily catches the customers’ attention and generates impulse purchase.

Spencer’s should provide better customer service than its competitors, increase the variety of merchandise with deep assortment, arrangement of product should be in proper way that creates good store image and it brings customers and works as a word of mouth marketing for attracting more customers. Spencer’s should also include apparels segment in the store, should advertise through pamphlets about various offers, provide parking space.


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Limitations of the Study The sample size chosen is limited to 400 only because of

time and financial constraint. This study was based purely in Dr. A.S. Rao Nagar,

Hyderabad. Data collected may not be a representation of the entire

population. The time duration for this project was only for a period of

45 days. I also took the view of respondents who don’t shop from

Supermarket’s. information given by respondents may be correct and

may not be correct.


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21thJune, 2009 Presented By Ajay Kumar Gupta, ICBM-School of Business Excellence, Hyderabad, Contact –

09291592309, [email protected]

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