Assigned By:-

Mr. Niraj Jaiswal(Faculty E-commerce)

By:-

Alisha KiranBhavya AdityaSurabhi RawatSurbhi Karn (B. F. Tech Sem V)

ACKNOWLEDGEMENT

At the outset, we wish to express our gratitude to everybody who has assisted in formulation of this project. There are many to whom expression of gratitude is inevitable, but there some special people who has to be given prominence, without whom we would not have reached the conclusion of this project so quickly and so efficiently.

No amount of Gratitude is adequate for Mr. Niraj Jaiswal, Faculty, E-commerce, and NIFT Kangra for his constant encouragement and help throughout the semester.

We express our deep indebtedness to the Employees of Vishal Mega Mart™ who guided and supported us through every stage of our primary research, and also the various customers of VMM who assisted us in conducted our consumer survey.

Alisha KiranBhavya AdityaSurabhi RawatSurbhi KarnB.F.Tech VNIFT Kangra

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Executive Summary

This E-commerce project provided us with an opportunity to increase and demonstrate our understanding of e‐commerce theory and practice.

Relatively few companies or nonprofit organizations effectively utilize the Internet in their marketing programs. Most small businesses still do not even have a website. We identified a company (vishal mega mart™) we believe would benefit from an improved e‐commerce program.

The first section of project consists of the Market Analysis of the company, its marketing environment, its main customer market, its marketing mix, and its major competitors. We have also conducted the SWOT analysis, STEP analysis for the company and have given the Porter's 5 Forces that affect the company’s environment. Primary data is collected through personal interview using structured questionnaire and secondary data is collected from management of the Vishal Mega Mart, various book, journals and from Vishal Mega Mart™ website.

The second section, the E‐Commerce Rationale is given, as to why the company or organization should increase and improve its E-commerce activity, given the particular nature of its marketing environment.

The final section consists of E‐Commerce Critique and Recommendations.

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LIST OF CONTENTS

AcknowledgementExecutive Summary

1. Introduction2. Vishal Mega Mart™

2.1 Overview 2.2 Positioning and establishment of Vishal Mega Mart™2.3 Reason for store selection

3. Research methodology3.1 Data Analysis (primary Research)

3.1.1. Demographics3.1.2. Frequency of visit 3.1.3 Psychographics3.1.4 Time of Visit3.1.5. Spending by consumer3.1.6. Items purchased

3.2 Market Analysis3.2.1. Major Competitors3.2.2. Marketing Mix 3.2.2.1. Product

3.2.2.2. Price3.2.2.3. Place3.2.2.4. Promotion

3.2.3. SWOT3.2.4. STEP3.2.5. Porter’s 5 forces

4. Critique and Recommendations5. Proposed e-tailing

5.1. Advantages5.2. Shortcomings.

6. Conclusion

Annexure

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1. INTRODUCTION TO E-COMMERCE

Presently internet has been used widely as a means of communication, as a potential source of information, as a means of entertainment and many more. Within few years after existence of internet, business men realized the possibilities of using internet as a medium of business. This idea kick started the first online business ventures. Modern technology has been developed to the extent that even shopping made possible over the internet.

The spread of high-speed Internet among communities and the proliferation of electronic commerce (e-commerce) among businesses create both opportunities and challenges for small businesses. On the one hand, e-commerce may reduce many of the disadvantages associated with an isolated location by decreasing marketing, communication, and information costs and increasing access to lower cost suppliers and services. On the other hand, geographically isolated businesses may find increased competition for their "local" or "traditional" customers from non-local Internet businesses.Many small businesses have adapted to the "opportunities" and "threats" created by advances in information and communications technologies (ICT) by developing an e-commerce strategy. E-Commerce often is defined narrowly to refer to using the Internet to market and sell goods and services. E-Commerce is, however, much broader and includes "the electronic exchange of information, goods, services, and payments and the creation and maintenance of web-based relations". E-Commerce may be involved in the design, finance, production, marketing, inventory, distribution, and service aspects of a business’ activities. As such, the use of e-commerce by a firm has the potential to both increase revenues from sales as well as significantly decrease costs through greater efficiencies of operation.

Electronic commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunications networks. Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet. With the advent of the Internet, the term e-commerce began to include:

Electronic trading of physical goods and of intangibles such as information. All the steps involved in trade, such as on-line marketing, ordering payment and support for delivery. The electronic provision of services such as after sales support or on-line legal advice. Electronic support for collaboration between companies such as collaborative on-line design and

engineering or virtual business consultancy teams.E-Commerce activities generally are classified as business-to-business (B2B) or business-to-consumer (B2C). Business-to-business e-commerce involves using the Internet to facilitate supply-chain operations and include electronic data interchange (EDI), electronic funds transfer, electronic forms and messaging, and shared databases. Business-to-consumer ecommerce uses the Internet as a retail market channel and in the case of information as a product or service delivery channel.

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TRANSACTION ORIGINATING FROM AND FULFILLED BY

TRANSACTION INITIATED & ACCEPTED BY

Business Consumer Government Peer

BusinessB-to-B B-to-C B-to-G B-to-P

ConsumerC-to-B C-to-C C-to-G C-to-P

GovernmentG-to-B G-to-C G-to-G G-to-P

PeerP-to-B P-to-C P-to-G P-to-P

The rapid growth of B2B and B2C e-commerce reflects their potential benefits to businesses in terms of increased sales, lower costs, and enhanced sustainability. Yet many businesses are reluctant to develop e-commerce or they are disenchanted with e-commerce because their experiences have fallen short of their expectations.

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2. SELECTED STORE

This project is based on the departmental store- Vishal Mega Mart™.

2.1. Overview

Vishal Retail Ltd. has a strong presence in manufacturing and retailing of readymade garments (apparels); retailing of non-apparels and a large variety of FMCG products. The jewel in Vishal Group’s crown is its flagship company Vishal Retail Ltd., a company engaged in Hyper market stores with an average area of 25,000 to 30,000 sq. ft. through an impressive chain of 172 fully integrated stores in spread over the area of more than 24,00,000 sq. ft. in around 129 cities across India in 24 states. The turnover of the company for 09-10 was 1105 crore. Maintaining the highest standards in quality and design, these stores have come to offer the finest fashion garments at down-to-earth price structure. It also has 29 warehouses located in 9 key cities in India covering over 1,053,066 sq. ft area. It started as a retailer of ready-made apparels in Kolkata in 2001. In 2003, it acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels. It follows the concept of value retail in India. In other words, their business approach is to sell quality goods at reasonable prices by either manufacturing them self or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). It facilitates one-stop-shop convenience for their customers and to cater to the needs of the entire family. Mr. Ram Chandra Agarwal, CMD, Vishal Retail Ltd. has been ranked as the 28th most powerful person in the Indian retail industry. The saga of Vishal Group dates back to 2001 when its directors foresaw the emerging potentials in the retail industry which is indeed the largest sector in the global economy. Imbibing its innovative concepts and techniques the Group identified the vast scope of growth in retailing for the common man. Up till now metros have been at the center of all the organized retail action. As this market is now saturating, VMM is moving towards tier-2 and tier-3 cities because here the opportunities for growth are high. Real estate prices in these cities are comparatively low and resources are easily available so the cost of operation is less. Also Tier-2 and tier-3 cities have large base of middle class customers who are educated and have rising disposable Income.

2.2. Positioning & establishment of Vishal Mega-Mart™

The key features that have shaped in establishing of the brand includes: -

It facilitates one-stop-shop convenience for their customers and to cater to the needs of the entire family. Maintaining the highest standards in quality and design, these stores have come to offer the finest fashion

garments at down-to-earth price structure. VMM’s business approach is to sell quality goods at reasonable prices. It follows the concept of value retail in India. VMM target middle class as it is the largest consumer base in India.

About VMM Departmental store, Chain of Departmental Stores operated in IndiaOutlets 172 outlets today, Located in 129 citiesProducts Departmental StoreParent Group Vishal Retail Ltd.

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Owner Mr. Ramchandra Agarwal, CMD of Vishal Retail Ltd.Founded 2001Headquarter New Delhi- 110037Salient Features VMM is moving towards tier-2 and tier-3 cities

Offers the finest fashion garments at down-to-earth price structurestrong manufacturing set-up with a capacity of 5,000 garment pieces per day in each unit

Tag Line Manufacturing to Retailing

2.3. Reason for store selectionWe selected vishal mega mart™ due to the following reason-

Easy accessibility of one of its branch in Kangra. Highly popular Country wide reach Renowned, highly trusted by people Opportunity to expand its reach to more consumers through E-commerce.

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3. RESEARCH METHODOLOGY

Primary data is collected through personal interview using structured questionnaire and secondary data is collected from management of the Vishal Mega Mart™, various book, journals and from Vishal Mega Mart™ website.

3.1. Data analysis (primary research)3.1.1. Demographics.

InterperationFrom the above bar graph it is clear that vishal mega mart™ caters to the needs of younger part of consumers that is between 15-25 years and 25-35 years.

15 to 25 25 to 35 35 to 45 above 450

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Age group No. of customers.

15-25 15

25-35 13

35-45 6

Above 45 6

3.1.2. Frequency of visit

Interpretation The survey clearly shows that there are more no people in the income group of Rs. 10,000 to 20,000 as compared to other groups of income. Hence it is clearly shows that both the retail stores cater to the need of the middle class segment as compared to the other class of segment.

Frequency No. of customers.

Most of the time 16Quiet often 13

Some times 8

Rarely 3

most of the time quiet often some times rarely0

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16

13

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3.1.3. Psycographics. InterpretationConsumers visited the retail stores mostly with their family. Then the second was their family members & then alone.

No. of customers.

Alone 5

With family 28

With friends 17

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alone with family with friends0

5

10

15

20

25

30

5

28

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customers

3.1.4. Time of visit

Interpretation It is quite clear from the above graph that the store had sales more in evening and that too in 4 PM- 7 PM slot and the second being 7 PM- 10 PM slot.

Time of visit No. of customers. (%)

10 am to 1 pm 12.51 pm to 4 pm 20..83

4 pm to 7 pm 41.66

7pm to 10 pm 25

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10 am to 1 pm 1 pm to 4 pm 4 pm to 7 pm 7 pm to 10 pm0

5

10

15

20

25

30

35

40

45

12.5

20.83

41.66

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3.1.5. Spending by the customer

Interpretation

The money spent by the consumer when he or she visited Vishal mega mart™ was between the slot of 1000 to 2000.

Amount of money spent No of consumers.

Less than 1000 15

1000-2000 18

2000-3000 8

3000-4000 6

13

Above 4000 3

below 1000 1000-2000 2000-3000 3000-4000 above 40000

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3.1.6. Item purchased

InterpretationThe above graph states that vishal mega mart™ has major portion of income from the sale of FMCG which is 40%.

Items purchased No of consumers.

FMCG 20Accessories 6Utility 4Apparel 12cosmetics 6Consumer durables 2

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FMCG accessories utilty apparel cosmetics consumer durables

0

5

10

15

20

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3.2. Market Analysis

Marketing help to define the business for the customer's interests, not your own .It is the process of learning what customers want or need and determining how to satisfy those wants or needs. It is also used to confirm whether the customer reacted to a marketing program as expected. The benefits of market research include:

Learning who your customers are and what they want. Learning how to reach your customers and how frequently you should try to communicate with

them. Learning which advertising appeals are most effective and which ones get no response. Learning the relative success of different marketing strategies, thus improving return on investment. Learning how not to repeat your mistakes.

Vishal Mega Mart™ has been the pioneer of retail revolution. Its first fight was against local Kirana stores. The task was to change the mindset of consumer to bring about changes in their shopping patterns. It wanted people to do bulk shopping for their monthly ration Instead of going to the shop each week.

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3.2.1. Major competitors

Big Bazaar Amartex Easy day Reliance Fresh V-Mart

3.2.2. Marketing-Mix of Vishal Mega-Mart™

4P Marketing Mix is more useful for services industries and knowledge intensive industries. Successful marketing depends on number of key issues. The four key issues are explained as:

3.2.2.1. Product 3.2.2.2. Price3.2.2.3. Place3.2.2.4. Promotion

3.2.2.1. Product

VMM offers a wide range of products which range from apparels, food, furniture, child care, toys, etc. Products of all the major brands are available at VMM. Also, there are many in house brands promoted by VMM.

In-house manufacturing help sustain margin, Vishal Retail operates two manufacturing facilities with a capacity of 1.5 mn pieces each. The Gurgaon manufacturing facility began operations in 2004 and currently operates at 80% utilization. The Dehradun facility, currently operating at 40% utilization, commenced operations in September, 2007. The company also makes FMCG products, like napkins, ketch-ups, etc., through a bakery in Gurgaon. The in-house manufactured products enable improvement in operating margin.

Changing product mixVishal Retail commenced operations with the retailing of readymade apparels for kids, women and men. Gradually, it expanded its product portfolio to include non-apparels and FMCG products. With over 100,000 SKUs, apparel is the largest contributor to sales. However this mix is expected to change with the increase in the variety of products. We expect the share of apparels to reduce to 50% over the next two years. Consequently the share of non-apparels and FMCG collectively is expected to increase to 50%. The change in the product mix will enable the company to reduce seasonality, attract more footfalls and maintain margins.

3.2.2.2. Price

They work on the model of economics of scale. There pricing objective is to get "Maximum Market Share". The various techniques used at Vishal Mega-mart™ are: --Value Pricing (EDLP - Every Day Low Pricing): Vishal Mega-mart™ promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping.

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-Promotional Pricing: Vishal Mega-mart™ offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Vishal Mega-mart™ also caters on Special Event Pricing (Close to Diwali, Holi, Raksha-Bandhan and Durga Pooja).-Differentiated Pricing: Time 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 Vishal Mega-mart.-Bundling: Selling combo-packs and offering discount to customers. The combo-packs add value to customer.

3.2.2.3. Place

Vishal Mega-mart stores are located in 129 cities with 172 outlets. VMM has presence in almost all the major Indian cities. They are aggressive on their expansion plans.

Vishal Retail targets cities with urban population of 1 million people or above or can be classified as Tier-2 and Tier-3 cities. In Tier-1 cities, the company opens retail outlets on the outskirts, rather than the prime area. Its target market includes people with middle income and lower income levels. This enables the company to overcome competition to some extent due to its first mover advantage (as competitors have relatively less space in tier-2 and tier-3 cities) and helps to lower rental cost. The company plans to maintain the ratio of Tier-2 and Tier-3 to Tier-1 cities at 80:20.

3.2.2.4. Promotion

Advertising has played a crucial role in building of the brand. VMM advertisements are seen in print media, TV, Radio (FM) and road-side bill-boards. Vishal Mega-mart™ started many new and innovative cross-sell and up-sell strategies in Indian retail market.

The various promotion techniques used at VMM include:

5 Din Ki Maha Bachat 2 din Ki Maha Loot Dhan-teras Dhamaal Great Savings Vishal Mega mart™ Gift Voucher Rs. 1000. 25% Off On All Items – Every Month Discount Offers At Various Festive occasions Grand Winter Sale – 50% & 60% discount for 2 days Paise Bachao Aandolan – 9 Din Ki Maha Loot Vishal Reward Plus: Consumers can make purchases at any store and accumulate points at a central

level. These points are redeemable at any of our stores.

Cross category promotions are now catching up where discounts are being offered on grocery purchases, redeemable against purchase of apparel and household products.

Rationale as to why the company or organization should increase and improve its ecommerce activity, given the particular nature of its marketing environment

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3.2.3. SWOT Analysis

Strength:

Prime location Large floor space allowing for better visual merchandising Large area also allows to stock a large variety of products under one roof High Financial backing Highly trained and motivated sales force Brand equity Large scale operations in various cities throughout the country allows them to reap the benefits of

“economies of scale”

Weakness:

Large scale of operations sometimes acts as a barrier to personalised customer relations

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Large scale operations lead to reduced flexibility by increasing the amount of overheads and a huge commitment in terms of fixed costs

Not popular with upper middle, and higher class. A large organization structure leads to delayed decisions. This can prove fatal for a business in the dynamic

fashion industry. Vishal Mega Mart ™ has a centralised purchasing department in Delhi, this fact sometimes result in delayed decisions in adapting to changing market trends.

Opportunities:

Apart from metro cities, cities like Ahmedabad, Pune, Luckhnow, Indore and Coimbatore have shown substantial retail presence. These markets are expected to show exponential growth in the next few years. Thus Vishal Mega Mart™ has the opportunity to explore new markets.

According to the customer outlook study, consumers are generally satisfied with the service that organised retailers extend to them. More importantly, they are increasingly regarding these organised retailers as providing ‘value-for-money’, these findings indicate that large retailers will capture most of the higher consumer spending.

To become a Benchmark for Indian departmental stores Increasing penetration of the internet into Indian homes has provided Vishal Mega Mart™ to break the

geographical barriers and to increase their customer base. The entry into online retailing, would, in fact, expand the product categories available to the consumer. The choices open to the consumer would not be restricted to those available in Vishal Mega Mart™

E-commerce implementation.

Threats:

The time when retailers had to worry about competition only from their peers down the street has come to an end. Vishal Mega Mart™ is now facing increased competition in the form of international retail chains that are making a bee line towards the highly potential Indian markets. Moreover many bi-Indian business houses are also trying a space in the Indian retail scene.

Competition by others (Amartex™, Big Bazaar™) Implementation of FDI

3.2.4. STEP Analysis

Social:

since income of individual is increasing and more and more people are moving towards western culture in dressing sense, in eating etc so the purchasing power of the people has really gone up and thus the impulse buying of the commodities is on a great increment mainly due to pricing strategies of retail players and full of festivals throughout the year.

Under the social environment effect hoping to usher in a socio-economic revolution VISHAL MEGAMART™ is all set to create at least 500,000 jobs through its jumbo Rs.80 billion investment in retail network to be launched in the two north Indian States. The departmental stores would be spread over an area of 150,000 sq. ft. and sell apparel, consumer durables, IT and lifestyle products, and home furnishings besides all the goods available in VISHAL MEGAMART™.

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Community facilities including a health centre and pharmacy, and a vocational training centre to assist youth in tapping employment avenues would also be provide at these centres. Sixty-eight Town Centres, each spread over 130,000 sq. ft. would be in place in most of the 70 district head quarters of Uttar Pradesh by the end of next year Poised to usher a new paradigm in rural areas, the agri-business vision of VISHAL MEGAMART™ is to build infrastructure for efficiency, value addition, logistics and market access to improve farm incomes, create an efficient market place for the true price discovery of farm produce, drive major initiatives to bring the best technology and thereby bring about drastic improvements in farm practices.

Economic

Vishal Retail’s focus is on tier II and tier III cities, which account for 87% of its total retail space. Of the 50 stores, Vishal Retail has 43 stores located in Tier II and Tier III cities. An average store is 20,000-30,000 sq.ft. in size generating sales of Rs 7500 per square feet.

VRL business model is based on value retailing, whereby it offers quality products at reasonable prices to customers primarily in the lower and middle income group.

VRL sells around 7,000 products of household needs, ready-made apparels, footwear, toys, watches, toiletries, grocery items, sports items, crockery, gift and novelties. 

North India accounted for 62% of sales, east India 19%, west India 15% and south India 4%. The apparel business contributed 63% of revenues, while then on-apparel business contributed 22% and the

FMCG sector 15%.

Political

The reforms include policies to woo foreign investors, make import duties incompliance with WTO commitments and customize the EXIM policy to boost imports.

Due to some political region at least three major cities saw protests in May against Reliance, India’s largest corporation, entering the business of retailing fresh vegetables and fruits through its brand Reliance Fresh.

Many visible corporate brands are into the retail business: VISHAL MEGAMART™, Bharti, Big Bazaar, Godrej and Subhiksha.

India has not yet allowed FDI in multi- brand retailing. But international behemoths like Wal-Mart, which has a deal with Bharti, are raring for joint ventures.

Technological

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India’s organized retail industry, constituting 3 per cent of the total retail, is indeed on a growth path. It has necessitated the development of sophisticated IT solutions to enable more profitability, efficiency and an enriching customer experience.

Retailing is the second largest income generator in India after agriculture constitutes 38 per cent to gross national income.

Proper supply chain is essential and customer experience is very critical for retail success. The retailer has to ensure that customer is not required to hang around or take too much time to spot his product.

3.2.5. Porter’s five forces

1) Threats of substitutes2) Bargaining power of the buyer3) Rivalry among competitors4) Threat of new entrants5) Bargaining power of the supplier

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4. CRITIQUE AND RECOMMENDATIONS

Fast moving consumer goods (FMCG) or daily used items should be available in more number of varieties because customers of Vishal 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 Vishal Mega mart™ as done in other retail outlets.

Most of the customers believe that stock is not updated and no offer schemes are provided by Vishal Mega mart™ 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.

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

Company should try to attract that family by providing family pack apparels. offer at discount rate Complains and feedbacks should be taken care in well manner to create the loyalty and goodwill. Company should give information to the customers through the marketing gimmick (SMS) using

database of customers.

5. PROPOSED E-TAILING

The uses of computers and internet have been expanding significantly over the years. Presently internet has been used widely as a means of communication, as a potential source of information, as a means of entertainment and many more. After conducting the market analysis, we arrived at the conclusion that Vishal mega mart™ would benefit by starting an online shopping store. The store would be a B2C e-tailing site. It revenue model would be- advertisement, and selling and buying. The site can further be expanded to a B2B model where it can buy bulk items from wholesalers worldwide. Both products and services could be purchased by online shopping.

5.1. Advantages

Many businesses adopt an e-commerce business plan because it provides the owner greater flexibility in terms of operating location and hours.

Enhanced flexibility Customer identification, group segregation, product demand , demographics. Easy and cost effective end-of-season sale.

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It provides the opportunity for increased profits (through higher sales or lower costs) and thus enhanced sustainability of the firm.

E-Commerce has the potential to significantly improve the efficiency of operations in all phases of the business' supply chain.

E-commerce may benefit a firm in product design, supply and inventory management, production, marketing, sales and distribution, and customer service.

Product Development

Supply and Inventory Management- the Company can use an integrated software system for mail order businesses that manages the inventory and warehouse (including location of items in the warehouse) based on information from online sales. The software system also determines the preferred distribution system (e.g. postal service, UPS, FedEx) and shipping costs based on the number, size, and weight of the items ordered online. These increases in operational efficiencies reduced the company's employment requirements from 15 to 5 full-time employees.

Minimize store area & Reduce set up cost for new stores Reduce Manufacturing or Production Costs Expand Marketing Efforts- E-Commerce offers cost effective opportunities for expanding and

targeting markets. The use of websites enables the two companies to expand their markets geographically. This advantage is more important for small businesses than larger companies because consumers may have the perception that the former business is too small and isolated to provide quality products and good service. A "good" website places the small firm on a more even footing for competing with larger business.

Increase Sales and Reduce Selling Costs- Business profits can be increased by increasing revenue through stronger sales and/or by decreasing the costs associated with constant sales. The use of e-commerce would also help to cut selling cost by reducing the need for paper catalogs and sales flyers.

E-Commerce may permit retail businesses to "cut out the middle man costs." Improve Customer Service- Customer service can be provided before the sale by making it easy for

the shopper to find what they want or after the sale in terms of addressing order returns, repairs, or operational questions. The company website can be helpful in providing both before- and after-sale service. And it saves customers time.

Strengthen Customer Relationships- Through targeted marketing push strategies, businesses can reach out to customers even when they are no longer in the area. Linked with the shopping cart feature of the site, this direct marketing touch allows customers to purchase products. Businesses can also use the e-commerce features of their sites to emphasize customer service and develop an edge over their competitors.

5.2. Shortcomings

E-Commerce is not for all businesses- In our opinion, most small businesses would benefit from having a website. Consumers increasingly rely on the Internet for information, and a website is a relatively inexpensive way to present information on a business' products, hours, location, phone number, and sales. E-Commerce is, however, much more than maintaining an informational website,

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and the e-commerce related components and services (e.g., shopping carts, fraud protection, SEO, EDI, analytics software) may add more to the firm's costs than they contribute to profits. That is, e-commerce may not be a profit maximizing business strategy for a firm if the cost of implementing e-commerce exceeds the increase in net revenues or decrease in operating and marketing costs attributable to e-commerce.

There are two general situations where ecommerce provides only limited potential in enhancing sales and net revenues. First, businesses that sell "commodities" such as books, shoes, clothing, consumer electronics, and sporting goods will find the Internet markets extremely crowded. Online competition from big box stores and Internet retailers will be intense, and these larger companies likely have a competitive advantage in terms of volume buying and early listings on search engines. Second, some products require personal inspection by the customer (e.g., furniture). The website may be helpful for getting the potential customer into the store for further inspection of the product, but an online sale is unlikely to occur.

In the final analysis, what is important to the firm is that e-commerce produces an acceptable return on investment. It is good business practice to forecast and monitor the resources (time, money, and other) devoted to implementing and conducting e-commerce and the benefits (increased sales and reduced costs) attributed to e-commerce strategies. If a business forecasts insufficient long-term return on investment, broadly defined to include financial and time commitments, then e-commerce as currently used is not a good fit for the company. In this situation, the business may elect to revise the scale and scope of its e-commerce program or it may decide to withdraw from e-commerce altogether.

Electronic illiteracy of the Indian women, who generally conduct all the household shopping. The usage of electronic items and internet is still not prevalent in India. So proposed e-commerce may not prove as useful in Indian scenario.

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6. CONCLUSION

E-Commerce is used by firms for reducing marketing costs, increasing sales, enhancing efficiencies in inventory management and distribution, and improving service delivery. In most cases, e-commerce is considered beneficial to the firm's profitability and sustainability.

In general, the benefits of ecommerce to the business are enhanced if the firm serves a niche market, takes advantage of service providers (public and private) to maintain an efficient and up-to-date e-commerce program, and integrates e-commerce into multiple aspects of the business operation. Most importantly, however, e-commerce must be viewed as an integral part of the firm's business plan.

E-Commerce is not an "add on" activity like a Christmas advertising campaign. E-Commerce has the potential to significantly impact business operations, and the firm should plan ahead regarding resources needed (financing, labor, production capacity, warehouse space) to serve new markets and customers.

Marketing and selling products through a designed website on the Internet places companies in competition with a large number of firms and provides consumers with easy access to comparisons of competitors' products and prices.

Smaller businesses generally do not have the ability to compete in these e-markets because the firms do not have the volume or scale economies to match the low price, or the marketing budget to get an early listing on web searches. A narrow market focus also may enhance a business' visibility on search engine rankings.

Effectively Use Service Providers- A wide variety of programs and services are available locally and on the Internet to assist companies with their e-commerce. Services available include website design and hosting; software systems for integrating e-commerce with accounting, shipping, and inventory management; and business analytics software to provide data and statistical analysis on the company's e-commerce activity.

In many cases, the services offered by private sector firms may be costly and the benefits to the business may not justify the expense. In addition, the market for these services and software is extensive and rapidly evolving and a significant time commitment may be required of the rural business owner to keep up-to-date.

Creating a Website is the Beginning, not the End of an E-Commerce Strategy- Strategies for optimizing a website are different from those needed to create an initial site and make it fully e-commerce capable, e.g., creating a shopping cart to handle online transactions.

Be Prepared for Growth- The initiation of e-commerce may result in a significant increase in sales, and the business must be prepared to meet this demand or the e-commerce "window of opportunity" may be lost. The typical Internet customer expects quick and accurate responses to their online

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orders. The timely delivery of goods and services consistent with the quality perceptions of customers is critical to cultivating repeat customers, word-of-mouth advertising, and favourable online reviews. In addition, the business can somewhat manage the pace of increasing product sales by limiting web-based promotions to targeted geographic areas or specific customer profiles.

Integrate E-Commerce into Overall Business Operations- E-Commerce is broadly defined as "using online resources and tools to do business better more efficiently and productively”. As such, e-commerce holds the promise and challenge of affecting every aspect of a business' operation from product design and production to distribution and service delivery. Businesses using or considering e-commerce should investigate the potential roles for e-commerce in all aspects of the businesses' operations.

Businesses with e-commerce activities (B2B or B2C) may benefit by using the information provided through ecommerce (e.g. customer characteristics, location, and order size and regularity) to enhance efficiencies in other areas of operation. For example, online sales may create the opportunity for direct delivery to customers and reduce reliance on wholesalers. In addition, Internet marketing may attract customers from parts of the world not previously served by the company. Cultural differences between buyers and sellers might present unforeseen challenges; thus, understanding and planning for transactions with foreign customers will enhance the benefits from these opportunities.

References & Bibliography:

www.vishalmegamart.net

www.wikipedia.com

www.retailsindia.net

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