Project On Marketing Plan1[1]

Project on Marketing Plan Of Shoppers’ Stop Ltd

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Index 1. The Vision & Mission Statement of the Company. 2. Background of the category/brand 2.1 Market Growth Rate 2.2 Volume and Value Rates 2.3 Zone wise break up of Sales 2.4 Main Market contributing 80% to Sales/Value 2.5 Product wise sales, value, volume 2.6 Fastest selling products and where we stand (Matrix Form will be better) 2.7 Seasonality if any… 2.8 Key Success Factors in the line of Business 3. SWOT Analysis of the category/brand 4. Market forecast- volume & value wise 5. Competition Analysis 6. Marketing Objectives-short term and medium term 7. Marketing Strategy overall including Brand Positioning including Assumptions 8. Product objectives and strategy 9. Distribution Objectives and strategy 10. Promotion Objectives and strategy 11. Pricing Objectives and strategy 12. Marketing Control and matrices for evaluation-what frequency, by whom?

13. Responsibility distribution within the organization for meeting major objectives 14. Profit and Loss Account 15. Executive Summary

1. The Vision & Mission Statement of Shoppers’ Stop Ltd India is flourishing market for Retail sector. People today are more interested in investing their money in the IPO’s of this business. Shoppers’ Stop Ltd established its first store in Andheri (Mumbai) in the year 1991 is considered as one of the pioneers in the business. Currently it operates stores in Bangalore, Hyderabad, Lucknow, Gaziabad, Jaipur, Delhi, Chennai, Mumbai, Pune, Gurgaon, Kolkata and Noida. The Company has a mission statement and a vision statement to achieve its long-term goals. The Vision Statement and Mission Statement of Shoppers’ Stop Ltd. The Vision statement of Shoppers’ Stop Ltd is “To be a global retailer in India and maintain its No.1 position in the Indian market in the Department Store category.” The Mission Statement of Shoppers’ Stop Ltd is “Nothing but the Best”. They believe in recruiting the best staff, the best technology, and the best service levels for the customers. Shoppers’ Stop wants to be a global retailer and also at the same time wants to maintain the No.1 position that it has acquired during all these years. This is its long-term vision. Now how to achieve this there is a mission statement, which says “Nothing but the Best”. This signifies that the management believes in selecting the best lot of staff & best technology, so as to provide the best & quick possible service to the customers. The punch line of the Shoppers’ Stop along with the logo says “Shopping, and Beyond” which signifies that Shoppers’ Stop gives you much more than mere shopping. Shopping today can be done at every other shop or store, then why the

customers have to come to Shoppers’ Stop to purchase which are available at local markets and that too at quiet cheap rates. The customers come to Shoppers’ Stop to feel the experience, the ambience, the space that they get, the variety they get and so on. Shoppers’ Stop Ltd has acquired this image in the minds of the customers since its establishment only due to its quick and prompt service levels that their staff provides to their customers. To achieve this vision and to accomplish this mission, Shoppers’ Stop also has certain values they abide and which help them in achieving our mission and vision.

1) We shall not take what is not ours. 2) The Obligation to dissent (against a viewpoint that is not acceptable). 3) We shall have an environment conducive to openness. 4) We shall believe in innovation. 5) We shall have an environment conducive to development. 6) We shall have the willingness to apologize and/or forgive. 7) We shall respect our customers' rights. 8) The value of trust. 9) We shall be fair.

2. Background of the category/brand Shoppers' Stop Ltd. is a chain of retail stores in India owned by K Rajeha Corp. It was started in 1991 for its first store in Andheri in Mumbai on S.V. Road. Currently it operates stores in Bangalore, Hyderabad, Lucknow, Gaziabad, Jaipur, Delhi, Chennai, Mumbai (Andheri, Juhu, Malad, Bandra, Chembur, Kandivli, Mulund), Pune, Gurgaon, Kolkata and Noida.

Shoppers’ Stop (Andheri) The Positioning Of Shoppers’ Stop Ltd. Shoppers’ Stop is positioned as a family store delivering a complete shopping experience defined by its mission, vision and values. It is basically positioned as a youth store in the market. The customers of Shoppers’ Stop Ltd. fall between the age group of 16 years to 35 years, the majority of them being families and young couples with a monthly household income above Rs. 20000 and an annual spend of Rs. 15000. The other formats of K Raheja groups (owners of Shoppers’ Stop) The K Raheja group has also entered into other formats of retailing apart from Departmental Stores (Shoppers’ Stop Ltd). They have taken over a specialty store named “Crossword” which is a known book retailer in India.

CROSSWORD It has also inaugurated an exclusive Home Collection Store, which is called “Home Stop”. Its kind of premium home concept store from Rahejas is the destination to transform the dream house into a reality. Presently in Bangalore & Mumbai spread over 30000 sq.ft each, HOME STOP offers a choicest range of home products to give house that unique look and feel which an individual always wants.

HOME STOP It has also opened a Hypermarket called “HyperCITY”. HyperCITY has every thing Available at one place from all the categories like food products, garments, furniture, groceries, crockery, and other daily usage products for a human being. Spread across around 120000 sq.ft, it caters to all income groups.

HyperCITY (Malad) Rahejas also own a mall called “In Orbit Mall” which is a mall spread across more than 225000 sq.ft has Shoppers’ Stop, with its closest competitors Lifestyles and also some exclusive brand outlets along with Fame Adlabs and the food court.

In Orbit Mall 2.1: Market Growth Rate The overall market as per the financial year ended 2006-07 is growing at 30% where as Shoppers’ Stop Ltd has only grown by 21% approx, which is far below the market growth rate. The company is expanding at an alarming rate to overcome this. There are around 22 outlets in different cities of India today. This is also because, Shoppers’ Stop is not marketing its in-house brands as it should be, whereas the other national brands are going on advertising their respective brands in their campaign successfully. If Shoppers’ Stop takes part in active advertising of its in-house brands

then the bottom line will obviously rise as they would always earn better margins in their In-house brands.

Shoppers' Stop Ltd Series1 Retail Industry 0%

10%

20%

30%

2.2 Volume and Value Rates Shoppers’ Stop is not a value for money store. The customers are bound to get good quality products but at comparatively higher rates, which may become hindrances for Shoppers’ Stop as a brand. According to the financial reports of Shoppers’ Stop Ltd for 2006-07, the company has achieved a top line (total revenue) of Rs.8996 million in which the business has grown by 33% as compared to last year. The Net Profit after Tax has Rs.262 million. The Sales per square feet here has increased by 5%, Customer Entry has increased by 10% and the Cash Memo Size has gone up by 14% as compared to last year.

2.3 Zone wise Sales Break-up Shoppers’ Stop Ltd has divided the whole territory of India into 4 major zones  West Zone,  North Zone,  South Zone and  East Zone Zone West North South East Total

Sales (in Millions) 3329 2249 2789 630 8997

% Zonewise 37% 25% 31% 7%

Zone Wise Sales

West North South East

2.4 Main markets contributing to 80% of Sales Value

2.5 Product wise Sales, Value, Volume

As said earlier, the Sales per square feet have increased by 5% over last year and currently is at Rs.7, 973. It is calculated on the built up area leaving the aisle and other movement areas of the customer. Sale per square feet comparisons for the last 5 years. Year 2002-03 2003-04 2004-05 2005-06 2006-07

Sales per sq/ft 6328 6898 6903 7576 7973

Sales per sq/ft 9000 8000

Sales per sq/ft

7000 6000 5000 Sales per sq/ft 4000 3000 2000 1000 0 2002-03

2003-04

2004-05

2005-06

2006-07

Year Source : Annual Report (SSL) – 2006-07

3. SWOT Analysis

Strengths 1) Service Levels: Shoppers’ Stop Ltd has always set high standards in services offered by the staff to the Customers. The Customers are treated as Kings in the true sense. Even the competitors have the merchandise that is present in Shoppers’ Stop Ltd, then what is the reason for customers coming back to Shoppers’ Stop repeatedly? The reason is warm ambience & high service levels that is offered by Shoppers’ Stop. It’s the service that has made the difference. 2) Loyalty Programme: The First Citizens is a loyalty club of Shoppers’ Stop. It’s the first citizens due to whom the store is on an expansion spree. These first citizens have made Shoppers’ Stop realize that they can deliver any service on time. The First Citizens are the real force behind the Shoppers’ Stop. Today Shoppers’ Stop has approx 8,00,000 first citizens all over the country. 3) Technology: Shoppers’ Stop had mplemented a new technology called JDA Retail ERP (JD Armstrong is one of the best billing and backend technology used all over the world) since the year 1999. The company believes that, investments in systems and technology offer the company the vital edge to compete with the competitors, and also control the performance year after year for the company. 4) Process: The Company has made a process guide called “Standard Operating Procedure”. Every store according to the company is supposed to follow certain procedures or process very strongly in order to maintain similarity between the stores. The processes in the book are not rigid but are flexible. If a store head feels that a particular process can not be used or implemented in his store, he can inform the process team head and not follow the same. Similarly if the store head feels that there is a need to include such and such process in the guide then he/she can also talk to the process team head and implement the same.

5) The Supply Chain Management of Shoppers’ Stop Ltd: The Supply chain Management of Shoppers’ Stop Ltd has also come a long way. During the initial stages of the company, the managers had to order for the stocks and then the distribution center would send the merchandise which is the fast mover. But today the scenario has changed completely largely due to systems and technology adopted by Shoppers’ Stop Ltd. Stocks consists of SKUs (Stock Keeping Unit) numbers. Every item has different SKU. Once the particular item is sold at Delhi Store, and the cashier punches the SKU in the system it automatically reflects in the Distribution Center system as sold item. So then it can be replenished as soon as possible. Weakness 1) Attrition Rate: In India only approximately 3 per cent of Retail is organized despite of that Retail is India’s largest industry which is expected to a whooping growth of around 10 per cent in 2010, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment. In a very short span of time, India has gained a lot of popularity in the field of retail sector. Every day there are new companies entering into the market looking at the growth prospects. Every new entrant requires certain experienced employees to run in the market. Shoppers’ Stop has lost a good number of such experienced employees in last 5-6 years. 2) Risk Taking: The Company believes in taking calculated risks, hence they are expanding at a slower rate as compared to the competitors. Pantaloons (Mr. Kishor Biyani) believes in risk taking, this is a reason why he is expanding at an alarming rate. But the management in Shoppers’ Stop has always tried to play slow and safe game with minimum risk factor involved. 3) Delay in store opening: Now the company has realized that expansion will be the key if at all it wants to stay in business. It has announced to open 30 more big budget stores all over the country excluding 22 stores currently operating in different corners of India.

But the issue now is that it has tied up with various malls, and will have to wait until the mall starts operating. 4) Stores opened very near to each other: The Company in expansion spree has bought out or rented land wherever possible. For instance Kandivali Store was doing reasonably good business until and unless Malad In orbit Store opened. The distance to be covered is merely 10-20 minutes. In Malad, the store is spread across 65000 sq.ft. Obviously it has a lot more variety in each and every category as compared to Kandivali. As a result the Kandivali store customer entry has dropped drastically and so has the business. 5) High Rents paid by Company: The real estate prices have really shot up in the past decade, as a result of which the company has to pay a heavy rent on the leased property. As a result of this the company takes relatively longer time in doing a break-even for the store. This may be a big cause of concern for the company in the time to come. Opportunities 1) Expansion Plans: The Company is present in 22 different locations as of now including smaller cities as well as metropolitan cities. The company has announced that in the near future they are planning to open 30 more stores in the country. The expansion plans are looking very ambitious and very good for the company’s growth prospects. This will also increase the coverage spread for the company through out the country. 2) Other Formats: In the mean while the company has also launched other formats like Hyper CITY which is a hyper market catering to all classes of customers, it has taken over CROSSWORD the mega book store or the specialty store for the readers, music lovers and movie buffs. The product portfolio comprises of books, stationery, Audio CDs, VCDs and DVDs. It has its own shopping Mall called In Orbit Mall. It has started a new Home Collection store as a complete home solution store which offers designs and style, quality and convenience which is called HOME STOP. Its kind of premium home concept store from Rahejas is the destination to transform the dream house into a reality. Presently in

Bangalore & Mumbai spread over 30000 sq.ft each, HOME STOP offers a choicest range of home products to give house that unique look and feel which an individual always wants. It has also launched a chain of Cafes’ and restaurants like BRIO and DESI Café. Brio has been introduced in all places where there is Shoppers’ Stop and Crossword present, whereas the Desi Café has been only present in Mumbai inside the Hyper CITY. 3) Licensing: The Company has already licensed two brands viz. Austin Reed for Men and Women and Mother Care for Kids. The company as a brand name is very strong and may influence other foreign players wanting to enter in the Indian Markets through Shoppers’ Stop.

Threats 1) New Entrants: Retail industry in India is growing at a fast pace. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. The future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. There is a slow but gradual increase in foreign entrants in the sector, the company expects many new entrants to enter in the field of retail sector thus increasing competition.

4. Market Forecast- Volume, Value

Market Forecast The retail market is growing at an alarming rate year after year, to match up with the same the company needs aggressive advertising campaign. Last year when the industry had grown by approx 30%, the company had just grown by 21% which cannot be called as a satisfactory result. The company will have to constantly monitor its conversion rate (converting customers into buyers) and cash memo size (per person purchase). Both these components are very vital and needs to increase to see better sales happening.

5. Competition Analysis

The Major competitors for Shoppers’ Stop are Pantaloons, Lifestyles and Westside (to a certain extent). Let us see the market share for each of the store in the departmental store category. Pantaloons have the largest market share with approx 41%. Shoppers’ Stop Ltd. is the follower with approx 32%. Then comes Lifestyle Stores with around 17% and then follows the West side stores of Trent (TATAs) with approx 9% to 10% of market share.

Market Share Graph

W estside

Stores

Lifestyle Series1 Shoppers' Stop

Pantaloons

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6) Marketing Objectives-Short term and Medium term Short Term Marketing objectives

Short term market objectives for the company as of now is to increase the a) Conversion rate (converting customers into buyers) b) Cash memo size (per person purchase) c) Sales per square feet. These three things are very important for the growth of bottom line (profits) year after year. These three things are also essential and prove to be decisive factor to achieve break even point for each and every store opened in the country. The question arises how to do it? The answer is 1) Select the best front end staff through rigorous recruitment process. 2) Get in the best quality and priced merchandise for the customers. 3) Get in the best managers to see that every thing is managed properly in the store. 4) Do a cost cutting wherever necessary. 5) Provide perfect training programs before introducing the front end staff to the floor from time to time. 6) Attach the new coming CCAs to Old timers who have spent some time on the floor for practical training (Mentor & Mentee). 7) Put your best performing associates in the best performing sections 8) To enroll as many first citizens as possible, as these are the customers who would remain loyal to us for a long time to come. 9) To promote more and more in house brands, as the margins achieved in in-house brands are mush higher as compared to national brands, besides the national brands are already advertised by their own companies. 10) Increase the visibility of the in-house brands in a tremendous way by displaying only the in-house brands on focal points and high points and giving them the space visible from all corners of the store. The above given ideas are some of the solutions for increasing the conversion rate, cash memo size, and also the sales per square feet.

Medium Term Market objectives Medium term objectives are to overtake the lead in retail sector from Pantaloons, which is going to be difficult if the above three components i.e. the conversion rate, cash memo size and the sales per square feet consistently. The market share for pantaloons today is approx. 41%. The market share of Shoppers’ Stop in comparison to this is approx 32%, to take over the differential market share i.e. 9% is going to be the medium term market objectives for Shoppers’ Stop Ltd. Capture the market through the strengths of our own company and the weaknesses of the competitive company. Also Expansion is to be seen as Medium term market objectives.

7) Marketing Strategy overall including Brand Positioning including Assumptions