Retail Bookstore Formation

Term paper Of

Retail management Topic: - retail bookstore

Submitted to: by: Mr. Pratish srivastav

Submitted mohd fahad Section: -

1803 Roll no. – a14 Reg. no. -10809577

Diamond bookstore Diamond Bookstore will be a general partnership type of business. The shop will be jointly owned by Mohd Fahad, Mohd Umar and Mohd Shabi. Diamond Bookstore will be establishing its shop in city towers main university road Delhi. This area is well known for every sort of shopping. Our facility is a 5,500 square ft. shop which allows us to stock a large amount of inventory. Our start-up expenses come to Rs 25 million, which are single time fees associated with opening the shop. These costs are financed by a bank loan and our investment as well. We have divided the market into three segments of potential customers. They include casual shoppers, hard to find shoppers and specific category shoppers. We will provide our customers a relaxed atmosphere for reading the books by the arrangement of comfortable chairs and tables. We will be having a buyback program to lower inventory acquisition costs and allow the customers to discard unwanted literature and music. Diamond Bookstore will offer a wide range of every kind of books and music CD’s and DVS’s on low prices. Our main competitors are Odyssey and Higginbotham and also local bookshops. Our competitive edge will be the lower prices we will charge our customers and the larger selection we can offer. One of the most critical elements of Books n Books’ success will be its marketing and advertising. Our sales forecast for the first three years is estimated to be as under:

Year 1

Year 2

Year 3

Rs.1,304,000

Rs.1,357,000

Rs.1,428,000

Type of retail format and ownership Diamond Bookstore is a retail chain format having its stores at multi locations in the state of Punjab, Haryana, and Uttar Pradesh etc. Form of ownership Diamond Bookstore will be a general partnership type of business. The shop will be jointly owned by Mohd Fahad, Mohd Umar and Mohd Shabi. We expect to begin offering services in December. Roles of owners All the owners will have to attend any type of meeting and business deal. The members will have to be present during the working hours. Products and Services Diamond Bookstore will offer a wide range of book, magazine, and music selections. This includes just about every conceivable category including fiction, non-fiction, business, science, children's, hobbies, textbooks, and other types of books. Our music selection will concentrate on CD's and DVD’s as these are the most popular and take up the least amount of floor space. In addition, we will be offering a competitive buy and trade service to assist in lowering our inventory acquisition costs and making our store more attractive to our customers. In addition, we offer a search and order service for customer seeking to find hard to get items. Diamond Bookstore will have a relaxed "reading room" type atmosphere that we will encourage through the placement of chairs, couches, etc. We

strongly encourage our customers to spend as long as they like reading through our book selection and enjoying a quiet, relaxing environment. Our store hours will be 8:30 a.m. to 8:00 p.m. Monday-Saturday and 10:00 a.m. to 6:00 p.m. Sunday. Once profitability becomes stable, we will extend these hours.

Multi channel decisions Multichannel retail decisions are those decisions through which retailers sell merchandise or service by more than one channel. By using a combination of channels, retailers can leverage the unique benefits provided by each to attract and satisfy more customers. There is three kind of multichannel retailing and Diamond Bookstore uses all of them to interact with customers. Store Channel: - Store offers a number of benefits to customers that cannot get when shopping through catalogues or on the internet. Diamond bookstore provides different facilities in their stores or the convenience of customers. Browsing – Shoppers often have only a great sense of what they want but don’t know the specific item they want. So they go to the stores to see what is available before they decide what to buy. 2. Touching and feeling products – the greatest benefits offered by Diamond bookstores is the opportunity for customers to use all five senses-touching, smelling, tasting, seeing and hearing- when examining the products. 3. Cash payment – Stores are the only channel that accept cash payments. Many customers prefer to pay with cash because it is easy, resolves the transaction immediately, and does not result in potential interest payments. 4. Entertainment and social experience – Shopping in a Diamond Bookstore can be a stimulating experience for 1.

5.

some people, providing a break in their daily routine and enabling to interact with friends. Risk Reduction – When customer purchase merchandise in stores, the physical presence of the store assures them that any problems with the merchandise will be corrected.

Catalogue channel: - the catalogue channel provides some benefits to the customers that are not available from the store or internet channels. 1. Convenience – Catalogues, like all non store formats, offer the convenience of looking at merchandise and placing an order on any day at any time from almost anywhere. With catalogue, customers have the added convenience of not being restricted to a place with internet access and a computer; they can look through catalogue on the beach or propped up in bed. 2. Safety – security in malls and shopping areas is becoming an important concern for many shoppers, particularly the elderly. Non store retail formats have an advantage over store-based retailers in that they enable customers to review merchandise and place orders from a safe environment- their homes. Internet channel: - Shopping over the internet provides the convenience and safety benefits offered by catalogues and other non store formats. However the internet compared with store and catalogue channels, also has the potential to offer a greater selection of products and more personalized information about products and services.

Customer Buying Behaviour The buying process, the customers go through when buying a product or service, begins when customers recognize an unsatisfied need. They seek information about how satisfy the need, such as what products might be useful and how they can be bought.

RESEARCH DESIGN The research design used here is exploratory research design for the purpose of addressing the research problem. The primary objective of exploratory research design is to provide insights and better understanding of the situation faced.

RESEARCH METHODOLOGY In our research we have used both Qualitative and Quantitative research extensively. Qualitative research would be used for interviewing the sales management of Diamond Bookstore in order to gain an insight of their style. Quantitative research was done for interviewing corporate and for taking surveys.

The

questionnaire

for

surveys

quantitative and qualitative research.

had

a

mix

of

DATA COLLECTION FROM PRIMARY SOURCES Through Questionnaire The data was collected through questionnaire it was prepared very

carefully

so

that

it

proves

to

be

effective.

The

questionnaire is based on primary and secondary objects of the study and there are totally 15 questions. Through Depth Interviews The necessary data’s where collected by interviewing the manager Mr. Mohd Umar of Diamond Bookstore. SCALING TECHNIQUE In our survey to find out the corporate behaviour towards the price, quality of products sold, ambience, parking facilities, store working hours, variety of products, approach of the sales person and to rate the knowledge of the sales person the scaling technique we used was continuous rating scaling. This technique was used in order to find out the common preferences towards the behaviour of the group. QUESTIONNAIRE DEVLOPMENT & PRE – TESTING The

questionnaire

was

developed

based

on

the

information needed i.e. to find out the corporate behaviour towards Diamond Bookstore. In order to get the desired

information the survey method used was personal interviewing and the questions where framed with respect to the objectives of

the

questionnaire.

Another

important

aspect

of

our

questionnaire is that, while framing the questions we made sure that the type of questions and the words used where simple and understandable by the respondents this was done in order to create willingness and interest among the respondents. Pilot studies have been done among few random people, to test the effectiveness of the questionnaire. SAMPLING It is the selection of small number of elements from a larger defined target of group of elements and expecting that the information gathered from the small group will allow adjustments to be made about the large group. A sample is a smaller representation of the larger whole. A sample contains primary sample units and a slice of population representing the universe. The purpose of sampling is to draw inferences concerning the universe. Sample size One can say that the sample size must be an optimum size that it should neither be large enough to give a confident interval of desired width and as such the size of the sample

must be chosen by logical process before the sample is taken from the universe. In order to extract much feasible result through the study a sample size of 20 respondents has been taken for the study. Sampling Technique The type of sampling used is simple random sampling. This type of sampling is also known as chance sampling or probability sampling where each and every item of the population has an equal chance of inclusion in the sample and each of the possible samples in case of finite universe has the same probability

being selected. This procedure gives each

item an equal probability chance of being selected. To carry out the survey we had been to lots of corporate office all over the Delhi to interview around 20 respondents.

Observation and Conclusion 1)

In Delhi, prioritize the major book stores you can recall?

Book stores Respond ent (in Percent)

Diamon Higginboth d am Booksto re 50 20

IMPRESSION:

Odyss ey 15

Oxfor Americ d an book store 10 0

Othe rs 5

According to the survey it was incepted that more than half of the respondents could recall Diamond Bookstore first, one fourth

of

respondents

could

recall

Higginbotham,

and

remaining was Odyssey, Oxford and Others.

2)

Have you ever visited Diamond Bookstore?

Particulars

Yes

Respondents( Percent ) IMPRESSION:

No

in 100

0

As per the survey it was found that all the

respondents have visited Landmark for either personal or corporate purposes. 3) Which store you generally prefer to purchase books? Book stores

Diamond Bookstor e

Respond 50 ents (in Percent)

Higgin botha m

Odysse Oxfor y d

American Others book store

25

15

0

10

5

IMPRESSION: The survey says that 50% of the respondents preferred Diamond Bookstore, 25% preferred Higginbotham and 15% preferred Odyssey and 10% each of oxford and other book stores. 4) Why do you prefer buying in that store? Particula rs Choice & Varieties Custome

Diamo nd 70

Higginboth am 0

Odyss ey 30

10

0

0

r Service One 20 Stop shoppin g Location 0 Access 0 Referenc 0 e Cost 0 Ambienc 0 e IMPRESSION: Varity/vertical

0

0

0 70 30

0 30 0

0 0

20 20

of books was the dominant

reason for the respondents for preference that of book store and other major reasons which contribute for the same are Accessibility & Customer services. 5) What is it in the store that you like the most? Particulars Diamond Bookstor e Ambience 50

Higginbotha m

odyssey

30

35

offer and 15 promotion

0

0

Parking facility Customer service

5

0

30

20

35

0

Location

10

20

35

15

0

One Stop 0 Shopping

IMPRESSION: Almost whole lots of corporate who shop at Diamond Bookstore prefer the store for its Ambience & Customer services.Those buyers of Odyssey find it convenient buying because of its easy and Accessibility and Location. 6)

What did you like the most in Diamond Bookstore?

particulars

Variety of Large books space

Air conditionin g

Helping hands

Respondent(i n percent)

55

5

5

35

IMPRESSION: Most of the respondents feel that “variety of books” adds more value to Diamond Bookstore and other major reason are “Large space” and “Helping hand. 7) How often do you shop in that store? Particulars

0-1 Months

1-3 Months

3-6 months Above 6 Months 20 10

Diamond 30 40 Bookstore Higginbotha 15 50 15 20 m Odyssey 0 70 30 0 IMPRESSION: The frequency of purchase is as follows: 50%

of the respondents purchase every quarterly & the remaining purchase half yearly. 8) Rather than books, what other kind of products do you generally buy from that store?

Particular Diamo s nd Gifts 50 Stationeri 20 es Music & 30 CDs Not 0 specific IMPRESSION: Apart from

Higginboth am 30 15

Odyss ey 0 30

30

35

25

35

books

most Corporate also

purchase Gifts, Music & CDs and Stationary from the store. 9) What kind of books you buy from that store? Particulars

Diamo Higginboth Odyss nd am ey Management 35 20 20 Finance 40 20 50 Computer 5 30 15 self motivation 0 10 5 Health 0 10 0 Magazine/perio 20 10 10 dic IMPRESSION: Management, Finance/Accounts, Magazine & Periodicals are the categories of books which are highly purchased by the Corporate. 10)What is your mode of payment? Particulars

Landmark Higginbotham

Odyssey

Cash

60

70

65

Credit

40

30

35

IMPRESSION: The survey states 70% of the corporate prefer to pay through cash purchase and 30% credit purchase.

11)Are you happy with the credit terms of payment? particulars yes No respondent 45 55 IMPRESSION: Almost all the respondents are happy with the credit terms of payment. 12)What is your mode of purchasing order? particulars landmark Higginbotha odysse m y Phone 15 0 0 Visit 85 85 0 Website 0 15 35 post 0 0 65 IMPRESSION: Mode of purchasing order by “Visiting” the store is found more convenient by the corporate compared to order via Phone, Website or Post. 13)Do you visit the website of that particular store? Particulars Diamond Bookstore Higginbotham Odyssey IMPRESSION: According

Yes 79

No 21

0 100 0 100 to the research there has been an

equal proportion between the users & non users of the stores website. The main purpose for the visiting the website was to get knowledge on variety of the books & its availability of products.

14)How

do

Particulars Diamond Bookstore Higginbotham Odyssey

you

prefer

to

be

informed

about

E-mail 55

SMS 25

Telephone 10

Post 10

50 0

35 65

0 35

15 0

the

promotional/ discount offers? IMPRESSION: According to the survey 70% of respondents would like to be informed about Discounts & offers through Email and 20% through SMS and rest by Post. Particulars

Yes

No

Diamond Bookstore Higginbotham

55

45

35

65

Odyssey

0

100

15)Do they deliver the product at your door step? 16)

IMPRESSION: The satisfaction of buyers takes a back seat here as the products are bought & generally not delivered by the store.

Retail Market Strategy As customers cut back on purchasing, Diamond Bookstore will look more attractive to customers who still wish to purchase books. Therefore, management believes this may be a good time to get into the industry and gain market share. Diamond Bookstore

serve the entire purchasing population of its

geographical area but focuses on the customer who desire to purchase books/music at a discount price and, with regards to books, often do not see a long-term attachment to the product.

Target Market Segmentation We anticipate serving the needs of all the potential customers within a ten to fifteen mile radius in which the approximate population is 150,000 (estimate). Bookshops serve the entire purchasing population of its geographical area but focuses on customers who desire to purchase books/music at low prices because they are seen either as near commodity items or, in the case of books, are not considered to be a long-term investment (i.e. they will trade them back). This is especially true with people seeking to cut costs with the bad economy. Even though we service the entire book reading population in

University road and the surrounding area, we can divide our customers based on purchasing habits. Casual Shoppers: These are customers who go to the bookshop with no set idea of what they want to purchase. They seek to spend a fair amount of time browsing the store and often are considered impulse buyers. Often they leave the store with small purchases or without buying anything. These customers are attracted to bookshops with low prices and large inventory. "Hard to Find" Shoppers: These are customers with very specific needs. They are looking for a difficult to obtain item, usually a book that is out of print. If we can satisfy this customer, then we are able to build significant customer loyalty. These clients are generally price insensitive and are also drawn to bookshops that have large inventory. Specific Category Shoppers: These customers are those types that generally buy books or music of one category, such as fiction or textbooks. These customers generally have a good idea of what they want to purchase and have the greatest buyback/trade

potential.

These

customers

represent

the

highest volume purchaser, often leaving the store having spent Rs500-1500. Marketing Strategy

One of the most critical elements of Diamond Bookstore success will be its marketing and advertising. In order to capture attention and sales we will use prominent signs at the store location, billboards, media bites on local news, and radio advertisements to capture customers. We will arrange book fairs in colleges and universities and will offer books to the students on discount rates. Sales Strategy Since our store will be a standalone facility, there is little in the way to directly influence how we close the sale other than to have an attractive storefront with our low prices and excellent selection. We believe this in itself is its own seller. One critical procedure we will be establishing is to insure top customer service and reliability and that our store always has enough inventories of all our products. We will be using industry data on inventory for bookstore chains to assist us. Competitive Edge The firm's competitive edge will be the lower prices we will charge our customers and the larger selection we can offer: through our large store, buyback/trade program, and leveraging management excellent supplier contacts. As stated before, in the bookstore industry, low cost and dominate selection are the two success criteria. We plan to create these

advantages in a new, comforting environment that will retain customers.

Financial Strategy OBJECTIVES & GOALS These are the goals for the next three years for Diamond Bookstore: ➢

Achieve profitability by the mid of Year 2.

➢

Earn approximately Rs.2000000 in sales by Year 3.

➢

Pay owners a reasonable salary while running at a profit.

KEYS TO SUCCESS In order to survive and expand, Diamond Bookstore must keep the following issues in mind: ➢

We must attain a high level of visibility through the media, billboards, and other advertising.

➢

We must establish rigid procedures for cost control and incentives for maintaining tight control in order to become THE low-cost leader in books.

➢

In order to continually attract customers, we must be able to keep the maximum amount of inventory available and achieve a high level of customer service.

Financial Objectives ➢ All the partners will contribute initially Rs.15million. It means each of the partners will invest 5million. The remaining 10million will be obtained from a bank by taking a loan. ➢

We expect Rs.3million to be the expenses of store decoration, reading room arrangements, computer systems and initial promotions.

➢

Of the remaining 2.2million, we will have our inventory.

Social Objectives Societal

Objective

are

related

to

broader

issues

about

providing benefits to society- making the world better place to live.

Diamond

Bookstore

will

provide

the

employment

opportunities for people in a particular area or more specifically for the handicapped.

Human Resource Management

The strategic Objective of Human resource Management in Diamond Bookstore is to align the capabilities and behaviors of employees with the short-and-long-term goals of the firm. Its performance measure is employee productivity. The HR manager will helps the firm in recruiting the new employees for the maintenance and increasing the sales for Diamond Bookstore.

Merchandise assortment, Planning and buying decisions ➢

The business and science books will be purchased from National Book foundation, as they give discounts and offer attractive packages for the retailers. For the textbooks we will have to get registered with the local textbook board. And for the other type of books including fiction, hobbies, children and story books will be purchased from the distributors in Chennai. Music CD’s and DVD’s will be purchased the markets of Mumbai, Bangalore and from foreign distributors as well.

➢

For the inventory control system we will buy software through which we can keep the management informed

about day to day sales, quantity of stock and also about the customers who visit us regularly. ➢

The customers will select books or music selections from the display in the racks and the salesmen will provide the item. Customers can also give orders for the books which are not available with us, we will request the distributor for that order and will provide it to the customer.

➢

We will be using updated accounting software and database software’s.

Pricing,

promotion

and

communication-mix

decisions Pricing: - the process of setting a price for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention. A number of modes of pricing techniques exist, which span: 1.

Elasticities (whether Price Elasticity of Demand, Cross Elasticity of Demand, or Income Elasticity of Demand)

2. Market skimming pricing 3. Market penetration pricing I have used market penetration pricing in which a company could release a product into a market years after it is initially introduced, but at an artificially low price in order to stimulate demand. The result of such a pricing strategy would be to draw consumers from competitors and into purchasing its own product. Low barriers to entry facilitate a company's ability to sell goods at a price lower than its market clearing point. Diamond Bookstore mission is to provide quality literature of all types at the lowest possible prices in Peshawar. The firm additionally seeks to provide a comfortable atmosphere for its clients that promote browsing, relaxation, and an enjoyable environment to spend extend time in. Diamond Bookstore attraction to its customers will be our large selection of books, magazines, music CD's and DVD’s and our purchasing/buyback option, which lower our book acquisition costs and allows our customers to discard unwanted books/CD's in exchange for cash. Promotion: - This includes advertising, sales promotion, including

promotional

education,

publicity,

and

personal

selling. Branding refers to the various methods of promoting the product, brand, or company.

Advertising is the form of paid communication to customers using impersonal mass media such as newspapers, T.V, radio, direct mail, and the internet. Diamond Bookstore used all the form of communication mix for the promotion of their sales and products in order to build Brand image. Diamond Bookstore will organized contest such as promotional games of chance. They will provide gifts to their customers who buy the books in large quantity.

Store Management: Layout design- Diamond bookstore design layout offers some unique challenges. Perhaps one of the greatest challenges is to create a layout that has distinctive qualities and therefore sets the store apart. Our facility is a 5,500 square ft. shop which allows us to stock a large amount of inventory.

Visual merchandise decisions - Visual impact is a huge component of retail merchandising.

Customers entering a

store are greatly influenced by the visual information they gather in the first split second. One simple visual element,

such as color, can catch a shopper’s attention and also greatly affect their mood. 1.

Display sale products in a creative way – Diamond Bookstore when building a product display look for products that are natural add-ons to the main product featured. This is a great way to increase the margin.

2.

Use accent lighting to feature products - Customers are drawn to light. Lighting can make products shine and bring colors to life. Using this visual merchandising tip to wash a display wall with light will enhance any product. Accent lighting creates visual interest for shoppers, and magically puts products in their sight. Once a product has captured a customer’s attention the odds are increased that a purchase is at hand. This visual merchandising tip will impact your customers’ impression of their shopping experience and your profits.

3.

Change displays weekly - This visual merchandising tip reminds us that customers want to see new and different products.

There is an aspect of entertainment and

education that customers appreciate when stores change their displays.

Customer relationship management and services

Diamond Bookstore provides quality literature of all types at the lowest possible prices in Delhi. The firm additionally seeks to provide a comfortable atmosphere for its clients that promote browsing, relaxation, and an enjoyable environment to spend extend time in. Diamond Bookstore attraction to its customers will be our large selection of books, magazines, music CD's and DVD’s and our purchasing/buyback option, which lower our book acquisition costs

and

allows

our

customers

to

discard

unwanted

books/CD's in exchange for cash. Diamond Bookstore Service: Everything at Diamond Bookstore is focused at customer satisfaction maximization. Vast range, trained polite and courteous staff and never saying no to customers is the aim of every Diamond Bookstore. The best customer order process, home delivery of books/music, and an efficient querying system are meant to satisfy every customer. Quiz Programs: Diamond Bookstore organizes an Open Quiz program every year where over 1000 teams participate from all corners of the country. It is the largest open quiz programme in the country and has been successfully conducted in Delhi. Loyalty Program:

Diamond Bookstore introduced a loyalty program named 'The Fellowship' in December 2003 for its customers. The main objective of the program is to provide benefits to the member not just as individuals but as a family. Program Sponsorship: Diamond Bookstore sponsors a number of programs related to products and services within the periphery of Diamond Bookstore business. A number of book launch events and music performance events are organized and hosted by Diamond Bookstore.

Conclusion The corporate buyers find Diamond Bookstore favourable to them, as they find all their requirements under one roof. According to the survey, it was found that more than half of the

corporate

preferred

buying

in

Diamond

Bookstore.

The

familiarity for Landmark was gained through ‘Word of Mouth’. And as per our finding we came to know that corporate want to get informed about their promotional and discounts offers through the mode of email. The primary reason for preferring Diamond Bookstore was because of the huge collection of collection of books, customer services, and ambience and also for standard quality of the product. Besides books, corporate also purchase stationeries, Music & CDs and gifts. From the analysis of the survey it was also found that the corporate would switch to Diamond Bookstore if the store provides the facility to order through phone and delivery at their door step.

Recommendation Diamond Bookstore should try to encourage the corporate customer to make cash purchases by offering those good

offers and discounts and by extending the credit period. The discount should be volume based and on delay of payment the discounts should be reduced and also could be made void. Adequate parking facility should be provided to all the branches which would be flexible to the consumers to shop from any three branches. Coffee shop should be opened up in the store which would help the customers to relax for sometime after heavy shopping. All the sales personnel should be given intensive training to increase their product knowledge. Book section should be improved by coming up with categories like school books, painting, books relating to Hindu mythology, devotional books. It should come up with huge volumes. Movies collection on Moserbaer brand should be increased in volumes.

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http://www.shopworks.co.uk/file/2cc4bb605fba5808a5115 f4635349f82/top-tips-for-store-merchandising.html

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