Visahal Mega Mart Promotion Strategies

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SRI SHARADA INSTITUTE OF INDIAN MANAGEMENT - RESEARCH

(NEW DELHI)

SATURDAY

DEVELOPMENT DAYS

PROJECT REPORT

ON

VISAHAL MEGA MART PROMOTION

STRATEGIES

SUBMITTED BY SUBMITTED TO

RAHUL SHUKLA(20090203) PROF. SARTAJ KHERA

DIWAKAR PANDEY(20090176)


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PREFACE

A man can become perfect with a perfect knowledge and experience. As a

student of business management, we have studied many theories in the

classroom but any professional degree is incomplete without practical

knowledge of concerned field.

And the same case is with management studies, management is incomplete

without knowing practical application of theories studied. I have experienced

and understood the practical importance of these theories on this training.

More books and theoretical knowledge cant help you in any field whether it is

management or technical. Only thing can help you is practical knowledge.

This development day provides a golden opportunity to the students for

getting a perfect knowledge and experience.

I come to know how the management of company is actually being done. How

decisions are made? How people behave and decide what to purchase?

As a part of my learning in management field and requirement of PGDM

program, I have been given an opportunity to grab practical knowledge in the

area of marketing and I had selected VISHAL MEGAMART . I have made

my best efforts to get knowledge and experience. During the day, I had

collected necessary information, and I present all the necessary information to

understand well.


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ACKNOWLEDGEMENT

It has been an enriching experience for me to undergo my SATURDAYproject, which would have not been possible without the goodwill and supportof the people around. As a student ofSRI SHARADA INSTITUTE OF INDIANMANAGEMENT (SRISIIM), VASANT KUNJ, I would like to express mysincere thanks to all those who helped me during my development dayprogramme.Firstly I would like to express my sincere thanks to reverend SWAMI DR.PARTHSARTHY for their blessings and well wishes.

I extend my sincere thanks to Mr. SANJEEV CHATURVEDI AND MRS.SARTAJ KHERA, Faculty Member, SRISIIM, NEW DELHI, for having sparedthere valuable time with me and for all the guidance given in executing the

project as per requirements.Last but not least, I would like to record my deepest sense of gratitude to myfriends for their support and constant encouragement.However, I accept the sole responsibility for any possible error of omissionand would be extremely grateful to the readers of this project report if theybring such mistakes to my notice.

.


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DECLARATION

WE, ASHISH SHARMA AND GHANSHYAMSINH JADEJA, hereby declare that the

report on Saturday development day entitled VISHAL MEGA MART PROMOTION

STRATEGIES is a result of my own work and my indebtedness to other work

publications, if any, have been duly acknowledged.

Place: New Delhi Signature

Date: 21/09/2010

(RAHUL SHUKLA)

(DIWAKAR PANDEY)


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INTRODUCTIONIn the background of high consumerism and income of the urban consumers, in

recent year there are a number of companies have expressed their interest towardsretail sector outlets. As a result numbers of shopping malls have started their

operations in metro and urban areas. Pantaloon, big bazaar, Vishal Mega Mart,Reliance Fresh are the best known examples of retail sector outlets in India.

Retailing is the interface between the producer and the individual consumer buyingfor personal consumption. This excludes direct interface between the manufacturerand institutional buyers such as the government and other bulk customers. Aretailer is one who stocks the producers goods and is involved in the act of selling

it to the individual consumer, at a margin of profit. As such, retailing is the last linkthat connects the individual consumer with the manufacturing and distribution

chain. Some of the key features of retailing include:

Selling directly to customers with out having any intermediaries

Selling in smaller units / quantities, breaking the bulk

Present in neighborhood or in the location which is quite convenient to thecustomers.

Very high in numbers

Recognized by their service levels

Fitting any size and or location

It is assumed that due to the entry of a number of retail outlets in the urban andsemi urban areas, the mindset of the existing customers have undergone drasticchanges. Besides it is also reported that the traditional retailing such an age oldGrocery shops have directly faced competition with the organized retailing sector.In some parts of the country, it is reported that the traditional retails are resistingthe entry of organized shopping malls. For instance the traditional retails of


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Bhubaneswar with the active support of the consumers at large didnt allow

reliance Fresh to start outlet initially.

RECENT TRENDS

Retailing in India is witnessing a huge revamping exercise as can be seen inthe graph

India is rated the fifth most attractive emerging retail market: a potentialgoldmine.

Estimated to be US$ 200 billion, of which organized retailing (i.e. modern

trade) makes up 3 percent or US$ 6.4 billion As per a report by KPMG the annual growth of department stores is

estimated at 24%

Ranked second in a Global Retail Development Index of 30 developingcountries drawn up by AT Kearney.


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EXECUTIVE SUMMARYThe Retail Sector is the largest sector in India after agriculture, accounting for over

10 per cent of the countrys GDP and around 8 per cent of the employment. India

has the most unorganized retail market in the world. Most retailers of the

unorganized retail market have their shop in the front and house at the back. Retail

industry is booming all around the globe at a very fast pace. Vishal Retail is a

known and strong competitor in the retail industry since 23 years. When we talk

about Indian market, the demands of every thing which you can find in every retail

store are increasing every year. Indians are famous for their traditions and festivals

and exchanging gifts with friends and relatives is a part of it.

VISHAL MEGAMART is a retail house in India. As of April 30, 2007, it

operates 50 retail stores, including two stores which are operated by theirfranchisees. These 50 stores are spread over about 1,282,000square feet and arelocated in 18 states across India. In its efforts to strengthen thier supply chain, ithas set up seven regional distributions centres and an apparel manufacturing plant.

It started as a retailer of ready-made apparels in Kolkata in 2001. At the time ofincorporation, the registered office of thier Company was situated at 4, R. N.


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Mukherjee Road, Kolkata 700 001. In 2003, it acquired the manufacturingfacilities from Vishal Fashions Private Limited and M/s Vishal Apparels.

It follows the concept of value retail in India. In other words, their businessapproach is to sell quality goods at reasonable prices by either manufacturingthemself or directly procuring from manufacturers

(primarily from small and medium size vendors and manufacturers). It facilitateone-stop-shop convenience for their customers and to cater to the needs of theentire family. It believes this concept has helped them grow to thier current sizewithin a short time frame of their years. Mr. Ram Chandra Agarwal has beenranked as the 28th most pitiful person in the Indian retail industry.

This project report is the study of various activities and strategies of Vishal MegaMart. It also helps us in understanding the different technologies being used byVRPL.

MISSION STATEMENT:

We shall deliver Everything, everywhere, everytime for every Indian Consumer inthe most profitable manner.

VISION STATEMANT:

We share the vision and belief that our customers and stakeholders shall be servedonly by creating and executing future scenarios in the consumption space leadingto economic development


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COMPANY SUMMARYFuture is thinking beyond horizon & in order to keep its pace with the modern

retail, Vishal Retail Limited is spreading its wings. Instead of resting on its laurelsthe Group are busy identifying new avenues of growth by venturing in otherformats like cash & carry, convenios as well as specialty stores and inspiring localretailers to grow along with the big names. The group has tied up with HPCL toopen corner stores at their petrol pumps and in addition to the above Vishal has

come up with an institute to train manpower for the service industry.As of April 30, 2007, it operates 50 retail stores, including two stores which areoperated by their franchisees. These 50 stores are spread over about1,282,000square feet and are located in 18 states across India. In its efforts tostrengthen thier supply chain, it has set up seven regional distributions centres andan apparel manufacturing plant.


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Today Vishal Retail Limited, Flagship Company of Vishal Group, engaged inHyper Market stores with an average area of 25,000 to 30,000 sq. ft. through animpressive chain of more than 100 fully integrated stores in spread of more than

the area of around 22, 00,000 sq. ft. in 69 cities across India & has a plan to crosstotal retail area of 35 lakh sq. ft. in tier II and tier III cities by the end of 2009.According to Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited, the groupowes its origin to a small 50 sq ft shop in Kolkata's Lal Bazaar that started sellingreadymade garments. In tune with the pulse of the market, he envisioned a megastore that would sell garments at prices none other could match. . The first big storeopened in Calcutta's Esplanade area in 1997, under the banner of Vishal Garments.He was involved in all the aspects of the business: right from sourcing thegarments to interacting with customers. And this led to his greatest finding The

Vishal Group.

After identifying the immense market in fashion garment for the masses, Hemoved to Delhi in 2001 and opened his first store in Delhis Rajouri

Garden by the name of Vishal Mega Mart (The jewel in Vishal Groups crown)

and then there was no looking back for Mr. Ram Chandra Agarwal. At present, inaddition to garments, Vishal Mega Mart stores retail the entire range of household

products, FMCG and electronic goods. Vishal's prices are roughly 15 to 20 per centless than other mass market garment labels.

Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited believes that theshopping habits of Indians are changing due to their growing disposable income,

higher aspirations, relative increase in the younger population, and the change inattitudes towards shopping. The emphasis has changed from price consideration todesign, quality and trendy. Age is also a major factor that affects the spendingdecisions of an individual. Consumer spending is an important factor that affectsthe economic growth and development in a country. As a trend, consumer is moreeducated. He has access to all reforms taking place through various arrays of

communication. He is becoming a value shopper everyday.Keeping this in mind, the group is now looking for franchisees to join handswith Vishal and grow under common banner. This partnership will help smallretailers to survive the onslaught of organized retail as it will enhance theircompetitiveness. Small stores can avail of the benefits on account of the economiesof scale, a key advantage for big retailers.


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As per the plans, Vishal Retail will completely take over the supply chain ofits franchisees and provide them with technology, new practices, visualmerchandising skill and special promotional schemes, besides its brand and

costumer base.

Some of the Franchisee exclusive business categories are:

Mens Fashion Ladies and Kids Footwear Toys and Games HomeGeneral Convenience (FMCG) CDIT Watches Mobile

It follows the concept of value retail in India. In other words, their businessapproach is to sell quality goods at reasonable prices by either manufacturingthemself or directly procuring from manufacturers (primarily from small andmedium size vendors and manufacturers). It endeavour to facilitate one-stop-shopconvenience for their customers and to cater to the needs of the entire family.

OUR PROMOTERS AND GROUP COMPANIES

Our Promoters

The following individuals are the Promoters of our Company:a). Mr. Ram Chandra Agarwal;

b). Mrs. Uma Agarwal; andc). Mr. Surendra Kumar Agarwal.The following companies are the Promoters of our Company:a). Unicon Marketing Private Limited;

b). Ricon Commodities Private Limited; andc). Vishal Water World Private Limited.


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In addition, the following HUFs are the Promoters of our Company:a). Mr. Ram Chandra Agarwal (HUF)

Name of Shareholders & Number of Shares % of shareholding

1. Unicon Marketing Private Limited 315,000 49.532. Ricon Commodities Private Limited 300,000 47.173. Mr. Ram Chandra Agarwal 12,010 1.894. Mrs. Uma Agarwal 9,010 1.42

Total 636,020 100.00

Establishment of Stores:

Selection of location

In selecting location for a new store, VRPL start by identifying the city/town.

VRPL target primarily cities/towns which may be classified as Tier II or Tier III

cities. In this regard, an analysis of the demography, literacy levels, nature of

occupation and income levels. Within a city/town, VRPL target locations with

good infrastructural facilities such as easy accessibility, provision for water,

electricity, parking, security and other basic amenities. VRPL prefer to locate their

stores in areas where real estate is available at reasonable prices. The efforts of

VRPLs retail business are targeted towards families having total income which

can be classified under the lower middle and middle income groups.

Accordingly, VRPL plan their strategy to search for areas within cities where such

customers are domiciled in large numbers and make efforts to locate themselves

within the reach of such customers.

VRPL believe that adoption of standard formats for their stores has led to their

brand establishment and identification among their customers and will increase

their base of loyal customers. In pursuance of this, they have adopted standard


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parameters for store planning and establishment. For ensuring standardized formats

of their stores, VRPL consider various factors, such as internal and external dcor

and colour schemes, allocation of store space, stock mix and pricing and

accounting methods.

Insurance

VRPL maintain comprehensive insurance coverage with Tata AIG, Bajaj Allianz,

Royal Sundaram and IFFCO-TOKIO for their existing stores, distribution centers,

manufacturing facilities and trucks. VRPL insurance policies include

comprehensive coverage for electronic equipment, fire and special perils and

burglary. Further, VRPL has filed a claim of Rs. 22.50 million on account of fire in

their store at Meerut as on July 7, 2006. In this regard, they have received Rs. 7.50

million as an interim payment.

Factories

VRPLs existing manufacturing facilities are located at Plot No. 224, Phase 1

Udyog Vihar, Gurgaon, for which they have leasehold interest until May 4, 2009.

In addition, VRPL have recently acquired freehold interest in relation to a land

admeasuring 7.24 acres in Dehradun, Uttaranchal, where they are exploring the

possibilities for establishment of another manufacturing facility.

Other Properties

VRPL have recently acquired freehold interest in relation to a land admeasuring

82,830 square feet in Hubli, Dharwad.

Merchandise Planning

VRPLs merchandise planning is based on the concept of category management

rather than traditional brand management practices.


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VISHAL Apparels Brand

Vishal Mega Mart is one of Indias fastest growing retail chains.. The

chain currently has 183 company stores in 24 states / 110 cities in India. TheVishal brand is known for great modern style for men, women and children.Vishal offers high level fashion styling. Since 1986, our name has beensynonymous with quality, value and fashion integrity. We offer an unparalleledcollection of clothes for the entire family. Each garment is hand selected forquality and contemporary styling. Vishal manufactures majority of its owngarments and out sources some under its direct quality supervision. This enablesus to offer the lowest possible and most reasonable prices.

Our goal is to provide a range of fashion wear to suit every pocket. Our productmix represents the most current fashion trends in tops, bottoms, formals andaccessories for men, women and kids. Our courteous staff will ensure thatconsumers get a perfect fit.

Popular Brands are:


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Zeppelin: Mens Shirts & Trousers Fizzy Babe : Ladies & Kids Girls

Kitaan Studio: Mens Shirts & Trousers Jasmine: Ladies & Kids Girls

Blues &Khakis: Mens Trousers Zero Degree : Kids Boys

Paranoia: Mens Shirts & T-Shirts Soil: Mens Shirts

Chlorine: Mens Shirts Massa Bay :Mens Trousers &Bermudas

Fume:Mens Shirts, T-Shirts,UnderGarments.

Our products

FOOTWEAR

Mens

Shoes Sandals Slippers

Ladies

Shoes Sandals Slippers
http://popimage%28%27bigbrands/zepplin.jpg','Zoom%20Image')http://popimage%28%27bigbrands/zepplin.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fizzybaby.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fizzybaby.jpg','Zoom%20Image')http://popimage%28%27bigbrands/kittan-studio.jpg','Zoom%20Image')http://popimage%28%27bigbrands/kittan-studio.jpg','Zoom%20Image')http://popimage%28%27bigbrands/jasmine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/jasmine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/blueskhaki.jpg','Zoom%20Image')http://popimage%28%27bigbrands/blueskhaki.jpg','Zoom%20Image')http://popimage%28%27bigbrands/blueskhaki.jpg','Zoom%20Image')http://popimage%28%27bigbrands/paraoniakids.jpg','Zoom%20Image')http://popimage%28%27bigbrands/paraoniakids.jpg','Zoom%20Image')http://popimage%28%27bigbrands/soil.jpg','Zoom%20Image')http://popimage%28%27bigbrands/soil.jpg','Zoom%20Image')http://popimage%28%27bigbrands/cholorine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/cholorine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/massa-bay.jpg','Zoom%20Image')http://popimage%28%27bigbrands/massa-bay.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fume.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fume.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fume.jpg','Zoom%20Image')http://popimage%28%27bigbrands/massa-bay.jpg','Zoom%20Image')http://popimage%28%27bigbrands/cholorine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/soil.jpg','Zoom%20Image')http://popimage%28%27bigbrands/paraoniakids.jpg','Zoom%20Image')http://popimage%28%27bigbrands/blueskhaki.jpg','Zoom%20Image')http://popimage%28%27bigbrands/blueskhaki.jpg','Zoom%20Image')http://popimage%28%27bigbrands/jasmine.jpg','Zoom%20Image')http://popimage%28%27bigbrands/kittan-studio.jpg','Zoom%20Image')http://popimage%28%27bigbrands/fizzybaby.jpg','Zoom%20Image')http://popimage%28%27bigbrands/zepplin.jpg','Zoom%20Image')


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Cleaning aids plastic aids

thermoware

Appliances kitchen aids

LADIES ACCESSORIES

Personal items fashion jewellery


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Cosmetics haircare

HARDWARE

ELECTRICALS

Bulb Ceiling Fan

Regulator Tester

Extension Cord Exhaust Fan


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Home Furnishing

Covers bath furnishing

Kitchen furnishing drawing room furnishing

Bed room furnishing


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FOODMART

Chinese and Indian food food and beverages

Fruits and vegetables

Imported fruit Regular Fruit

Regular Vegetables Imported fruit


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HOUSE HOLD

Hair Dryer Chopper

Waffle Maker Griller

GARMENTS

Mens wear womens wear


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Boys wear girls wear

Infants wear

FMCG

Additives - Preservatives Aftermints Diary Products
http://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htmhttp://www.vishalmegamart.net/diary-products-1.htmhttp://www.vishalmegamart.net/aftermints.htmhttp://www.vishalmegamart.net/additives-1.htm


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Drink Beverages Health Food Home Care

Personal Care Ready To Cook Ready To Eat

SERVICES AND SEMI-DESCRIPTION

SBI, Vishal mega mart launches card
http://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htmhttp://www.vishalmegamart.net/ready-to-eat-1.htmhttp://www.vishalmegamart.net/ready-to-cook-1.htmhttp://www.vishalmegamart.net/fmcg-personal-care-1.htmhttp://www.vishalmegamart.net/home-care1.htmhttp://www.vishalmegamart.net/health-food.htmhttp://www.vishalmegamart.net/drink-beverages.htm


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SBI Card launched a co-branded card in association with leading retail chainVishal Mega Mart to tap the booming organized retail market that is pegged to hitRs 1, 09,000 crore by 2010.

"SBI Vishal Mega Mart Card is one of the best co-branded credit cards that offersreward points and other benefits to frequent shoppers and will be free for thosewho spend above Rs 7,500 per annum," SBI Card CEO Roopam Asthana said.Asthana said the card would be free of cost for the first year, but would charge Rs700 per annum if purchase on the card was less than Rs 7,500.

Other SBI Card holders could also flip their card for SBI Vishal Mega Mart Cardand use it like any other credit card.

"By partnering with SBI Card, we are not just offering customers a convenientpayment mechanism but a unique consumer loyalty programme that rewards themevery time they shop," Vishal Retail MD Ram Chandra Agarwal said.

Some of the features of the co-branded card include Rs 250 discount voucher onsigning up for the card and a set up by which the card holder earns five reward

points on every Rs 100 spent that could go up to eight points on spends above Rs7,500 and the points are redeemed at any Vishal Mega Mart store.

Other offers in the credit card are no transaction fee on fuel purchase at select IOCand IBP petrol pumps and balance transfer facility without any interest for 75 daysand complementary personal accident insurance.

Vishal Mega mart retails a large variety of household, FMCG and consumerdurable goods at bargain prices at its 24 self-owned stores, which are likely toincrease to 50 by the end of 2006.


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PROMOTIONAL STARTEGIES OF VISHAL

MEGA MART

How attractive is the funding of retail industry, from an investor perspective?

In the initial years, returns are limited due to the high real estate costs, large andsustained capital expenditure to create scale, and start-up costs for storeinfrastructure.

However, investors with longer investment horizons are beginning to recognisethe potential for long-term value appreciation of investing in differentiated

businesses with large-scale plans and able execution teams.

Apart from the traditional sources like banks and financial institutions, there aremultiple avenues including PE funds. Companies have even successfullyapproached the IPO (initial public offering) route to raise funds.

We have seen many PE investors taking stakes in retail ventures. For example,Subhiksha raised PE from ICICI Ventures, while Actis took a controlling stake in

Nilgiris.


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After the initial rounds of PE-funding, companies like Vishal Megamart andKoutons approached the public for capital through an initial offering of shares.Large players like Shoppers Stop, Trent and Pantaloons are already listed on the

stock exchanges.

E-COMMERCE:

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. With

in 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 process of shopping done over the

internet is called online shopping.

Both products and services can be purchased by online shopping. Online shopping

is used for business to business transactions or business to customer transactions

with applications of electronic commerce (ECommerce). Vishal Mega Mart is soon

launching its online shopping website this summer named as

www.vishalmegamart.comwhich promises to be a boon for its customers.

VRPL has its own site named aswww.vishalmegamart.net.
http://www.vishalmegamart.com/http://www.vishalmegamart.com/http://www.vishalmegamart.net/http://www.vishalmegamart.net/http://www.vishalmegamart.net/http://www.vishalmegamart.net/http://www.vishalmegamart.com/


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Vishalmegamart.net is concerned about the safety and security of their websiteand customers. Accordingly, they have put a number of technological protectionsin place to ensure that their transaction process is extremely safe and that their


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customers' information is secure. They provide a large amount of information totheir customers, suppliers through their website. This information includes theirstores in different areas, cities with correct address and contact nos, produc ts

being offered by them, career opportunities, enquiry, suppliers zone etc.

Vishal Mega Mart also provides opportunities to its customers by

collaborating withshopping.indiatimes.comand withshopping.rediff.com.
http://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.indiatimes.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.indiatimes.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.indiatimes.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.rediff.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.rediff.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.rediff.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.rediff.comhttp://localhost/var/www/apps/conversion/tmp/scratch_3/shopping.indiatimes.com


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RETAIL VALUE OF DEFFERENT RETAIL STORE

Value Retail same store sales (SSS) growth rebounded in Nov'07 to 40% after a

25% decline in Oct'07, due to late Diwali this year. This implies a growth of mere

2.8% in the festive season (Oct-Nov07 combined). Lifestyle SSS growth in Nov

is at 30% as against a decline of 7% in Oct. Collectively in the festive season SSS

growth is 9% compared to over 20% growth maintained for most of the months of

the previous fiscal. The chart below represents sales mix ofPantaloon Retail India

Ltd. VISHAL MEGAMART still account for bulk of the sales for the company.

The company has added retail sales space aggressively in last financial year. In

FY2005, the company added 1 mn sft while it declined to 0.85 mn sft in FY06 and

zoomed to 2.7 mn sft in FY07. This FY, the company has been little bit slow due

to unrealistic realty prices and has managed to add mere 1.5 mn sft till the end of

Nov.The company is expected to clock sales of Rs 7,400 crore for FY2008 but

going by the recent reported numbers, a slowdown is imminent

MARKETING STRATEGY OF VISHAL MEGA MART TO PROMOTE A

PRODUCT OF STORE

Product

Vishal Mega Mart offers a wide range of products which starts from apparels to

food items, footwear to home furnishing, crockery to sport items, child care
http://finance.google.com/finance?q=BOM%3A523574http://finance.google.com/finance?q=BOM%3A523574http://finance.google.com/finance?q=BOM%3A523574


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products to toys, watches, drinks etc. There are many in house brands promoted by

Vishal Mega Mart. In pursuance of their business plan to diversify their portfolio

of offerings, FMCG products play a key role. FMCG products are usually meant to

fulfill the daily needs of consumers and therefore, VRPL believe retailing of

FMCG products will bring customers to their stores on a frequent basis and this

may in-turn lead to consumption of their apparels. VRPL have a number of private

labels for apparels such as Zepplin, Paranoia, Chlorine, Kitaan Studio, Famenne,

Fleurier Women and Roseau.


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Price

Vishal Mega Mart promises its consumers the lowest available price. 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,

Christmas, New Year etc.). Selling combo-packs and offering discount to

customers. The combo-packs add value to customer. Through Bundling, they also

reduced the price of the products. In addition to VRPLs strategy to continue

procurement of goods from small and medium size vendors and manufacturers

which leads to cost efficiencies, VRPL intend to procure FMCG and apparels from

low-cost production centers located outside India. Towards this objective, VRPLs

propose to increase their procurement of finished and semi-finished goods from

China and thereby realize economies of scale and pass on the benefits so accrued

to their customers. The efforts of VRPLs retail business are targeted towards

families having total income which can be classified under the lower middle and

middle income groups. VRPL follow uniform pricing policy across their stores

in respect of private labels and non-branded products sold by them. This enhances

brand loyalty, encourages customer confidence and results in operational

convenience. In relation to the other products, the prices may vary between stores

on account of state-specific taxation and vendor policies.

Place

Vishal Mega Mart stores are located in 110 cities with more than 180 outlets.

Vishal Mega Mart has presence in almost all the major Indian cities. They are

aggressive on their expansion plans. VRPL intend to increase their penetration in

the country by setting up new stores in cities where they already have presence, as

also entering into new areas in the country. In particular, they intend to focus on


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expansion in Tier II and Tier III cities. VRPL target locations with good

infrastructural facilities such as easy accessibility, provision for water, electricity,

parking, security and other basic amenities.

Promotion

Advertising has played a crucial role in building of the brand. Vishal Mega Mart

advertisements are mainly seen in print media i.e. newspapers, Television with

Tina Parekh as there in advertisement, and sometime road-side bill-boards.

VRPLs category management system is used to plan promotional schemes. They

launch promotional schemes weekly. Apart from general sales promotion, the

category manager formulates promotional plans for slow movers. In addition, to

promote sales, they focus on layout of the stores and positioning, presentation and

display of merchandise, in order to appeal to the customer. In addition, VRPL have

introduced, in association with SBI Cards & Payment Services Private Limited, a

co-branded credit card. VRPLs propose to continuously undertake such initiatives

to increase the satisfaction of their customers. Some of the features of the co-

branded card include Rs 250 discount voucher on signing up for the card and a

process by which the cardholder earns five reward points on every Rs 100 spent. A

cardholder accumulates points on the basis of purchases made and the points

accumulated can be redeemed for gifts or purchases. In September 2005, VRPL

entered into a long term advertising agreement with Bennett, Coleman & Company

Limited (BCCL). Under the agreement, they are entitled to fixed discounts for

their advertisement in print publications of BCCL for a period of five years from

the date of the agreement. In addition, BCCL would also act as a facilitator for

other print and non-print media of the Times Group i.e. internet, radio and


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television or any other new medium launched during the tenancy of the agreement.

As a part consideration, VRPL had issued 1,670,605 Equity Shares of Rs. 10 each

and 384,190 Preference Shares of Rs. 146 each amounting to an aggregate of Rs.

300 million.

Thier Competitive Strengths

It believes that the following are thier principal competitive strengths which

have contributed to thier current position in the retail sector in India:

Understanding of the value retail segment

Thier business plan involves implementation of the concept of the value retailing,

targeting the middle and loiter middle income groups, which constitute majority ofthe population in India. It intend to provide quality products at competitive prices.It sells a vast range of merchandise across apparels and accessories,FMCG(frequently marketed consumer goods) products, food products and

consumer durables with over 74,000 SKUs.Thier emphasis has been to maximisethe value that the customers derive in spending on goods bought in thier stores.

It endeavthier to continuously reduce thier costs through a variety ofmeasures, such as, in-house production of apparels, procurement of goods directlyfrom the small and medium size vendors and manufacturers, efficient logistics anddistribution systems along with customized product mix at thier stores depending


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on the regional customer behavithier and preferences. Central to thier value retailstrategy is to pass on the benefits of cost reduction measures to thier customers.

Supply chain management

Their supply chain management involves planning, merchandizing sthiercing,standardization, vendor management, production, logistics, quality control,pilferage control replacement and replenishment. Their supply chain management

provides us flexibility to adapt to changing patterns in consumer behavithier andtheir ability to add value at various steps/levels. In particular, thier supply chainmanagement gains strength from their ability to undertake in-house manufacture,design and development of apparels.

Strong and eff icient logistics and distr ibuti on network

VRPLs distribution and logistics network comprises seven distribution centers.

Besides, VRPL have their own fleet of 31 trucks, which helps VRPL to transport

and deliver their products in a cost and time efficient manner. VRPL believe that

their distribution and logistics set up is well networked and allows them to fulfill

the store requisition within short time period of generation and receipt of order,

which has helped VRPL to optimize in-store availability of merchandise and

minimize transportation costs. Their strong distribution and logistics network has

enabled them to dispense with the requirement of a dedicated storage space at

every store, which is an industry practice, and instead undertake periodical

replenishment of depleted stock. Due to adoption of an efficient racking system,

they are able to benefit from optimum utilization of the space allocated for display

in their stores. This provides them assistance in maintaining a low working capital

requirement and less carrying cost.


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Geographical spread

Thier stores and distribution centres are spread in various parts and regions of thecountry. This has not only enabled us to build thier brand value but also facilitatedus to explore cost-effective sthiercing from different locations, identify potentialmarkets and efficiently establish new stores in different locations. An aggregate of43 of 50 of thier existing stores are located in Tier II and Tier III cities, which, It

believe, enables us to capture market share in locations where a majority of thiertarget customers are located.

I dentif ying new locations

It believe that It possess the ability to identify locations with potential for growth,in particular in Tier II and Tier III cities. It has an exclusive site identification andassessment team, which undertakes systematic analysis of the business prospects,taking into account factors such as population, literacy levels, nature of occupation,income levels, accessibility, basic infrastructure and establishment and runningcosts. Further, it has a dedicated warehouse for the purposes of storing thematerials essential for setting up of new stores.

Private labelsIt has a number of private labels for apparels (i.e. apparels manufactured by us)such as Zeppelin, Paranoia, Chlorine, Katina Studio, Famine, Flthierier Womenand Roseau. In fiscal 2007, thier income from thier private labels was Rs. 583.60million, which accounts for 9.68% of thier total sales for fiscal 2007. It believesthat their focus on thier private labels and their recognition in thier customersegment enables us to differentiate themselves from thier competitors.

Their Strategy-----------

It intends to pursue the following strategies in order to consolidate thier position asan operator in the value Retail segment in India. Thier growth strategy is based

on:


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Increasing thier penetration in the country by leveraging thier supplychain, distribution and logistics network

It intends to increase thier penetration in the country by setting up newstores in cities where it already have Presence, as also entering into new areas inthe country. In particular, it intends to focus on expansion in Tier II and Tier IIIcities. It believe that thier existing infrastructure have been designed for a higherscale of operations than thier current size, and can help us grow without the need tosignificantly increase costs. Moreover, their continuous effort to improve systemsand processes leads us to believe that it can deal with higher scale of operationswithout any hindrance. Higher business volumes will also improve thiernegotiating pouters and help us get further economies of scale in thier buying.

Emphasis on Backward Integration

It believes that through backward integration It will continue to substantiallycontrol the cost of production, resulting in such cost benefits being passed on tothier customers. It intends to increase the in-house manufacture, design anddevelopment of thier products and realizes economies of scale. It intends tomanufacture at least 25% of thier requirement for apparels and may requireexpansion of thier existing manufacturing facilities. This will also enable us to

reduce thier reliance on external agencies for supply of thier products and willresult in loiter turn-around time.In addition, thier focus would be to undertake in-house such functions of themanufacturing processes, which, in thier view, would add maximum value andwould enable us to reduce their procurement costs.

Expansion of FMCG

Historically, it has derived significant portion of thier revenue from sale of

apparels. In pursuance of their business plan to diversify thier portfolio ofofferings, FMCG products play a key role. FMCG products are usually meant tofulfill the daily needs of consumers and therefore, It believe retailing of FMCG

products will bring customers to thier stores on a frequent basis and this may in-turn lead to consumption of thier apparels. It believe retailing of FMCG productswould help us to eliminate the impact of seasonality of the apparels market inIndia, which depends on factors such as change in tether conditions and festival


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celebrations. In furtherance of thier endeavthiers to reduce costs, It intend toprocure FMCG products directly from the manufacturers. For this purpose, It has

entered into and will continue to explore the possibilities of entering into certainarrangements with domestic FMCG majors on such terms and conditions, whichare suitable to their business model.

Procurement from low-cost production centres outside IndiaIn addition to thier strategy to continue procurement of goods from small andmedium size vendors and manufacturers which leads to cost efficiencies, It intend

to procure FMCG and apparels from low-cost production centres located outsideIndia. Towards this objective, It propose to increase thier procurement of finishedand semi-finished goods from China and thereby realize economies of scale and

pass on the benefits so accrued to thier customers.

Increasing customer satisfaction and thier base of loyal customers

It believes that understanding the needs of thier customers is of prime importancefor the continuous growth of thier business. In order to continuously providecustomer satisfaction, thier customer management team assimilates customerfeedback and it endeavthier to take necessary steps to address the requirements of

thier customers. In addition, It has introduced, in association with SBI Cards &Payment Services Private Limited, a co-branded credit card. It proposes tocontinuously undertake such initiatives to increase the satisfaction of thiercustomers.

Compensation and Performance Based Incentives

VRPLs compensation policy is performance based and they believe it is

competitive with industry standards in India. VRPL endeavor to recognize talent

and potential in their employees and encourage them to take additional

responsibilities. Based on performance, VRPL calibrate their employees and

reward loyalty by preferring in-house promotions. Their compensation policy

reflects their continuing efforts to build a world class performance driven culture.

They benchmark ourselves on compensation externally through consultants


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biannually, and aspire to be on the upper quartile of their target segment,

comprising of FMCG companies and other retail companies and are currently at

the 75 percentile.

Management Organization Structure:-


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R.C.AgarwalChairman &

Managing Director

Board of Directors

Category Heads

Merchandise

Head

S.K.Agarwal

Whole-time Director

Heads - ZonalHead-Supply Chain

Management

Head- Retail

Chief Operating

Officer

Head Legal &

SecretarialHead IT

Head-Admin & HRHead-Finance,

Accounts & MIS


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Vishal Mega Mart

CONCLUSIONVISHAL MEGA MART done a great job in promotion strategy by awareness,

location and product specification and differentiation in his store. Basically they

targeted low quality product in low price and the outlets location is very good in

point of view of selling of a product.

Documents

Visahal Mega Mart Promotion Strategies