Universal Business School

Ronak Nitin ModiMBA3-1355

Retail visit at Tata Croma

Table of Contents

Executive Summary

Socio-Economic Importance of TATA CROMA

Identifying the Retail Type and its Product categories

Key Strategic drivers of the Retail Industry

Modern Technologies deployed by TATA CROMA

Marketing Mix Strategy by TATA CROMA

Executive Summary

Tata Croma is India’s first national, large format, specialist retail chain for

consumer durables & electronics. Croma is owned and run by Infiniti Retail

Limited Infiniti Retail – a 100% subsidiary of Tata Sons. Woolworths Ltd is a

company which provides technical support and strategic sourcing facilities from

it’s The first Croma store was launched in Juhu, Mumbai on October 9, 2006.

Croma has over 180 brands and 6000 products across eight categories which suit

the profile of the customer. These categories include Mobile Phones, Digital

Cameras, Computers, Laptops, Entertainment, Home Appliance, Kitchen

Appliance, Gaming and Accessories. Presently, there are more than 101 Tata

Croma stores in 25 cities. The stores are spread across the states of Maharashtra,

Gujarat, Delhi, Karnataka, Chandigarh, Andra Pradesh, Tamil Nadu, and Punjab.

It also offers and helps customers to buy their favorite products for their own place

through Croma’s online portal known as ‘www.cromaretail.com’. An authorized

Croma Care Centre provides after sales support for all Croma branded products

24/7.

The Chroma Zip stores is an outlet for portable electronic items and meant for the

mobile consumer. The first Zip store was opened on Jun 22, 2007 at

the Mumbai domestic airport. Croma has also launched its own tablet based

on Android operating system called Croma Tablet. In 2012, Infiniti retail acquired

the Indian retail business of Woolworths for A$35 million, or Rs. 200 crore.

Brand PhilosophyIf service wasn't important.

If technology wasn't complex.

If variety wasn't confusing.

We would have no reason to be in business.

We help you buy.

POWER OF 49

VISION OF CROMA

The vision of croma is to be the number one in retail in electronics and durables

products in India, through quality products and deliver services. It should imbibe a

world class system to bring in delight to all our associates and the society at large.

MISSION OF CROMA

The mission our enterprise is to provide unique customer satisfaction through

innovation, quality, productivity, human resource development, continuously

striving for excellence with pride in our values and confidence in our approach.

“THE OVERALL MISSION OF CROMA IS

TO BE THE FIRST CHOICE OF THE

CUSTOMER”

Socio-Economic Importance of Tata Croma

The urban consumer electronics and durable retail industry is growing at an annual rate of 7% - 10% and the rural consumer electronics and durable retail industry is growing annualy by 25%. Croma is one of the leading players in the growing industry and is also fulfilling the customers needs and wants by providing them superior products and values.

I have chosen Tata Croma retail store located in Bhayander (West) as it is near to my home and it is located at the place where majority of the public resides. The store is surrounded by Mall, College, Coffee Shops, International call center, Restaurants. Bhayander’s most people spend their precious evening time by shopping in mall, watching movies in theater, relaxing in coffee shops, Surfing for electronics and apparials. It is the main area in Bhayander.

The total population of Bhayander is around 8,50,000 plus; of which male are 4.8 lakh and females are 3.8 lakh.

Large number of people buys electronic gadgets such as Laptops, Digital camera, Television, Home Theaters, Mobile phones, Air-conditioner, Refrigerator, Coolers, Water Purifier, Games(Xbox 360 and playstation)for household from Croma because:

Croma provides value for money product. Huge variety of products is available under one roof.

Non-availability of other branded electronics and durables retail outlet.

Croma has good association with muitinational companies like Nokia, Motorola, Sony, Blackberry, Voltas, LG, Acer, Apple, Canaon, Panasonic, Samsung, Micromax, HCL, HP, Intex, Lenovo, Hitachi, Moserbear, Nikon, Compac, Kodak, Whirlpool, Videocon, UBL, Creative, IFB.

Customer can physically experience the product on shelf. Personal assistance is provided by the sales staff Training (How to use the product) is provided to the customer by the expert

team of croma. People do not prefer travelling to other places when they get the same

product.

Tata Croma has few adjacent retailers with which they have to share traffic. Therefore it has quite a few advantages which work in its favor.

The advantages are:

Less Competition Low rental cost. Huge parking space More footfalls Comparatively less cost on advertisement High customer base Sustainable profit margins. Cater large number of people. Infrastructure development on a large scale.

Migration of people from different locations because of development of infrastructure .

Medium and High income level of people in that area.

The disadvantages are:

Price is comparatively higher as compared to other local electronics and durable stores in that particular area.

More focus is giving to gaming products like Xbox 36 & Playstation, Led Television, Digital camera, Laptops, Home Theaters, Mobile phones which are placed on ground floor. But, products placed on the first floor such as Washing Machine, Fridge, Water purifiers, Dryers, Trimmers and others are giving less importance.

Late arrival of products at Croma-Bhayander because Croma follows its own distribution structure. It normally takes 7-10 days to bring products on shelfs.

Non-availability of free demos of products such as Xbox, Mobiles, Digital camera because of unexpected things like Battery dying problem etc.

Croma donot perform more advertisment.

Consumer Buying behavior towards electronic and durable products

Consumer durables and electronics are items that provide a flow of services to a consumer over a period of time. Examples include TVs, household appliances, audio-visual equipment, furniture etc. The real level of spending on durables has surged in the last eight years.

The reasons are:

Falling prices for many durable products. Low interest rates which have encouraged people to spend more on “big

ticket items”

Strong consumer confidence and borrowing levels. The demand for consumer durables is more income elastic than for non-durables which are usually staple items in people’s monthly budget.

Identifying the Retail Type and its Product categories

Croma - The Electronics Megastore

Big Box Speciality Retail Store For Consumer Electronics & Durables

Product Categories

PRODUCT CATEGORY

RETAIL TYPE

Croma the electronics megastore is a Big Box retail store for consumer electronics and durables.

Key Strategic drivers of the Retail IndustryWith the growing pace in technological advances, educational, changing trends and hyper competition, it is very difficult for the retailers to survive this competition, on and off the web. Revolutionary thinking needs to be possessed by the retailers to thrive in today’s world. There need to be a few changes that have to be made by the retailer to sustain in this hyper-competitive retail world.

They are:

A focused approach to strategic planning.

Strategic pricing of products

Proper formulation and execution of Business models for

different

Outlets.

Advanced marketing skills.

A stronger customer focus.

Enhanced exposure on the Internet.

Some of the few drivers in the electronic and consumer durable

industry which are and can be used by Tata Croma.

Price Sensitivity:The consumer electronics and durables industry is highly price sensitive. The low end models sell due to their volume and low pricing strategy for the lower range consumer. For the medium and upper range customers - brand name, technology and other features are important to sell.

Availability of newer variants of a product:In today’s hyper-competitive business scenario, the consumer have a large variety of choices in his/her hand. Consumers are looking for new products which are to be developed and sold according to the consumer’s changing behaviors, taste and preferences.

Increase in disposal Income:With the growing levels of education and growing economics, the net disposal income is also growing accordingly, thus, the standard of living is also rising which results in rise of purchasing power.

Availability of Finance Schemes:

Strategic

drivers

Focused approach on

Strategic planning

Advanced Marketing

skills

Strong Customer

Focus

Exposure to Internet

In today’s world, EMI has become very common where consumers pay a certain amount at the point of purchase and the remaining payments are spread over a time period depending on the consumer. This gives the consumer access to expensive products.

Advertising and Brand Promotion:The unique style of promoting and advertising for discounts, free gifts and exchange offers helps Croma distinguish itself from the others.

Festival Seasons:Festivals in India are in abundance. During this season, retails come out with offers and discounts to cash in on the festive mood. This period will always be one of the most important growth drivers of the consumer electronic and durables industry.

Modern Technologies deployed by Tata Croma

The evolution of technology within the retail and e-commerce space is shaping how consumers behave and interact with brands and savvy, smart retailers know that understanding shoppers’ behavior is a key for success. These retailers realize they can utilize technology to capitalize on consumer needs and customized offerings to help significantly increase their bottom lines.

Croma as a retailer follows a lot of modern trends to increase customer satisfaction and save time on both ends (retailer and customer). The modern technologies deployed by Croma are given below:

Electronic Point-of-Sale System:

An EPOS system is one in which a universal product code (black and white stripes or barcode) is read by a laser scanner connected to a computer. On scanning a product, the computer records the sold items and displays the price of the products to the customer. Eventually, an itemized bill is generated and given to the customer as the receipt.

Electronic Data Interchange:

EDI is the electronic exchange of data that takes place between the retailer’s computer and that of his supplier. The exchange consists of orders, delivery notices, invoices, returns and sales data. Its saves the lead time of

deliveries and large savings can be made by the consequent reduction in inventory required. Given below is the process a business would take have to go through with and without EDI.

Quick-Response Replenishment Systems:

When EPOS systems are combined with EDI, retailers are in effect adopting just-in-time replenishment or quick-response (QR) replenishment methods. Ordering merchandise is not based on historical but current sales. An advantage that that the QR Replenishment Systems have is the reduction in stock outs and the amount of inventory carried. This reduces the cost to the retailer and improves the service to the customer. The image below shows a simplified quick-response replenishment system.

CRM

Customer Relationship Management is much healthier than other retailers. No doubt, being a Tata Sons Ltd. subsidiary, the TCOC (Tata Code of Conduct) helps them learn the rules of being an employee. Ethics is the key motto of the TCOC. Procedures about complaints and other queries inside the company are present in the TCOC which help the employees to work better and pressure free.

Marketing Mix Strategy applied by Tata Croma

Product Strategy

A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. Tangible products are those that have an independent physical existence. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product move.

Place Strategy

It refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

Price Strategy

Price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.

Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. 

BUNDLING

PROMOTION

All of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, sales organization and sales promotion.

TIME PRICING

FESTIVAL PROMOTION PRICING

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum

BELOW THE LINE PROMOTION

ABOVE THE LINE PROMOTION

NEW PROMOTION STRETEGY