A Report on Retail Strategies of Planet-M
Submitted to: Prof. Pravin Patil kumar das 282) patel submitted by: Pranjal (08bs0002 Prateek
An understanding study like this is never an outcome of the efforts of a single person; we would like to express a word of thanks to all those who gave me their sincere advice and information which made my training period an educative and informative one. My heartfelt gratitude goes to Prof. Pravin Patil, who is always willing to take time off hir busy schedule for guidance and discussions. Finally, special thanks to our family & friends who are our source of encouragement and inspiration.
Abstract This project is aimed at understanding the Indian music and mobile retail industry with the special stress is given on one of the major players in the industry; planet M. in this project we have tried to analyze the market position of planetM, its product line and the services that are provided to the customers at the retail shops. We have also focused on the product line and the variety of the products. Finally we have tried to understand the marketing strategies and the future expansion plans of the group in the growing Indian music and mobile phone market
Music retail industry
The music industry in the world is one of the fastest growing segments of the world economy. The total revenue from the music and movies and the related products have crossed the $350 billion in the year 2008 with a very impressive growth. With such a vast and fast growing industry all the major player likes the apple with iTunes, Amazon, HMV have entered the retail music industry. In India the organized music industry began to flourish in the mid 90s with the entry of many big business houses. In fact in the last couple of years the industry has seen an impressive growth in the terms of the revenue and the customer base. In India prior to the entry of the organized music retailers, the music and the related products were sold through the unorganized small shops and the distribution channels of the production houses. But the scene has change drastically with the entry of these new players into the market. The music industry across the globe can broadly be divided into three segments: creation, marketing and distribution. Music artists create music, which is marketed and distributed by a network of record labels, distributors, retailers, broadcasters and DJs/clubs. Labels (record companies) play an important role in all three stages by providing capital and the marketing know-how to create, promote and distribute music. Music marketing takes place through branding, community building and information dissemination. Music is sold in 'containers' like compact discs (CDs) and audio cassettes through distribution channels. Another form of music distribution is conducting public and private music shows. The business of music involves many intermediaries between artists (creators) and customers (end users). Each intermediary adds to the final cost of the product. Therefore, some record companies like Bertelsmann combine the roles of multiple intermediaries to reduce overall costs by selling music directly to their club members at low prices. Another way to reduce the cost of promotion and distribution was to sell music in the form of albums containing many solos. Companies such as EMI, Warner and BMG have been doing this for a long time in the international market. In the domestic market the emergence of many organized music retailers like Music World, Planet M, Crossword, Odyssey and the online retailers have increased the competition in fast growing the Indian market with a host of products and services.
Planet M is an Indian music retail store originally founded by The Times Group (BCCL). It was sold to Videocon group in Nov 2007. It is present in many cities (265 -plus locations) all over India. The Planet M stores are mainly known for selling music and movies and related accessories. They also sell gaming consoles like PlayStation Portable, PS2, PS3 and Xbox360. Planet M is also a new entrant for the Mobile retail, offering a wide range of mobile handsets with lucrative schemes. Planet M, which was launched in 1999, has over 5.5 million annual walk-ins across its stores spanning 42 cities. The retail chain has a conversion rate of close to 40% and has been experiencing a compounded annual growth rate of 33% over the past four years, a release said. Planet M has 265 outlets across the country with 124 own stores and 131 satellite outlets. Planet M, a wing of Videocon Industries Ltd, is planning to set up 500 outlets, 75 of them in the metros, by the end of this financial year. The new stores will encompass three formatsMegastores covering more than 3000 sq ft including a theme cafeteria, Superstores that will cover about 1200 to 1500 sq ft and the neighborhood Planet M stores of between 300 and 500 sq ft. Besides music, these stores will retail mobiles, Play Station gaming consoles, iPods, MP3 players, garments, slippers, stress balls and in-house brands such as T-shirts, Curtis, bags, caps, deodorants, sunglasses and more. Currently, Planet M has 250 stores across India, of which 50 are flagship stores (over 2,000 sq ft each), 25 are `super stores’ (1,000 to 1,500 sq ft each) and the remaining neighborhood stores (400 to 500 sq ft each).
Planet M is present in following cities an d has the future plans to expand the business into more small cities and towns: Pune, Bangalore, Mangalore, Mysore, Hyderabad, Vijaywada, Vishakhapatnam, Chennai, Tirupati, Mumbai, Thane, Vashi, Nerul, Nagpur, Nashik, Indore, Aurangabad, Ahmedabad, New Delhi, Ghaziabad, Noida, Faridabad, Gurgaon, Lucknow, Allahabad, Varanasi, Agra, Dehradun, Kanpur, Jaipur, Jamshedpur, Chandigarh, Mohali, Patiala, Ludhiana, Jalandhar,
Jammu, Kolkata, Tinsukia, Shillong, Bhubaneswar, Guwahati, Mussourie, Patna, Kochi, Barrackpore, Barasat, Thiruvananthapuram.
Product line of planet m
The retail chain planet m is basically engaged in four type of product line of different type. Their core business was basically the music retailing as an organized player but with the new opportunities coming out, they have diversified into other product lines which are of four type• • •
Music retailing Mobile and accessories retailing. Gaming and gaming products and accessories Gift, greeting items and apparels
PlanetM product portfolio comprises audio CDs and cassettes, VCDs and DVDs, CD-ROMs and other music accessories. The company is an important player in the home video market.
PlanetM has successfully forayed into high end ‘personal audio’ gadgets like Apple iPods, Neo Pods and MP3 players. The company also offers home theatre systems, speakers and headphones. The company provides World Space receivers and subscription packs, and is now also offering the Tata Sky consoles and subscriptions. The core business of the planet m was basically the music retailing. In that segment they offer a host of options to the customers. With a large collection of music files of different type they offer the customers with music type of both the national as well as the international levels and artists.
The segments of products available in the retail outlets of planet m are SEGMENTS The major products and services covered in the outlets are: • • • • • • • CD albums Music Video/DVD CD singles DVD Album Vinyl Cassettes Online music and video contents In addition to the Hindi and English songs that are offered at the outlets the retail chain also offers songs in 17 other regional languages in India depending upon the location of the retail shop. The retail chain has a collection of 4.5 million songs in different formats of different artist. In fact it holds a music library of 20000 albums of different genera. In the Hindi or regional language music the library is arranged according to the years and the genera of the music. The
customer can find the preferred music on the specific locations of the outlet. The English language or the foreign language music is arranged according to the genera like pop, jazz, Latino, county, disco, party, folk and so on. The retail shop also provides the customization of the music to the customers. Now the customers can select the songs of different artist or of different genera and upload the preferred songs into a CD or a DVD. The customers are also given the choice of the quality of the songs. So they can select the bits rate of the songs and they are charged accordingly the songs selected or the quality of the songs. These outlets also offer the video songs and DVD and CDs of the movies of different language and era. I fact some of the stores have a collection of more than 5000 movies. So the customers are provided with a large pool of movies to choose from. In addition to the physical store across India, planet M has also launched online music stores under the brand. The customers can download the preferred songs by paying the amount through the online transaction process.
Mobile and accessories retailing
The Indian telecom sector is the fastest growing telecom sector in the world. The annual mobile sales in India are highest in the world. India has passed the Chinese market as the biggest mobile handset market in the world in terms of the volume. Last year about 150 million mobile handsets were sold in India with 10000 handsets are being sold every hour. With such a huge and fast growing market, the planet has also ventured into the mobile retailing segment in India. Currently its product offering in mobile includes all the major brands like Nokia, Motorola, Samsung, Sony Erickson, LG, Spice, Apple etc. in case of the mobile phones its product line is divide into basically the following segments• • • • • • Low end cheap mobiles Low end multimedia phones Multimedia phones with audio and video capacity High end multimedia phones Smart phones Mp3 music players
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FM radio Gaming device Accessories like head phone, battery, mobile contents etc Storage device DVD players Cordless phone
Gaming and gaming products
The planet m retail shops are also engaged in the sale of the gaming and gaming products. In their retail outlets they have a wide variety of the gaming consoles to offer. They have a vast collection of different popular game consoles in their gallery. In addition to the premium games in their retail outlets, they also offer the customers with the online games. The customers have the option of downloading the selected games at the sites of planet. Even in the games they are divided into different types like action games, puzzles, board games, racing games, shooting games etc. The retail outlets also sell the other gaming products like the gaming device and the gaming CDs. In the outlets many popular gaming device are on offer like the •
• • •
Sony play stations Nintendo gaming console IPod touch Microsoft Xbox
The company site also provide with the online real time gaming facilities to the customers. For that the customers have to log into the site and pay a specific amount to use these facilities.
Gift items and apparels
The planetM stores also stocks and sells other gift items like cards, statues, dolls and all the ranges of the gift items. There are also apparels products and life style products available in the
planet stores. The stores also have a range of products like the t-shirts, all sorts of men wear and women wears and other body accessories. They have also launched products like eye gears, wrest watches etc.
The operation of the retail chain
The planet m is founded by the times group as a music retail outlet. The chain was a wholly owned entity of the times group. It is basically engaged in the music retailing and movies retailing in the physical stores. After the takeover of the company by another retail chain Next in the year 2007, the company is still maintained as an independent entity sticking to the core business of music retailing. Over the years, the retail chain has enlarged the span of its operation and now it has also ventured in to the other retail sectors like the mobile phone, games and the other gift and apparel item retailers. In addition to the physical shops in all the metros and the tier ii cities, they have also launched the online retail shop under the same brand name. The customers can download music, games, movies or they can purchase the products on display through the e-payment system. The planet m is basically a multi brand retail chain displaying products of different brands. In the music segment it offers music from all the leading music producing houses in India as well as the western music companies. They also offer movies of all the leading producing houses in India and the western producing houses. The mobile phone retail business is another important part of the retailing business of the planetM brand. in this segment all the major mobile phone brands are sold in the retail outlets. More over the other mobile accessories and the gaming devices are also available in the retail shops. The other part of their business is the gift items and apparels. In this case they source the products from the contract manufacturers and sell them under their brand name. in case of the games or the mobile contents that are available in the online stores and the retail outlets, these are mostly third party applications and planet M is basically engaged in the marketing of these applications.
Planet M is a wholly owned company of the Videocon groups. It is positioned as a retail chain to leverage the gap between the groups other electronic retail shop Next and other appliance retail brands. It is planned to introduce the electronic items in the product line of the planet m outlets also. For that Videocon has an agreement with the Japanese electronic giants Hitachi for supplies and outlet setting and layouts. It also plans to introduce more brands under their retail outlets. Planet m has a very good presence in all the metros and the important cities through their retail chains. It operates both the wholly owned retail shops as well as the franchises in the market. In the big cities and the metros they have their wholly owned retail outlets called as the planetM music stores with the floor area of 1500-2000 sq feet. These are manned by the employees of the planetM. But in other tier II and tier III cities, they have franchises outlets. These are called the music outlets of the planetM. The product range depends upon the location as well as the demand of the products in particular outlets.
MAJOR COMPETITORS OF PALNET-M
Planet M major competitors are retail biggies like Crossword, Landmark, Music World and Odyssey. The category consists of retailers of music, gifts, books, toys, etc against each other, evaluating them on parameters such as setting benchmarks in leisure retailing, and expanding the market and consumer base. CROSSWORD Crossword Bookstores is a chain of largest bookstores in India. Shoppers Stop acquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as a lifestyle bookstore with their spacious, well laid out stores which encourage customers ease in browsing through the merchandise. The name Crossword was selected to reflect the dual fun and learning experience of a visit to Crossword similar to playing the puzzle. Crossword brand has 50 stores across the country. Recently Crossword launched its youngest store at a newly-inaugurated mall at the GVK One mall in Banjara Hills, Hyderabad. Spread over 1,500 square feet, the store featured reader staples, clubbed under fiction, non-fiction, classics, children's books, management and IT among other categories. Crossword also addresses a wider audience than existing stores with its unique product mix. There is of course, the widest range of books for the young and old alike, along with magazines, CD-ROMs, music, stationery and toys. With its large children's section and its focus on making the store a friendly, safe, fun-filled place, Crossword attracts many families who normally don't think of visiting bookstores. Services like Dial-a-book, Fax-a-book and Email-a-book enable customers to shop from their homes; and when they come to the store, the unobtrusively helpful staffs assist them in finding the right book, the right CD or the right gift for the right occasion. Facilities like the Crossword Gift Vouchers, the friendly 'Return, Exchange & Refunds' policy, the Cafes within the stores and the unique store experience make it easy and enjoyable for customers to shop at Crossword. Over 100,000 loyal customers are rewarded through the Crossword Book Rewards Program with points, discounts, promotional offers and more. 'eWords', a monthly e-newsletter with reviews of new books, news about in store events and bestseller lists, is currently mailed to these Members.
Landmark commenced its operations in 1987 with its first store in Chennai with a floor space of 5500 sq. ft. Landmark is the first large format book retailer in India. Landmark currently has 10 stores, ranging in size from 12,000 sq. ft. to 45,000 sq. ft., 3 in Chennai, 1 in Bangalore, 1 in Mumbai, 1 in Vadodara, 1 in Gurgaon, 1 in Pune, 1 in Lucknow and 1 in Ahmedabad. Until 1996, Landmark was focused on books, stationery and greeting cards and then added music to its product portfolio and also started the trend of stocking curios, toys, music, CDs and other gift items. Category killers in all focus categories- Landmark's USP is the range and depth of its stocks. Landmark currently deals with the following product lines that cater to the needs of all age groups- Books, Music, Stationery, Magazines, Home Store, Gifts, and Toys. Landmark sponsors a number of programs related to products and services within the periphery of Landmark's business. A number of book launch events and music performance events are organized and hosted by Landmark.
MUSIC WORLD Music World India is a major source of digital music entertainment and provides a music platform to all music lovers. It offers a vast collection of songs where one can search songs of any genre. Music World India is an mp3 search engine for music audio files. Their website crawler searches through the internet indexes and provides new brand or popular songs with fast search services. Music World India offers songs of world class bands, genres, artists to download. They also provide all genres and grooves of cutting edge music and innovative independent labels. Music World is India’s largest chain of music stores retailing the widest range of international and Indian music. Music World operates different store formats to service different consumer groups. Music World's product portfolio comprises audio CDs and cassettes, VCDs and DVDs, CD-ROMs and other music accessories. The company is an important player in the home video market. Music World has successfully forayed into high end ‘personal audio’ gadgets like Apple iPods, Neo Pods and MP3 players. The company also offers home theatre systems, speakers and
headphones. The company provides World Space receivers and subscription packs, and is now also offering the Tata Sky consoles and subscriptions.
ODYSSEY Odyssey is a 100% subsidiary of Deccan Chronicle Holdings Limited, publishers of newspapers, Deccan Chronicle and Financial Chronicle. In 1995, Odyssey opened its flagship store in the southern suburbs of Chennai in Adyar. The idea was to make people lose themselves doing the good things in life, in a world that would make the experience as rich as their varied interests – and forget the time. Today Odyssey operates through 40 stores in 13 cities with about 2.60 lakhs sq.ft of retail space under its operations. Recognized predominantly as a book store, Odyssey has genres ranging from popular fiction, non-fiction, computing, self-help, health, management, food and drink, travel, art and architecture, children's books and so on, giving its customers a relatively wide range to choose from. Apart from books, the store has a wide range of music, movies, multimedia, stationery, toys and gifts. Odyssey maintains a good mix of products to suit customer's requirements and endeavors to keep abreast with the market dynamics and latest trends. The chain receives over 4 million walk-ins every year. Odyssey India Ltd recently forayed into the optical eyewear category with the launch of The Eyewear Store a hi-fashion destination for international designer sunglasses & prescription frames. As far as online business is concerned the major competitors of Planet-M are; FUTUREBAZAAR.COM FutureBazaar.com is owned and operated by Future Bazaar India Ltd. (FBIL). FBIL is a part of the Future Group, India’s largest retail conglomerate. FBIL is the e-commerce arm of the Future Group. The company was incorporated in 2006 and began business in 2007. In FY09, Future Bazaar sold Rs 122 crore worth of goods, 1.5 per cent of total sales of the Future group.
What makes them different from others!! ➢ A choice of more than 20,000 products ➢ Delivery across more than 1500 cities and towns in India covering around 16,000 pin codes ➢ Fast deliveries – tie ups with world leaders in logistics & transportation services ➢ A dedicated Customer Care helpline for any queries ➢ Always offering Manufacturer’s guarantee as opposed to Seller’s guarantee, which most of the other online shopping sites offer ➢ Aggressive Pricing strategy ➢ Guaranteed Delivery ➢ Their simple 15-Day Return Policy EBAY.IN Founded in September 1995, eBay is a global online marketplace where practically anyone can trade practically anything. eBay is a platform for the sale of goods and services by a diverse community of individuals and businesses. Today, the eBay community includes more than 222 million registered members from all around the world. At any given time, there are approximately 100 million listings on eBay worldwide, and approximately 6.6 million listings are added per day. The users can trade in more than 50,000 categories including collectibles, antiques, sports memorabilia, computers, IT and office, art, antiques, toys, dolls, stamps, comics, magazines, music, pottery, glass, photography, electronics, jewellery and gemstones. eBay India (formerly Baazee.com) was launched in India in 2000 & has become one of India's leading online shopping destinations. eBay India has a community of over 2 million registered users across over 670 towns in India. Approximately 12,800 sellers use eBay India as a primary or secondary source of income. (Source: A C Nielsen International Research, June 2006) Although eBay is a global company, eBay.in offers a trading platform tailored to the unique needs of Indians. The eBay community consists of passionate Indians as well as International buyers and sellers trading in a variety of goods.
Marketing strategies of planet m
In terms of the marketing products and the services the brand planetM is very successful in the Indian context. As pert the latest data concern, the company registered an annual footfall of more than 8.5 million people in their retail stores across India with a conversion rate of more that 40%. In fact it is one of the highest in the Indian retail sector. For the expansion of the retail market India and the growth of the market share of the company, they have adopted many marketing strategies which can be highlighted as•
Celebrity endorsement is one of the focuses in the planetM retail shops. The retail brands hosts many celebrities in the media campaign. Music releases of many of the newly released movies are organized at the selective planetM retail shops. Shahid kapoor, Hrithik Roshan, Abheshak Bacchan are the regular visitors at the retail outlets of planetM. By this type of marketing, the company is also gaining the media focus and the market exposure.
The locations of the stores are in such places where there is more crowds of the young people and the teenagers. By this way planetM is able to attract more and more customers to its stores. In fact the customer base has increased by almost 35% in the last three years.
The ambience and the interior of the retail shops are also organized in such a manner to attract the youth and the teens. The stores display the product in a very organized way. More over there are music playing ports where the customers can listen to the music prior to the purchase. They are offering a host of products of different brands under the same roof to the customers resulting into better conversion rate.
Another very popular marketing strategy adopted by planetM in all the retail shops is the discounts and sales. They offer discounts and sales in their product to attract the customers. Moreover there are always surprise gifts and goodies with the purchase to encourage the customers.
The wide range of the product offerings available in the retail outlets of another factor of attracting more and more customers. For example, in the music segment they have a collection of more than 4.5 million songs of different language and 20000 albums. They provide options to the customers in 17 different Indian languages to cater to all cultures of the Indian society.
Most of the products at the retail shops are focused at the youth population of the population. For that they offer products ranging from the music, mobile and accessories, games and other apparels like the eye gears and t-shirts. Thus offering the youth with a complete shopping experience.
The pricing of the products in the planetM retail shops are very competitive compare to the others. Along with the discounts and the value added services, this combination offers the customer a very good shopping option.
Business strategy and future expansion plan
With the fast growing retail sector in India, the music and mobile retailing sector is witnessing an explosive growth. To keep up with the expanding market the consumer base, planetM has also taken some future expansion plans and future strategies for growth
It aims to introduce more than 500 retail stores in India by the end of this year. This was announced by Venugopal Dhoot in March’09. In addition to the present stores the company plans to increase the total number of its planetM retail stores to 1500 in the coming three years.
An investment of Rs 1800 crore is planned to be infused into the retail business of the Videocon group. The company has tied up with many of the film producing houses in Bollywood as well as the western music houses to market their products. The company also plans to gain the exclusive marketing rights of many upcoming Hindi movies in the coming years.
The company has also tied up with the Japanese electronic major Hitachi for the marketing of its products under the retail chain. In addition to that, the company has also moved into an agreement with mobile phone major Nokia for the marketing of the mobile phones along with the other major players like Motorola, Samsung, LG, Sony etc.
There are announcement from the company to introduce more product lines under the brand name. For that they are in talks with the other retail chains of the Videocon group. The company also plans to introduce itself to the in the small cities with market opportunity. For that it has identified about 100 new tier II and tier III cities to set up the retail outlets.
The Indian entertainment industry is growing very fast with the acceptance of the Indian music and the movies in the west and middle east. With this developments the industry has a very good prospect to increase its size and the market penetration. The organized music and entertainment industry is also bound to grow with the boom in the music industry. The addition of the new retailers and the competition between them has spiced up the market resulting it improvement in the product offerings and customer service. The planetm holds a very strong ground in the organized music retailing. But with the changing market situation and competition, it has to come up with new and innovative product offerings to attract the customers and to retain the market leader position.
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www.planetm.com www.musicworld.com www.marketresearch.com www.imrb.com
• Retail management, ICMR