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PROJECT REPORT ON CUSTOMER SATISFACTION
PUNJAB NATIONAL BANK
Submitted to Punjab Technical University in partial fulfillment of the requirement for the award of
BACHELOR OF BUSINESS ADMINISTRATION
SUBMITTED TO:SUBMITTED BY :Prof.DIVAKAR JOSHI (H .O .D IN MANAGEMENT) Mushkoor Ah. Bhat B.B.A- 1st SEM ROLL NO:-8140332018
ST. Solidier Management and Technical Institute Jalandhar Punjab. 1
Vishal Mega Mart
Acknowledgement Executive Summary Objectives & Limitations Retail-Introduction Company Overview VRPL’s business Domain Area Financial Management Marketing Management Operations Management MTIC Human Resource E-commerce
Road ahead Findings of the study Conclusion (S,C,R) Bibliography
3 4 5 6 10 13 14 21 28 36 41 46 50 51 53 55
Vishal Mega Mart
Words often fail to express one’s inner feelings of gratitude and indebtedness to one’s benefactors, but then it is only the readily available medium through which the undersigned can express his sincere thanks to all those who are associated with the work in one way or the other. Nothing concrete can be achieved without an optimal combination of inspiration and perspiration. No work can be accomplished without taking the guidance of the experts. It is only the critiques from ingenious intellectuals that helped transform a product into a quality product. Project work is never the work of an individual. It is more of a combination of use, suggestions and contributions and work involving many individuals. This project also bears the impact of many people. First and foremost I would like to gratefully acknowledge and express my sincere gratitude towards___________, my faculty guide who always helped and provided guidance during the course of my project. I would like to extend my earnest thanks for her assistance in the course of my project. The learning during the project was immense & invaluable. I shall be failing in my duties if I do not express my gratitude to other faculty members and dear friends for their useful help at various stages of this project.
Vishal Mega Mart
EXECUTIVE SUMMARY:The project is about business development strategy of Vishal Retail in near future as a part of expansion plan being adopted by the company. This is about all the operations performed in the Vishal Mega Mart. 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. This project report is the study of various activities and strategies of Vishal Mega Mart and relates it to the theoretical aspects within the scope of our subjects. It also helps us in understanding the functioning that took place with in an organization from different perspectives. A questionnaire has been drafted, to try and understand the psyche of the VISHAL MEGA MART customers to know their needs and expectations which can be further utilized by the company to gain a competitive edge over their competitors. It also helps us in understanding the different technologies being used by VRPL. In the end, I came up with some suggestions based on my analysis of customer tastes and preferences and competition prevailing in retail sector.
Vishal Mega Mart
OBJECTIVES:1. 2. 3. 4. 5. 6.
To study the different software or Technologies used by Vishal Retail. To study the financial health of the organization in the current scenario and its stock. To study the selection and recruitment process of the employees and also to analysis the training and development method of the company. To Understand the Marketing Strategies being adopted by the company. To know the production process and plant location and layout of the company. To understand the scope of e-commerce in the context of modern business.
LIMITATIONS OF THE STUDY:1. 2. 3. 4.
Time available for the project being very short, in-depth study could not be done. The officials interviewed did not give the detailed information on recruitment and selection policies to maintain confidentiality. Sample size during the survey could not be taken higher due to time constraint. In-depth financial information could not be attained due to the policies of the company.
RESEARCH METHODOLOGY:Methods are the means to accomplish objectives. This study of Vishal Retail is primarily accomplished through secondary data since the collection of data was made through
Vishal Mega Mart published annual reports of the company, various records being available at office premises, Audited annual reports, Web site of the company. And also through interview process of customers and various officials who doesn’t want their name to be published.
INTRODUCTION:The Retail Sector is the largest sector in India after agriculture, accounting for over 10 per cent of the country’s 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. The Retail Industry in India is today amongst the fastest growing industries with several players entering the market. Currently, the organized retail sector accounts for only 2 per cent indicating a huge potential market opportunity. India is being seen as most attractive market by retail investors from all over the world. Retail is clearly the sector that is poised to show the highest growth in the next five years. The sector is set for a revolution, as both the present players and new entrants are gearing up to explore the market. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. There are about 300 new malls, 1500 supermarkets and 325 departmental stores currently under construction. Many players are coming up with huge investments, due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. Global retail giants such as Wal-Mart, Tesco, Germany's Metro AG and many others are ready to enter the retail markets. The rising demands of branded products and increase in purchasing power have lured these companies to enter the market. Modern retail development in India is focused on the cities like Mumbai, Pune, Ahmedabad, Delhi and the National Capital Region, Chennai, Banglore, Hyderabad, Kolkata. The leading Indian retailers are Bata India Ltd, Big Bazaar, Crossword, Vishal Mega Mart., Food Bazaar, Globus Stores Pvt. Ltd., Liberty shoes Ltd., Music World Entertainment Ltd., Pantaloon Retail India Ltd., Shoppers Stop, Subhiksha, Titan Industries etc.
Vishal Mega Mart
MODERN RETAIL STRUCTURE:It includesMalls like Ansal Plaza (New Delhi), Nucleus (Pune), Centre Stage (Noida) etc Discount Stores like Brand Factory, Loot, M&B Factory, Subhiksha, Big Apple, and Reliance Fresh. Department Stores like Shoppers Stop, Big Shop, and Pantaloons. Hypermarkets/ Supermarkets like Big Bazaar, Vishal Mega Mart. Convenience Stores like Spencer’s Daily, Tru Mart, Choupal, More. Multi Brand Outlets like Globus.
CURRENT SCENARIO:A glimpse of the international retail47 global fortune companies & 25 of Asia's top 200 companies are retailers Dominated by developed countries US, EU & Japan constitute 80% of world retail sales. Biggest player in India is Pantaloon Retail India Limited.
Vishal Mega Mart
PERCENTAGE OF ORGANIZED RETAIL:USA - 85% Taiwan - 81% Malaysia - 55% Thailand - 40% Brazil - 36% Indonesia - 30% Poland - 20% China - 20% India - 3% According to A.T. Kearney GLOBAL RETAIL DEVELOPMENT INDEX, India was placed at 1st position in the year 2005. However within 2 years of time i.e 2007, it is being placed at 2nd position jointly with China and after Vietnam.
Vishal Mega Mart
GROWTH OF RETAIL SECTOR:The following are the reasons for growth of retail sector in India- Increase in disposable income of consumers, Increase in consuming desire, Low share of organized retailing. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Accessories, Food, and even Jewellery, are slowly becoming lifestyle products. Retailers are taking benefit of this growth and accordingly are aiming to expand. Indian retail is expanding at a fast pace. India's retail industry, which is currently valued at nearly $350 billion, is expected to double in size by 2015. The Indian Retail Industry is gradually moving ahead towards becoming the next boom industry. Modern Large-Format retail, efficiently connects the producers and the consumers and is helpful to both in the long run. In India there is a huge wastage of fresh fruits and vegetables. In this scenario, the Large-Format Retail provides all important infrastructures to carry the farm produce to the consumers with lesser wastage. In this way the farmers get better returns and the consumer better quality and price.
KEY TRENDS:The existing players like Big Bazaar, Shoppers' Stop, Piramyd, and Vishal Mega Mart are expanding to smaller towns and cities. Many other business houses are planning to enter the retail sector either on their own or through partnerships. New entrants like Bharti pvt ltd and Wal-Mart are going to enter the market soon. Even rural areas will provide a huge opportunity to be explored.
Vishal Mega Mart
VISHAL RETAIL PVT. LTD. HISTORY
What started as a humble one store enterprise in 1986 in Kolkata (erstwhile, Calcutta) is today a conglomerate encompassing around 183 showrooms in 110 cities / 24 states. India’s first hyper-market has also been opened for the Indian consumer by Vishal. Situated in the national capital Delhi this store boasts of the singe largest collection of goods and commodities sold under one roof in India. VRPL was incorporated on July 23, 2001 under the Companies Act, 1956 as Vishal Retail Private Limited. VRPL was converted to a public limited company on February 20, 2006. At the time of incorporation, the registered office of VRPL was situated at 4, R. N. Mukherjee Road, Kolkata 700 001. Subsequently VRPL’s registered office was shifted to 54/4C, Strand Road, Kolkata 700 006 on August 1, 2001 and on February 14 2004, VRPL’s registered office was shifted to Mouza Kuch Pukur, P.S. Bhangore, 24 Paragnas (South), West Bengal. On December 29, 2005, VRPL’s registered office was shifted to RZ-A-95 & 96, Road No. 4, Street No. 9, Mahipalpur Extension, New Delhi 110 037, which is the present registered office of the Company. The fresh certificate of incorporation consequent on change of name was granted to our Company on February 20, 2006 by the Registrar of Companies, West Bengal. With a business purchase agreement dated November 23, 2001 executed between VRPL and Mr. Ram Chandra Agarwal (carrying on proprietorship business in the name of M/s The Vishal Garments) and Mrs. Uma Agarwal (carrying on proprietorship business in the name of M/s Vishal Garments), VRPL acquired the business of “M/s The Vishal Garments” and “M/s Vishal Garments”, and the said businesses were transferred to VRPL as a going concern with effect from December 15, 2001. With a business purchase agreement executed between VRPL and M/s Vishal Fashions Private Limited, they acquired the business of manufacturing of readymade garments as a
Vishal Mega Mart going concern with effect from March 31, 2003. VRPL went into backward integration by acquiring a manufacturing unit for readymade garments.
DETAILS OF DIRECTORS:Mr. Ram Chandra Agarwal, 43 years, is VRPL’s Chairman and Managing Director. He holds a bachelor’s degree in commerce from St. Xavier’s College, Kolkata. Mr. Agarwal has more than 20 years of experience in the retail industry and has been with VRPL since their inception in 1997. He started the business under the name of “Vishal Garment” with a small store at 9, Lal Bazaar Street, Kolkata. Mr. Agarwal has made efforts for the development of the value retailing industry in India and is well known for his business acumen. Mrs. Uma Agarwal, 33 years, is an executive Director of VRPL. She holds a bachelor’s degree in arts. Mrs. Agarwal has more than 7 years of experience in the retail industry. She has been associated with accounts department of VRPL. Mr. Surendra Kumar Agarwal, 46 years, is an executive Director of VRPL. He holds a bachelor’s degree in commerce. Mr. Agarwal has more than 17 years of experience in the retail industry. He has been associated with store development and management at various locations of VRPL. Mr. Bharat Jain, 45 years, is an independent Director of VRPL. He holds bachelor’s degree in commerce. Mr. Jain is engaged in the business of leather garments and accessories and has more than 23 years of work experience. Mr. Jain joined VRPL Board on May 8, 2006. Mr. Rakesh Aggarwal, 44 years, is an independent Director of VRPL. He holds a master’s degree in commerce. Mr. Aggarwal is currently engaged in roto-moulding industry has more than 20 years of work experience. Mr. Aggarwal joined VRPL Board on October 31, 2006. Mr. Ram Chandra Aggarwal is the husband of Mrs. Uma Agarwal and brother of Mr. Surendra Kumar Agarwal. None of our other Directors are related to each other.
Vishal Mega Mart
VRPL PROMOTERS AND GROUP COMPANIES:The following individuals are the Promoters of the Company: a). Mr. Ram Chandra Agarwal; b). Mrs. Uma Agarwal; and c). Mr. Surendra Kumar Agarwal. The following companies are the Promoters of the Company: a). Unicon Marketing Private Limited; b). Ricon Commodities Private Limited; and c). Vishal Water World Private Limited. The company has during the year 2008, established its five new companies by the name of VRL Foods Ltd., VRL Movers Ltd., VRL Consumer Goods Ltd., VRL Fashions Ltd. & VRL Infrastructure Ltd., none of the companies have commenced business operations during the year.
Vishal Mega Mart
VRPL’s BUSINESS:VRPL started as a retailer of ready-made apparels in Kolkata in 2001. In 2003, VRPL acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels. Subsequently, with evolution of retail industry in India and change in consumer aspirations, VRPL diversified their portfolio of offerings to include other retail goods. Currently, VRPL sell ready-made apparels and a wide range of household merchandise and other consumer goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, home furnishing, beverages, drinks, gift and novelties. VRPL follow the concept of value retail in India. In other words, VRPL’s business approach is to sell quality goods at reasonable prices by either manufacturing themselves or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). VRPL endeavor to facilitate one-stop-shop convenience for their customers and to cater to the needs of the entire family. VRPL believe this concept has helped them grow to their current size within a short time frame of 8 years. In order to reduce costs and take advantage of economies of scale VRPL have embarked on backward integration of their products. VRPL’s apparel manufacturing plant is located at Gurgaon, Haryana. For ensuring efficiency in supply chain, VRPL have set up seven regional distribution centers located around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Delhi. Further, VRPL have focused on developing a cost and time efficient distribution and logistics network, which currently comprises seven distribution centers and a fleet of trucks for transportation. VRPL achieved total sales of Rs. 1005.31 cr for fiscal 2008, as opposed to a turnover of Rs.602.65 cr for fiscal 2007 and Rs. 288.46 million for fiscal 2006. During the same period VRPL’s profit after tax was Rs. 40.64 cr, Rs.25.07 cr and Rs. 12.39 cr, respectively.
Vishal Mega Mart
To understand the financial position of Vishal Mega Mart. To analyise its share in stock market.
Financial management seeks to plan for the future such that a personal or business entity has a positive flow of cash.
Vishal Retail Balance Sheet ------------------- in Rs. Cr. ------------------Mar '04 Mar '05 Mar '06 Mar '07 12 12 12 12 mths mths mths mths 12 12 8 0 1.19 0 21.19 0.97 7.13 8.1 29.29 Mar '04 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors 12.31 2.52 9.79 0 0.98 20.27 0 14.82 14.82 0.09 0 15.49 0 30.4 19.56 3.1 22.66 53.06 Mar '05 12 mths 24.01 5.42 18.59 0 0 37.4 0 22.1 16.49 0 5.61 50.6 0 72.7 47.61 7.44 55.05 127.75 Mar '06 12 mths 45.99 10.6 35.39 4.64 0 78.2 0.09 18.32 18.32 0 0 108.44 0 126.76 216.3 26.91 243.21 369.97 Mar '07 12 mths 132.93 25.77 107.16 1.09 0 249.15 0.12
Mar '08 12 mths 22.4 22.4 0 0 248.76 0 271.16 448.9 83.9 532.8 803.96 Mar '08 12 mths 262.3 53.37 208.93 20.51 0.13 557.47 0
Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities
Vishal Mega Mart
Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 2.04 22.31 3.22 0 25.53 0 6.48 0.56 7.04 18.49 0.02 29.28 0 10.99 2.2 39.6 6.12 0 45.72 0 9.68 1.57 11.25 34.47 0.01 53.07 0 20.45 8.06 86.35 32.59 0.21 119.15 0 23.7 7.74 31.44 87.71 0 127.74 3.75 40.68 14.18 263.45 66.28 0.97 330.7 0 48.51 20.47 68.98 261.72 0 369.97 4.48 69.18 50.17 607.64 122.13 4.79 734.56 0 117.14 43.02 160.16 574.4 0 803.97 6.98 121.06
Source : Asian CERC
Vishal Mega Mart
PROFIT & LOSS ACCOUNT
Profit & Loss account
------------------- in Rs. Cr. ------------------Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 12 mths 12 mths 12 mths 12 mths 12 mths 88.10 0.00 88.10 0.11 8.02 96.23 66.49 0.00 3.02 8.84 0.00 14.87 0.00 93.22 Mar '04 12 mths 2.90 3.01 0.21 2.80 1.47 0.00 1.33 0.00 1.33 0.95 0.38 26.73 146.31 0.00 146.31 0.14 15.37 161.82 104.77 0.00 6.04 13.49 0.00 28.63 0.00 152.93 Mar '05 12 mths 8.75 8.89 0.98 7.91 2.92 0.00 4.99 0.00 4.99 1.98 3.02 48.16 288.46 0.00 288.46 0.31 40.70 329.47 216.74 8.69 15.13 12.83 45.07 4.06 0.00 302.52 Mar '06 12 mths 26.64 26.95 3.08 23.87 5.36 0.01 18.50 0.10 18.60 6.22 12.39 85.78 602.65 0.00 602.65 2.39 226.30 831.34 573.47 17.28 30.01 20.48 109.23 10.47 0.00 760.94 Mar '07 12 mths 68.01 70.40 15.73 54.67 15.29 0.00 39.38 -0.11 39.27 14.20 25.07 187.47 1,005.31 0.00 1,005.31 7.76 300.45 1,313.52 862.68 29.72 72.31 9.32 192.21 17.50 0.00 1,183.74 Mar '08 12 mths 122.02 129.78 38.99 90.79 27.60 0.00 63.19 0.00 63.19 22.55 40.64 321.06
Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalized Total Expenses
Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition
Vishal Mega Mart Preference Dividend 0.00 Equity Dividend 0.00 Corporate Dividend Tax 0.00 Per share data (annualized) Shares in issue (lakhs) 120.00 Earning Per Share (Rs) 0.32 Equity Dividend (%) 0.00 Book Value (Rs) 10.99 Source : Asian CERC The Company completed yet another year of strong performance with robust growth and high quality earnings. All business divisions posted strong growth and revenue and enhanced their market standing, testifying to the robustness of Corporate Strategy of creating multiple drivers for the growth. This performance is even more satisfying when viewed in the light of the challenging business environment of the Retail Industry. Its Total revenues rises up 67.43 % from Rs. 6050.42 Million to Rs. 10130.75 Million driven by addition in retail space, increased footfalls & increased Conversion Ratio. Daily footfalls increased by 103% from 89,829 to 182,396. Conversion Ratio improved from 42.2% to 43.1%.At the start of the year, Vishal Retail had planned the addition of 50 Stores to their Portfolio, but the Management exceeded the benchmark set by the board of directors, and launched 52 Stores and added Approx 1 Million. Sq. Ft. of Retail Space during the financial year ended March 31, 2008. under review. However, no dividend has been declared for this year because the directors were of the opinion that more funds are being required for the growth initiatives of the company. The relations between the Company and its employees continued to be cordial and harmonious throughout the year 0.00 0.00 0.00 148.20 2.04 0.00 20.45 0.00 0.00 0.00 164.91 7.51 0.00 40.68 0.00 0.00 0.00 183.25 13.68 0.00 69.18 0.00 0.00 0.00 223.99 18.14 0.00 121.06
Vishal Mega Mart
Vishal Retail Cash Flow ---in Rs. Cr.---
Mar '06 12 mths 18.82 -28.21 -25.91 60.38 6.06 2.2 8.27
Mar '07 12 mths 39.38 -102.41 -95.18 204.47 6.89 8.27 15.15
Mar '08 12 mths 63.19 -197.49 -114.58 356.24 44.17 10.79 54.96
Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents
Source : Asian CERC
Vishal Mega Mart
Vishal Retail Ltd. Stock:BSE: 532867 | NSE: VISHALRET | ISIN: INE945H01013 | Trading
PE ratio EPS (Rs) 1.79 (24/03/09)
18.17 (Mar, 08) 355.45 (Dec, 08) 10 9.39 4.01 (Mar, 08) (Mar, 08)
Sales (Rs crore) Face Value (Rs)
Gross profit margin (%) Net profit margin (%) Return on average equity Operating Ratio (%) Current Ratio Quick Ratio
14.98 (Mar, 08) 12.13 ( Mar, 08) 4.59 1.10 (Mar, 08) (Mar, 08)
Depending upon the success or failure of the Management to role over the debts and manage additional funds, this share will either zoom or go bust. The company is in talks to roll over more than Rs 90 crore of debt owed to banks. Company officials say the retailer is not generating enough cash. “We have not been able to generate positive cash flows from our operations in the first two months of this quarter,” said Chief Executive Manmohan Agarwal. Therefore, the next two quarters will be critical for the company, as sales are expected to fall further. The company’s third-quarter profit dropped 86 per cent to Rs 2.15 crore. CARE Rating, while downgrading the retailer’s short-term bank facilities, said the risk was accentuated due to the company’s inability to carry out a
Vishal Mega Mart proposed capital infusion, delay in sanction of working capital limits and higher liquidity risk. The company had a net debt, net of cash and other liquid assets, of Rs 765 crore on December 31, 2008. The company, being charged an average interest rate of 13 per cent, is negotiating with lenders to reduce the cost of the debt, as its interest outgo is expected to nearly triple this year. “Increasing interest payment on our balance sheet is a cause for concern and there is pressure,” Agarwal said. Vishal Retail is expected to pay interest of nearly Rs 100 crore in FY09 as against Rs 38 crore in FY08.
Vishal Mega Mart
OBJECTIVE:• • To understand the different marketing strategies being followed by Vishal Mega Mart. To learn their marketing mix.
Marketing help to define the business for the customer's interests, not your own. It is the process of learning what customers want or need and determining how to satisfy those wants or needs. It is also used to confirm whether the customer reacted to a marketing program as expected. The benefits of market research include: Learning who your customers are and what they want. Learning how to reach your customers and how frequently you should try to communicate with them. Learning which advertising appeals are most effective and which ones get no response. Learning the relative success of different marketing strategies, thus improving return on investment. Learning how not to repeat your mistakes. Vishal Mega Mart has been the pioneer of retail revolution. Its first fight was against local ‘Kirana’ stores. The task was to change the mindset of consumer to bring about changes in their shopping patterns. It wanted people to do bulk shopping for their monthly ration instead of going to the shop each week.
Vishal Mega Mart
MARKETING STRATEGY OF VISHAL MEGA MART
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 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.
Vishal Mega Mart
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 VRPL’s 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, VRPL’s 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 VRPL’s 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.
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 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.
Vishal Mega Mart
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. VRPL’s 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. VRPL’s 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 nonprint media of the Times Group i.e. internet, radio and 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.
Vishal Mega Mart
Strong understanding of the ‘value retail’ segment
VRPL’s business plan involves implementation of the concept of the ‘value retailing’, targeting the middle and lower middle income groups, which constitute majority of the population in India. VRPL intend to provide quality products at competitive prices. VRPL sell a vast range of merchandise across apparels and accessories, FMCG products, food products and consumer durables. VRPL’s emphasis has been to maximize the value that the customers derive in spending on goods bought in their stores. VRPL endeavor to continuously reduce their costs through a variety of measures, such as, in-house production of apparels, procurement of goods directly from the small and medium size vendors and manufacturers, efficient logistics and distribution systems along with customized product mix at their stores depending on the regional customer behavior and preferences. Central to their value retail strategy is to pass on the benefits of cost reduction measures to their customers.
Strong and efficient logistics and distribution network
VRPL’s 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.
Vishal Mega Mart
Studying Consumer Behavior
Dear Sir/Madam, I am doing a survey for my project on customer satisfaction level in Vishal Mega Mart. The following questionnaire has been drafted to help for understanding the needs and expectations of the customers. Therefore we request you to kindly spare some time and give us the following information. We assure you that the results of the study will be kept confidential. Please tick (√) the followings:-
1. 2. 3. 4. 5. 6.
Name: _________________ Income:_________________(optional) Gender:__________________ Age:__________ Occupation:_________________ What excites you most for shopping at Vishal Mega Mart? Any other plz specify_________
Promotional offers_____ Variety of products______ Price of the products_______
What do you usually buy from Vishal Mega Mart? Child care & Toys______ Utensils_____
FMCG products______ Apparels_________ Electronic goods__________
How often do you come at Vishal Mega Mart? Within 2 week______ Above 1 month____
Within a week________ Within a month______
How is your shopping experience at Vishal Mega Mart? Satisfactory_____ Unsatisfactory_____
Very Satisfactory_____ Average_____
Vishal Mega Mart Poor_____
Are you satisfied with the quality of the products offered by Vishal Mega No_____ Somewhat satisfied_____
Do you ever face any problem at Vishal Mega Mart? Heavy Rush_____ Out of stock products____
Billing Problems_____ Personnel’s lack of knowledge____ No problems faced_______
How would you rate your overall experience in this retail outlet? (Rate on
a 10 point scale) _______________
____________________________________________________________________ ____________________________________________________________________ ________________________________________________________
____________________________________________________________________ ____________________________________________________________________ ____________________________________________
Vishal Mega Mart
O P E RAT I O N S M A N A G E M E N T
OBJECTIVE:• • To study the inventory management, transportations system and logistics of Vishal Mega Mart. To understand the process of plant location and layout of the company.
VRPL Business Processes:VRPL’s business process can be summarized as below:
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 VRPL’s 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 parameters for store planning and establishment. For ensuring standardized formats of their stores, VRPL consider various factors, such as internal and external décor and colour schemes,
Vishal Mega Mart 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 VRPL’s 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.
VRPL’s merchandise planning is based on the concept of category management rather than traditional brand management practices. Apparels and Non Apparels Under category management for, say, apparels, VRPL create and cater to products across length and breadth of a category at different price points, fabrics, designs, shapes, seasons, colors and sizes. VRPL formulate annual merchandising plan for each division of merchandise taking into consideration factors such as past sales data, regional customer tastes and preferences, number of stores (established and proposed), likely 29
Vishal Mega Mart fashion and trends, in-house production resources, vendor management and price. Each division is further divided into major categories (for instance, men’s apparel as a division is further divided into three major categories, namely, upper, lowers and sports and ethnic wear). These major categories are in turn segregated into various subcategories. For example, men’s upper as a major category would be further divided into several subcategories such as formal shirts, casual shirts, party wear etc. Each sub-category consists of pre-defined SKUs, which are classified on the basis of price point, brand, style, pattern and size. VRPL draw annual sales projections for different SKUs and, accordingly, ascertain their sourcing requirements. Based on such information and lead time estimates for supplies, purchase orders with delivery schedules are issued. The inventory position for each SKU is reviewed fortnightly taking into account the actual sales and variations from the budgeted plans. Regular visits to the stores are made by the category merchandising team to identify the slow-moving-SKUs and explore the options to expeditiously dispose of them. For certain non apparel categories, their merchandise planning and scheduling also depends on introduction of new products and schemes by the vendors. For instance, if a branded home appliance manufacturer replaces a product with a new version, then their planning for the product would need to be reviewed based on the acceptability of the new version. In-house Manufacturing VRPL benefit from backward integration and in-house manufacturing of part of the apparel products sold in their stores. Through their manufacturing capabilities, VRPL is able to attain relative independence from intermediaries with a competitive advantage in terms of value and cost. VRPL use their manufacturing strengths to focus on enhancing product knowledge and their experiences from manufacturing enable them to negotiate better terms from the vendors and job workers. VRPL currently have an apparels manufacturing plant at Gurgaon, Haryana. The manufacturing plant is well-equipped with fully automatic machines for fusing, buttoning, embroidery and welt pocket-making operations. The factory has a capacity to
Vishal Mega Mart manufacture 5,000 pieces per day. The plant was commissioned in 2004 and achieved a capacity utilization of 80%. It has 450 machines and is operated by 500 workers. Further, VRPL are exploring the possibilities for establishment of another manufacturing facility, for the purposes of which they have acquired certain portions of land admeasuring 7.24 acres in Dehradun, Uttaranchal. In addition to in-house manufacturing, they have outsourced some parts of the manufacturing to “job workers” who work in their factory premises. VRPL undertake quality control measures by way of random sampling to ensure the pre-determined quality standards are met. To verify that the quantity of supplies is as per the order, they undertake count-check for every receipt of the goods. VRPL’s manufacturing team works closely with their design team to understand trends, develop products, value engineer and finally create season wise collection that cater to regional tastes. Purchasing Purchasing or vendor management assumes critical importance in retail business where one has to deal with multiple products. VRPL have in place a vendor management system, under which they identify vendors all over the country and overseas and seek to develop alliances and arrangements with them. They regularly interact with the vendors and share information such that the vendors remain familiar with their goals and targets. It has been their strategy to procure goods from small and medium sized vendors and manufacturers, which they believe has led to reduction in the cost of goods they sell and increase in their profitability. Upon ascertaining the procurements needs based on each SKU, VRPL explore the various options for sourcing the products. They continuously strive to procure goods from the place of origin to reduce the costs and control the quality. For identifying the vendors, VRPL assess the various possible options on factors such as capacity, credibility in the market, quality awareness and experience. After identifying the vendors for the goods, VRPL place purchase orders based on their SKU-wise plan, estimated lead time of each vendor and quantity to be procured from each vendor. VRPL follow a policy of ‘payment on delivery’ to negotiate better prices
Vishal Mega Mart with the vendors and in certain cases they also release payments in advance. To ensure quality of supplies, VRPL check quality by way of random sampling at the time of receipt of the goods. To verify that the quantity of supplies is as ordered, they undertake count-check for every receipt of the goods. For FMCG products, VRPL procure from large as well as small and medium size manufacturers. For procurement from the large manufacturers or their distributors, they endeavor to enter into formal arrangements for supply of products to all VRPL stores, such that they are able to derive fixed margins from sales of such products, irrespective of the locations. Under these agreements, they benefit from special discretionary discounts and offers directly from the manufacturers or their distributors. Since most of the arrangements with the large manufacturers or their distributors are for supplies across the country, they facilitate VRPL to expeditiously launch new stores, as VRPL do not have to identify local sources for supplies of the FMCG products. Such arrangements also help VRPL in standardizing the promotional schemes across all VRPL stores. For some of the FMCG products, such as staples and food grains, they purchase in bulk and break them down into smaller packages for sales. Further, based on their assessment of regional tastes and preferences, VRPL purchases some products locally from small and medium size vendors.
The basic raw materials required for the manufacturing process of apparels includes fabrics and accessories. VRPL merchandising teams source fabrics from local manufacturers in India depending upon their production plan. VRPL also source fabrics from the place of origin. VRPL source various other components and accessories from vendors in various parts of the country and also import them from China. Inventory Management, Distribution Network and Logistics VRPL’s distribution network and logistics encompasses all activities to ensure that goods are dispatched in right quantities and at right time to reach stores with sufficient time in hand to promptly cater to customer demands and optimization of inventory position. 32
Vishal Mega Mart They have built a system to monitor the inventory position on a real-time basis at each store, under which a stock requisition or delivery order is generated when pre-determined stock or re-order levels are reached. The re-order levels for stores are determined based on factors such as display levels, lead time for replenishment and average daily sales. VRPL review these re-order levels on continuous basis to factor in variances in demand based on seasons, trends and promotional schemes. VRPL have seven distribution centers over approximately 385,033 square feet. These distribution centers are located around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Mahipalpur (New Delhi). VRPL have clearly demarcated the stores which will be serviced by each distribution centre. The reorder levels for distribution centers are ascertained on the basis of factors like average daily sales of all the stores services, lead time for replenishment and buffer stock, which caters to both the existing and proposed stores to be fed. As for the stores, they regularly review these re-order levels. VRPL’s distribution centers and stores are connected through company-wide virtual network connection through broadband which helps to efficiently manage their network of stores and distribution centers throughout the country. They primarily utilise their own vehicles to transport the inventory to their stores from the distribution centers. In addition, VRPL use the services of logistic solution providers including low cost transport service providers in order to deliver products on time to VRPL stores and optimize transportation costs. Distribution centers operations have been streamlined through the standardisation of racking system, layouts and implementation of automatic replenishment system. Under arrangements with some of their merchandise manufacturers, they receive payment on account of display of their products.
Vishal Mega Mart
Internal Controls and Cost Reduction Measures:As a value retail chain, VRPL emphasize on reduction of costs at various stages and levels. In addition to reduction of costs of procurement and by way of optimization of inventory, VRPL employ on the following measures to enhance efficiencies and reduce operational and administrative costs: Pilferage Control VRPL have established three-layer security checks to control losses on account of pilferages at their stores. At the first level, VRPL employees screen the goods being carried out of the store by the customers. Professional security guards oversee the screening process. Lastly, VRPL have deployed electronic sensors to check any pilferages. In addition, all VRPL stores are covered by closed circuit television monitoring. Resource Utilization VRPL believe in reducing operating and administrative costs by way of optimum utilization of their human and other resources. For instance, they determine the staffing requirement on basis of a matrix containing factors such as store space and footfall intensity. VRPL also train their employees to assume cross-functional responsibilities. As a measure for optimum utilization of their space resources, they have adopted an efficient racking system by deploying relatively higher racks to maximize the space available in a store. The upper slabs of a rack are utilized for storage and the lower ones for display. This helps VRPL in eliminating the need of dedicated storage spaces is most of VRPL stores. Efficiency of Processes VRPL believe in adopting processes which are efficient. For instance, they ensure that about a quarter of the staff at a new store is deployed by transferring from their existing stores. This helps in ensuring that a new store is operated efficiently and that the freshly recruited staff receives on-the job training from the experienced staff. VRPL believe in continually reviewing and re-engineering various operational and administrative processes to make them both more efficient and cost effective.
Vishal Mega Mart
Wastage Monitoring VRPL endeavor to reduce wastage of goods at various stages. For instance, for transportation of goods in their trucks, they use iron boxes instead of cardboard cartons to ensure that the damage in transit is minimized. In addition, iron boxes have a longer life and have been more cost efficient.
Franchise and Other Arrangements
VRPL have franchise arrangements for three of their stores at Agra, Gwalior and Lucknow. Under the franchise agreements, the franchisee operates the stores. The expenditure for establishing the stores and holding the inventory is incurred by the franchisees subject to an assurance from their Company that there would be a minimum payment of commission towards the estimated operational expenses incurred by the franchisee. The sales registered in such stores are accounted for in their books and, as a consideration, VRPL pay a fixed commission on sales to the franchisees. VRPL store at Agra, which was operated by a franchisee, has been destroyed by a fire on November 27, 2006 and is currently not in operation. In addition, VRPL have entered into commission or joint venture arrangements for one store each in Bhubaneswar and Siliguri with the owners or lessees of the immovable properties where such stores are located. For the Siliguri store, VRPL operate the store and are obligated to pay a commission of 2% of the net sales per month from the store, subject to a minimum of Rs. 224,000 per month, subject to certain escalation provisions. Under the joint venture arrangement for VRPL Bhubaneswar store, VRPL operate the store and are obligated to pay commission of 2% on total monthly turnover of the store and fixed commission of Rs. 113,300 per month subject to certain escalation provisions.
Vishal Mega Mart
M A N AG E M E N T O F T E C H N O LO GY , I N N O VAT I O N & C H A N G E
OBJECTIVE:• To study the different software’s or technology being used by the Vishal Mega Mart. Technology is important to cut costs, improve efficiency, providing value to customers and increasing the customer experience. IT solutions help in synchronizing activities across various verticals such as procurement of inventory. Securities from both external and internal threats are also important when the scale of the operations increases. Most of their critical functions such as Supply Chain, Operations, Finance & Accounts, and Customer Loyalty Program & Human Resources are linked through a computer network. This has enabled them to reduce their time to market and respond to the changing customer requirements. This has also helped them reduce their costs of operations through both, reduction in wastages and missed opportunities as well as a consequent reduction of the overall costs of operations. VRPL are focused on acquisition and implementation of advanced information technology systems, processes and business applications in order to handle all store operations including inventory management and billing. VRPL office processes are also computerized which support procurement, supply chain logistics, distribution centers management and inventory control. All the locations are connected through companywide virtual network connection which helps to efficiently manage their network of outlets throughout the country. VRPL believe that their business requires efficient management and storage of data and information to utilise for business analysis, research and forecast. Based on VRPL’s existing information technology systems, they are able to generate detailed daily reports covering the various aspects of their business such as division wise sales per store, inventory movement and position at stores and distribution centers and generation of 36
Vishal Mega Mart purchase and delivery orders. In August 2005, VRPL had entered into a software end-user license agreement with Systems, Applications and Products in Data Processing Private Limited (“SAP India”) for grant of a non-exclusive and perpetual license to VRPL to use the SAP software, documentation and other information related thereto. SAP for Retail provides an integrated technology platform for retailers and a one point solution for supporting and managing different business models such as owned stores, franchise stores, shop n shop concepts. Strong business decision and analytical capabilities have enabled retailers of all sizes the power to make the right decisions quickly and profitably. Beginning with a computerized cash memo, to use FoxPro for operations & accounting and, implementation of a complete ERP from JDA (J. D. Armstrong Software Group), they have gradually extended the Use of technology in their various areas of operations. In order to increase the speed and traceability to the supply chain management Vishal Mega Mart introduces Bar Code Technology. Bar code is tried and tested technology— the “no-brainer” choice for identifying items in the supply chain. Yes, it does have short comings in that applying it means that everything has to be in line of sight because light is used to capture and read the bar code. But as goods are handled either by humans or machines, the goods are always visible, as are their labels—labeling standards mean that it is virtually impossible to not see the label and its bar code. This means that some form of scanner is used—the range of available technology is broad—either by an operator wielding a hand-held device or by a machine-mounted or fixed-position scanner. Beyond the bar code is RFID (radio frequency identification) where a chip within a tag carries information and is read using radio waves. Vishal Mega Mart uses the latest technology to improve its performance Quality as well as Quantity Wise. Bar code scanners are very sophisticated devices these days. Functionality and reliability is extremely important. Vishal Mega Mart also uses CCTV to monitor its stores. Various CCTV’s are being installed in a store, with a room where the entire functioning taking place in a store can be monitored by a human operator. VRPL have partly implemented their information technology set up and are currently in the midst of completing the process of upgrading their information technology set up and
Vishal Mega Mart have entered into an agreement dated September 6, 2005 with Tata Consultancy Services Limited for providing information technology services including implementation of more advanced ERP applications such as SAP, rendering services inter alia for management information system on reports related to stock management, receipt processing, picking and packing, project systems, merchandise assortment management, pricing and promotion, sales, controlling and financial accounting. Management Information Systems (MIS) They have strong MIS capabilities that make use of their technological investments to generate valuable insight for them and help them in improving their operations, as well as in enhancing their speed of response to what the customers want. They are thus able to monitor their performance on a day-to-day basis, across stores, departments and product categories and compare the same with other stores as well as across periods. This helps them take corrective action on a timely basis, and optimize their stock. They are currently using Business Objects to analyze data related to the buying trends of their loyalty customers.
Vishal Mega Mart Following are the table which shows the different software used by the organization in the organization activities, for customer transaction & for employees working in the organization. 1. “JDA ERP” software. Functional Area: Merchandising Buying, product ordering, Receipt confirmation, Stock transfer, Inventory Management, Sales Merchandise event
Comments: JDA is one of the leading ERP systems used by many retailers for multiple Business models in regards to retailing. The system is fully integrated and takes care of the Supply chain from a manufacturer to the end customer by using back-end and front-end systems like MMS (Merchandise Management System) & WinDSS (Windows Distributed Stores Systems).
2. “Oracle Financial” software. Functional Area: Financial Accounting Comments: Completely integrated with their retail ERP- MMS, allows them to get online integrated financials. 3. “RAMCO HRMS” software Functional Area: Human Resources. Comments: Their system supports Personnel Management, Payroll Management, Employee Benefits Management, Training Management and Executive Information.
Vishal Mega Mart
4. “WMS” software Functional Area: Distribution and Logistics. Comments: WMS enable the space planning and also integrated SKU location which enable faster picking and putting of merchandising. 5. “Arthur Planning” software Functional Area: Merchandising Planning. Comments: An integrated planning and decision making tool. 6. “Microsoft Exchange” software Functional Area: Internal/External communication.
Comments: Enterprise wide mailing solution.
Vishal Mega Mart
H U M A N R E S O U RC E S M A N AG E M E N T
OBJECTIVES:• • • To study how the company manages its human resource. To try and understand the recruitment and selection process, various training and development programmes for its employees. To understand the management organization system.
Human Resource Management (HRM) means employing people, developing their resources, utilizing maintaining and compensating their services in tune with the job and organizational requirement. The industry needs skilled manpower to fit the diverse roles at the front-end and back-end of the new and complex retail formats. It is estimated that over 2.5 million jobs will be created in the sector by 2010. The complexity of the operations requires trained personnel. The modern formats require staff to handle administration, public relations, advertising, store management, sourcing, and merchandising and information management. A number of reputed institutes have started offering specialized courses in retail management. The Company places a huge emphasis on fostering a culture of innovation and enterprise that allows people within the Company to realise human beings' infinite potential. The Company continues to increasingly focus on internal growth and development of its associates, cutting across levels and functions, through focused developmental efforts and growth opportunities. For the year under review, the Company has provided 66 hours of training per associate. Apart from regular training in skills enhancement and customer engagement, the Company also emphasizes on building a sense of pride, belonging and self-confidence among its employees working at the stores. It has been able to employ innovative strategies to attract talent from other industries. Their human resource policies are targeted at creating an engaged and motivated work force. They have a fairly young team with the average age of the organization being 26 41
Vishal Mega Mart years as on January 31, 2008. Managing a young team engaged in a service intensive business with largely repetitive work is one of the challenges that they face. Their human resource policies are aimed towards creating a skilled and motivated work force. VRPL have around 7000 employees both employed in their stores as well as in their manufacturing units and other facilities, as on September 30, 2006. They provide a conducive work atmosphere and opportunities for their employees to learn and grow. The following table provides a classification of VRPL employees on the basis of their age and education. Age No. of Employees 18-24 25-35 Total 4,093 2,013 6,938 4,440 2,081 417 6,938
35 and above 832 Education No. of Employees Under Graduates Graduates Post Graduates Total
Compensation and Performance Based Incentives
VRPL’s 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 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. Variable pay is an important component of total compensation, with all their associates
Vishal Mega Mart covered under their Profit Linked Reward Scheme (PLRS), linking individual performance and Company profitability. Their part-time and full-time employees are eligible for PLRS. Almost 60% of Customer Care Associates earned PLRS in the year ended March 31, 2007. They also have Employee Stock Option Plans (ESOPs).
VRPL encourage their employees to be enterprising and expect them to ‘learn on the job’ and contribute constructively to their business, either through ideas, personal networks or effective knowledge management. In essence, they train their employees to become next generation entrepreneurs, who can effectively lead the growth of their business. Their corporate objective is to provide every associate with an average of 5 man days of training per annum through internal and external resources. All senior management members are required to contribute 30 hours per annum towards training.
Recruitment & Selection
For posts of team members the following rounds takes place-
1. 2. 3.
Psychometric tests, Behavioral Intelligence Test, Logical thinking and Comprehension Test. Application blank. Personal Interview, Operations Interview, Regional Manager Interview.
For Area Manager:
1. 2. 3.
Collection & review of curriculum vitae Personal interview with Regional HR Manager Personal interview with GM- HR
The salient features of Vishal Mega Mart staff are: -
Well-trained staff, the staff employed by Vishal Mega Mart is well-suited for 43
Vishal Mega Mart modern retail.
2. 3. 4. 5. 6.
Well-dressed staff improves the overall appearance of store. Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so staff is empowered to take innovative steps. Multiple counters for billing, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere. The employees are motivated to work efficiently and effectively towards the achievement of organizational goal by satisfying their personal needs. The employees were given bonus and gifts during the festivals like diwali, etc.
Vishal Mega Mart
Management Organization Structure:-
Vishal Mega Mart
R.C.Agarwal Chairman & Managing Director
Board of Directors
S.K.Agarwal Whole-time Director
Heads - Zonal
Head-Supply Chain Management
Chief Operating Officer
Head – Legal & Secretarial
Head – IT
Head-Admin & HR
Head-Finance, Accounts & MIS
Vishal Mega Mart
E - C O M M E RC E
OBJECTIVES:• • To study the different steps taken by VRPL in relation with online shopping. To try and understand the importance of Vishal Mega Mart website.
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.com which promises to be a boon for its customers.
Vishal Mega Mart
VRPL has its own site named as www.vishalmegamart.net.
Vishalmegamart.net is concerned about the safety and security of their website and customers. Accordingly, they have put a number of technological protections in place to ensure that their transaction process is extremely safe and that their customers' information is secure. They provide a large amount of information to their customers, suppliers through their website. This information includes their stores in different areas, cities with correct address and contact no’s, products being offered by them, career opportunities, enquiry, supplier’s zone etc.
Vishal Mega Mart
Vishal Mega Mart also provides opportunities to its customers by collaborating with shopping.indiatimes.com and with shopping.rediff.com.
How to Shop Firstly, you have to register yourself with the shopping.indiatimes.com & shopping.rediff.com. Place your order through following these 7 quick and easy steps: 1. Find the Items You Want to buy. 2. Add the Items to Your Shopping Bag 3. Proceed to Checkout 4. Sign In/Create a New Account/Choose guest checkout 5. Enter a Shipping Address 6. Provide Payment Information and authorization 49
Vishal Mega Mart
7. View or print your Order Acknowledgment and check your Order status. Here are a few important action points that you should bear in mind:1. Keep your PC updated with the latest anti-virus / anti-spy ware software. 2. Install a personal firewall on your PC to protect your account. 3. Keep your PC updated with the latest security patches and, most importantly, 4. Do not click on links or open attachments in unknown or unsolicited (spam) emails.
Vishal Mega Mart
Road Ahead; Plans of Large Retailers
• Reliance Retail: Investing Rs.30, 000 crore ($6.67 billion) in setting up multiple retail formats with expected sales of Rs.90, 000 crore-plus ($20 billion) by 2009-10. • Pantaloon Retail: Plans to occupy 10 mn sq.ft retail space and achieve Rs.12, 000 crore-plus ($2.5 bn) sales by 2010. • RPG: Planning IPO will have 450-plus Music World, 50-plus Spencer's Hyper covering 4 mn sq.ft by 2010. • LIFESTYLE: Investing Rs.400 crore-plus ($90 mn) in next five years on Max Hypermarkets & value retail stores, home and lifestyle centers. • Raheja's: It Operates Shoppers Stop, Crossword, Inorbit Mall, and 'Home Stop' formats. Will operate 55 Hypercity hypermarkets with US$100 million sales across India by 2015. • Piramyd Retail: Aiming to occupy 1.75-million sq.ft retail space through 150 stores in next five years. • TATA (Trent Ltd.): Trent to open 27 more stores across its retail formats adding 1 mn sq.ft of space in the next 12 DLF malls. Titan industries to add 50-plus Titan and Tanishq stores in 2010.
Vishal Mega Mart
1. The choice of a store location has a profound effect on the entire business life of a retail operation. A bad choice may all but guarantee failure, a good choice, and success. 2. Choosing a retail location is, at best, a risky undertaking. Considering the consequences of choosing a location that proves to be unsuitable, it pays to get as much assistance as possible. According to a survey more than 60% of the customer prefers to shop in a retail store which is easily accessible to them. 3. Advertising plays a very important role in achieving growth for any retail company. This is evident from the fact that Advertising by Retail Industry registered a rise of 12 percent during January - May 2007 over January - May 2006. 4. The right location, trained manpower, software assistance, product with a distinct differentiation, a strong value proposition, efficient supply chain management these are the factors that influence the success of a retail outlet. With competition in this segment increasing, differentiation and a strong value proposition assume significance. Retail chains are realizing that they cannot be another ‘me-too’ store. The differentiation today among the 5-6 retail chains has come through private labels, which in some cases account for as much as 70 per cent of the total merchandise in the outlet. 5. Variety offered by any retail store is of very much important to attract all type of customers in the stores. A large variety of products caters to each segment of customers. 6. Shopping experience within a store also has a great impact on selecting a product from a particular retail store. Overall ambience includes infrastructure facilities provided by the store such as air conditioners, lighting etc. 7. Pricing is in fact a dramatic controller of at least 3 key strategic elements to any company's success: Company’s image, the product and services company sells and consumer behavior. The Importance of Pricing their Products' will give them an insight into developing appropriate costing methods and the impact of getting 52
Vishal Mega Mart it wrong in today's competitive creative market. This topic should be of interest to anyone who is unsure if they are getting it right. Remember the difference between over or under-pricing their work can mean a very short future for any business. Approximately 60% customers think that Price is the most important factor while they go for shopping in a retail stores 8. Quality in everyday life and business, engineering and manufacturing has a pragmatic interpretation as the non-inferiority, superiority or usefulness of something. This is the most common interpretation of the term. The quality of a product or service refers to the perception of the degree to which the product or service meets the customer's expectations. Quality has no specific meaning unless related to a specific function and/or object. Quality is a perceptual, conditional and somewhat subjective attribute. And in addition to that, more than 90% of customers place quality as the most important factor than anything else in the list to shop in a retail store. 9. More than 70% of customers place variety as an important factor to shop in a particular retail store. 10. Brands name bears an important role while shopping of any type of goods. So building a brand for a retail store is important as 80% of customer still prefer to buy branded clothes in the retail store instead of local or unbranded clothes.
Vishal Mega Mart
Suggestions:1. Include more trained sales person to help customers in the store while shopping. 2. Improve quality of the products especially clothes. 3. Play good songs or soothing music in the store rather than cheap filmy songs. 4. Customer care service can be introduced 5. More branded products can be displayed in the store as people still prefer branded clothes than offered by local venders. 6. Constant reminder of discounts through pamphlets, speakers inside the store for inducing consumers for impulse buying. 7. Add more cosmetic products as its having a huge market of consumers attached to it. 8. Display of product should be improved so that the product is easily visible to the consumers. 9. Proper advertisement in press and outdoor to make Vishal Mega Mart should be visible in the eyes of consumers. 10. Should have parking spaces in front of every store. 11. Hire more salesgirls as in ladies section its very difficult for both the consumers and salesman to interact with each other. 12. Regular training to sales person to improve there overall performance.
Complaints: 1. Low variety of product available and customization of products is not there. 2. Air conditioners are not properly working 3. Prices are not mentioned at all places and at all products. 4. Prices are not competitive as they are assumed to be higher when consumers are visiting other retail outlets. 5. Grocery items are not sufficient and they are not at all available at many stores. 6. Clothing items of women are priced unreasonably 7. Lack of space in the store while shopping and moving within a store.
Vishal Mega Mart
Recommendation: 1. Customization of clothing should be given an important consideration. 2. Proper packaging and provide contrast labeling in displays of product. 3. Should apply electronic supply chain management for better inventory management. 4. Proper power back up as air conditioners are not working to their full capacity at many stores. 5. Proper placements of Gondola in the stores as space between them are very less. 6. Proper display in the gondola and top most rack of the gondola should be used for storing of inventory rather than display of product. 7. Should provide more festival schemes and at proper time. 8. Should use psychological pricing-more discounts by increasing the price 9. Proper display of cutlery items 10. Clothes should be in sync with fashion.
Vishal Mega Mart
BIBLIOGRAPHY:1. http://www.vishalmegamart.net/ 2. http://www.moneycontrol.com/india/news/OTHER%20NEWS/sbi-card-vishalmega-mart-launch-co-branded-credit-card/22/46/205965 3. http://www.moneycontrol.com/india/stockpricequote/trading/vishal-retail/VR02 4. http://www.cxotoday.com/India/News/Vishal_Megamart_Deploys_PRILs_Retail _Excel/551-75867-911.html 5. http://www.televisionpoint.com/news/newsfullstory.php?id=1127933505