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Vishal Mega Mart

PROJECT REPORT ON
CUSTOMER
SATISFACTION
AT

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 Mushkoor Ah. Bhat


(H .O .D IN MANAGEMENT) B.B.A- 1st SEM
ROLL NO:-8140332018

Jalandhar
Punjab.

ST. Solidier Management and

Technical Institute

Vishal Mega Mart

INDEX
Acknowledgement

Executive Summary

Objectives & Limitations

Retail-Introduction

Company Overview

10

VRPLs business

13

Domain Area
Financial Management

14

Marketing Management

21

Operations Management

28

MTIC

36

Human Resource

41

E-commerce

46

Road ahead

50

Findings of the study

51

Conclusion (S,C,R)

53

Bibliography

55

Vishal Mega Mart

ACKNOWLEDGEMENT
Words often fail to express ones inner feelings of gratitude and indebtedness to
ones 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. To study the different software or Technologies used by Vishal Retail.


2. To study the financial health of the organization in the current scenario and
its stock.

3. To study the selection and recruitment process of the employees and also
to analysis the training and development method of the company.

4. To Understand the Marketing Strategies being adopted by the company.


5. To know the production process and plant location and layout of the company.

6. To understand the scope of e-commerce in the context of modern business.

LIMITATIONS OF THE STUDY:1. Time available for the project being very short, in-depth study could not be done.

2. The officials interviewed did not give the detailed information on


recruitment and selection policies to maintain confidentiality.

3. Sample size during the survey could not be taken higher due to time constraint.

4. 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
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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 doesnt 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 countrys GDP and around 8 per cent of the employment. India
has the most unorganized retail market in the world. Most retailers of the
unorganized retail market have their shop in the front and house at the back. 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.
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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 Spencers 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. Indias 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 VRPLs registered office was shifted to
54/4C, Strand Road, Kolkata 700 006 on August 1, 2001 and on February 14 2004,
VRPLs registered office was shifted to Mouza Kuch Pukur, P.S. Bhangore, 24 Paragnas
(South), West Bengal. On December 29, 2005, VRPLs 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
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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 VRPLs Chairman and Managing
Director. He holds a bachelors degree in commerce from St. Xaviers 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
bachelors 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 bachelors 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
bachelors 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
masters degree in commerce. Mr. Aggarwal is currently engaged in rotomoulding 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.

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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.

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Vishal Mega Mart

VRPLs 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, VRPLs 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. VRPLs 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 VRPLs profit after tax was Rs. 40.64 cr, Rs.25.07 cr and
Rs. 12.39 cr, respectively.

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Vishal Mega Mart

F I NAN C IALMANAG E M E N T

OBJECTIVES:-

1. To understand the financial position of Vishal Mega


Mart. 2. 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.

BALANCE SHEET
Vishal Retail
Balance Sheet

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

------------------- in Rs. Cr. ------------------Mar '04


Mar '05
Mar '06
12
12
12
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

14

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 '07
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

Mar '08
12
mths

Vishal Mega Mart


Cash and Bank Balance

2.04

2.2

8.06

14.18

50.17

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

22.31
3.22
0

39.6
6.12
0

86.35
32.59
0.21

263.45
66.28
0.97

607.64
122.13
4.79

25.53
0
6.48
0.56
7.04
18.49
0.02
29.28

45.72
0
9.68
1.57
11.25
34.47
0.01
53.07

119.15
0
23.7
7.74
31.44
87.71
0
127.74

330.7
0
48.51
20.47
68.98
261.72
0
369.97

734.56
0
117.14
43.02
160.16
574.4
0
803.97

Contingent Liabilities
Book Value (Rs)

0
10.99

0
20.45

3.75
40.68

4.48
69.18

6.98
121.06

Source : Asian CERC

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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

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

16

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

288.46
0.00
288.46
0.31
40.70
329.47

104.77
216.74
0.00
8.69
6.04
15.13
13.49
12.83
0.00
45.07
28.63
4.06
0.00
0.00
152.93
302.52
Mar '05 Mar '06
12 mths 12 mths
8.75
26.64
8.89
26.95
0.98
3.08
7.91
23.87
2.92
5.36
0.00
0.01
4.99
18.50
0.00
0.10
4.99
18.60
1.98
6.22
3.02
12.39
48.16
85.78

602.65
0.00
602.65
2.39
226.30
831.34

1,005.31
0.00
1,005.31
7.76
300.45
1,313.52

573.47
862.68
17.28
29.72
30.01
72.31
20.48
9.32
109.23
192.21
10.47
17.50
0.00
0.00
760.94 1,183.74
Mar '07 Mar '08
12 mths 12 mths
68.01
122.02
70.40
129.78
15.73
38.99
54.67
90.79
15.29
27.60
0.00
0.00
39.38
63.19
-0.11
0.00
39.27
63.19
14.20
22.55
25.07
40.64
187.47
321.06

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

0.00
0.00
0.00

0.00
0.00
0.00

0.00
0.00
0.00

0.00
0.00
0.00

148.20
2.04
0.00
20.45

164.91
7.51
0.00
40.68

183.25
13.68
0.00
69.18

223.99
18.14
0.00
121.06

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. The relations between the Company and its employees continued to be
cordial and harmonious throughout the year 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.

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Vishal Mega Mart

CASH FLOW
Vishal Retail
Cash Flow
---in Rs. Cr.---

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

Mar '06
12
mths
18.82
-28.21

Mar '07
12
mths

Mar '08
12
mths

39.38
63.19
-102.41 -197.49

-25.91
60.38

-95.18
204.47

-114.58
356.24

6.06
2.2
8.27

6.89
8.27
15.15

44.17
10.79
54.96

Source : Asian CERC

1
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Vishal Mega Mart

Vishal Retail Ltd. Stock:BSE: 532867 | NSE: VISHALRET | ISIN: INE945H01013 | Trading
PE ratio

1.79

(24/03/09)

EPS (Rs)

18.17 (Mar, 08)

Sales (Rs crore)

355.45 (Dec, 08)

Face Value (Rs)

10

Gross profit margin (%)

9.39

(Mar, 08)

Net profit margin (%)

4.01

(Mar, 08)

Return on average equity 14.98 (Mar, 08)


Operating Ratio (%)

12.13 ( Mar, 08)

Current Ratio

4.59

(Mar, 08)

Quick Ratio

1.10

(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 companys third-quarter profit dropped 86 per cent to Rs 2.15
crore. CARE Rating, while downgrading the retailers short-term bank facilities, said the risk
was accentuated due to the companys inability to carry out a
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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.

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Vishal Mega Mart

MAR K E TI N G MANAG E M E N T

OBJECTIVE:1 To understand the different marketing strategies being followed by


Vishal Mega Mart.
2 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.

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Vishal Mega Mart

MARKETING STRATEGY OF VISHAL MEGA MART


Product
Vishal Mega Mart offers a wide range of products which starts from apparels to food
items, footwear to home furnishing, crockery to sport items, child care 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.

22

Vishal Mega Mart

Price
Vishal Mega Mart promises its consumers the lowest available price. The concept of
psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Vishal Mega
Mart also caters on Special Event Pricing (Close to Diwali, Christmas, New Year etc.).
Selling combo-packs and offering discount to customers. The combo-packs add value to
customer. Through Bundling, they also reduced the price of the products. In addition to
VRPLs strategy to continue procurement of goods from small and medium size vendors
and manufacturers which leads to cost efficiencies, VRPL intend to procure FMCG and
apparels from low-cost production centers located outside India. Towards this objective,
VRPLs propose to increase their procurement of finished and semi-finished goods from
China and thereby realize economies of scale and pass on the benefits so accrued to
their customers. The efforts of VRPLs retail business are targeted towards families
having total income which can be classified under the lower middle and middle
income groups. VRPL follow uniform pricing policy across their stores in respect of
private labels and non-branded products sold by them. This enhances brand loyalty,
encourages customer confidence and results in operational convenience. In relation to
the other products, the prices may vary between stores on account of state-specific
taxation and vendor policies.

Place
Vishal Mega Mart stores are located in 110 cities with more than 180 outlets. Vishal
Mega Mart has presence in almost all the major Indian cities. They are aggressive on
their expansion plans. VRPL intend to increase their penetration in the country by setting
up new stores in cities where they already have presence, as also entering into new
areas in the country. In particular, they intend to focus on 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.

23

Vishal Mega Mart

Promotion
Advertising has played a crucial role in building of the brand. Vishal Mega Mart
advertisements are mainly seen in print media i.e. newspapers, Television with Tina
Parekh as there in advertisement, and sometime road-side bill-boards. VRPLs category
management system is used to plan promotional schemes. They launch promotional
schemes weekly. Apart from general sales promotion, the category manager formulates
promotional plans for slow movers. In addition, to promote sales, they focus on layout
of the stores and positioning, presentation and display of merchandise, in order to
appeal to the customer. In addition, VRPL have introduced, in association with SBI
Cards & Payment Services Private Limited, a co-branded credit card. VRPLs propose to
continuously undertake such initiatives to increase the satisfaction of their customers.
Some of the features of the co-branded card include Rs 250 discount voucher on signing
up for the card and a process by which the cardholder earns five reward points on every
Rs 100 spent. A cardholder accumulates points on the basis of purchases made and the
points accumulated can be redeemed for gifts or purchases. In September 2005, VRPL
entered into a long term advertising agreement with Bennett, Coleman & Company
Limited (BCCL). Under the agreement, they are entitled to fixed discounts for their
advertisement in print publications of BCCL for a period of five years from the date of the
agreement. In addition, BCCL would also act as a facilitator for other print and non-print
media of the Times Group i.e. internet, radio and 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.

24

Vishal Mega Mart

Strong understanding of the value retail segment


VRPLs 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. VRPLs 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


VRPLs distribution and logistics network comprises seven distribution centers. Besides,
VRPL have their own fleet of 31 trucks, which helps VRPL to transport and deliver their
products in a cost and time efficient manner. VRPL believe that their distribution and
logistics set up is well networked and allows them to fulfill the store requisition within
short time period of generation and receipt of order, which has helped VRPL to optimize
in-store availability of merchandise and minimize transportation costs. Their strong
distribution and logistics network has enabled them to dispense with the requirement of
a dedicated storage space at every store, which is an industry practice, and instead
undertake periodical replenishment of depleted stock. Due to adoption of an efficient
racking system, they are able to benefit from optimum utilization of the space allocated
for display in their stores. This provides them assistance in maintaining a low working
capital requirement and less carrying cost.

25

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.

__________
N
a Income:_________________(
m optional)
e
: Gender:__________________
_
_ Age:__________
_
_ Occupation:_______________
_ __
_
_ What excites you most for
shopping at Vishal Mega Mart?

A _____ Utensils_____
Promotional offers_____ Any p
Electronic
other plz specify_________
p
goods__________
a
Variety of products______
r 8. How often do
Price of the products_______ e
you come at Vishal
l Mega Mart?
7. What do you usually buy s
from Vishal Mega Mart?
_ Within a
FMCG products______
Child _ week________
_
Within 2
care & Toys______
_ week______

Within a month______
Above 1 month____

9. How is your shopping


experience at Vishal Mega
Mart?
Very Satisfactory_____
Satisfactory_____

Average_____
Unsatisfactory_____
26

Vishal Mega Mart


Poor_____

10.

Are you satisfied with the quality of the products offered by Vishal Mega

Mart?
Yes____

11.

No_____

Somewhat satisfied_____

Do you ever face any problem at Vishal Mega Mart?

Billing Problems_____

Heavy Rush_____

Personnels lack of knowledge____

Out of stock products____

No problems faced_______

12.

How would you rate your overall experience in this retail outlet? (Rate on

a 10 point scale)
_______________

13.

Any complaints:-

____________________________________________________________________
____________________________________________________________________

________________________________________________________

14.

Any suggestions:-

____________________________________________________________________
____________________________________________________________________

____________________________________________

2
7

Vishal Mega Mart

O P E R AT I O N S M A N A G E M E N T

OBJECTIVE:1 To study the inventory management, transportations system and


logistics of Vishal Mega Mart.
2 To understand the process of plant location and layout of the company.

VRPL Business Processes:VRPLs 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 VRPLs retail business are
targeted towards families having total income which can be classified under the
lower middle and middle income groups. Accordingly, VRPL plan their strategy to
search for areas within cities where such customers are domiciled in large numbers
and make efforts to locate themselves within the reach of such customers.
VRPL believe that adoption of standard formats for their stores has led to their brand
establishment and identification among their customers and will increase their base of
loyal customers. In pursuance of this, they have adopted standard parameters for store
planning and establishment. For ensuring standardized formats of their stores, VRPL
consider various factors, such as internal and external dcor and colour schemes,
28

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
VRPLs existing manufacturing facilities are located at Plot No. 224, Phase 1
Udyog Vihar, Gurgaon, for which they have leasehold interest until May 4, 2009.
In addition, VRPL have recently acquired freehold interest in relation to a land
admeasuring 7.24 acres in Dehradun, Uttaranchal, where they are exploring the
possibilities for establishment of another manufacturing facility.
Other Properties
VRPL have recently acquired freehold interest in relation to a land admeasuring
82,830 square feet in Hubli, Dharwad.

Merchandise Planning
VRPLs merchandise planning is based on the concept of category management
rather than traditional brand management practices.
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, mens 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, mens upper as a major category would be further
divided into several sub-categories 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
30

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.
VRPLs 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
31

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.

Apparel Manufacture
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


VRPLs 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 predetermined 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.

VRPLs 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.

33

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.
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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.

35

Vishal Mega Mart

MANAG E M E N TO F TE C H N O LO G Y,
I N N O VAT I O N & C H A N G E

OBJECTIVE:1 To study the different softwares 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 company-wide 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 VRPLs
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 nobrainer 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 labelslabeling standards mean that it is virtually
impossible to not see the label and its bar code. This means that some form of scanner is
usedthe range of available technology is broadeither by an operator wielding a handheld 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 CCTVs 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
37

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.

38

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.
39

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.

40

Vishal Mega Mart

H U MAN R E S O U R C E S MANAG E M E N T

OBJECTIVES:1 To study how the company manages its human resource.


2 To try and understand the recruitment and selection process, various
training and development programmes for its employees.
3 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 4,093
25-35 2,013
35 and above 832
Total 6,938 Education
No. of Employees
Under Graduates

4,440

Graduates

2,081

Post Graduates

417

Total

6,938

Compensation and Performance Based Incentives


VRPLs compensation policy is performance based and they believe it is competitive
with industry standards in India. VRPL endeavor to recognize talent and potential in
their employees and encourage them to take additional responsibilities. Based on
performance, VRPL calibrate their employees and reward loyalty by preferring inhouse 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
42

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).

Training
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. Psychometric tests, Behavioral Intelligence Test, Logical thinking and


Comprehension Test.

2. Application blank.
3. Personal Interview, Operations Interview, Regional Manager Interview.
For Area Manager:

1. Collection & review of curriculum vitae


2. Personal interview with Regional HR Manager
3. Personal interview with GM- HR
The salient features of Vishal Mega Mart staff are: -

1. Well-trained staff, the staff employed by Vishal Mega Mart is well-suited for
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Vishal Mega Mart


modern retail.

2. Well-dressed staff improves the overall appearance of store.

3. Employees are motivated to think out-of-the-box. Retail sector is in growth


stage, so staff is empowered to take innovative steps.

4. Multiple counters for billing, staff at store to keep baggage and security
guards at every gate, makes for a customer-friendly atmosphere.

5. The employees are motivated to work efficiently and effectively towards the
achievement of organizational goal by satisfying their personal needs.

6. The employees were given bonus and gifts during the festivals like diwali, etc.

4
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Vishal Mega Mart

Management Organization Structure:-

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Vishal Mega Mart


Direc
tors

S.K.Agarwal
Whole-time
Director
R
.
C
.
A
g
ar
w
al
C
h
ai
r
m
Category
a
Heads
n
&
M
a
n
Me a
rch g
an i
dis n
e g
H
eD
ai
dr
e
c
t
o
r

B
Chi
o
ef
a
Op
r
era
d
tin
g
o
Officer
f

Head
Supp
ly
Heads Zonal
Chain
Management

HeadRetail

Head Legal &


Secretarial

Head IT

Head-Admin &
HR
4
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Vishal Mega Mart

E- COMMERCE

OBJECTIVES:1 To study the different steps taken by VRPL in relation with online shopping.
2 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.

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

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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
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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.

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Vishal Mega Mart

Road Ahead; Plans of Large Retailers


1

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.


3

RPG: Planning IPO will have 450-plus Music World, 50-plus Spencer's

Hyper covering 4 mn sq.ft by 2010.


4 LIFESTYLE: Investing Rs.400 crore-plus ($90 mn) in next five years on Max
Hypermarkets & value retail stores, home and lifestyle centers.
5

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.


7

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 50plus Titan and Tanishq stores in 2010.

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Vishal Mega Mart

Findings
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 56 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: Companys 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
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2

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.

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Vishal Mega Mart

Conclusion
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.
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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.

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Vishal Mega Mart

BIBLIOGRAPHY:1. http://www.vishalmegamart.net/
2.

http://www.moneycontrol.com/india/news/OTHER%20NEWS/sbi-cardvishal- mega-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

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