Research Report

On
“CUSTOMER SATISFACTION ON
BUYING PRODUCTS FROM VISHAL MEGA
MART”

In Partial Fulfillment of Degree of

Master of Business Administration
Affiliated to U.P. Technical University, Lucknow
UNDER GUIDANCE OF:
Mr. Prashant Sharma
(Faculty, M.B.A.)

SUBMITTED TO: SUBMITTED BY:

U.P.T.U. Brijesh Kumar Yadav

Lucknow Roll No.0807470017
M.B.A. IV SEM

DEWAN INSTITUTE OF MANAGEMENT

STUDIES

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2
 PREFACE

No professional curriculum is considered complete with out work experience. Every

individual who is doing management studies has to go this phase of practical study

before he/she considers himself/herself fully qualified as potential managers.

I got an opportunity to do training with Vishal Mega Mart. I undertake the training to

study.

“A framework for the implementation of a Customer Relationship

Management strategy in retail sector”

This study discusses on the various aspects of Customer relationship management and

its importance in retailing. The study is based on questionnaire survey results of Vishal

Mega Mart in LUCKNOW. The study concentrates on the concept of retailing in the

current scenario and prevailing market of retail. And describe the effectiveness of CRM

by identifying the key activities that should perform in order to maximize the

profitability of Vishal Mega Mart.

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 ACKNOWLEDGEMENT

I, BRIJESH KUMAR YADAV the student of DEWAN INSTITUTE OF

MANAGEMENT STUDIES , PARATAPUR MEERUT feel honored in doing my

RESEARCH REPORT in a renowned company like VISHAL MEGA MART.

I am grateful to MR. PRASHANT SHARMA ( FACULTY ) without whose guidance

and motivational encouragement I could not do anything.

I also acknowledge and express my deepest gratitude to Mr. Shalender (Assistant

HR manager), of VISHAL MEGA MART for providing me this opportunity of

industrial training in the most adaptable environment. I am indebted to them

and for extending their valuable guidance, comments, suggestions and inspiration

for this Research.

I would in particular like to express gratefulness to all my respondents of

questionnaires, my friends and colleagues (Rajiv and Kamlesh ) who have helped

me directly as well as indirectly, in carrying out this Research work.

And lastly, I wish to express profound respect and love towards my family

members, for their constant support and inspiration at each stage of not only this

project work but also during the course.

BRIJESH KUMAR YADAV

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 STUDENT DECLARATION

I am Brijesh Kumar Yadav student of M.B.A. here by declares that the Research

report titled “CUSTOMER SATISFACTION ON BUYING PRODUCTS FROM

VISHAL MEGA MART” is completed and submitted under the guidance of “Mr.

Prashant Sharma” is my original work.

The imperial finding in this report is based on the data collected by me. This Research

has not been submitted to U.P. Technical University, Lucknow or any other university

for the purpose of compliance of any requirement of any examination or degree.

Brijesh Kumar Yadav

Roll No. – 0807470017

M.B.A. IV Sem

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 CONTENTS

1. Company profile 6

2. Objective of the study 32

3. Research methodology 33

4. Data analysis 39

5. Swot analysis 59

6. Findings 62

7. Limitation 67

8. Recommendations and suggestions 69

9. Conclusion 72

10. Bibliography 74

11. Annexure 76

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COMPANY

PROFIL

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 COMPANY PROFILE

“Future is thinking beyond horizon” & in order to keep its pace with the modern retail,

Vishal Retail Limited is spreading its wings. Instead of resting on its laurels the Group

are busy identifying new avenues of growth by venturing in other formats like cash &

carry, convenience as well as specialty stores and inspiring local retailers to grow along

with the big names. The group has tied up with HPCL to open corner stores at their

petrol pumps and in addition to the above Vishal has come up with an institute to train

manpower for the service industry.

Today Vishal Retail Limited, Flagship Company of Vishal Group, engaged in Hyper

Market stores with an average area of 25,000 to 30,000 sq. ft. through an impressive

chain of more than 100 fully integrated stores in spread of more than the area of around

22, 00,000 sq. ft. in 69 cities across India & has a plan to cross total retail area of 35

lakh sq. ft. in tier II and tier III cities by the end of 2009.

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Esplanade area in 1997, under the banner of Vishal Garments. He was involved in all the

aspects of the business: right from sourcing the garments to interacting with customers.

And this led to his greatest finding “The Vishal Group.”

After identifying the immense market in fashion garment for the masses, He moved to

Delhi in 2001 and opened his first store in Delhi’s Rajouri Garden by the name of Vishal

Mega Mart (The jewel in Vishal Group’s crown) and then there was no looking back for

Mr. Ram Chandra Agarwal. At present, in addition to garments, Vishal Mega Mart

stores retail the entire range of household products, FMCG and electronic goods.

Vishal's prices are roughly 15 to 20 per cent less than other mass market garment labels.

Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited believes that the shopping

habits of Indians are changing due to their growing disposable income, higher

aspirations, relative increase in the younger population, and the change in attitudes

towards shopping. The emphasis has changed from price consideration to design,

quality and trendy. Age is also a major factor that affects the spending decisions of an

individual. Consumer spending is an important factor that affects the economic growth

and development in a country. As a trend, consumer is more educated. He has access to

all reforms taking place through various arrays of communication. He is becoming a

“value shopper” everyday.

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Some of the Franchisee exclusive business categories are

Mens Fashion

Ladies and Kids

Footwear

Toys and Games

Home – General

Convenience (FMCG)

Mobile and Watches

Another venture of the Group is the agreement with Hindustan petroleum Corporation

limited. HPCL has a chain of around 8,000 outlets across India and according to the

MoU, the group will open its stores or set up warehouses at some selected outlets of

HPCL.

Noting but the manpower is the biggest challenge for any retailer, the Group is also

coming up with its own institutes, IME (Institute of Management Excellence) to train

people for fulfill the growing demand of trained manpower in their stores as well as the

service industry.

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Vishal Strategy

They intend to pursue the following strategies in order to consolidate the position as an

operator in the ‘value retail’ segment in India. Their growth strategy is based on:

Increasing penetration in the country by leveraging the supply chain,

distribution and logistics network

They intend to increase 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. They believe

that existing infrastructure have been designed for a higher scale of operations than

current size, and can help them to grow with out the need to significantly increase costs.

Moreover, continuous effort to improve systems and processes leads to believe that

they can deal with higher scale of operations without any hindrance. Higher business

volumes will also improve the negotiating powers and help them get further economies

of scale in buying.

Expansion of FMCG

Historically, they have derived significant portion of revenue from sale of apparels. In

pursuance of business plan to diversify portfolio of offerings, FMCG products play a

key role. FMCG products are usually meant to fulfil the daily needs of consumers and

therefore, they believe retailing of FMCG products will bring customers to the stores on

a frequent basis and this may in-turn lead to consumption of apparels. They believe

retailing of FMCG products would help them to eliminate the impact of seasonality of

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the apparels market in India, which depends on factors such as change in weather

conditions and festival celebrations. In furtherance of endeavours to reduce costs, they

intend to procure FMCG products directly from the manufacturers. For this purpose,

they have entered into and will continue to explore the possibilities of entering into

certain arrangements with domestic FMCG majors on such terms and conditions, which

are suitable to business model.

Procurement from low-cost production centres outside India

In addition to the strategy to continue procurement of goods from small and medium

size vendors and manufacturers which leads to cost efficiencies, they intend to procure

FMCG and apparels from low-cost production centres located outside India. Towards

this objective, they propose to increase the procurement of finished and semi-finished

goods from China and thereby realise economies of scale and pass on the benefits so

accrued to customers.

Increasing customer satisfaction and base of loyal customers

They believe that understanding the needs of customers is of prime importance for the

continuous growth of business. In order to continuously provide customer satisfaction,

customer management team assimilates customer feedback and endeavour to take

necessary steps to address the requirements of customers. In addition, they have

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

branded credit card. They propose to continuously undertake such initiatives to increase

the satisfaction of customers.

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 ESTABLISHMENT OF STORES

Selection of location

They consider the following factors while deciding the locations where they are going to

operate.

Selection of city/ location

In selecting location for a new store, they start by identifying the city/town. They 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, we target locations with good infrastructural facilities such as easy

accessibility, provision for water, electricity and other basic amenities. They prefer to

locate the stores in areas where real estate is available at reasonable prices.

Segmentation of Target Audience

The efforts of retail business are targeted towards families having total income which

can be classified under the “lower middle” and “middle” income groups. Accordingly,

they plan strategy to search for areas within cities where such customers are domiciled

in large numbers and make efforts to locate ourselves within the reach of such

customers.

Store Planning, Layout and Operations

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They believe that adoption of standard formats for the stores has led to brand

establishment and identification among the customers and will increase the base of loyal

customers. In pursuance of this, they have adopted standard parameters for store

planning and establishment. For ensuring standardised formats of stores, they consider

various factors, such as internal and external décor and colour schemes, allocation of

store space, stock mix and pricing and accounting methods

Merchandise Planning

The merchandise planning is based on the concept of category management rather than

traditional brand management practices. Further, they adopt various retail methods

while formulating the annual merchandising plans, which are based on certain factors

discussed below.

Apparels and Non Apparels

Under category management for, say, apparels, they create and cater to products across

length and breadth of a category at different price points, fabrics, designs, shapes,

seasons, colors and sizes. They 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

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 sub-

categories. For example, men’s upper as a major category would be further divided into

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several sub-categories such as formal shirts, casual shirts, party wear etc. Each

subcategory consists of pre defined SKUs, which are classified on the basis of price

point, brand, style, pattern and size. They draw annual sales projections for different

SKUs and, accordingly, ascertain the 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,

our 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 the planning for the product would need to

be reviewed based on the acceptability of the new version.

FMCG

For FMCG products, they procure from large as well as small and medium size

manufacturers. For procurement from the large manufacturers or their distributors,

they endeavour to enter into formal arrangements for supply of products to all stores,

such that they are able to derive fixed margins from sales of such products, irrespective

of the locations. Under these agreements, the 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 to expeditiously launch new stores, as they do not

have to identify local sources for supplies of the FMCG products. Such arrangements

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also help in standardising the promotional schemes across all the 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 assessment of regional tastes and preferences, purchase the

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. The merchandising teams source fabrics from local

manufacturers in India depending upon the production plan. They also source fabrics

from the place of origin. They 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

The 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.

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. They review these re-order levels on continuous basis to factor in

variances in demand based on seasons, trends and promotional schemes. They have

seven distribution centres over approximately 471,426 square feet.

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These distribution centres are located around Kolkata (West Bengal), Thane

(Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana

(Punjab),Gurgaon (Haryana) and Mahipalpur (New Delhi).They have clearly

demarcated the stores which will be serviced by each distribution centre. The re-order

levels for distribution centres 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.The distribution centres and stores are connected through

company wide virtual network connection through broadband which helps to efficiently

manage the network of stores and distribution centres throughout the country. They

have a fleet of 41 trucks. They primarily utilise their own vehicles to transport the

inventory to the stores from the distribution centres. In addition, they use the services of

logistic solution providers including low cost transport service providers in order to

deliver products on time to stores and optimize transportation costs. Distribution

centres operations have been streamlined through the standardisation of racking

system, layouts and implementation of automatic replenishment system.

Pricing

They follow uniform pricing policy across the 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 statespecific taxation and vendor policies.

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Sales Promotions and Customer Service

The category management system is used to plan promotional schemes. Theylaunch

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. Under

arrangements with some of the merchandise manufacturers, they receive payment on

account of display of their products.

They have also entered into a co-branded card agreement with SBI Cards & Payment

Services Private Limited (“SBI”) for providing a credit card called “SBI - Vishal Mega

Mart” to the customers. A cardholder accumulates points on the basis of purchases

made and the points accumulated can be redeemed for gifts or purchases.

Advertising and Publicity

They undertake regular promotion of stores through print media, television and local

radio channels and have organized press conferences in the past to promote themselves.

Outdoor advertising such as banners, posters and hoardings are employed to advertise

and to increase visibility. The Company has entered into an advertisement agreement

dated September 9, 2005 with BCCL for the purpose of advertisement of its products or

services, in BCCL print publications and non print media for five years starting from

September 1, 2005 and ending on August 31, 2010.cIn addition, since BCCL held

384,190 Preference Shares, they have paid a dividend at the rate of about Re. 0.10 per

Preference Share prior to their conversion into Equity Shares.

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Franchise and Other Arrangements

They have franchise arrangements for two of stores at 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 our 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 the books and, as a consideration,

they pay a fixed commission on sales to the franchisees. The erstwhile 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, they have entered into commission or

joint venture arrangements for one store each in Bhubaneshwar with the owners or

lessees of the immovable properties where such stores are located. Under the joint

venture arrangement for Bhubaneshwar store, they operate the store and are obligated

to pay commission of 2% on total monthly turnover of the store and fixed commission of

Rs. 0.11 million per month subject to certain escalation provisions.

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Competition

They face competition from other retailers of similar products and services. These

include stand-alone stores in the organized and unorganized sector, as well as other

chains of stores including department stores. They focus on offering the customers a

vast variety of products and services catering to their diverse requirements and needs.

Human Resources

The human resource policies are aimed towards creating a skilled and motivated work

force. They have 6,801 employees both employed in the stores as well as in the

manufacturing unit and other facilities, on April 30, 2007.

Main Objects

Some of the main objects as contained in Memorandum of Association are:

1. To carry on the business as traders, dealers, wholesalers, agents, distributors,

consigners, consignee, retailers, combers, job work, scourers, spinners, weavers,

finishers, dyers, tailors and drapers, cutters, import and export of all garments of

gentlemen, ladies and children and to act as commission agent in connection

therewith tailor or otherwise stock and sell all under-garments which are used by

men,

ladies, children, makers of curtain and other furnishings for cars, furniture or

otherwise, makers of handkerchiefs, scarves, ribbons, gloves, socks, nylon, caps,

headdresses, garters, towels, linens, sheets, bed covers, sportswear, sport gear

and accessories or other fasteners or every size, shape and description and to

open and operate stores, departmental store or any other outlet for consumable

goods including ready made garments.

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 2. To carry on the business of manufacturers, processing, producing, washing,

dyeing, ginning, pressing spinning weaving, crimping, texturing, carding,

bleaching, combing, doubling, finishing, calendaring, sizing, colouring, printing,

merchandising, reeling,

winding, throwing, embroidering, blending, sorting, garmenting, drying,

drawing, cutting, improving, buying, sellers, dealers, retailers, clothes, tailors,

stickers, importers exporters, and agents in textile goods and readymade garment

of all fabrics, cotton, woollen, silk, terrene, terri cotton, linen and such fabrics

which may come into market as an advent of scientific development and suitable

for manufacture of garments, industrial and furnishing cloth and printing,

knitting, dyeing and colouring of all kinds of fabrics and yarn, silk mercers & silk

products and to act as Export House and to carry on any business in any way

connected therewith.

OVERVIEW OF CUSTOMER RELATIONSHIP MANAGEMENT

 Customer relationship management (CRM) is a business philosophy and a

set of strategies, programs, and systems that focuses on identifying and building

loyalty with a retailer's most value customers.

 CRM is based on the philosophy that retailers can increase profitability by

building relationships with their better customers.

Effectively managing merchandise inventory and the stores provides value and supports

the primary objective of building customer loyalty. The goal is to develop a base of loyal

customers who patronize the retailer frequently

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 . The CRM Process

 Retailers are now beginning to concentrate on providing more value to their

customers using targeted promotions and services to increase their share of the

wallet – the percentage of the customers' purchases made from the retailers –

with these customers.

This change in perspective is supported by research indicating that it now costs over six

times more to sell products and services to new customers than existing customers and

that small increases in customer retention can lead to dramatic increases in profits.

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What is Loyalty?

 Customer loyalty, the objective of CRM, is more than having customers make

repeat visits to a retailer and being satisfied with their experiences and

merchandise they purchased. Customer loyalty to a retailer means that

customers are committed to purchasing merchandise and services from the

retailer and will resist the activities of competitors attempting to attract their

patronage.

 Loyal customers have an emotional connection with the retailer. Their reasons

for continuing to patronize a retailer go beyond the convenience of the retailer's

store or the low prices and specific brands offered by the retailer. They feel such

goodwill toward the retailer that they will encourage their friends and family to

buy from it.

 Programs that encourage repeat buying by simply offering price discounts can be

easily copied by competitors. However, when a retailer develops an emotional

connection with a customer, it is difficult for a competitor to attract the customer.

 Emotional connections develop when customer receive personal attention.

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Customer Database

 Ideally, the customer database should contain the following information:

1. Transactions – a complete history of the purchases made by the customer,

including purchase date, the price paid, the SKU's purchased, and whether or not

the merchandise was purchased in response to a special promotion or marketing

activity.

2. Customer Contacts – a record of the interactions that the customer has had with

the retailer, including visits to the retailer's website, inquiries made through in-

store kiosks, and telephone calls made to the retailer's call center, plus

information about contacts initiated by the retailer, such as catalogs and direct

mail sent to the customer.

3. Customer Preferences – what the customer likes, such as favorite colors, brand,

fabrics, and flavors as well as apparel sizes.

4. Descriptive Information – Demographic and psychographic data describing the

customer that can be used in developing market segments.

5. Responses to marketing activities – analysis of the transaction and contact data

provides information about the customer's responsiveness to marketing

activities.

To get a complete view of the customers, the retailers need to be able to

combine the individual customer data from each member of a household

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 The analysis of the customer database can provide important insights for

planning merchandise assortment.

With today's technology, even small, independent retailers can create and use a

customer database.

1. Asking for Identifying Information

 Some retailers ask customers for identifying information such as their phone

number or name and address when they ring up a sale. The information is then

used to create the transaction database for the customer.

This approach has tow limitations: (1) some customers may be reluctant to provide the

information and feel that the sales associates are violating their privacy, and (2) sales

associates might forget to ask for the information or decide not to spend the time getting

and recording during a busy period.

2. Offering a Frequent Shopper Card

Frequent shopper programs, also called loyalty programs, are

programs that identify and provide rewards for customers who

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 patronize a retailer. When customers enroll in one of these programs, they

provide some descriptive information about themselves or their household.

Customers are then offered an incentives to show the card when they make

purchases from the retailer.

From the retailer's perspective, frequent shopper programs offer two benefits: (1)

customers provide demographic and other information when they sign up for the

program and then are motivated to identify themselves at each transaction, (2)

customers are motivated by the rewards offered to increase the number of visits

to the retailer and the amount purchased on each visit.

The major problems using frequent shopper cards is that the card is often squeezed

out of the customer's wallet by other cards. Some retailers allow customers to

register all their cards with the retailer and receive rewards if any of them are used to

purchase merchandise. Other retailers are experimenting with cardless ways of

identifying customers.

3. Linking Checking Account Numbers and Third-Party Credit Cards

Rather than asking for identifying information or requiring a frequent shopper card,

some retailers unobtrusively collect enough information about the customer to link

transactions to the individual. For example, Kmart gets enough information from

the credit cards and checks used by a customer to link the transactions to that

person.

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Privacy and CRM Programs

While detailed information about individual customers helps retailers provide more

benefits to their better customers, consumers are concerned about retailers violating

their privacy when they collect this information.

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1. Privacy Concerns

 The degree to which consumers feel their privacy has been violated depends on:

(1) their control over their personal information when engaging in marketplace

transactions, (2) their knowledge of the collection and use of personal

information.

2. Protecting Customer Privacy

 Some people define personal information as all information that is not publicly

available; others include both public (i.e., driver's license, mortgage data) and

private (hobbies, income) information in the definition of personal information.

 The European Union (EU) is more aggressive in protecting consumer privacy and

its provisions include:

a. Businesses can collect consumer information only if they have a clearly defined

the purpose such as completing the transaction.

b. The purpose must be disclosed to the consumer from whom the information is

being collected.

c. The information can only be used for that specific purpose.

d. The business can only keep the information of the stated purpose.

e. Business operating in Europe can only export information from the 15 EU

countries to importing countries with similar privacy policy.

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 The EU perspective is that consumers own their personal information.

Retailers must get consumers to explicitly agree to share this personal

information. This is referred to as opt in.

Analyzing Customer Data and Identifying Target Customers

 The next step in the CRM process is analyzing the customer database and

converting the data into information that will help retailers develop programs for

building customer loyalty.

 Data mining is one approach and is a technique used to identify patterns in

data, typically patterns that the analyst is unaware of prior to searching through

the data.

Market basket analysis is a specific type of data analysis that focuses on the

composition of the basket, or bundle, of products purchased by a household during a

single shopping occasion. This analysis is often used for suggesting where to place

merchandise in a store.

A. Identifying Market Segments

Customer data analysis is focused on identifying market segments – groups of

customers who have similar needs, purchase similar merchandise, and respond in a

similar manner to marketing activities.

B. Identifying Best Customers

Using information in the customer database, retailers can develop a score or number

indicating how valuable they are to the firm. This score can then be used to

29
 determine which customers to targetone-to-one services provided by shopkeepers

who know their customers personally,

Figure 1: The relationship between operational and analytical CRM

The ultimate goal of CRM is to provide a one-toone personalised service to each

customer – preand post-sale. If a firm can identify its customers, it can gain data on

them individually. Using the individual data it can compare them with on another.

These comparisons give an insight into each customer. As a result, the firm becomes

more aware of customer needs and can change their marketing strategy – moving away

from mass marketing towards database marketing. It is apparent that it would be easier

to implement a CRM strategy in an industry where the firms already have much

information on their customers such as banks and insurance companies. These have

information on the customers, their family and spending habits. Consider also online

mail-order retailers such as Amazon.com which require customers to register before

they buy. The company can then track the purchases and browsing habits of every

customer and tailor their service accordingly. It is however much harder for

the traditional bricks-and-mortar retailers to achieve the key ingredient of CRM –

customer data. Customers can visit the shops virtually anonymously, purchase the goods

and leave. This paper investigates strategies which could be implemented by such

companies in order to better manage their customer relations. Specific reference shall be

applied to the extremely competitive sector of retail sectors, where in recent years the

big players have taken very different routes to obtain customer information.

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2. Customer-centric strategies – CRM Value Cycle

CRM by its very nature is not a one way street. For a company to make a return on

investment (ROI) on a CRM strategy, more customers must stay loyal, which means

customer satisfaction must increase.

Pyramid framework of a customercentric

CRM strategy

The problem with this pyramid representation of the CRM strategy is that it does not

illustrate any continuous improvement. It is impossible to simply reach the pinnacle of

figure 2 and assume that competitive advantage has been obtained and will be

maintained. This is especially applicable to the retail sector sector, where the costs for a

customer changing the store they shop at are minimal and the competition between

stores fierce. The cycle of analytical and operational CRM is continuous as shown in

figure 1. This is because more customer data is produced whenever a revised business

strategy is used, which can then be analysed and acted upon. If we incorporate this idea

with Chu and Pike’s theory that the customer experience should be the overarching goal

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of retail CRM, we find good cause to support a framework that Chu and Pike proposed

in their 2002 paper; Bringing the customer experience full circle: The CRM value cycle

[2]. This is shown in figure 3.

LOCATIONS

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34
 OBJECTIVE
OF THE STUDY

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This study discusses on the various aspects of Customer relationship management and

its importance in retailing. The objective of the study can be understood in various

parts.

To understand the concept of retailing, role and relevance of retailing for

business, economy and consumer behavior in retailing

To concentrates on the concept of Customer relationship management that

says that the CRM plans were originally implemented with the idea to grow

closer to the customer.

Evaluating the effectiveness of CRM by identifying the key activities that

should be performed in order to maximize the profitability by CRM in the

Vishal Mega Mart.

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 RESEARCH
METHODOLOGY

37
 RESEARCH METHODOLOGY

Research methodology is a systematic way, which consists of series of action

or steps necessary to effectively carry out research and the desired

sequencing of these steps. The marketing research is a process of involves a

number of interrelated activities which overlap and do rigidly follow a

particular sequence. It consists of the following steps.

1. Formulating the objectives of the study

2. Designing the methods of data collection

3. Selecting sample plan

4. Collecting the data

5. Processing and analyzing the data

6. Reporting the findings

38
 DATA COLLECTION

PRIMARY DATA

The primary data are those data which are collected afresh and for the first

time and happen to be original in character. The primary data to be collected

for the study are----

By interviewing to the Marketing people.

By structured questionnaire.

SECONDARY DATA:-

Secondary data are those data have already been collected by someone else

and which already had been passed through the statistically process. The

secondry data to be collected fore the study are ---

Annual reports of each news paper company.

Newspapers, magazines, journals, books.

By internet websites

39
RESEARCH INSTRUMENTS

STRUCTURED QUESTIONNAIRE

A questionnaire consists of a number of questions printed or typed in a

definite order or set of forms. It is the set of questions presented to the

respondents for their answer. In my study I’ll be used structured

questionnaire because sequence or series are required to ask the question to

respondent.

DATA ANALYSIS

Data analysis refers to the computation of certain measures along with

searching for patterns of relationship that exist along data groups, as the

objective of study is already divided in to two main parts, thus the data

analysis of collected data is primary divide in to two divisions as the field is

completed and questionnaire have been received the task is to prepare the ---

Consumer Behavior

RESEARCH DESIGN

In my study, Descriptive research design are used because it provides

information in a described manner which is relevant to a research project .

in this research design the objective of the study is clearly defined and have

accurate method of measurement with a clear cut definition.

40
SAMPLING DESIGN

A Sample design is a definite plan for obtaining a sample from a given

population . it refers to the technique or the procedure adopted

In selecting items for the sample. The main constituents of the sampling

design below-

Sampling unit

Sample size

Sampling procedures

SAMPLING UNIT

A sampling framework i.e. developed for the target population that will be

sampled i.e. who is to be surveyed –

Consumer behavior

SAMPLE SIZE

It is the substantial portions of the target population that are sampled

achieve reliable results.

Sample size- 100

41
 RANDOM SAMPLING

Random sampling is chosen for my study. Probability sampling is

also is also known as “Random sampling” or “chance sampling”. Under this

sampling design, every item of the universe has an equal chance of

inclusion in the sample it is, so to say, a lottery method in which individual

units are picked up from the whole group not deliberately but by some

mechanical process. Here it is blind chance alone that determine whether

one item or the other is selected. The result obtained sampling can be

assured in the terms of probability i.e. we can measure the error of

estimation or the significance of result obtained from a random sample,

and this fact bring out the superiority of random sampling design over the

deliberate sampling design.

42
DATA ANALYSIS

43
 DATA ANALYSIS

The Analysis of the Questionnaire filled by the Customers of the Vishal

Mega Mart.

Q1: How often you come to Vishal Mega Mart?

Every day or more 0

2-6 times a week 29
Once a week 42
Once a month 29

Out of 100 Respondents 42 Customers visit Vishal Mega Mart Once in a week and

similar number of 29 respondents came in 2-6 times and 29 in once in a month. No

customers come daily to the store.

Q2: What kind of product you shop mostly?

44
Garments 39
Home furnishing27
FMCG 22
Others 12

Customers Purchases the Garments product mostly 39 respondent came to shop

garment products and 27 respondent came for the home furnishing products and 22

respondent says that they came for the FMCG products which also have a maximum

number. Only 12 respondent use to buy other products.

Q3: Is Vishal Mega Mart is your first preference for shopping?

Preference for shopping

38
yes
62
NO

45
 Y

ES 38
NO 62

Vishal Mega Mart is not the first preference for the shopping for maximum number of

customers Only 32 respondents out of 100 says that they came to Vishal Mega Mart first

Q4: How you found the services in Vishal Mega Mart?

Excellent 9
Good 35
Fair 31
Average 25

46
The 35 respondents out 100 Says services in Vishal Mega Mart are Good. The other

maximum number of respondents 31 says the service is fair only. The 25 Customers

found the services average and the least number of respondent which are only 9 in

number out of 100 sys it is Excellent.

. Q5: Does the Sales person attend you?

Yes 29
No 71

47
The maximum number of respondent that are 71 out of 100 says that the sales persons

in the store do not attend them. Only 29 customers agree with this that the sales staffs

attend them in the store.

Q6: Does Sales person satisfy you completely?

Yes 21
No 79

48
 The maximum number of respondent says which are 79 out of 100 that the sales persons

do not satisfies them. The sales persons are satisfying only 21 customers out of 100.

Q7: Where do you think Vishal Mega Mart should improve

more?

Pricing 12
Customer services 53
Environment 16
Variety 19

49
The 53 customers of Vishal Mega Mart out of 100 want that it should improve its

customer services. The 19 respondents are saying that it should improve its variety of

products. Only 16 respondents are saying that the environment must be take care of and

the left minimum number of respondent that only 12 are saying it’s pricing should be

improved.

Q8: Have you ever filled the suggestion or feedback register?

Yes 8
No 92

50
The 92 respondents out of 100 are saying that they have never filled the suggestion or

feedback register of Vishal Mega Mart. Only 8 respondents have filled it out of 100.

Q9: Have you made any complaint before?

Yes 12
No 88

51
The 88 customers of Vishal Mega Mart have made complaint regarding various issues in

the stores. Only 12 respondents out of 100 have not made any complaints.

Q10: (If YES) What was the action taken?

Yes 3
No 9

52
The 12 respondents have made the complaints before out of which 3 complaints of the

customers have been solved and the action on 9 complaints are still not been taken.

The Analysis of the Questionnaire filled by the Employees of the Vishal

Mega Mart.

Q1: Customer satisfaction is not as important as customer delight?

TRUE 22
FALSE28

53
The 22 employees out of 50 says that customer satisfaction is not important in

comparison to customer delight 28 employees thought that customer delight is more

important.

Q2: CRM is all about retention of customers than acquisition?

TR

UE 11
FALSE 39

54
The 39 employees of Vishal Mega Mart out of 50 say that acquisition is more important

than retention in CRM. Only 11 employees agree with the given statement.

Q3: CRM implementation requires a cultural change than rather than mind set change

of people in Organization?

TRUE 33
FALSE 17

55
The 33 employees say that its true that cultural change is required more than mind set

change of people in the organization. Only 17 employees out of 50 says that the given

statement is false.

Q4: How you found your morale while working?

Excellent 29
Good 11
Fair 8
Average 2

56
The 29 employees of Vishal Mega Mart found very excellent morale while working in the

store. 11 employees say Good. The 8 say fair and left 2 say average out of total 50

employees.

Q5: Do we maintain enough customer data to retain them?

YES 13
NO 37

57
The 37 employees of Vishal Mega Mart out of 50 say that we do not maintain enough

customer data to retain them. Only 13 employees are saying that we do maintain it.

Q6: Are you related with SAP?

YES 42
NO 8

58
The 42 employees out of 50 are related with SAP in Vishal Mega Mart. 8 out of 50

employees are not working or have any relation with the SAP.

Q7: (If YES ) Do you think that you need more training?

YES 36
NO 6

59
The 36 employees out of 42 employees who are related with SAP want more training

only 6 employees thinks that they does not need more training.

Q8: Does Vishal Mega Mart need more Schemes to retain Customers?

YES 42
NO 8

60
Yes the maximum number of employees that are 42 out of 50 respondents are saying

that Vishal Mega Mart needed more schemes. Only 8 employees says no that we doesn’t

needed more schemes

61
.Q9: Where you want more improvement to retain customers?

Pricing 5
Customer Services 32
Environment 10
Variety 3

The 32 employees say more improvement is required on the customer

services. 10 employees want to improve environment of the store, where as only 5 says

for pricing and 3 for variety out 50 employees.

62
SWOT ANALYSIS

63
 SWOT ANALYSIS OF THE MARKET

STRENGTH

1. Organized retailing at US$ 3.31 billion, growing at 8%.

2. 2nd largest contributor to GDP after agriculture at 20%.

3. Pattern of consumption changing along with shopping trends.

4. A Growing population will translate to move consumers.

5. Consumer spending increasing at 11% annually.

6. Almost 25 million sq. ft. retail space available.

7. Paradigm shift in shopping experience for consumers pulling in more people.

8. Most of the entrants to organized retail come from 3 main categories, and have

ventured into retail as their business extension.

Real Estate Developers

Corporate Houses

Manufacturers/Exporters

WEAKNESSES

1. Shortage of quality retail spaces at affordable rates.

2. Government regulations on development of real estate(Urban Land Ceiling Act)

3. Need to provide Value for Money-squeezing margins

4. Lack of industry status.

5. Retail revolution restricted to 250 million people due to monolithic urban-rural

divide.

6. Footfalls not a clear indicator of sales as actual consumers lower in number.

64
7. Lack of huge investments for expansion.

OPPORTUNITIES

1. Increasing urban population-more participants in retail revolution.

2. Increase in consuming middle class population.

3. Social factors like dual household income has enhanced spending power.

4. Spends moving towards lifestyle products and esteem enhancing products.

5. Availability of old industrial lands-prime real estate locked in sick industrial units.

6. Average grocery spends at 42% of monthly spends-presents a huge opportunity.

7. Increase in use of credit cards.

THREATS

1. Rising lease/rental costs affecting project viability

2. FDI restrictions in the retail sector

3. Poor monsoons and low GDP Growth could affect consumer spending drastically.

4. Archaic labour laws are a hindrance to providing 24/7 shopping experience

5. Personalized service offered by Mom-&-Pop stores.

6. Unavailability of qualified personnel to support exponential growth in retail.

7. Differentiate taxation laws hindering expansion.

65
FINDINGS

66
 FINDINGS OF THE STUDY

These findings are based on the analysis of the Questionnaire filled by the

valuable customers of Vishal Mega Mart.

The customer mostly comes to stores in the weekends or once in a week. No

customer visits regular or daily to the store.

The maximum sale of Vishal Mega Mart is from the garments. The home

furnishing & other products also have good customers but FMCG have a

wider scope and should be well promoted

The Vishal Mega Mart should work upon the advertising and promotion

reason being it’s not the first preference of most of the customers.

The services of Vishal Mega Mart are good not much appreciated most of the

times in stores.

The sales staff does not attend the customers individually that’s why the

customer remains unsatisfied or unaware about most of the good things

offered by the company.

The most of the customers thought Vishal Mega Mart should improve its

customer services where they found problems most of the times.

The suggestion or feedback forms are not offered to the customers in the

stores that create a gap with the customers.

The complaints made by the customers are not welcomed and only few

complaints or suggestions being taken in a view.

67
 The suggestions taken by the valuable customers of Vishal Mega Mart are:

The company should understand the value of respect and interaction.

The good consumer connection should be done.

The company should introduce more retail offers to them.

The core customers should be well entertained.

Mainly the consumer wants that Vishal Mega Mart should take some more

initiatives to retain and understand them so that they can create a good bond

with them.

These findings are based on the analysis of the Questionnaire filled by the

Employees of the Vishal Mega Mart.

The maximum employees thought that the customer delight is more

important than the customer satisfaction that is not true ideally.

They thought that Customer relationship management is acquisition than

retaining which is false statement.

They understood well that for customer relationship management cultural

change is more important than the mind set change of people in

organization.

The employees are well motivated in the stores while working only a bit more

attention and grooming is needed.

68
The maximum employees say that more work should be done on customer

data to retain them.

The most of the employees are related with SAP in the stores but they are

interested in more training.

The employees also think that the Vishal Mega Mart should introduce more

retail offers for the customers in order to retain and making them loyal

towards company.

The maximum employee says that the customer services that are being

provided by the Vishal Mega Mart should be improved more.

The SBI card scheme provided by the Vishal Mega Mart is a good offer that

helps in increasing the sale and customer relation as well.

The highly appreciated suggestions taken by the employees of the Vishal

Mega Mart are:

The company should recruit the more educated and motivated sales staff.

Training for the better customer services should be given in some interval of

time.

Customer services needed to be reengineered.

The company should do more effort on customer database management.

According to the competitors more retail schemes and offers are needed.

New services that will efficiently process customer orders.

New services to handle customer queries.

New services to handle customer complaints.

69
The employees mainly want that the customer services should be taken more care of and

more work on competitors, loyalty schemes, and loyalty retailing and consumer

connection should be done so that our customer will remains with us and ours always.

70
LIMITATION

71
 LIMITATION OF THE STUDY

The sample size taken for the study is quite small and it does not represent

the whole population.

Time and other factors, which are beyond the human limitations, have also a

bearing on study.

Since only limited number of Respondents have been selected which do not

represent the whole pattern followed by different retail stores.

Customers or employees don’t easily reveals the facts due to very reasons.

Scope of survey is large enough but the time is limited.

The survey is done only in two stores of ghaziabad Ansal’s and Silver City,

therefore the result shows the limited reactions only

The questionnaire contained some open ended question; therefore many of

the respondents did not give a proper response. Therefore all this increased

biased ness.

Respondent were reluctant to answer some questions as they took them as

personal therefore increasing the possibility of error.

72
RECOMMENDATI
ONS AND
SUGGESTIONS

73
 RECOMMENDATIONS AND SUGGESTIONS

Given below are some meaningful and useful recommendations for the Vishal

Mega Mart particular based on the conclusion and the Limitation identified

above :

The Company must promote themselves in the market and create

awareness regarding the various services provided by them through

proper channels because it was found that still most of the potential

customers in the market is unaware.

The Company must do something remarkable to win the confidence of

the potential customers.

The Company must try to design some special retail offers which really

have something in it for the targeted customers such as loyalty system ,

loyalty cards, loyalty schemes.

The Advertising should be done in print (local newspaper and in local

language) and audio video media as well.

Though the competition in the retail sector is increasing the company must

try to provide better and fast information to the customers.

The company should use the existing customers for improving the customer

base for this the customer should be compensated.

The Vishal Mega Mart need to organize around customer segments

A fully integrated, real-time customer information system is needed.

74
The 20% of customers account for up to 120% of profits and it costs 5 times

as much to acquire a new customer it is to as retain an existing one. So it’s

better to retain our existing customers.

The Vishal Mega Mart need to improve the knowledge and listening of the

customers by really hearing them and what they are telling us and then

having the ability to respond rapidly.

Some work should be done upon the Customer data integration by cleaning

and updating of customer records.

75
CONCLUSION

76
 CONCLUSION

CRM is potentially a useful concept in the marketing and customer service areas of a

retail sector. The information and data attainable from a retail sector’s customers is so

deep and detailed, that the potential of CRM in this

sector is enormous. The Implementation of CRM in the Vishal Mega Mart is not a

complex or challenging task. But for that the enterprise must take truly successful

initiative and businesses must take an approach that seamlessly integrates all

information about the customer and makes it available across the enterprise. Moreover,

all channels and touch points within the Vishal Mega Mart must be able to leverage

customer information, buying patterns, and supply chain related information so that

business processes can be adjusted dynamically. CRM implementation is likely to

generate greater benefits across all key functions (sales, marketing, customer service,

and operations), thus benefiting the enterprise as a whole.

In conclusion the consumer and employee wants that a strong customer

retention work should be done and reengineering of the company is needed

for a successful CRM approach.

77
BIBLIOGRAPHY

78
 BIBLIOGRAPHY

C. R. Kothari “Research Methodology” Second Edition, Wishwa Prakashan.

Donald S. Tull, Dell I. Hawkins “Marketing Research” Sixth Edition,

Published by Ashok K. Ghosh, Prentice-Hall Of India Pvt. Ltd.

Business Today “paint industry” Page 25 March 2005.

Business world “growth of Asian Paint “ Page 35

Feb. 2005.

News papers:- Date:

Times of India November 6th 2004
Hindustan times November 7th 2004
Business standard February 3rd 2005
The Hindu March 7th 2005

www.vishalmegamart.com
www.google.com

79
ANNEXURE

80
 ANNEXURE I

Questionnaire for data collection.

Dear respondent, your valuable time and effort in filling this questionnaire are highly

appreciated. The information collected through this questionnaire

will be used for academic purpose only. Please complete the following questionnaire to

assist the Vishal Mega Mart study. The purpose of these questions is not to ask

unnecessarily about personal matters. Please do not discuss the questionnaire or your

answers with anyone. It is very important that the answers be yours and ours alone.

Remember that there are no "right" or "wrong" answers; only truthful answers. You are

sworn to give true and complete answers to all questions.

PART I: Questionnaire for Customers.

Q1: How often you come to Vishal Mega Mart?

(i) Every day or more (ii) 2-6 times a week

(iii) Once a week (iv) Once a month

Q2: What kind of product you shop mostly?

(i) Garments (iii) Home furnishing

(ii) FMCG (iv) Others

Q3: Is Vishal Mega Mart is your first preference for shopping?

YES: NO: .

Q4: How you found the services in Vishal Mega Mart?

(i) Excellent (ii) Good

(iii) Fair (iv) Average

81
Q5: Does the Sales person attend you?

YES: NO: .

Q6: Does Sales person satisfy you completely?

YES: NO: .

Q7: Where do you think Vishal Mega Mart should improve

more?

(i) Pricing (ii) Customer services

(iii) Environment (iv) Variety

Q8: Have you ever filled the suggestion or feedback register?

YES: NO: .

Q9: Have you made any complaint before?

YES: NO: .

Q10: (If YES) What was the action taken?

Ans: .

Q11: Do you have any suggestions regarding Vishal Mega Mart?

Ans: .

Personal Details:

Name.

Age.

Occupation

82
 Address

PART II: Questionnaire for Employees.

Q1: Customer satisfaction is not as important as customer delight?

True: . False: .

Q2: CRM is all about retention of customer than acquisition?

True: . False: .

Q3: CRM implementation requires a cultural change rather than mind set change of

people in Organization?

True: . False: .

Q4: How you found your morale while working?

(i) Excellent (ii) Good

(iii) Fair (iv) Average

Q5: Do we maintain enough customer data to retain them?

YES: NO: .

Q6: Are you related with SAP?

YES: NO: .

Q7: (If YES) Do you think that you need more training?

YES: NO: .

Q8: Does Vishal Mega Mart need more schemes to retain Customers?

YES: NO: .

Q9: Where you want more improvement to retain Customers?

(i) Pricing (ii) Customer services

83
 (iii) Environment (iv) Variety

10: What is your feedback on the effectiveness on the SBI Vishal Mega Mart?

Ans: .

Q11: Do you have any suggestions on improvement in services being offered by Vishal

Mega Mart?

Ans: .

Employee Details:

Employee Name.

Employee Designation. .

Department

84