y Middle class have a considerable amount of disposable income y Difficult to attract upper class through discount based price policy.FOUR CRITICAL DECISIONS: 1. y These people usually use personal vehicle for shopping hence may lead to bulk purchase. Connection with findings : y Focus on mass market. y Middle class segment is price conscious. . y y Target segment: Middle and upper middle class families Positioned as residential ´full serviceµ supermarkets with limited assortment of fresh food. y Upper income households spend more on provision goods and more frequently visit supermarkets.

Connection with findings: y Targeting mass market by providing value for money products. however they were unwilling to pay any price premium. y Analysis suggested that there was ample scope for building competitive advantage over current near by location provision shops ( as important parameters for differentiation were price. y The main source of provision still remain the grocery shops that carried a rather narrow range of products y Respondents preferred the prices to be lower than the standard market prices. In case of fresh vegetables. even a parity price was acceptable. Strategic pricing policy for the four categories of product. Mega price offer on at least two SKUs every month. y y y y y y Value proposition: Pricing was in-line with the corner grocer. Top 15 SKUs were sold at 3% below MRP. the top five items would be cheaper than market price and other will be on par with the market price. . quality and ambience of shop).2. Quantity discounts savings on food SKUs.

destination. weekly or monthly basis. y They offered top brands across different product categories. Connection with findings: y Focus on daily needs of customers. routine. furniture etc. y This list was based on the shopping list of customers as well as the budget.3. occasional. Merchandising facilities: y Merchandise was divided into four categories namely: convenience. electronics. . y Availability of additional product lines (garments. did not add to utility of the respondents much. routine.). y Most shoppers went for the purchase armed with a list of items y People who patronize supermarkets did so essentially due to the availability of a much larger basket of products and at times better prices. y Strategy was to carry everything that a typical household would shop on daily.

. y Series of retail outlets with standardized format. Bangalore (eight) iii. y Only ground floor property between 3000 to 3500 sq. Location: y Residential high streets with minimum 6000 households in 2/3 km radius were identified. policy and strategy in major cities in India: i. ft with minimum 40 ft frontage was selected. Chennai (six) ii.4. preferably in the shopping area of the locality. Hyderabad (five) Connection with findings: y Consumers prefer outlets closer to their home y Supermarkets as a source of regular purchase is featured only in mega-metros.

The choice of Store name.. FOODWORLD .

. INSIGHTS FROM THE CUSTOMER SURVEY: y Housewives are the prime decision makers y Attributes like: location. or at a parity. And since the company did not have any prior experience in fashion or textile. food was decided as the entry product line.y Company wanted to focus on daily necessities of household like. clothing and health. y Respondents preferred prices to be lower than the standard market price. But they were unwilling to pay price extra facilities and price were most important. followed by quality of products and shop ambience.

shopping complex. Consumers perceived it to be more expensive by 10-15% and not as a place for regular shopping. neat etc. and a non-spencer shopper was perceived as a simple person. ‡ A typical Spencer shopper was perceived as an up-market in her tastes and a showy lady. etc. good quality. ‡ Even though Spencer·s was perceived to be modern. kitchen appliances. for whom economy is important . and the good times children had during shopping.Perception of ´Spencer·sµ ‡ Spontaneous familiarity with soft drinks. ‡ Spencer·s could be associated with consumer durables.

Perception of ´Spencer·s Food worldµ The combination gave a cue that Food world was a section of Spencer·s store. Product perception were not too different from: Spencer·s It was perceived to be upper-middle class. a grade higher than ´Food Worldµ but a grade lower than ´Spencer·sµ .

´Wµ is perceived as 2 ticks. the name was perceived to be at par with other supermarkets in Chennai Expected product categories were mainly on the lines of respondents· planned purchase. respondents could relate with the image of a typical shopper at FOOD WORLD . etc. foods.groceries. bakeries. snack items. cosmetics etc were not expected by the respondents Also. indicating very good!! In terms of range and quality. Medicines. y y y y y vegetables.Perception of ´FOOD WORLDµ y There was spontaneous association with fast food. etc. electronics.

. WORLD SHORT TERM World indicates that the store holds a large variety and range of products.SPENCE RS SHORT TERM Using the name Spencer·s in short term will require a lot of expenditure on promotion for communication of the fact that Spencer·s is also value for money LONG TERM Using the name Spencer·s will help the company in two ways. indicating very good!! LONG TERM Using the name. first in retaining the existing customers. ´Wµ is associated with 2 ticks. restricts the opportunity of expanding in terms of the product categories and offerings LONG TERM The company can continue with the word ¶World· in its name. FOOD SHORT TERM Using the name ´Foodµ helps the company because the expected product categories were mainly on the lines of respondents· planned purchase. Second. having a large share of mind as it is already a recognized name.

Q3. Analyse the category management process at Foodworld by using Table1 . . Exhibit 3.

83%) and Staples(.17% ) % Revenue Staples HW and home Appliances 28. y % of total revenue per sub category is maximum in case of perishables (.39 Weighted average margin 14.81%) whereas it is lowest in case of Hardware & home app(.39%) whereas it is vice-versa in case of hardware & Home appliances.60 23.79 5.24 .y Weighted average margin for staples is the lowest (14.79) which accounts for maximum contribution in revenue(28.

Inference: This is consistent with their decision to focus more on Destination category where tactical usage is high as compared to low in other product categories. .

y Looking at the average no of SKUs per sub category shows that the no of SKUs allotted per subcategory is very high(51. Beverages & Perishables are among the major contributors to revenue (combined revenue of 57.67% of the total SKUs.39 15.39 13.79 57.6 % of revenue whereas it is low in case of other merchandise groups ranging between 13 to 20. .67% % Revenue 28.57 100 As Staples.57%) we see a scope of increasing the no of SKUs in these categories which at present is just 21. Staples Beverages Perishable Total SKUs/revenue Total no of SKUs 523 319 310 5317 21.3) in case of Hardware & home appliances which actually contributes only 5.


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