Company Strategy and Different Model and Some Starting Project work 4 Ps of Marketing PRODUCT There are 5 categories in which products are offered. There are some Pantaloons in house brands under every category. There are tie ups with other brands also. PRICE Kishore Biyani’s ability to forecast the future definitely paid off for PRIL. Back in January 2008 the CEO initiated the cost-cutting campaign ‘Garv se kaho hum kanjoos hain’. Through emails to his employees, Biyani made sure to instill awareness of the dim future amongst each of his employees and to devise processes to meet the requirements within 6 months. PRIL started converging back-end operations 6 months ago, and plans on continuing in the future. This exercise that primarily involves converging the back-end operations of all similar lines of businesses has proved profitable in terms of cost-saving on resources. The company took steps towards strategic realignment and cost-control techniques way back in 2006. Through a series of scenario planning exercises and continuous review of business plans, it was able to bring out the best possible levels of ‘efficiency, productivity and resilience to the external environment’. PLACE As per Fitch Ratings, the company is now concentrating on supply-chain efficiency, highmargin private labels, and reworking lease rentals. PRIL is one company that has always promised value and quality at lower prices. Hence maintaining low prices is at the heart of all strategies they will be implementing in the future. The company has also succeeded in cutting its 5-level supply-chain structure to a 2-level one. A very strategic decision in terms of real estate helped the company gain considerable cost advantage over its competitors. It had acquired land for reasonable rates a few years ago, as it expected the increase in real estate prices. PROMOTION In addition to all the above, PRIL also introduced shopping festivals, end of season sales, exchange fairs and days dedicated to low-price shopping. Through a partnership with McKinsey & Co., they were able to develop a process-driven approach towards discount planning and inventory management. Porter’s Five forces: When Kishore Biyani started Pantaloons Retail (India) Ltd.(PRIL), he must have hardly expected to hit in such a manner in the short time frame. What started off as India’s first brand for formal trousers back in 1987, transitioned into what is now the country’s largest retail giant with its footfall in every arena the modern-day consumer believes to be part of his/her lifestyle. PRIL, the flagship company of the Future Group, operates through a large number of formats that target different aspects of consumerism. These Sports and Fashion - Pantaloons, Central, Brand Factory etc. Food – Food Bazaar, Fair price etc. Home products – e-Zone, Staples, Home Town etc. Leisure and Entertainment – F123, Bowling Co. etc. largely center on:- Threat of Entry PRIL’s rivals Shopper’s Stop and Vishal Retail only grew by 3.3% and 17.8%, with operating margins falling over last year‘s. This hardly seems a lucrative opportunity to any big names scanning the horizon. In addition to this, the latest budget did nothing to spur growth when it made no mention of the relaxation in FDI norms for the retail sector – a longstanding demand by the major players in the sector, along with recognition as an industry. However, considering AT Kearney’s predictions of the potential in the Indian retail market, the threat of foreign entrants looms large in the near future with the first Wal-Mart in India opening just a few weeks ago. Threat of suppliers Market share generally reflects the focal firm’s influence over its consumers, competitors and suppliers. Rather than the traditional ‘Producer-push’ format of supply-chains, large retailers enjoy the advantage of the ‘Consumer-pull’ format. Threat of substitutes Substitutes to this sector may largely come in the form of Internet, wherein direct selling of consumer goods may take place. But considering this phenomenon has not gained momentum in India, its chances of posing a major threat to the sector is fairly low . Threat of Buyers The retail sector has always faced trouble retaining consumer-loyalty. The gloom of the meltdown has spread rather rapidly in the consumption segment with same-store sales in most retail chains dropping to abysmal numbers. In the current scenario most consumers prefer deferring purchases of retail items, and hence pose the largest threat. Threat of Rivalry PRIL’s immediate competitor, Vishal Retail is running out of cash and closing stores all over the country. Although they have no hopes of opening these outlets just as yet, they do plan on reworking their format through expansion by way SWOT Analysis Strength 1. It is India’s largest retailer having 1000 stores across 70 cities in India 2. It is country’s largest retailer by market capitalization and revenue 3. It manages high number of purchase orders 4. It is always updated with changing consumer preferences 5. Popular brand with a high presence across India Weakness of franchisee units. 1. It serves mass consumer base; still skilled labor force is not adequate when compared with global standards 2. Consumers from premium target group perceives it as low quality brand Opportunities 1. Increase in footfalls by increasing ATL – TV commercial promotion. 2. India is fast emerging as retail hub for top brands as government allowed FDI in single brand and multi brand retail 3. Organized retail is only 4.5 % of total Indian retail industry Threat 1. Strong competition from unorganized retail sector in India. 2. Government policies are not well defined in emerging markets 3. Online shopping is emerging trend in consumers due to convenience PESTEL Analysis of apparel retail industry Macro environmental factors affecting the clothing industry are those which lie outside small companies and their competitors. Business owners have less control of these external factors, and their impact in changing them is minimal. Instead, small companies must adapt to these macro environmental factors, which include consumer characteristics, technology, government influence and the economy. The way small companies adapt to macro environmental factors determines both their ability to differentiate themselves from key competitors and overall success. Legal and Political factor A number of legal and political macro environmental factors affect small businesses in the clothing industry. The industry has repeatedly been affected by issues such as workers' rights and child labour laws. Union workers in clothing manufacturing plants may picket their employers, especially if their wages or medical benefits are less favourable than workers in comparable industries. Workers picketing their clothing employers impacts production. This can cause delays for retailers in getting spring or fall fashions on time. Activists who are not employed by the companies may also picket retailers who purchase clothing from countries known for violating child labour laws. This negative publicity may impact small clothing retailers' sales and profits. Also, a trade embargo against another company's imports would force clothing wholesalers to find different suppliers. • Shop and Establishment Act • Standards of Weights and Measures Act • Provisions of the Contract Labour (Regulations and Abolition) Act • The Income Tax Act • Customs Act Economic factor Economic factors can have both positive and negative impacts on the clothing industry. During economic boom periods, people have more disposable income. Hence, they may buy more clothes, increasing sales for clothing manufacturers, wholesalers and retailers. However, recessions have the opposite effect. Sales for these various clothing entities may be significantly lower. Consequently, retailers may be stuck with large amounts of inventory. And they may have to sell the clothing at substantially reduced prices. Clothing manufacturers and retailers may also need to sell lower-priced clothing brands to compete with more generic brands. Consumers often shop for cheaper brands when they have less disposable income. Social factor Consumer micro environmental factors include cultures, norms, lifestyle, demographics and population changes. These factors affect the clothing industry in different ways. For example, a small clothing manufacturer needs to create styles that appeal to those of different cultures, especially if those cultural groups represent large enough segments of its market. Contrarily, clothing manufacturers, wholesalers and retailers avoid creating too many clothing items that fall outside the norms of society, such as styles worn 100 years ago. An ageing population may increase the demand for larger jeans and pants sizes, such as relaxed or looser-fitting styles. Generally, many people become more sedentary when they get into their 40s and 50s. Consumers' waistlines expand so they need larger sizes and more room for comfort. Technological factor Technological micro environmental factors affecting the clothing industry include availability of resources, demand and production. For example, the scarcity of certain materials, such as leather, may force retail and wholesale clothing companies to sell more faux or substitute leather products. Retailers may increase the prices of cotton clothing if they encounter shortages of this raw material, as they must pay their manufacturers more. The introduction of new clothing styles by a competitor can shift demand away from older fashions. Hence, a small clothing manufacturer may need to discontinue certain clothing lines and produce new ones that meet the needs of consumers. Moreover, clothing companies may add more advanced equipment in their plants like robots, which may force companies to fire some workers. PROJECT WORK (Part-B) Research Objective: The objectives of this study is: To analyze store operations through store green card, KPI, loyalty drive, Mission Happiness and how a buyer and a non-buyer customer reacts. Research Methodology Research process is a series of systematic steps that are followed to solve a business problem. It is the framework of the entire plan-of-action. It clearly describes crucial issues like the study‘s purpose and objectives, the type of data needed, the technique to be used for selecting samples, data collecting method, analyzing it, managing costs and other aspects that are essential for conducting business research. A descriptive research design has been followed for this marketing research which highlights both the qualitative and quantitative aspects of the identified problem. ‘Descriptive research’ is a study designed to depict the participants in an accurate way. More simply put, descriptive research is all about describing people who take part in the study. There are three ways a researcher can go about doing a descriptive research project, and they are: Observational, defined as a method of viewing and recording the participants Case study, defined as an in-depth study of an individual or group of individuals Survey, defined as a brief interview or discussion with an individual about a specific topic Observational studies are all about watching people, and they come in two flavors. Naturalistic, also known as field observation is a study where a researcher observes the subject in its natural environment. This is basically what Jane Goodall did; she observed the chimpanzees in their natural environment and drew conclusions from this. This makes the observations truer to what happens in the chaotic, natural world. But it also means you have less control over what happens. The other flavor is laboratory observation, where a researcher observes the subject in a laboratory setting. This gives the researcher a little more control over what happens so they don't have to fly out to some tiny little island in the middle of a war zone to observe something. However, it does ruin some of the naturalness that one might get from field observation. An example of a laboratory observation in psychology would be done to understand something about children at a certain age, such as the process of how a child learns to speak and mimic sounds. Survey A survey comes in different flavors, be it interviewing people face to face or handling out questionnaire to fill out. The main difference between surveys and observations is that in a survey, you don’t watch people; you ask them about themselves. SAMPLING DESIGN: Sampling is an essential part of the business research process. Sampling is the technique of selecting a representative part of a population for the purpose of determining the characteristics of the whole population. During the research, DATA COLLECTION: Primary Data: - It is original, problem or project specific and collected for serving a particular purpose. Its authenticity or relevance is reasonably high. To collect the primary data the best way is to interact with people directly or it can be through direct interviews and questionnaires. Both these methods have used for collection of primary data. Secondary Data: - It is not topical or research specific. It can be economically and quickly collected by the decision maker in a short span of time. It has been collected and compiled by some other researcher or investigative body. Secondary data is collected from company websites and various Literature reviews. As Pantaloons is daily in news because of its expansion plans, and its recent merge with forever 21. So I benefited a lot from articles on net For the study Mission Happiness, data collected was Primary data. A questionnaire of 3 questions is kept near every billing counter. The response given by customers is used data. Above is the picture of the questionnaire. First question (Score Category): This question asks customer to rate the shopping experience. Scale is from 0 to 10, 0 being worst & 10 being best. Customers rating between 9 & 10 are called promoters. It is expected that they will spread a positive word of mouth. Customers giving score 7 or 8 are passive. They are not happy with the shopping experience, but also not disappointed. We can make a try to convert them to promoters with little efforts. Rating below 7 is the area of concern. Those customers are detractor. They can spread a negative word of mouth, which must be taken care of. Second question (L1 reasons): This question asks about L1 reason which has options like billing, Staff service, range & variety, product quality, pricing & others. The score given in question 1 is related to one of those reason. Third Question (Hygiene Hat trick): This question covers 3 sub yes/no questions which are called as hygiene hat tricks. It includes whether customer was greeted at store. At the entrance of store, guard is supposed to greet customer so that they feel welcomed. Then next Is about features explanation. This is to check was anybody there to help customer to choose the product. Last one is about trial recommendation. It is highly recommended to try the product before billing. So question tells us whether our staff is focusing on this point or not. Response Rate: Response rate is no. of feedback /total no. of bills As every customer is important, his feedback is valuable. So ideally response rate should be 100%. Its cashier’s duty to ask customer to give feedback and also explain them what are the questions. Many times, customers are in hurry and they try to avoid this. So we are unable to understand whether they are happy or unhappy with the shopping experience. Another observation is that some customer give the feedback just for the sake of doing. They give score, reason randomly. So whatever results we get are not with highest accuracy. Effective communication is solution to this issue. Verbatim: At the end of the day, some customers are selected for calling. They include both promoters and detractor from almost all stores. This calls are to get the actual detailed feedback. This calls are recorded. Verbatim given by the customer is attached to the feedback given by customers on the day of shopping. They are also asked about reason of shopping, frequency of shopping, preferred brands, Other places where they shop(competitors) etc. This calls are also important to find lost sales. Major concerns can be pointed out for every store and accordingly actions can be taken. DATA ANALSIS & INTERPRETATION: RANGE AND VARIETY: Every feedback is provided with the unique ID. All other details like store, timing of billing, amount of bill, payment mode, mobile no. of customer, cashier name etc. are given with every feedback. This helps to study feedback in depth. After IBC, Verbatim from customer is also mentioned with feedback. If any query us left unsolved, it has to be taken care of within 24 hours by store manager. Otherwise, Escalation matrix is used and accordingly concerned person is supposed to satisfy the customer. Happiness index is (no. of promoter – No. of detractor) / total no. of feedback. Happiness index for every reason can be calculated by taking respective inputs. For example, to calculate billing Happiness Index, all feedbacks who have given billing as the reason are considered. Then according to score category, Billing HI is calculated. Hygiene Hat trick is No. of YES / total no. of feedback. It is directly related to conversion.