Kirana immersion project
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KIRANA IMMERSION PROJECT
Analyzing pain area of Grocery Stores
Submitted by: Anamika Gupta, PGDM-IB IB/04/02
Reliance Market(Mart)
A subsidary of Reliance retail Ltd Reliance Market is an Cash & Carry Store The first store was launched in 2007 ,August in
Ahemdabad Product are traded in bulk It offers more than 20,000 products
About The Project
. Reliance is planning to launch one of these stores in Delhi
NCR to know the problem of grocery stores with their wholesaler
or distributors To know analyze the gaps which make shopkeeper to switch
to organized wholesaler To observe the problem in grocery stores To interview shopkeeper
Retail Industry
Market size INR 16 trillion
Organized retail sector 2-3%
Unorganized retail sector 97 %
Growth rate 15% p.a
Contribution in National GDP 14%
•7% Share Of Retailing In Employment•There are around 12 million grocery stores in India
Source: Technopark research 2010
Cash & Carry Store
Cash and Carry model was developed by Lawrence Barely (he was entrepreneur and philanthropist) from Huddersfield. It is a wholesale model.
It is a membership based retail store selling limited SKUs in bulk packs.
Customers are usually members of the club and pay an annual fee
Only For members like wholesalers, semi-wholesalers and retailers
Source: Wikipedia
BITS AND BYTES
No FDI restriction in cash & carry business
Cash and carry in India is worth around $140 billion,
Carefour, Metro AG and Bharti–Walmart are the major players
Objective of Project
There are four major objectives of this project which listed as follows:
Understanding Kirana profitability. Gaps in current kirana sourcing. Need gap of kirana for increasing their profitability. Key requirements which will make kirana shift their current
sourcing to organized wholesale.
Sample Design
•These stores are established in the area of 3000-5000sq m. they are famous in their area.
•Their inventory and cash counters are computerized.
A -class Kirana stores
•These stores are established in the area of 600- 1200 square meter..
•Their inventory and cash counter is manually managed
B -class kirana stores
•They are very small kirana stores that are located in the colonies.
•They may have their local customers for whom they are fulfilling the demand of staple goods and day today’s need.
C -class kirana stores
Analysis
Profitability Of Shopkeepers’
Credit Limit
Transportation Cost
Frequency of purchase and time
Credit Preferred by Shopkeeper
80%
20%
Shopeeker opting Credit
Yes No
All the 8 stores of A, B and C type store purchase goods on credit. The two of the A type store stores those who have high sales & income
around a crores don’t prefer credit, they pay cash on delivery of the products.
Number of credit days
15days30%
7days70%
Time period for credit
The majority of shopkeeper purchase goods on Credit. The credit limit may vary from 10,000 to Rs 100,000. The C type store takes credit of 20,000Rs approximately while B and A type stores credit varies with purchase. The most common time period for credit is 7 days. But some companies give credit for the time period of 15 days also in the case high volume purchase.
7days credit 15 days0
20,000
40,000
60,000
80,000
100,000
120,000
credit limit for the credited days
amount of credit limit
Transportation Cost
FMCG companies provide Door to Door delivery and it is free of cost
the branded staple products were delivered free to the stores while local staple products which are bought from whole sale
market incurred the cost in transportation.
Frequency Of Purchase And Time
Delhi B
azaa
r
Budg
et B
azaa
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m N
agar
Eas
t
pura
n stor
e
Kitc
hen
frien
dly ,D
warka
Dwarka
Sto
re,u
ttam
nag
ar
Shan
ti stor
e,gu
rgao
n
Sum
pura
n St
ore,
Dwar
ka
Amul D
udh
stor
e, D
warka
Agar
wal sto
re,g
urga
on
Bhwan
i sto
re0
2
4
6
8
10
12
14
16
FMCGStaple
Frequency of Purchase of Stores (A, B, C) Per Month
Atype Store B type Store C type Store0
2
4
6
8
10
12
FMCGstaple
Sourcing
Type of product
Branded Wholesale market
Both by branded and wholesale mkt
Staple 30% 20% 50%
Mode Of Sale for Staple Product
Sales rerensative
Wholesale mkt
Sales representive& phone
Sales representative & wholesale Mkt
On phone&wholesale market
11% 45% 11% 22% 11%
Mode of Payment
80%
20%
mode of payment
cash on deliveryCheque/draft
Shopkeepers’ Desirability
Price &Assort-ment&Door Deliv-
ery22%
Door Delivery11%Quantity $
Quality22%
price 33%
terms of trade11%
Shopkeepers' desirability
Observation
Issue between shopkeeper and wholesaler/distributor Inventory management Account Management
Company’s scheme for kirana stores Factor affecting sales
Other Source of Earning Relationship edifice between Customers and stores
Problems
Replacement means the substituting the damaged product with new product is major issue with distributor among all the stores. Most of the FMCG Company does not take replacement.
Delay in delivery, out of stock and supplying more than the order is being placed are the common issues among store keepers.
Unnecessary interference of distributor
The scheme offered by company also has lot of terms and condition which is hard to achieve by shopkeeper especially with small retailers (B and C type).
The demand and desirability of stores varies with location.
Recommendations
First all, it is necessary to provide free door to door delivery either its FMCG or Staple or other commodities.
we can come up with special offer on the purchase of less volume We need create uniformity in pricing. The margin which we will be going to provide
shopkeepers of small stores will be same as for the shopkeepers of big stores. There is need to possess more branded product and variety in product in order to
attract these stores.
There must be a helpline number
There should be group of representative who can visit weekly in store in order to manage their inventory and take order as per the shortage in the stores
It is necessary to keep inventory up to date according to demand
Conclusion
The two month internship gave me an exposure in B2B and had developed my interpersonal skill
I learnt about Different kind of Brands I get to know how business is conducted in B2B I learnt how to persuade and deal with people I learnt the art of selling I imbibe hard work, patience, determination and
marketing skills from the shopkeeper
Things To Remember
Listen to your boss Be punctual and be concise
THANKYOU