A

SUMMER INTERNSHIP PROJECT REPORT

ON
CUSTOMER SATISFACTION
IN
VISHAL MEGA MART
Submitted for the Partial Fulfillment of the requirement for the
award
Of
BACHELOR OF BUSINESS ADMINISTRATION

Submitted to: Submitted By:

Dr. Mani jindal Puja Poddar

MANGALMAY INSTITUTE OF MANAGEMENT AND

TECHNOLOGY
(Affiliated To Chaudhary Charan Singh University, Meerut)

a
 CERTIFICATE

This is to certify that Puja Poddar a student of Bachelor of Business Administration,

Batch (2018-2021) of MANGALMAY INSTITUTE OF MANAGEMENT AND
TECHNOLOGY, Roll No-180992105164 has undertaken the summer internship project
under my guidance for the project title “Customer Satisfaction in Vishal Mega Mart" This
project report is prepared in partial fulfillment for the B.B.A. course in management. To the
best of my knowledge, this Summer Training work is original and the student earlier to any
institution/university has submitted no part of this report.

(Signature)

Date: …………………… Faculty Mentor Name: Mrs. Mani Jindal

b
 DECLARATION
I Puja Poddar, bearing University Roll No. 1809921051654 of CCS University, Meerut,
enrolled as student of BBA at Mangalmay Institute of Management & Technology, Greater
Noida, solemnly declare that the project report titled, ‘Customer satisfaction in Vishal mega
mart.’ embodies the results of original research work carried out by me and the same has not
been submitted in any form partially or fully for award of any diploma or degree of this or
any other University/Institute.

NAME-PUJA PODDAR
ROLL NO.- 180992105164

c
 PREFACE

No professional curriculum is considered complete without 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. 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 Ghaziabad city.
The study concentrates on the concept of retailing in the current scenario and prevailing
market of retail. And describe the effectiveness by identifying the key activities that should
perform in order to maximize the profitability of Vishal Mega Mart.

d
 ACKNOWLEDGEMENT

I am grateful to Dr. Mani Jindal (Assistant Professor of MANGALMAY INSTITUTE OF

MANAGEMENT AND TECHNOLOGY) without his guidance and motivational
encouragement I cannot complete my report.

I also acknowledge and express my deepest gratitude to Mr. Devendhu Bhardwaj

(Branch 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
project.

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

questionnaires, my friends and colleagues who have helped me directly as well as
indirectly, in carrying out this project 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.

Puja Poddar

e
 TABLE OF CONTENT

CHAPTERS CONTENTS . PAGE NO

CHAPTER 1 INTRODUCTION
1

CHAPTER 2 LITERATURE REVIEW 21

OBJECTIVES, SCOPE AND IMPORTANCE 47

CHAPTER 3 OF STUDY

CHAPTER 4 RESEARCH METHODOLOGY 48

CHAPTER 5 DATA ANALYSIS

50

CHAPTER-6 CONCLUSIONS & RECOMMENDATIONS 72

l. BIBLIOGRAPHY 75
m. ANNEXURE/QUESTIONNAIRE
76

f
 CHAPTER-1
INTRODUCTION

In the background of high consumerism and income of the urban consumers, in recent
year there are a number of companies have expressed their interest towards retail sector
outlets. As a result numbers of shopping malls have started their operations in metro and
urban areas. Pantaloon, big bazaar, Vishal Mega Mart, Reliance Fresh are the best known
examples of retail sector outlets in India.
Retailing is the interface between the producer and the individual consumer buying for
personal consumption. This excludes direct interface between the manufacturer and
institutional buyers such as the government and other bulk customers. A retailer is one who
stocks the producer’s goods and is involved in the act of selling it to the individual consumer,
at a margin of profit. As such, retailing is the last link that connects the individual consumer
with the manufacturing and distribution chain. Some of the key features of retailing include
 Selling directly to customers with out having any intermediaries

 Selling in smaller units / quantities, breaking the bulk

 Present in neighborhood or in the location which is quite convenient to the customers.

 Very high in numbers

 Recognized by their service levels

 Fitting any size and or location

It is assumed that due to the entry of a number of retail outlets in the urban and semi
urban areas, the mindset of the existing customers have undergone drastic changes.
Besides it is also reported that the traditional retailing such an age old Grocery shops
have directly faced competition with the organized retailing sector. In some parts of the
country, it is reported that the traditional retails are resisting the entry of organized
shopping malls. For instance the traditional retails of Bhubaneswar with the active
support of the consumers at large didn’t allow reliance Fresh to start outlet initially.

RECENT TRENDS
 Retailing in India is witnessing a huge revamping exercise as can be seen in the graph

1
  India is rated the fifth most attractive emerging retail market: a potential goldmine.

 Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade)
makes up 3 percent or US$ 6.4 billion

 As per a report by KPMG the annual growth of department stores is estimated at 24%

 Ranked second in a Global Retail Development Index of 30 developing countries

drawn up by AT Kearney.

RETAIL SALES IN INDIA

GROWTH FACTOR FOR INDIAN ORGANIZED RETAIL
INDUSTRY
India's economy is booming, due to so many economic reforms. The rise in the working
population which is young and reduction of the unemployment rate. Pay- packets which are
hefty, and having a huge package of salary package. More nuclear families in urban areas rise
in the number of working women more disposable income and customer aspiration western
influenced life style is adopted by all the people. Growth in expenditure for luxury items
increases.

GROWTH OF RETAIL INDUSTRY:

Growth of Retail Companies in India exhibits the boom in the retail industry in India over
the years. The increase in the purchasing power of the Indian middle classes and the influx of
the foreign investments has been encouraging in the Growth of Retail Companies in India.
Reason for the growth of retail industry is
Existing Indian middle classes with an increased purchasing power
Rise of upcoming business sectors like the IT and engineering firms
Change in the taste and attitude of the Indians
Effect of globalization
Heavy influx of FDI in the retail sectors in India

TYPES OF RETAIL
The retail industry is divided into organized and unorganized sectors. Organized retailing
refers to trading activities undertaken by licensed retailers, that is, those who are registered

2
for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail
chains, and also the privately owned large retail businesses.
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the lookalike ana shops, owner manned general stores,
paan/beedishops, convenience stores, hand cart and pavement vendors, etc.

Retailing Formats in India

Malls
The largest form of organized retailing today. Located mainly in metro cities, inproximity to
urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above. Theylend an ideal
shopping experience with an amalgamation of product, service and entertainment, all under a
common roof. Examples include Shoppers Stop, Vishal MegaMart, India bulls, Pantaloon.
Specialty Store
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword,
RPG’s Music World and the Times Group's music chain Planet M, are focusing on specific
market segments and have established themselves strongly in their sectors.

Discount Stores
As the name suggests, discount stores or factory outlets, offer discounts on the MRPthrough
selling in bulk reaching economies of scale or excess stock left over at the season. The
product category can range from a variety of perishable/ non perishable good

Department Stores
Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs.Further classified into localized departments such as clothing, toys, home, groceries,
etc.Departmental Stores are expected to take over the apparel business from exclusive brand
showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, Vishal Mega
Mart and now has more than seven large stores (over 30,000 sq. ft) across India and even has
its own in store brand for clothes.

Hyper Markets / Super Markets

Large self service outlets, catering to varied shopper needs are termed as Supermarkets.
These are located in or near residential high streets. These stores today contribute to 30%of
all food & grocery organized retail sales. Super Markets can further be classified in tomini

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supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets rangingfrom of 3,500
sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

Convenience Stores
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock
a limited range of high-turnover convenience products and are usually open for extended
periods during the day, seven days a week. Prices are slightly higher due to the convenience
premium.
MBO’s
Multi Brand outlets, also known as Category Killers, offer several brands across a single
Product category. These usually do well in busy market places and Metros.
Berhampur is an important town in the Southern part of Orissa. Most of the business
transactions of Southern Orissa concentrate in berhampur. It is found that the traditional
retail stores are scattered around different clusters of the city such as Bada Bazar, Vapur
Bazar, and Annapurna Market. In last two a couple of organized retails have entered into the
city for the purpose of grabbing the market opportunities prevailing in the city. The
organized retails mostly include Kokata Bazar (Urban Bank road), Vishal Mega
Mart (Church Road) and The World (Giri Road).
In this background, present study is modest attempt to understand the impact of Vishal
Mega mart on traditional Retailing.

Vishal Mega Mart,

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 than100
fully integrated stores in spread of more than the area of around 22, 00,000 sq. ft. in69 cities
across India & has a plan to cross total retail area of 35 lakh sq. ft. in tier II andtier III cities
by the end of 2019.

Traditional retailing
Traditional retailing or we can say the unorganized retailingare the traditional formats of
Low-cost retailing, for example, the localkirana shops, owner manned general stores,
Paan/beedi shops, convenience stores, hand cart and pavement vendors, etc

4
 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 2019.

According to Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited, the group owes its
origin to a small 50 sq ft shop in Kolkata's Lal Bazaar that started selling readymade
garments. In tune with the pulse of the market, he envisioned a mega store that would sell
garments at prices none other could match. . The first big store opened in Calcutta's
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.”

5
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.

Keeping this in mind, the group is now looking for franchisees to join hands with Vishal and
grow under common banner. This partnership will help small retailers to survive the
onslaught of organized retail as it will enhance their competitiveness. Small stores can avail
of the benefits on account of the economies of scale, a key advantage for big retailers. As per
the plans, Vishal Retail will completely take over the supply chain of its franchisees and
provide them with technology, new practices, visual merchandising skill and special
promotional schemes, besides its brand and costumer base.

Some of the Franchisee exclusive business categories are

 Mens Fashion
 Ladies and Kids
 Footwear
 Toys and Games
 Home – General
 Convenience (FMCG)
 Mobile and Watches

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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, Mangalmay institute of management and technology to train
people for fulfill the growing demand of trained manpower in their stores as well as the
service industry.

The Group also has a plan to raise around Rs 200 crore through preferential issue in the next
few months to fund the company’s expansion plan. Mr. R C Agarwal said “Rs 100 crore
corpus raised through the initial public offering had already been utilized and more money
was required to push the expansion plans further.”

The group has registered a consistent growth over the years. It recorded a whopping turnover
of more than Rs.600 crores in 2016 -20178as opposed to a turnover of Rs 288 Crore for
2017- 2017. This ascent has inspired the Group to chalk out an ambitious expansion program,
with expansion and growth plans being implemented on different dimensions.

“Retailing is an engine for taking merchandise to the end-users. There is a lot of opportunity
in this sector for us since demand of the potential consumers are not being met under the
existing facilities. Therein lies the road to success.” says Mr. R C Agarwal.

Supply chain management

Vishal supply chain management involves planning, merchandizing sourcing,
standardization, vendor management, production, logistics, quality control, ‘pilferage’ control
replacement and replenishment. The supply chain management provides flexibility to adapt to
changing patterns in consumer behavior and ability to add value at various steps/levels.

In particular, supply chain management gains strength and ability to undertake in-house
manufacture, design and development of apparels.

7
Logistics and distribution network
Vishal distribution and logistics network comprises seven distribution centres. Besides, they
have their own fleet of 41 trucks, which helps them to transport and deliver products in a cost
and time efficient manner. They believe that their distribution and logistics set up is well
networked and allows to fulfil the store requisition within short time period of generation and
receipt of order, which has helped to optimize in-store availability of merchandise and
minimize transportation costs.The 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 stores. This provides assistance in maintaining a low working capital requirement
and less carrying cost.

Geographical spread
Vishal stores and distribution centres are spread in various parts and regions of the country.
This has not only enabled to build the brand value but also facilitated to explore cost-
effective sourcing from different locations, identify potential markets and efficiently establish
new stores in different locations. An aggregate of 43 of 50 of existing stores are located in
Tier II and Tier III cities, which, they believe, enables to capture market share in locations
where a majority of our target customers are located.

Identifying new locations

They believe that possess the ability to identify locations with potential for growth, in
particular in Tier II and Tier III cities. They have an exclusive site identification and
assessment team, which undertakes systematic analysis of the business prospects, taking into
account factors such as population, literacy levels, and nature of occupation, income levels,
accessibility, basic infrastructure and establishment and running costs. Further, they
Have a dedicated warehouse for the purposes of storing the materials essential for setting up
of new stores.

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Private labels
They have a number of private labels for apparels (i.e. apparels manufactured by own) such
as Zepplin, Paranoia, Chlorine, Kitaan Studio, Famenne, Fleurier Women and Roseau. In
fiscal 2019, the income from private labels was Rs. 583.60 million, which accounts for 9.68%
of total sales for fiscal 2019. They believe that focus on private labels and their recognition in
customer segment enables to differentiate themselves from the competitors.

Information technology systems

They believe that efficient information technology systems, processes and business
applications are essential to handle retail chain of our magnitude. The office processes
arecomputerized which support procurement, supply Chain logistics, distribution centers
management and store operations including inventory management and billing. They are in
the process of implementing SAP. All the stores and distribution centres are connected
through a company-wide virtual network connection which helps to efficiently manage the
network of outlets throughout the country.

Experienced and skilled management team

They have an experienced management team which is complemented by a committed
workforce. The management team comprises of talented professionals who are skilled in the
retail sector. This has assisted in management of the stores. They believe in creating the right
balance of performance bonuses and other incentives for employees.

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
9
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.

Emphasis on Backward Integration

They believe that through backward integration they will continue to substantially control the
cost of production, resulting in such cost benefits being passed on to the customers. They
intend to increase the in-house manufacture, design and development of products and realize
economies of scale. They intend to manufacture at least 25% of requirement for apparels and
may require expansion of existing manufacturing facilities. This will also enable to reduce the
reliance on external agencies for supply of products and will result in lower turn-around time.
In addition, the focus would be to undertake in house such functions of the manufacturing
processes, which, in view, would add maximum value and would enable to reduce our
procurement costs.

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 the apparels market in
India, which depends on factors such as change in weather conditions and festival
celebrations. In furtherance of endeavors 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,
10
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 endeavor 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.

Continue to upgrade information technology systems and

processes
They believe that any retail business requires efficient information technology systems for
control over the functioning of various stores including stock management, pricing and
promotion, replenishment, sales, quality control and financial accounting. They are currently
in the process of upgrading information technology set up and have entered into
arrangements with leading vendors of information technology services for implementation of
more advanced ERP applications such as SAP. They intend to periodically upgrade the
information technology systems and processes.

Continue to train employees and seek entrepreneurship from

employees
They believe a key to success will be ability to continue to maintain and grow a pool of
strong and experienced professionals. They have been successful in building a team of
talented professionals and intend to continue placing special emphasis on managing attrition
and attracting and retaining the employees. They intend to continue to encourage the
employees to be enterprising and expect them to ‘learn on the job’ and contribute
constructively to the business, either through ideas, personal networks or effective knowledge
management. They also intend to continuously re-engineer the management and
organizational structure to allow to respond effectively to changes in the business
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environment and enhance overall profitability The Company was incorporated on July 23,
2017 as “Vishal Retail Private Limited”. The Company was converted into a public limited
company pursuant to an extraordinary general meeting of shareholders dated November 28,
2018 and subsequently by a fresh certificate of incorporation consequent to change of name
dated February 20, 2019 issued by the Registrar of Companies, West Bengal and the name
was changed to “Vishal Retail Limited”.

Business Processes
Currently, the business plan involves implementation of the concept of value retail in India.
They sell quality products at reasonable prices by directly procuring from manufacturers. The
business process can be summarised as below:

Board of Directors
The following persons constitute the Board of Directors:
1. Mr. Ram Chandra Agarwal, Chairman and Managing Director;
2. Mrs. Uma Agarwal, whole-time Director;
3. Mr. Surendra Kumar Agarwal, whole-time Director;
4. Mr. Bharat Jain, independent Director;
5. Mr. Jay Prakash Shukla, independent Director; and
6. Mr. Rakesh Aggarwal, independent Director.

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,

12
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

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 standardized 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.

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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 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 also help in standardizing 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
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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.
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.

15
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.

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 for providing a credit card called “- 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.

16
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.

Information Technology Systems

They are focussed 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. The office processes are also computerized which support
procurement, supply chain logistics, distribution centres management and inventory control.
All the locations are connected through companywide virtual network connection which
helps to efficiently manage the network of outlets throughout the country. They believe that
business requires efficient management and storage of data and information to utilize for
business analysis, research and forecast. Based on existing information technology systems,
they are able to generate detailed daily reports covering the various aspects of business such
as division wise sales per store, inventory movement and position at stores and distribution
centres and generation of purchase and delivery orders. In August 2005, thay 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 the Company to use the SAP software, documentation and other information related
thereto. They have partly implemented the information technology set up and are currently in
the midst of completing the process of upgrading information technology set up and have
entered into an agreement dated September 6, 2005 with Tata Consultancy Services Limited

17
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.

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.

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,

18
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.

Introduction of Indian Retail Industries:

Retail is India’s largest industry, accounting for over 10 per cent of the country’s
GDP and around eight per cent of the employment. Retail industry in India is at the
crossroads. It has emerged as one of the most dynamic and fast paced industries with
several players entering the market. But because of the heavy initial investments
required, break even is difficult to achieve and many of these players have not tasted
success so far. However, the future is promising; the market is growing,government
policies are becoming more favorable and emerging technologies are facilitating
operations. Retailing in India is gradually inching its way toward becoming the next
boom industry. The whole concept of shopping has altered in terms of format and
consumer buying behavior, ushering in a revolution in shopping in India. Modern
retail has entered India as seen in Sprawling shopping centers, multi-storied malls and
huge complexes offer shopping, entertainment and food all under one roof. The Indian
retailing sector is at an inflexion point where the growth of organized retailing and
growth in the consumption by the Indian population is going to take a higher growth
trajectory.
The Indian population is witnessing a significant change in its demographics. A large
young working population with median age of 24 years, nuclear families in urban
areas, along with increasing working-women population and emerging opportunities
in the services sector are going to be the key growth drivers of the organized retail
sector in India. Retailing is the final step in the distribution of merchandise – the last
link in the Supply Chain - connecting the bulk producers of commodities to the final
consumers. Retailing covers diverse products such as foot apparels, consumer goods,
financial services and leisure .A retailer, typically, is someone who does not effect

19
 any significant change in the product execs breaking the bulk. He/She are also the
final stock point who makes products or services available to the consumer whenever
require. Hence, the value proposition a retailer offers to a consumer is easy
availabilities of the desired product in the desired sizes at the desired times. In the
developed countries, the retail industry has developed into a full-fledged industry
where more than three-fourths of the total retail trade is done by the organized sector.
Huge retail chains like Wal-Mart, Carr four Group, Sears, K-Mart, McDonalds, etc.
have now replaced the individual small stores. Large retail formats, with high quality
ambiance and courteous.
Retailing is the interface between the producer and the individual consumer buying
for personal consumption. This excludes direct interface between the manufacturer and
institutional buyers such as the government and other bulk customers. A retailer is one who
stocks the producer’s goods and is involved in the act of selling it to the individual consumer,
at a margin of profit. As Such, retailing is the last link that connects the individual consumer
with the manufacturing and distribution chain. Retailing is more than selling goods: Retailing
consists of the sale of goods or merchandise, from a fixed location such as a department store
or kiosk, in small or individual lots for direct consumption by the purchaser. Retailing is a
well recognized business function which compromises making available desired product in
the desired quantity at the desired time. This creates a time, place and form utility for the
consumer. The success of retailing is highly dependent on an efficient supply chain
management. A well-developed supply chain reduces wastages and transaction cost thereby
reducing the cost of inventories to be maintained by the producers and the traders. A
reduction in the cost of inventory management leads to a reduction in the final price to the
consumer.

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 CHAPTER-2
LITERATURE REVIEW

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

. 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.

21
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

 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

23
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

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.

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.

These concerns are particularly acute for customers using an electronic channel because
many of them do not realize the extensive amount of information that can be collected
without their knowledge. In addition to collecting transaction data, electronic retailers
can collect information by placing cookies on visitors' hard drives. Cookies are text files
that identify visitors when they return to a website. Due to the data in the cookies,
customers do not have to identify themselves and use passwords every time they visit a
store. However, the cookies also collect information about other sites the person has
visited and what pages they have downloaded

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.

25
 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.

 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.

26
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 determine
which customers to target.

1. Lifetime Value

 Lifetime customer value (LTV) is the expected contribution from the customer to
the retailer's profits over his or her entire relationship with the retailer.

 LTV is estimated by using past behaviors to forecast the future purchases, gross
margin from these purchases, and costs associated with servicing the customers.
Some of the costs associated with a customer are the cost of advertising and
promotion used to acquire the customer and the cost of processing merchandise that
the customer has returned.

These assessments of LTV are based on the assumption that the customer's future
purchase behaviors will be the same as they have been in the past.

2. Special Customer Services

Retailers provide unusually high quality customer service to build and maintain the
loyalty of platinum customers.

3. Personalization
 With the availability of customer-level data and analysis tools, retailers can now
economically offer unique benefits and target messages to individual customers.
They now have the ability to develop programs for small groups of customers and
even specific individuals.

 Many small, local retailers have always practice 1-to-1 retailing. They know each of
their customers, greet them by name when they walk in the store, and then
recommend merchandise they know the customers will like.

The Internet channel provides an opportunity for retailers to automate the practice
of 1-to-1 retailing...

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 4. Commnnity

Retailers can also develop a sense of community among customers. The Internet channel
offers an opportunity for customers to exchange information using bulletin boards and
develop more personal relationships with each other and the retailer. By participating in
such a community, customers are more reluctant to leave the "family" of other people
patronizing the retailer.

Converting Good Customers into Best Customers

 Increasing the sales made to good customers is referred to as customer alchemy –
converting iron and gold customers in to platinum customers. Customer alchemy
involves offering and selling more products and services to existing customers and
increasing the retailer's share of the wallet with these customers.

 The retailer's customer database reveals opportunities for cross selling and add-on
selling. Cross selling is selling a complementary product or service in a specific
transaction, such as selling a printer when a customer buys a computer.

Implementing CRM Programs

 Increasing sales and profits from the CRM program is a challenge. The effective
implementation of CRM programs requires the close coordination of activities by
different functions in a retailer's organization.

 The MIS department needs to collect, analyze, and make the relevant information
readily accessible for employees implementing the programs – the front-line service
providers and sales associates and the marketers responsible for communicating with
customers through impersonal channels (mass advertising, direct mail, and e-mail).

Store operations and human resource management needs to hire, train, and motivate the
employees who will be using the information to deliver personalized services.

Customer Relationship management (CRM) has been a hot topic in industry for a relatively
short period of time. It formalises best practice into a strategy that enables a firm to identify
its customers and target them in a way which will make them more profitable and loyal. Fair

28
Hurst argues that “the best examples of CRM still remain the one-to-one services provided by
shopkeepers who know their customers personally”. The topic has thus been around for
centuries, yet it is only in recent years that computing technology has been developed which
can go some way to replicating this kind of customer management. The power of computers
allows large firms to apply these techniques on their many customers.
The definition of CRM that we shall use is: The infrastructure that enables the delineation of
and increase in customer value, and the correct means by which to motivate valuable
customers to remain loyal – indeed to buy again. This can be broken down into two specific
types; analytical and operational. The distinction is that operational CRM occurs at customer
touchpoints (i.e. where the customer and firm interact) and is thus concerned with collecting
data and practicing strategies. Analytical CRM occurs in the back office and is concerned
with processingdata and forming strategy. Figure 1 shows how the two forms go hand in hand
with one another. Operational CRM produces customer data which can be analysed in the
back office. Using the findings from this, a new strategy can be developed and operated on
the customers, which in turn
Produces data. This cycle is continuous with each type of CRM hopefully building on the
output of the previous.

29
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 one 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.

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. Chu and Pike (2002) [1] detail a survey that IBM
conducted into what drives retail customer satisfaction in the USA. It was found that the most
important factors were the in-store experience and their interactions with the staff.
Interestingly marketing and communications (how promotions are communicated) and data
integration and analytics (using information from a customer’s past purchases to provide a
better service) were not so important to customers, yet these properties are often touted as the
major strengths of e-CRM. There was little difference between the one-to-one experience
scores of the best and worst performing stores, yet a big difference between the store
experiences of differently performing shops. This led Chu and Pike to conclude that CRM

30
can do little unless the store has its retail basics in order. They also believe that marketing and
communication and data integration and analytics should not be the sole goals of CRM, but
should support the customer’s experience, since this is a more important factor to the
customer. This can be modelled by the pyramid in figure 2, in which the
Lower levels support each level above. This shows that although it is important to have a
CRM strategy, this is only one component within the firm’s customer-centric strategy.

Figure 2: 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 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.

31
Figure 3: The CRM value cycle (Source: Chu, J, Pike, T. (2002) Bringing the customer
experience full circle: The CRM value cycle, IBM Institute for Business Value [2])
The lower half of the cycle shows the role of CRM, with the customer insights corresponding
to analytical CRM and the refined business action referring to operational CRM. The
consequence of these two stages is an altered customer experiencewhich can in turn be
analysed

This framework was proposed as a generic solution for CRM strategy in retail, and is
definitely applicable to retailers. Retailer’s case studies were in fact used by Chu and Pike to
develop this.

3. Landscape for the value proposition chain

In the next section we take the Chu and Pike framework and by using the Peppers and Rogers
IDIC blueprint for retailers and produce an Information Communication Landscape for the
value proposition chain. The IDIC methodology was chosen as a generic blueprint for CRM
implementation which can be applied to many situations. This helps us view the problem
from a CRM perspective before focussing on the retail sector. Within the stages there is much
freedom as to how to go about achieving it, hence it should be possible to customise the
approach for retailsectors. The best way to think of IDIC is as a bridge between the general
CRM strategy discussed earlier and the technical implementation of the project. The Peppers
and Rogers consulting group suggest the IDIC methodology for implementing CRM

32
initiatives. IDIC is an acronym for Identify, Differentiate, Interact and Customise – the
sequence of stages a company must employ before Realisin g the perfect CRM situation. The
2001Insight Report, written by Peppers & Rogers Group and Microsoft Great Plains [6],
suggests that the perfect CRM implementation is when a one-to-one relationship with each
key customer is realised. At this stage it may be costly or cumber some for the customer to
switch loyalties causing them to become ‘locked in’. This idea may not be as applicable to
the retail sector, since there is little cost involved for a customer to change the retail sector
they visit. Anecdotal evidence from Peppers & Rogers Group suggests that a firm that
changes the way they deal with the top 5% or bottom 20% of their customer base can realise
payback

On a CRM. The stages of this methodology shall be examined with reference to retail sectors.

Identify customers
Information such as name, address and purchase information must be collected across the
company, at all points of contact. The more information gathered on each customer, the more
can be read into their habits and preferences. In the retail sector environment,
Purchase information is extremely valuable due to the wide range of products available (e.g. a
customer buying nappies and baby food suggests they are looking after babies, and much can
be inferred about an individual’s income and attitudes by something as small as the type of
bread they buy). The problem for bricks and mortar retail sectors is actually identifying the
customers in the first place. In recent years many retail sectors have introduced loyalty
schemes, offering promotions and money off shopping or petrol in exchange for customer
data. To obtain ‘points’, customers must produce their card (i.e. identify themselves) at every
transaction point. The advent of internet shopping has enabled retail sectors to identify
customers at the point of registration and track their purchases and browsing habits whilst on
the web site.

Differentiate customers
Peppers & Rogers justify this stage by saying “that customers represent different levels of
value to a company and that they have varied needs"[6[. A good retail sector example of this
is the BA Executive Club frequent flyer

33
Scheme, where their level of membership is dependent on how often they fly (i.e. their Value
to BA). Differentiation should be relatively easy for the retail sector to achieve once the data
has been collected, since there is full information on how much each registered customer
spent and what they spent iton. With the information gained on the total spend of each
customer, it is possible to work out their value to the company (e.g. top 10%). The products a
customer purchases can put them into categories such as ‘vegetarian’, ‘parent’ and ‘social
class’. These socio-economic categories are clearly independent of one another, so customers
can be members of different combinations allowing a high degree of differentiation. This is
extended further when combined with the customer’s value to the company.

Interact with customers

This is the stage where the benefits of CRM kick in. Having categorised the customers, the
retail sector is in a position to treat them differently. Valuable customers for example can be
given more benefits, such as better offers to encourage them to stay faithful, since their
loyalty is more important to the company.

Customize content
Once the interactions and reactions of each customer have been analysed, a full one-to one
service can be offered to customers based ontheir value to the

Company, personality and background. Offers can be tailored according to the

socioeconomic classification (e.g. there is no point in offering money off vouchers for a
brand ofdog food if the customer does not own a dog)
In summary, we can see that the IDIC blueprint is applicable to the retail sector. The biggest
challenge facing the retail sector is how they actually obtain the data in order to identify the
customers. Once it can do this, the volume of data available is vast, which gives the
remaining three stages a much higher chance of success

3.1 Implementing CRM technology in the retail sector

34
So far we have investigated the processes which the retail sector must go through in order to
gain customer data and provide a one to one service to its patrons. The underlying theme of
this should be to support the customer experience; however the physical outputs of a CRM
initiative are data integration and analytics which can support marketing and communication
with the customer.
In all but the smallest local shop, grocery stores will have to employ some form of
technology in order to perform IDIC on their customers. This section focuses on the
technology strategy which the retail sector must employ in order to achieve thelower half of
the CRM value cycle of figure 3, and how it fits in with the IDIC blueprint
Fairhurst in his 2000 paper, ‘what is CRM?' [4], outlines the technology required for
implementing an E-CRM strategy. The focus is a customer support centre of an online
company, and the aim appears to be to integrate customer information in order to improve
customer service and reduce costs.
The situation we are investigating is very different, with bricks-and-mortar retail sector
focussing on improving customer experience. Fairhurst’s model does not mention any
specific technologies, only the roles which need to be fulfilled for CRM to be integrated and
implemented. It was thus decided to adapt his model for the retail sector. An advantage of
adapting this framework is that it can be linked to the strategies discussed earlier; IDIC and
the CRM value cycle.
The six key requirements Fairhurst identifies for the implementation of an online E-CRM
strategy are: customer data storage and analysis, personalization engines, content
management, broadcast engines, transaction engines and workflow management.
This was adapted for the off-line world of retail retail sectors by removing the workflow
Management requirement. The rationale for this is that it is the number of customers in the
store at any one time that determines workflow, not who they are.

35
Figure 4: Technology Design Landscape for value proposition chain
Figure 4 shows the adaptations to Fairhurst’s technology model, and how the earlier
strategies formulated (IDIC and the CRM value cycle) fit in with the technology. The first
stage of the process is identifying the customer. This is done by the transaction engine (at the
retail sector this is at the point of sale) and is in the operational CRM level.
Since it is a point of interaction with the customer. Details of each transaction are passed into
the customer data store. Once there is enough data at this level the retail sector is able to
analyse it and differentiate the customers. Since we are processing the data at this stage, we
have entered the analytical CRM phase of the value cycle. At this level there is also an
amount of content which can be customised once interactions have occurred between the
retail sector and customer. The personalisation engine matches the right content with the right
customer. Once this has taken place, the content must be broadcasted to the customer.
The broadcast engine does this by converting the content into the format preferred by the
customer (e.g. e-mail or post) and directing it to them. The broadcast engine need not be a
piece of technology; it is merely implementing the new strategy suggested by the analytical

36
CRM. Interactions between customer and retail sector occur once the customer has been
identified and differentiated.

Customer satisfaction and its theories:

Customer Satisfaction:

Customer satisfaction emerged as a distinct area of inquiry in the 1970s (Churchill &
Surprenant, 1982), and companies both big and small have realised the strategic benefits of
service quality and customer satisfaction as competition become more intense and global.
The achievement of customer satisfaction has become a good business practice that
businesses strive to achieve (Szymanski & Henard, 200 cited in Yu et al, 2005).

Definition of Customer Satisfaction:

Several definitions have been offered for customer satisfaction over the past three decades.
Anderson et al. (1994) suggested two definitions of customer satisfaction, in accordance with
the two broad classes of customer experiences identified by the literature – transaction
specific experiences and cumulative experiences (Mittal et al, 1999 cited in Zeithaml et al,
2009). With a transaction-specific experience, customer satisfaction is defined as the post-
choice evaluative judgement of a specific purchase occasion. Whereas a cumulative
experience, customer satisfaction is determined as a result of a customer’s evaluation of his
or her total purchase and consumption experience over time. Oliver (1997) cited in (Zeithaml
et al, 2009) defined satisfaction as

“…the consumer’s fulfilment response. It is a judgement that a product or service feature, or

the product or service itself, provides a pleasurable level of consumption related fulfilment”.

It is the ability of the service or product to meet the customer’s needs and expectations.
Fornell et al. (1996) in their CSI model defined customer satisfaction as a function of
customer expectations, perceived quality, and perceived value.

Why is Customer Satisfaction Important to Businesses?

Customer satisfaction helps companies in many ways, some of which include:

37
Customer satisfaction information helps companies to evaluate their ability in meeting
customers’ needs and expectations effectively (Zeithaml et al, 2009).

It also helps companies to analyse the performance of an offering to customers in order to

identify areas for improvements as well as what areas customers consider to be very
important to them (Zeithaml et al, 2009).

EXPECTATIONS AND CUSTOMER SATISFACTION

Expectations are beliefs (likelihood or probability) that a product and/or service (containing
certain attributes, features or characteristics) will produce certain outcomes (benefits or
values) given certain anticipated levels of performance based on previous affective,
cognitive, and behavioural experiences. Expectations are often related to satisfaction and can
be measured as follows:

1. Importance: Value of the product/service fulfilling the expectation.

2. Overall Affect-Satisfaction Expectations: Like/dislike of the product/service.

3. Fulfilment of Expectation: The expected level of performance versus the desired
expectations. This is “predictive fulfilment” and is a respondent-specific index of the
performance level necessary to satisfy.

4.Expected Value from Use: Satisfaction is often determined by the frequency of use. If

a product/service is not used as often as expected, the result may not be as satisfying as
anticipated. For example, a motorcycle that sits in the garage, an unused year subscription
to the local fitness centre, or a little-used season pass to a ski resort would produce more
dissatisfaction with the decision to purchase, than with the actual product/service.

MEASURING EXPECTATIONS:

In building a customer satisfaction survey, it is also helpful to consider reasons why pre-
purchase expectations or post-purchase satisfaction may not be fulfilled or even measurable.

1. Expectations may not reflect unanticipated service attributes.

2. Expectations may have been quite vague, creating wide latitudes of acceptability in
performance and expected satisfaction.

38
 3. Expectation and product performance evaluations may be sensory and not cognitive,
as in taste, style or image.
4. The product use may attract so little attention it produces no conscious affect or
cognition (evaluation) and results in meaningless satisfaction or dissatisfaction
measures.
5. There may have been unanticipated benefits or consequences of purchasing or using
the product (such as a use or feature not anticipated with purchase).
6. The original expectations may have been unrealistically high or low.
7. The product purchaser, influencer, and user may have been different individuals, each
having different expectations.

Factors influencing customer satisfaction

1.Accessebility

You need to ensure that customers are able to find and access your products and services
efficiently, without barriers and friction, on their preferred channel.

Also, make sure that they can reach your company and obtain good service whenever they
have a question or need assistance to make a purchase decision.

2.Navigation

Navigating and browsing your store should be a straightforward and simple process. This
includes providing users who know what they want with an effective keyword search or
filters but also integrating solutions that guide unsure shoppers to help them identify suitable
products quickly.

A website that’s difficult to navigate will only lead to customer frustration and a loss of
potential customers.

3.Page Load Speed

39
It’s a simple rule: the faster your website loads, the happier your visitors. If one of your pages
doesn’t appear lightning-fast, your customer will move on to speedier online stores. In fact,
the Aberdeen Group found that,
“A 1-second delay in page load time equals 11% fewer page views, a 16% decrease in
customer satisfaction, and 7% loss in conversions.”

According to a survey by Akamai and Gomez.com, 79% of web shoppers who experience a

slow website say they would not return to the site to buy again and around 44% of them
would tell a friend about the poor online shopping experience.

4.Language

Speaking to your customers in their preferred language is pivotal for your business. More
than 50% of consumers won’t make a purchase if information about a product isn’t available
in their language.

However, language doesn’t only apply to language in terms of geographical demographics

but also how certain phrases or terms resonate with your audience and reflect back on your
business. Use user-friendly language and avoid industry specific jargon that could cause
confusion and rob you of an opportunity to connect on a personal level.
Without great communication, there can be no great customer experience.

5. Memory

According to Harvard Business Review, customers become frustrated if they have to repeat
themselves. Consumers feel comfortable switching from one channel to another and expect
their information and data to follow them along. They don’t want to be asked for the same
details over and over again, regardless of the channel or department, they’re interacting with.
Memory also means remembering your customer’s needs and wants to avoid trying to sell
products to customers, which they already have or clearly have no interest in.

6.Personalized

40
It’s kind of ironic that shoppers want personalized experiences in a sphere in which so many
business and personal interactions can be anonymous.
By personalizing the experience and sharing the right content, at the right time with the right
people, you can make interactions faster, easier and more efficient for your customers.

This results in increased customer satisfaction and the likelihood of repeat visits.

7.Convenience

Convenience is an essential element of a positive customer experience. It influences how

customers make decisions about what to buy, what services to use, where to go, and with
whom to engage.

It consists of 5 key variables

1. Decision Convenience: How quickly and easily a customer can decide what to
shop at your store?
2. Access Convenience: How easily is your store is accessible?
3. Benefit Convenience: What core benefits does a customer receive at your store
like receiving great customer service?
4. Transaction Convenience: How quickly can the customer complete the
payment?
5. Post-Benefit Convenience: How effectively are you handling post-purchase
issues like replacements or return of products?
If the perceived convenience is low, your customer will see interacting with you as work. If
they struggle to do business with you during any of the areas above, then they’re more likely
to go elsewhere.

8.Intuition

Customers value companies that “really get them”. Some companies simply have a good
intuition or “sixth sense”. They are proactive and anticipate the needs and emotions of
customers. Companies who know what their customers want before they want it or solve a
problem before customers even know it exists are able to create better, more convenient
experiences and a trust-based relationship.

41
For example, Southwest Airlines has a team called Proactive Customer Service that works
with 14 other departments to ensure operational efficiencies, effective communications, and
better customer accommodations. Their job is to evaluate flight disruptions, determine the
customer impact, and reach out to customers proactively so the customer doesn’t have to
reach out to them.

9.Real time
If you want to capture the attention of your audience, think about how you can take
advantage of real-time experiences. It’s about showing up when your customers need you.
Real-time interactions are becoming increasingly important to the modern consumer. They
expect real-time responses and faster resolutions.

For instance, “instant chat” and chatbots have emerged as a highly popular marketing

solution for companies that want to provide their customers immediate access to information
and show the more human and authentic side of their business.

10. Simplicity
Simplicity is key. It is one of the easiest ways to improve your chances of getting your
customer’s business is by making the process as simple as possible. You need to take away
the intricacy and complexity related to decision-making by advising and supporting
customers throughout their journey.
“To keep your customers, keep it simple”
Harvard Business Review
A study of the Latin American life insurance market observed that 40% of people who
purchased a life insurance policy and were happy about their experience said it was because
of a simple buying process.

Strategies followed by companies in the to satisfy customers:

Chamhuri and Batt refer that organizations must ensure good targeting and segmentation
strategies in order to achieve customer satisfaction level. Additionally, the authors also clear
that segmentation strategies will help the organization to differentiate their potential
customers into a 22 different group and targeting help the organization to target their desired
customer base in order to achieve financial benefit in the organizational context. Slamet et al.

42
(2015) also describe that the organizations must need to ensure the needs of the customers
and plan accordingly. Additionally, the study helps to understand that promotional activities
have a huge impact on retaining the customers and it also helps the organizations to felicitate
the repeat purchase behavior of the customers. According to Grewal and Levy (2007), the
pricing of the product retail industry has a huge impact on the customers. So, the
organizations must need to ensure price fairness strategy where the price of the product is
reasonable, acceptable or justifiable. The author also clarifies that customers will buy those
products which enable valuation to their money and the organizations need to felicitate a
good strategy where the first concern will be the value of customer’s money. According to
Hassan and AbuBakar (2010), reasonable pricing will enable a competitive advantage in the
organizational context. Additionally, it will create a customer satisfaction and loyalty among
the potential customers. Many authors also pointed out the same thing that pricing was a
critical firm characteristic that could not be ignored when discussing customer satisfaction.
The organizations must need to ensure additional free services which will help the
organization to establish their position in the market and as the world become fast the
organizations must need to enhance the technological aspect in the organizational context and
it will help the customers to save their time which will create a customer satisfaction.
Customers are considered one of the vital key elements for any kind of business organization
for successfully proceeding in the international as well as the local marketplace. Therefore, it
is to be stated that providing satisfaction to the consumers of a business organization is
approved as a major step for a business organization in order to be endured.
The companies that are under the industry of retail also embrace some strategies in order to
provide satisfaction to the consumers of those business organizations. Some of the strategies
have been stated below:
• Pricing strategies: One of the vital strategies that have been followed by the business
organization that is under the industry of retail is that pricing strategy. Customers always
scrutinize as well as make the justification that the price of the products that has been allotted
by the company is appropriate for the product or not. Therefore, it is to be stated that
correctly pricing is approved as an important and crucial step for the retail business
organization for achieving as well as maximizing profit by ensuring the loyalty of the
consumers along with repurchase. According to the remark of Marinescuet al. (2010), it has
been analyzed that the companies under the retail industry utilize numerous strategies for
pricing based on special circumstances as well as criteria.
Some of the pricing strategies that are considered more popular are stated below:
43
  The strategy of variable price: The regular sale appeal, by which method is
getting promoted with the help of sales, is presumed by the strategy of
variable price so that the price can be changed in a typical timeframe. This
pricing strategy is more popular to the consumers as this strategy can provide
more discount on the products to the consumers. Therefore, it is to be stated
that this strategy is considered more beneficial to the companies under retail
industry as it helps in intensifying of the flow of the consumers in the in-store
of the business organization as well as strengthening the loyalty of the
consumers as consumers are vulnerable to the prices of the products.
 The strategy of fixed price: This strategy is for a long time period, by which
long term constant price implementation is presumed. The strategy of fixed
price bets 24 on the economies that are created with the help of product
management simplification and tight consumers’ engagement development as
well.
 Product quality strategies: Another strategy that is utilized by the business
organization under the retail industry to provide satisfaction to the consumers is that
strategy of product quality. Satisfaction of the customers is dependent upon the
quality of the products and services that are provided by the companies. From the
research work of Hennig- Thurau and Klee, (1997), it has been analyzed that the
perceptions of the consumers on the quality of the products as well as services of the
business organization under retail industry is associated regularly in with some
properties such as durability, stability etc. Therefore, the organizations under the
industry of retail are utilizing the best as well as effective quality in order to
formulate the products as well as services with good quality. The consumers always
have a progressive perception of the quality of services and products. Therefore, the
products, as well as the services of the retail business organizations, are always
evaluated by the consumers positively for the heightening performance of the
services or the products. The consumers also have the perception of stable quality as
well and for that, the consumers always desire a qualitative continuity of the
products. Therefore, this strategy has been vigorously followed by the organizations
under the retail industry so that those can be able to provide immense satisfaction to
the consumers and stick to the secured place in the competitive market.

44
  Marketing strategies: Another strategy endured by the retail companies to provide
ample satisfaction to the consumers is marketing strategy as it is considered one of
the most sustainable ways to provide satisfaction to the consumers. The companies
under the retail industry endure this strategy consisting of numerous activities that
assist the companies in order to maintain a good relationship with the consumers. As
per the comment of Dudzevičiūtė and Peleckienė, (2010), it is to be stated that the
companies become able to identify the preference of the consumers with the help of
marketing strategies. As a result, the companies also become able to utilize the
capabilities as well as strengths for gratifying the consumers’ impulses along with
market requirements. In addition, it is to be stated that the presentation, as well as
packaging, also influence the engagement as well as the loyalty of the consumers. For
that, the companies under the retail industry also spot its light on the presentation as
well as the packaging of their products so that it can effectively grasp the attention
along with loyalty of the consumers. Moreover, the retail companies also provide
proper and correct information of the products as well as services to the consumers
that grab the attention of the consumers immensely as well.

Retail companies follow many methods to satisfy their customers. They offer discounts as
well as roll out special offers for their loyal customers. One common trend these days is
introducing offer cards. By this, consumers earn points for every penny spent and these points
can be redeemed while shopping further. Using Internet for reaching out to people like
starting Facebook page, Instagram handle for the store and advertising via social media too.
Referral strategy is used by retailers not only to get new customers but benefitting old
customers too with reward points. Another strategy used by retailers to satisfy their customers
is introducing many discounts offers like Black Friday (Puccinelliet al. 2009). This not only
attracts new customer but also the loyal customer return home happily.

Customer satisfaction models

Customer satisfaction model link People and performance and assesses the impact of Product
and its price as well as promotion.

45
This model states that to achieve Customer Satisfaction, retails should exceed expectation of
customers in terms of product, its value and quality. Further it states to group the satisfied
customer to create a market. And use scale economics and market clout methods to generate
profits by leveraging the market. Kano Model of Customer Satisfaction –
IntroductionNowadays, retail business is focusing to maintain the existing customer rather
than creating the new base since customer loyalty is more beneficial for the business. And
customer loyalty depends on the customer’s impression regarding the product and its quality.
(Krassadaki and Grigoroudis, 2018)27 Kano model was first published in 1984 in an article
by Professor Kano. Kano model provides a method to understand the customer needs, which
in turn can be used to create or alter the product and thus help in satisfying the customers.
Kano model provides answers to questions like to provide customer satisfaction which
services and what kind of products can be made available to the consumers

46
According to Kano’s Model, customer satisfaction is affected by below attributes-
• Basic factors- Basic factors are considered as prerequisites by customers. If these basic
factors are not fulfilled it causes dissatisfaction to the customers but the mere fulfilment of
these does not cause satisfaction in customers. This attribute is taken for granted by the
customers.
• Performance factors- Performance factor varies linearly with level of satisfaction.
Customer is happy and satisfied is the performance is high and customers are unhappy and
dissatisfied if the performance is low.
• Excitement factors- The Excitement factor excites the customers and make them
delightful. This factor generally satisfies the customers by exciting them with offers but if
this factor is unavailable it does not cause any dissatisfaction in the customers. There are
three more attributes to Kano’s Satisfaction model, but customers are unaffected by those.
These attributes are Reverse attribute, Indifferent attribute and questionable attribute.

47
 CHAPTER-3
OBJECTIVE OF THE STUDY
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.

48
 CHAPTER-4
RESEARCH METHODOLOGY

This project is the mixture of theoretical as well as practical knowledge. Also it contains
ideas and information imparted by the guide. The secondary data required for the project was
collected from various websites and books of reputed authors. The project started with sorting
all the raw data and arranging them in perfect order. To add value to the project and to
understand the practicality of retailing business, I have visited two stores of Vishal Mega
Mart in the Ghaziabad city the best ones in retailing business. Further, to understand the
consumers better, a field survey was also conducted to find out the tastes and preferences,
purchasing habits, expectations of the consumers etc. Analysis of this primary data has been
done to actually understand the survey in a better way.

TO TYPES OF DATA COLLECTION

 Primary Data

 Secondary data

PRIMARY DATA
Primary data is that kind of data which is collected directly by the investigator himself for the
purpose of the specific study. Primary Data is collected by the investigator through interviews
of company employees, Data such collected is original in character. The advantage of this
method of collection is the authentic.

SECONDARY DATA
When an investigator uses the data that has been already collected by others, is called
secondary data. The secondary data could be collected from Journals, Reports, libraries,
magazines.

MODE OF SURVEY

49
The mode of survey was personal interview with the respondents during the filling up of the
questionnaires.

RESEARCH DESIGN

The research is based on the information collected by the help of the questionnaires filled.
The first three questions aim at the basic introductory information of the organization and the
person being interviewed thus rendering the follow up work easier. The fourth question is
about the financial standing of an organization, it gives an idea about the financial status of
the society being approached. The fifth question aims at generating information about the
various sources of funds of the societies. The sixth and seventh questions deal about the
financial performance of the societies.

SAMPLING TECHNIQUE

Sample Random

SAMPLE SIZE- (100+50)

 This refers to the number of items to be selected from the universe to constitute a sample.
This is a major problem before a researcher. The size of the sample should be neither is
excessively large, nor too small. It should be optimum. An optimum sample is one which
fulfills the requirements of efficiency, representatives, reliability and flexibility

SAMPLE UNIT

100 Customer, 50 Employees have been interviewed to know their opinion.

50
 CHAPTER-5
DATA ANALYSIS & INTERPRETATION

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

INTERPRETATION
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?

Garments 39
Home furnishing 27
FMCG 22
Others 12

51
INTERPRETATION
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?

YES 38
NO 62

Preference for shopping

38
yes
62
NO

52
INTERPRETATION
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

INTERPRETATION
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

53
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

INTERPRETATION
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?

54
 Yes 21
No 79

INTERPRETATION
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

55
INTERPRETATION
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

56
INTERPRETATION
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

INTERPRETATION
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.

57
58
Q10: (If YES) what was the action taken?

Yes 3
No 9

INTERPRETATION
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
59
 FALSE 28

INTERPRETATION
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.

60
Q2: CRM is all about retention of customers than acquisition?

TRUE 11
FALSE 39

INTERPRETATION
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.

61
Q3: CRM implementation requires a cultural change than rather than mind set change of
people in Organization?

TRUE 33
FALSE 17

INTERPRETATION
The 33 employees say that it’s 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.

62
Q4: How you found your morale while working?

Excellent 29
Good 11
Fair 8
Average 2

INTERPRETATION
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

63
INTERPRETATION
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

64
INTERPRETATION
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

65
INTERPRETATION
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

66
INTERPRETATION
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

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

Pricing 5
Customer Services 32
Environment 10
Variety 3

67
INTERPRETATION
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.

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 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.
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.

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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.

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 FINDINGS

These findings are based on the analysis of the Questionnaire filled by the valuable
customers of Vishal Mega Mart.

 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.

 The 33 employees say that it’s 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.

 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.

 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.

 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.

 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.

 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

 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.

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 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.
 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.

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 CHAPTER-6
CONCLUSION AND RECOMMENDATIONS

Customer Satisfaction 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 Customer Satisfaction in this
Sector is enormous. The Implementation of Customer Satisfaction 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. Customer Satisfaction 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 Customer Satisfaction approach.

RECOMMENDATIONS

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.

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 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.

 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.

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 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.

 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.

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 BIBLIOGRAPHY
REFERENCES

1] Chu, J, Pike, T. (2002) what top-performing retailers know about satisfying customers:
Experience is key, IBM Institute for Business Value
2] Chu, J, Pike, T. (2002) Bringing the customer experience full circle: The CRM value
cycle, IBM Institute for Business Value
[3] Dyché, J. (2002) the CRM Handbook: A Business Guide to Customer Relationship
Management. Reading, MA: Addison-Wesley.
[4] Fairhurst, P. (2000) e-CRM, the Journal of Database Marketing, Vol. 8, 2, pp 137-142.
[5] Feinberg, R.A., Kadam, R., Hokama, L & Kim, I. (2002) the State of Electronic
Customer Relationship Management in Retailing. International Journal of Retail &
Distribution Management. Vol. 30, 10, pp. 470-481.
[6] Puleo, P. (2002) How Retailers are Using Customer Insight to Build Competitive
Advantage. Peppers and Rogers Group white paper.

WEBSITES:-
1. http://www.crmcommunity.com/library
2. www.amrresearch.com
3. www.retailindia.com
4. www.google.com
5. www.soople.com

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 ANNEXURE

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
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?

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 (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
Address

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 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

(iii) Environment (iv) Variety

Q10: 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: .

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 Employee Details:

Employee Name.
Employee Designation. .
Department

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