Retail Management

NAHEED SUPERMARKET

Submitted to: - Ms Sanya Shahid

MUNEEB TASNEEM | NAMDEV
LETTER OF TRANSMITTAL

09/08/2019
The course Instructor
Retail management SZABIST, Karachi.
Respected miss In order to have an idea of the studies of retail management we made a report on
our chosen retailer Naheed superstore. It feels pleasure to present you this report after the
hardworking research regarding the retailer. We hope that this report is up to the standards you
expected. The report has been prepared with great dedication and hard work. Applying the
concepts we studied in retail management. It was a great learning experience and a knowledge
gaining period. We have put our maximum effort in this report and have tried our best to explain
each and every function in detail. We really hope this report fulfils the required standards.
Yours sincerely,
Muneeb Tasneem
Namdev
ACKNOWLEDGEMENT

First of all thanks to Almighty Allah with whose grace we were able to complete this report
successfully. Secondly, we would like to express our gratitude to the manager of Naheed
superstore who helped us in it. It was a great opportunity for us to learn how a retailer actually
works. We highly appreciate and are grateful to MISS SANYA SHAHID who gave us a chance
to prove ourselves worthy and provided us opportunity to understand the application of retail
concepts.
ABSTRACT

The report needed to incorporate a thorough investigation of the basic decision making method,
center and valuable administrations identified with the store, the showcasing blend, the
methodologies utilized for advertising, advancement and marketing, how the site determination
and exchanging zone examination was directed and the dissemination channels utilized. It
reveals to us how well does Naheed work as per its rivals and its foundation. The Impact of
economy to it and the PESTEL investigation. Naheed making progress toward Customer
devotion and satisfaction and in such manner fulfilling its workers too. Introduction of its loyalty
programs, the points and more.
EXECUTIVE SUMMARY

The report tells us the unique marketing and Retail techniques used by Naheed Superstore.
Ranging to the Retail mix, strategy, time, PESTEL analysis, blueprints and Financials etc. It
gives us fair knowledge about how Naheed works and little knowledge about its future plans as
well. It also tells us about the distribution channels which tells us about its supply chain etc.
Furthermore, you will find attached the perceptual map as well.
Introduction to the Retailer
Naheed Supermarket was formed in the 1970's as a small grocer's outlet in Bahadurabad by a
man named Abrar. Slowly and gradually the store gained goodwill and it became popular
amongst the residents in the Bahadurabad area.
Once a small business, this supermarket is now one of city’s largest retail stores and attracts
between 3,000 to 4,000 customers daily – most of whom belong to middle and upper-middle
class. The growth has been around 10%.
Soon after, the shop became congested and it was inconvenient for the customers to shop freely
due to limited shopping space. The management was of the view that they were in danger of
losing customers due to the congestion in the stores in peak shopping periods. The store was
converted into a super market as they opened an outlet with 3 floors, reasonable parking space
and shopping area. It was first reopened as a 3 floored small store focusing on cosmetics after
which it purchased the adjoining areas to accommodate a wide range of items. Soon the 60-year
old made fortunes out of a strategy that has now become standard in the retail business – reduce
prices (and margins) to increase volumes and profits and deliver the best quality products with
absolutely no compromise on the originality of the product. Naheed has its set dealers and they
have been working with the company for as long as 30 years. While suppliers of other stores
including the nearby Chase Up last 4-5 years at the most, Naheed believes in long term
partnership with its suppliers based on the quality of their goods, the trust factor and personal
goodwill built over time.
Naheed Supermarkets are providing all their merchandizes on a single place to the customers.
The ground floor displays groceries and cereals. These include branded company groceries,
imported items like ice cream, and Naheed’s own branded products like dry fruit. The second
floor displays electronic items and cosmetics whereas the third floor displays baby products and
different branded products like clothes and shoes.

Naheed's Philosophy: Ensuring the maintenance of customer trust in us.

Naheed's Commitment: Total customer satisfaction.
PESTAL Analysis
Political:-
The revenue and profitability of any retail store are affected by government policies. These
regulations impact the economy, consumer buying habits, and international trade laws. The only
thing left for the company to do about these changes is abide by them.
Each country must abide by their political regulations. The regulations affect which products can
be imported, exported, and sold in stores. Stores offering food products must comply with health
guidelines proposed by the government. If they don’t, not only will the food by pulled from the
shelves, but it could also lead to legal troubles for the company. Naheed has only one branch in
Karachi and is successfully running.

Economical:-

A stronger economy allows consumers to buy products they want. Rather than just buying
products they only need. It also means more investors are becoming interested in the profitability
offered by retail stores. This is only possible when the economy is on the rise.
When it’s on the decline, the opposite is true. People save their money for products of necessity.
They’ll spend the bare minimum on food while the rest goes towards unpaid bills. This can
happen when unemployment rates spike. Or when a certain industry is hit harder than others. The
country has recently been through a recession and during the recessionary period, people are
cutting down costs which meant hard times and losses for the brands. Once the recession is over
and the condition of the world economy gets better. This will lead to a boost in the consumers’
confidence. With consumer confidence boosted, people will be ready to spend more on small and
big items. So, the changing economic environment would be a good news for the large business
brands.

Social:-

Consumer preferences are the main social factors affecting the retail industry. For instance,
people enjoy buying products in bulk. This is the exact premise behind Naheed, a Pakistani
retailer. Here you can find food products, clothing, and electronics, in large quantities. Stores
other than Naheed now mass stock various products to avoid running out quickly.
These products aren’t bought by retailers on a whim. They use market research to identify
buying trends and shifts in consumer behaviour. Understanding these two things helps to find
items more likely to boost profits. Retailers who offer products online can collect data provided
by their customers. They can easily see which products people are buying, leaning towards, or
completely ignoring. Then, they shape their offerings based on this data. It’s a never-ending
process.

Companies set targeted ads to customers most likely to visit their stores and buy from them.
Larger retailers can achieve this easier than mom and pop shops. But even smaller shops can
benefit from offering discounts and sales on products. All consumers love a good deal.
Technological:-

Naheed use a variety of technology every day. Like a point of sales system. As well as cash
registers to manage money after a sale. It’s standard for any store. As technology advances,
stores are adopting new systems, software, and hardware. It’s fast and easy to use.

Environmental:-

Sustainability and environmental factors have become central to business in the 21st century.
Even for the retail brands like Naheed concerns like sustainable packaging, waste reduction and
renewable energy are becoming central to business. Some of the key areas where Naheed has
maintained a strong focus in this area are:

 Maintain a low carbon footprint

 Enhance the energy management systems at its super stores.
 Expand its packaging design initiatives.
 Develop its recycling and waste stream management systems.

Big brands that are investing in sustainability and environment friendliness are not just enjoying
increased profits but also better reputation of the brand and social image

Legal:-

A retail store needs to meet legislative conditions before opening the shop. These conditions are
often standard. It includes abiding by taxation laws, labor laws, and more. Legal factors become
trickier once the company expands overseas or offers products online. Naheed therefore meets all
the legal requirements.
Store Based Strategy Mix
 PRICE:
LOCATION: Most local grocery items are
Naheed Supermarket is priced by manufacturers, hence,
they cannot be marked up by
located in the heart of the Naheed. Other local products
city on SirajudDaula Road are marked up about 15%-20%.
near Bahadurabad. However, the imported goods
earn a mark up of 20%-25%
PROMOTION:
Naheed prominently displays its own
products in shelfs. However, shelves
catch less attention that kiosks.
Company promotion personnel are
always present at Naheed sent by the
company themselves. They intercept
and inform customers about products.

ATMOSPHERE AND SERVICE:

MERCHANDISE: Naheed provides air conditioned
It offers General Merchadise, Food, superstores and a complete
Electronics, Medicines etc. shopping experience to the
customers. it also has a trained staff
to help the customers.

Store Based Strategy Mix

Product:

Naheed Supermarket offers more than 26,000 products with utmost importance given to the
product quality. Expiry dates are checked upon delivery from the vendor, and products that need
to be stored in cool and dry places are catered for in the warehouse as well as the supermarket
itself. Staple goods contain groceries, wheat, rice and pulses. Convenience goods include
toothpastes, soaps, shampoos and polish. Impulse goods include ice-cream, donuts and candies.

Naheed’s own employees and the suppliers are very well trained and have years of experience.
They can identify a fake product from a real one and that has been Naheed’s secret of success.
No matter what low prices a vendor offers, Naheed will not take it because it realizes that the low
price means a drop in quality and Naheed has generations of shoppers coming to them due to
their trust in Naheed something that Naheed can not let go of just for a higher margin.
This is why,even when other stores have seasonal sales, Naheed does no such deals. Stores mix
quality of rice to make new bags in Ramzan that people buy to give in Charity but Naheed does
not offer low price bags because even if one customer picks up a bag of this rice and uses it, the
customer will be dissatisfied and loose its trust.

The hierarchy at Naheed Supermarket is divided under the following main heads:
 Supermarket Items
 Baby Products
 Electronic Items
 Meat, Poultry, Sea food

Price
Naheed Supermarket has more than 26,000 products and there are different markup and
markdown ratios. Most local grocery items are priced by manufacturers, hence, they cannot be
marked up by Naheed. Other local products are marked up about 15%-20%. However, the
imported goods earn a mark up of 20%-25%. This is because those goods are imported and they
cannot be exchanged or returned to the suppliers. Naheed Supermarket has to keep a higher
margin for these goods in order to make up for the huge risk.

Promotion:-
Promotion creates awareness amongst customers about their products. Naheed Supermarket
promotes itself in collaboration with other multinational companies like Nike and Samsung.
There is a preference for independent promotion but due to the lack of monetary resources, the
organization has to be content with promoting itself in collaboration with other multinationals.
Companies put up their own Stalls. Like Loreal has a promotional kiosk in the middle of the grocery store
to catch attention about its new deal and the companies pay Naheed for these stalls and promotions. All
promotional offers on products are the companies’ own and Naheed does not offer any schemes on them.
Naheed prominently displays its own products in shelfs. However, shelves catch less attention that kiosks.
Company promotion personnel are always present at Naheed sent by the company themselves. They
intercept and inform customers about products.

Place:

Naheed Supermarket is located in the heart of the city on SirajudDaula Road near Bahadurabad.
This enables people from almost all parts of the city to access the supermarket for a pleasurable
shopping experience. An analysis reveals that apart from the residents of Bahadurabad people
from Gulshan, PECHS and Defence do their monthly shopping from Naheed Supermarket. The
Location is convenient because it has ample parking space as well which is what the customers'
desire the most after a healthy environment inside the shopping area.

People:-
Naheed has no ethnic or clannish priorities when hiring. It prefers a low turnover in all tiers of
employment due to the trustworthiness of older employees. Again this issue is resolved by the
fact that all jobs are based on referrals and recommendations with accountable relatives present.
In order to satisfy the customers the employees should be well trained. They should be polite and
should seem interested in dealing with the customer and satisfying his needs, failing to satisfy the
customer may lead to losing his loyalty. Therefore Human Resource is integral to Naheed’s
business success. There are 80 employees employed at Naheed Supermarket. 30% employees are
employed on the ground floor where the items are diverse and checking counters are busier. 20%
are employed at the warehouse and in inventory related tasks. Of the remaining 20% and 20%
are positioned at the two floors and 10% are IT related.

Physical Evidence:-

Naheed Supermarket has 11,000 square feet area out of which 70% is used as selling area, 20%
is used as non-selling area while 10% is back-end used for storing products.
Visual Merchandising and Display:

Every product is exclusively displayed in order to attract customers, especially the

imported and electronic items that are displayed in transparent shelves. There are
different brand corners as well inside the shop, which display particular brands
exclusively, for e.g. Nike. The items, which are high in demand, are placed at the eye
level on the shelves. An analysis shows that goods displayed at eye level on the shelves
are more probable to be bought by the customers.
Those goods, which are not too likely to be bought, are either displayed above eye level
or below eye level. The baby products were shifted to the second floor in order to attract
customers to that floor. Since the baby products were shifted upstairs there has been an
increase in the customers on the second floor. This was a very well thought of strategy
which has been successful.

Decision Making Model

1) Identifying the problem: Need to expand and open a new store in order to meet customer demand and
to satisfy and retain the customer.
2) Establish and weigh decision criteria: Keeping in sight the footfall and how to maximize the profit by
cutting cost.
3) Identify alternatives: Choose the items that will quickly be sold and have an advantage over the other
product if the same category.
4) Weighing alternatives: Calculating all possibilities of profitability associated with every product and
stop importing products that has less demand.
5) Choose among alternatives: Choosing the best option in terms of demand, feasibility and profitability.
6) Implement the decision: Start to buy the inventory from the company in bulk and providing it to the
customer in the best possible prices.
7) Review the decision: Check the inventory left and the sales in accordance with the forecasted demand.
See if the stock ends before the date of expiry.

Core and Augmented Services

Naheed’s core service is to provide a unique and best shopping experience to the customers with best
possible prices and give them variety of imported products as well as local products. It also offers loyalty
cards to its customers. It makes sure that the demanded product is available there at the store making it
the one stop solution for all the grocery needs. It also provides general merchandise, electronics and
clothing etc. With electronic products it gives an augmented service of guarantee. It also has its
representatives who help the customers keep the shoppers in their mode of transport. Augmented services
of Naheed includes the ambiance, assortment, and payments option. They accept cash as well as
debit/credit cards.

Distribution Channels
A distribution channel is a chain of businesses or intermediaries through which a good or service passes
until it reaches the final buyer or the end consumer. Distribution channel includes wholesalers, retailers,
distributors and even the internet.it is a part of downstream process which answers several questions such
as “How do we get our product to the consumer? A distribution channel can be short or long it depends
upon the amount of intermediaries.

The stock inventory level in the store is basically done by estimation. The opening stock is
studied and then the total amount of supplies required for operation. After analysing these
figures, a figure is deduced revealing the actual amount of supplies needed by Naheed
Supermarket in that particular time period. The inventory is checked on a daily basis. Since
Naheed is purely a supermarket, they have to keep a lot of merchandise in the shelves in order
for the customers to purchase those items. This doesn't mean that the role of the supplier is not
vital; they rely heavily on the efficiency and speed of the suppliers, so that when re-ordered, the
stock reaches the warehouse in time and no shortages are faced by the management. The forward
planning is done considering the stock required and the stock already in their warehouse, which
is done almost monthly.
The goods are ordered from the supplier at least one week before to avoid any shortages.
Imported goods are purchased by placing a pre-purchase order first which is a tentative order for
the importers. After the forward planning is done and it is decided how much stock is needed to
buy the purchase order is placed which confirms the original order. The suppliers then supply the
goods to Naheed Supermarket after the terms and conditions of the order have been discussed.
But this generally is not a problem because the goodwill of the organization is such that
discussing the terms and condition is just a formality, as a lot of trust prevails between the
supplier and Naheed Supermarket itself.

Suppliers also offer discounts on bulk buying. Suppliers deliver the goods usually within a week.
Upon delivery, the goods received note is signed. The goods are then checked to see any
damages. They are then stocked in the warehouse with the barcodes and the retail price tags. An
inter-transfer note is prepared on goods accepted and which have no faults, which means that
these goods are ready to be shifted to the supermarket where it would be displayed for sale. If
any of the supplies contain faults then the warehouse employees inform the upper management
about the defects and the top management itself rejects the good, which is then returned to the
supplier in return of cash or the good is then replaced by another faultless item. The same
procedure is then applied on the replaced goods which upon being judged faultless are
transferred to the supermarket with an inter-transfer note for selling purposes.

Purchase is on different credit terms with different suppliers. Some are given cash on delivery
because their product will definitely sell out (example, pepsi) and others are paid after a month
or on sale.
Not all operations are strictly controlled by rules and policies. The Naheed managers have a
strong relationship with these suppliers and sometimes they buy products from or give their less
popular products a chance for the sake of the relationship.
Site Selection and Trading Area

Naheed supermarket is located at central part of the city, on Siraj Ud Daula Road near Bahadurabad. This
enable people from almost all parts of the city to access the supermarket for a pleasurable shopping
experience. The reason they chose this area as their location was because they have been doing business
in this area ever since the 1970’s when they opened their very first supermarket in this area. According to
them, they know this area very well and since they have been operating there for a very long time, they
have been able to build a long-term loyal relationship with their target market which are local public of
this area who want very thing near their locality. An analysis reveals that part from the resident of
Bahadurabad people from Gulshan, PECHS and Defence do their monthly shopping from Naheed
supermarket. The location is convenient because it has ample parking space as well which is what the
customers desire the most after a healthy environment inside the shopping area.
Their location in this part of the city does not bring any problems as far as the supply of labor and big
competitor is concerned. In their local surrounding there is no such big competitor who give tough time
and, they need only unskilled labor which is located everywhere and so they did not face any problem in
searching of them. Secondly the wages paid to these unskilled labors is the same at all major areas of the
city and there is no such problem of having pay their labor more due to premier location in a well-
developed area like Bahadurabad. They are not interested an any such expansion since they are short of
management staff and they think their present staff is not enough to run branches in more than two area.
Branding and Merchandising Plan
 Forcast: Naheed forcast
through its past trends of
sales and take economic
point of view in account.

Innovativeness: Naheed take

Allocation: They locate three fashion trends and target
floor for their operation first market interest into account
floor for crockery items, when they consider
second floor kids section and innovation in their offering.
third floo for general grocery They offer according to
items target market and watch out
intial sales.

Merchandising Plan

Assortment: They offer

different type of product
lines with product line filling
Timing: Their operation
and width such as grocery
hours is 12 hours from 11 am
items, frozen foods,
to 11 pm for regardless of
pharmacy, baby products
any day
and etc . Their offering also
depend upon the season and
fashion
Brands: Naheed offer
different type of high to low
quality brands in their
offering as per need of the
target market segement.
They do not offer any private
brand they offer only
manufacturer brand
 Perceptual Map

High Quality

Beverages Cosmetics

utensil Meat

Low Price High Price

Baby Items
General grocery

Electronics

Low Quality

Imported cosmetics highly attracted by the customers because it provides satisfaction to the customers as
compare to the local cosmetics and Naheed takes high margin on that products.

Most of customers turn Naheed because of general grocery, they charge less price or market price and
average quality of grocery items.

Naheed also provide electronics item such as dryer and trimmer to customer because to provide
everything under one roof shopping experience.

Naheed have assortment of baby items for which they high price but provide average quality product.

Naheed provide utensil and beverage categories at affordable price which is of high quality
Communication/ Promotional Strategy
They segment the market on the basis of Gender and age. As they have food items ranging from
vegetables, frozen foods, daily cooking items .Through this they are targeting house-wives.
Moreover, through the baby products they are targeting Mothers, who actually buy the product,
although the end users are the children. Cosmetics section is mostly for teenage girls.
Naheed Supermarket maintains this goodwill by not only stating its loyalty for its customers but
also displaying it practically. Reason for displaying a product on sale is also stated along with the
new discounted price e.g. in order to see dry fruits in offseason, the super market displays the dry
fruit on sale and states a reason that the sale is due to the non-season due to which the quality of
the dry fruits would just be below par. The customer knows very well that they will get full value
from the goods for which they have to pay a price
The supermarket also launches its own discount and promotional campaigns for all the products
which again depends on the factors of peak seasons of products sales and special occasions.
As far as the marketing of our wholesalers’ products at our supermarket is concerned, the sales
staff of our wholesalers’ themselves come to our supermarket and market their products to the
customers. We are only responsible for executing the promotional and discount schemes of our
wholesalers’ products. Margins depends upon open displays of merchandise around focal display
creates an attractive selling area. Also retailers can boost sales by displaying together items that
complement each other. Since display height is very important, Kids products are placed at lower
height so that kids can see the products. Display heights are according to standards of retail
industry.
We focus on advertising on special magazines and that too is not done regularly. We do not even
possess a marketing department and all the marketing of our supermarket is done through
promotional and discount schemes at our shop only and through our loyalty cards and Facebook.
Customer Loyalty Cards

Business nowadays, put more focus in relationship building that is creating long term
relationship with customers than ever before. At Naheed Loyalty cards, for example, are carried
by customers and can be swiped at the cash point by a staff member; the customer accumulates
points per purchase which can be used to get money off later purchases. Customer Loyalty
Program is a fully integrated system capable of recording customers shopping automatically
whenever one shops at Naheed Super Market. However, you are required to ensure that your
membership card should be swiped when paying at the counters.
Service Blueprint
Service Environment

Back Stage Front Stage

Actvities Activities

Placing order welcoming the

to the supplier customers

making
Give the
trasaction to
information
the supplier

unloading Help
products from Customers
truck about product

restocking the Help

product into customers in
shelves checkout

upload invoice Enjoying the

in system environment

Recieving the
Payment from
Customers

Greet and
thankyou note
to customer
Foundation for setting Price

Naheed Supermarket has more than 26000 products and there are different markup and markdown ratios.
Most local grocery items are priced by manufacturers; hence, they cannot be markup by the Naheed.
Other locals’ products are marked up to about 15 to 20%. However, the imported goods earn a mark up of
20 to 25%. This is because those goods are imported and they cannot be changed, exchanged or returned
to the supplier. Naheed Supermarket must keep a higher for these goods in order to markup for the huge
risk. Their most of the items are priced by the manufacturers because they do not have any private brand
for such item they follow “cost” based strategy to keep the cost of the products but in imported items they
follow “value to customer” based strategy because they provide imported products to their customer at
high price and providing high quality which involve a lot of risk.

Financials

They maintain proper books of accounts and update their balance sheet every month. All products that
they buy from wholesalers, they take a retailer margin on it which is the main source of income. Luxury
items carry the high margin which include electronics items. Items that carry the low margin are items
that are purchased more frequently or stable merchandise.

Income statement year ended in 2013

Sales Revenue 54750000

Cost of Goods sold 43800000

Net profit 10950000

Expenses:
Operating Expense 3650000
Salary Expense 3650000
7300000
Administration Expense 10950000
Marketing Expense 100000
Retained Earnings 2455000
Conclusion

In conclusion, we got to learn and apply all the retail concept practically, that we learned from
assignment, quiz, and lectures from Madam Sanya Shahid and through textbooks e.g. we had to apply the
decision making model and weigh all the possibilities we had and then chose the best outcome which
would result in maximum. This require a lot of calculation in the background and resulted in good
learning experience. Moreover, it gave us an opportunity to get a hands-on experience about the retail
system in Pakistan and how it operates.
Appendix