Organised Retailing and Role of CRM in Vishal Megamart, Hyderabad


Prof. Dr. Dinesh Sharma
Faculty of Commerce
University of Lucknow

Dr. Jailaxmi Mishra (Sharma)
Academic Associate
IIM (Ahemedabad)

Mr. Punit Kumar Dwivedi
Research Scholar
Faculty of Commerce
University of Lucknow

Overview: Customers are the "profit –centre" in an organization. The existence of organization depends on the customers. With this the concept –Customers Relationship Management has come into the picture. The main aim is to maintain a good relationship with the customers. It is the process of creating, maintaining, and enhancing strong value-added relationships with customers and other stake holders.

Customers Relationship Management is the strategy that aims to understand and, anticipate, manage and personalize the needs of an organization's current and potential. The Rs.85,000 crore FMCG market in India is growing at a fast pace despite of the economic downtrend. The increasing disposable income and improved standard of living in most tier II and tire III cities are spearheading the FMCG growth across the nation. The changing profile and mind set of the consumers has shifted the thought to "Value for Money" from "Money for Value". Over the years companies like HUL, ITC and Dabur have improved performance with innovation and strong distribution channels. Their key categories have strengthened their presence and outperformed peers in the FMCG sector.

Retail: In Detail

The emergence of Retail in India is cause for success of Indian organized Retail & Marketing. With the help of modern management techniques we will become the specialist Retailers in future. We know that the relationship between the Retailer & customer is very close than other chains of distribution.

India is a nation of shopkeepers. We can see more than 16 million plus retail outlets in India, and India has highest density of retail outlets in the world. Retail Industry in India is at present estimated to be more than US $ 250 billion. On that part of organized retailing is estimated 3.5% i.e. $ 7.47 billion. By the year 2010 the vision of Industry is to attained more than the goal which was estimated US $ 23 billion in organized retail. 

If we are comparing the growth of retail in India as compare to China we will find that China has more growth than India. In the year 1996 the per capita GDP of China was US$ 675 and it increased US$ 434 in year 2003 i.e. in the years 2003 the contribution of retailing in GDP per capita of China was US$ 1109. But in India, in the year 2005 it was only US$ 710. We can say that in 1996-97 (or in 90's the position of retail market in China was very strong than Indian Retail market.  

If we are taking as base the size of retail market in India it was only US$ 215 billion in 2005 but in China it was US$ 225 billion in 1996 & US$ 400 billion in 2003. It means the status of India's size of retail market is not very matured as compare to China.

The share of organized trade in retaining in India was quite more than 4% in 2005, but it was between 7-8% in 1996 and 17% in 2003 in China.

At present USA is biggest retail market with 85% share of organized trade in retailing at the second step. There is Malaysia with 55% plus, Thailand with 40%plus , Brazil with 35%plus, Russia with 33%plus, Indonesia with 30%plus, Poland with 20%plus, China with 17% plus & then India with 6% plus only.

Organized Retail:

Organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011.

It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

Shopping in India has witnessed a revolution with the change in the consumer buying behaviour and the whole format of shopping also altering. Industry of retail in India which has become modern can be seen from the fact that there are multi- stored malls, huge shopping centres, and sprawling complexes which offer food, shopping, and entertainment all under the same roof.

India retail industry is expanding itself most aggressively; as a result a great demand for real estate is being created. Indian retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. It is expected that by 2010, India may have 600 new  shopping  centers.

In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of non- branded  items.

India retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort. The report examines the growing market for FMCG market in India. This starts with an overview of the Industry in India and goes on to explain how product and demographic categories across the nation have added value to the Industry. The report examines the recent development within the industry and tries to gauge the impact in shaping the landscape of the FMCG market. It also contains a summary of the key players, including their product portfolio, business operations, and strategies. The report concludes with an industry outlook section. Finally the report mandates with the outlook for the year 2013, considering the current events and growing economy. The report concludes with a list of growth drivers, breaking them into demand side, supply side and systematic drivers.

Analysis and Interpretation:

1) Do you come to Vishal Mega mart for shopping regularly?

The above shows that 73.33% customers come to Vishal for shopping regularly. The numbers of regular customers are more. So to retain them different loyalty programmes should be introduced.

2) Which one do you like in Vishal?

The above chart shows that 83.34% customers prefer offer. Manly 25% offer on Wednesday & Thursday is preferred by customers. So by giving offer on these days it can satisfy its customers

3) With whom would you like to shop?

The above chart shows that 55.33% customers prefer to come for shopping with family members. So combo family offer pack should be more.

4) Do you find the products easily in Vishal Mega mart?

From the above chart it is clear that 53.33% customers don't find the products easily. So the concentration would be given to visual merchandise.

5) Are you satisfied with the sales force' behaviour?

Above chart shows that 86.66% customers are satisfied with the behaviour of sales force. So it would increase the satisfaction level.

6) Do you like the shopping environment inside the Vishal Mega mart?

The pie chart shows that 64.66% customers are satisfied with the shopping environment inside. It is clear that ambience is preferable.

7) How much can you spend shopping?

According to the chart, customers spending capacity falls between 500-1000(36.66%).It is the maximum capacity.

8) How is the billing process in Vishal?

According to the chart, billing process 50% is good & 50% average. But the problem is with the coding system.

9) Which of the following do you prefer for advertisement?

The above chart shows that 46% customers prefer mobile SMS  and they have shown less interest in TV which only 10%.

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Source: E-mail February 1, 2011


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