Kirana immersion project

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KIRANA IMMERSION PROJECT

Analyzing pain area of Grocery Stores

Submitted by: Anamika Gupta, PGDM-IB IB/04/02

Reliance Market(Mart)

A subsidary of Reliance retail Ltd Reliance Market is an Cash & Carry Store The first store was launched in 2007 ,August in

Ahemdabad Product are traded in bulk It offers more than 20,000 products

About The Project

. Reliance is planning to launch one of these stores in Delhi

NCR to know the problem of grocery stores with their wholesaler

or distributors To know analyze the gaps which make shopkeeper to switch

to organized wholesaler To observe the problem in grocery stores To interview shopkeeper

Retail Industry

Market size INR 16 trillion

Organized retail sector 2-3%

Unorganized retail sector 97 %

Growth rate 15% p.a

Contribution in National GDP 14%

•7% Share Of Retailing In Employment•There are around 12 million grocery stores in India

Source: Technopark research 2010

Cash & Carry Store

Cash and Carry model was developed by Lawrence Barely (he was entrepreneur and philanthropist) from Huddersfield. It is a wholesale model.

It is a membership based retail store selling limited SKUs in bulk packs.

Customers are usually members of the club and pay an annual fee

Only For members like wholesalers, semi-wholesalers and retailers

Source: Wikipedia

BITS AND BYTES

No FDI restriction in cash & carry business

Cash and carry in India is worth around $140 billion,

Carefour, Metro AG and Bharti–Walmart are the major players

Objective of Project

There are four major objectives of this project which listed as follows:

Understanding Kirana profitability. Gaps in current kirana sourcing. Need gap of kirana for increasing their profitability. Key requirements which will make kirana shift their current

sourcing to organized wholesale.

Sample Design

•These stores are established in the area of 3000-5000sq m. they are famous in their area.

•Their inventory and cash counters are computerized.

A -class Kirana stores

•These stores are established in the area of 600- 1200 square meter..

•Their inventory and cash counter is manually managed

B -class kirana stores

•They are very small kirana stores that are located in the colonies.

•They may have their local customers for whom they are fulfilling the demand of staple goods and day today’s need.

C -class kirana stores

Analysis

Profitability Of Shopkeepers’

Credit Limit

Transportation Cost

Frequency of purchase and time

Credit Preferred by Shopkeeper

80%

20%

Shopeeker opting Credit

Yes No

All the 8 stores of A, B and C type store purchase goods on credit. The two of the A type store stores those who have high sales & income

around a crores don’t prefer credit, they pay cash on delivery of the products.

Number of credit days

15days30%

7days70%

Time period for credit

The majority of shopkeeper purchase goods on Credit. The credit limit may vary from 10,000 to Rs 100,000. The C type store takes credit of 20,000Rs approximately while B and A type stores credit varies with purchase. The most common time period for credit is 7 days. But some companies give credit for the time period of 15 days also in the case high volume purchase.

7days credit 15 days0

20,000

40,000

60,000

80,000

100,000

120,000

credit limit for the credited days

amount of credit limit

Transportation Cost

FMCG companies provide Door to Door delivery and it is free of cost

the branded staple products were delivered free to the stores while local staple products which are bought from whole sale

market incurred the cost in transportation.

Frequency Of Purchase And Time

Delhi B

azaa

r

Budg

et B

azaa

r, Utta

m N

agar

Eas

t

pura

n stor

e

Kitc

hen

frien

dly ,D

warka

Dwarka

Sto

re,u

ttam

nag

ar

Shan

ti stor

e,gu

rgao

n

Sum

pura

n St

ore,

Dwar

ka

Amul D

udh

stor

e, D

warka

Agar

wal sto

re,g

urga

on

Bhwan

i sto

re0

2

4

6

8

10

12

14

16

FMCGStaple

Frequency of Purchase of Stores (A, B, C) Per Month

Atype Store B type Store C type Store0

2

4

6

8

10

12

FMCGstaple

Sourcing

Type of product

Branded Wholesale market

Both by branded and wholesale mkt

Staple 30% 20% 50%

Mode Of Sale for Staple Product

Sales rerensative

Wholesale mkt

Sales representive& phone

Sales representative & wholesale Mkt

On phone&wholesale market

11% 45% 11% 22% 11%

Mode of Payment

80%

20%

mode of payment

cash on deliveryCheque/draft

Shopkeepers’ Desirability

Price &Assort-ment&Door Deliv-

ery22%

Door Delivery11%Quantity $

Quality22%

price 33%

terms of trade11%

Shopkeepers' desirability

Observation

Issue between shopkeeper and wholesaler/distributor Inventory management Account Management

Company’s scheme for kirana stores Factor affecting sales

Other Source of Earning Relationship edifice between Customers and stores

Problems

Replacement means the substituting the damaged product with new product is major issue with distributor among all the stores. Most of the FMCG Company does not take replacement.

Delay in delivery, out of stock and supplying more than the order is being placed are the common issues among store keepers.

Unnecessary interference of distributor

The scheme offered by company also has lot of terms and condition which is hard to achieve by shopkeeper especially with small retailers (B and C type).

  The demand and desirability of stores varies with location.

Recommendations

First all, it is necessary to provide free door to door delivery either its FMCG or Staple or other commodities.

  we can come up with special offer on the purchase of less volume  We need create uniformity in pricing. The margin which we will be going to provide

shopkeepers of small stores will be same as for the shopkeepers of big stores.  There is need to possess more branded product and variety in product in order to

attract these stores.

There must be a helpline number

There should be group of representative who can visit weekly in store in order to manage their inventory and take order as per the shortage in the stores

It is necessary to keep inventory up to date according to demand

Conclusion

The two month internship gave me an exposure in B2B and had developed my interpersonal skill

I learnt about Different kind of Brands I get to know how business is conducted in B2B I learnt how to persuade and deal with people I learnt the art of selling I imbibe hard work, patience, determination and

marketing skills from the shopkeeper

Things To Remember

Listen to your boss Be punctual and be concise

THANKYOU