retailing in agribussiness

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Retailing in agribusiness

Retailing According to Philips Kotler retailing includes all the activities involved in selling of goods and services directly to final consumer for personal, on business use.Indian Retail Industry is ranked tenth largest retail markets in the world.It create enormous employment .Retailing accounts 10% of GDP.

Classification of retail sector in India

Format of retail marketingSupermarketsHypermarketsDepartment StoresShopping mallsSpecialty Chains

Unorganized retail marketingTraditional storeHand cart stores

Spencers

Introduction

Introduction Spencer is Indias oldest retailerRPG was established in 1996Founders - Charles Durrant & John William SpencerMember of - RPG GROUP Managing director Mohit Kampani

Headquarter of spencer

No. of location 120 across 35 cities

Spencers expressSpencers dailySpencers super Spencers hypermarket

Spencers express dairy, fruit and vegetables, bread and bread products, fruit juice, fresh batter, fresh coffee/tea, masalas, pickles, Ghee, Fish and meatMinimum trading area 1000 sq. meter in sizeOpen from 7am to 9pm Provide home delivery


Spencers daily

vegetables, fruits, milk, eggs, breads2000 sq. meter in size


Spencers superhome care products; personal care products, Bakery, Chilled and frozen food; Baby care productsMinimum trading area 8000-15000 sq.(ft.)


Spencers hypermarket

Spencers Hyper market is a Mega store which combine supermarket with departmental store.Minimum trading area is more than 25000 sq. ft. in size.It deal in miscellaneous stocks

SPENcERS ROLE IN HELPING FARMERS

1) Establishedbackward linkages with farmers for procuring fresh fruits and vegetables.

2) Linkages Reduce market risks and transaction costs of Farmers.

3) Farmers are provided with a package of Good Agricultural Practices (GAP) has led to increase in the intensity of cultivation as well production.

4) Small and marginal farmers, throughtheir intensive cultivation of getting fair price , have been able to earn the higher incomes.

5) It helps the farmers in procuring inputs from suppliers at reduced rates.

6) Technical guidance on aspects likethe time of planting, crop production andmanagement, harvest time, quantity to be harvested are provided by the Consolidation Centre to farmers to ensure quality and marketability.

7) Consolidation Centre ensures a sort of support price even during the glut in the market, so that farmers do not incur losses.

8) Farmers preferred to supply their produce to the Consolidation Centre, as it provided them stable prices and assured market, compared to the highly volatile prices at the wholesale market.

9) Diversity in crops had increased after their association with Consolidation Centre, as they had assured market for their produce and their marketing risks were minimized under the new institutional arrangement.

10) The gross income from agriculture of a farmer was Rs 1,72,000 per year while that of a traditional market farmer was Rs 70,000, due to improved agricultural practices and provided extra income to these farmers.

11) The high net returnsfor farmers were due to drastic reduction in transaction costs, particularly transportation cost andcommission charges.

12) This new institutionalarrangement by Consolidation Centre has helped the farmers to break away from the clutches of traditional brokers/wholesaler/commission agents.

13) With improvement in the level of education, Ownership of transportation vehicle getting by the farmers probability of selling vegetables at Consolidation Centre increased.

StrengthsReduced transaction costHigher yieldReduced market risksHelps the farmers to break away from clutches of traditional brokers/ commission agents(to a great extent)chains have brought quality consciousness among farmerscost of compliance is not prohibitiveDealing with large number of small and marginal farmers

WeaknessCould not keep pace with the competitive and dynamic environmentFarmers could not completely break away from the clutches of middlemenNo written contracts and consignments places the financial risks solely with the producers/suppliers

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OpportunitiesFocus more on non-food items to break even (in the context of present status)(Losses in retail chain in FY 2013-14 = Rs 164.5 crore)Develop better marketing strategyE-commerce can help the company in attaining higher sales

ThreatsNeed to adopt innovations in product (e.g. reducing perishability) commensurate with the needs of the target market.Threat from the competitors

Problem

Low bargaining power

Recommendation

can work with farmer leaders or work in groups, cooperative or associations

Problem

Market access for small producersUnderstanding the marketsOrganization of the firm or operations Communication and transport linksAn appropriate policy environment

Recommendation

Collective action Strengthen small farmer organizationsCooperatives which are more market orientedGovernments, NGOs, can facilitate small farmers participating in the supermarket channel

Innovation in Marketing ChannelInnovate! Think like a Marketer! Thank You!

Economy & Finance

retailing in agribussiness