tag:blogger.com,1999:blog-19923720969200026332024-03-13T21:31:51.754-07:00Retail Fanatic!Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1992372096920002633.post-65228127482407443702011-10-27T20:28:00.000-07:002011-10-27T20:35:43.188-07:00Promotions<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="text-align: justify;">Of course you have noticed the board that says discount!! Ever wondered what all goes behind extending that discount to you? </div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">Before we get into the promotions we should know theses promotions can be interpreted in two ways based on who is extending the promotion? Is it the vendor or the retailer? It makes a hell lot of difference.</div><div class="MsoNormal" style="text-align: justify;"><br />
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</div><div class="MsoNormal" style="text-align: justify;"><i>Possibility 1: Customer oriented promotions</i></div><div class="MsoNormal" style="text-align: justify;"><i><br />
</i></div><div class="MsoNormal" style="text-align: justify;"><i>Who gets the discount- The end customer</i></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">The retailer communicates with the Vendor, informs him/her about the event calendar (which logs all the events/promotions to take place in the outlets) The vendor either decides to participate or not to participate in these promotions. If the vendor is willing to participate he/she will have to inform the retailer the nature of promotion, on what SKUs/items is the promotions being offered, for how long and for which specific retial outlets? That’s not all, also the advertising inside the stores and the kind of racks and display of the product is decided in advance and the vendor pays for those ads. So, the retailer is getting benefited too. Not only that, the vendor may also choose to offer his products at a lower price to the retailer if achieves a specific sales target. e.g if Big Bazaar sells, 4lakh packs of Oreo, Ores will waive off a small percentage of the cost price to Big Bazaar. </div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><i>Possibility 2: Vendor Promotions</i></div><div class="MsoNormal" style="text-align: justify;"><i><br />
</i></div><div class="MsoNormal" style="text-align: justify;"><i>Who gets the discount-The Vendor</i></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">There are many scenarios where this could happen but I will explain with one example. A retailer is expanding his product portfolio. If a specific product has a high brand value the retailer will approach the vendor of that product and offer a price at which he/she will purchase the product to stock it in their retial outlets. This is a plain vanilla explanation there is more to it but lets keep it simple for now. The retailer will offer some freebies like free in-house publicity for a month, Central display for two week without additional cost a higher margin percentage and so on. So the vendor is offered a benefit. This usually happens only when the vendor product is on high demand and the retailer is not large enough. Also, there may or may not be a benefit for the end customer.</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">There is more to come on this topic.</div></div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com0tag:blogger.com,1999:blog-1992372096920002633.post-48122350044621315622011-05-23T08:16:00.000-07:002011-05-23T20:45:22.450-07:00Noodles segment in SOUP!<div dir="ltr" style="text-align: left;" trbidi="on"><div><div style="text-align: justify;"><br />
</div></div><div style="text-align: justify;">I couldn't help but get back to write a little bit more about the Noodles segment in India! While the noodle kings and new entrants are sweating it out to push a pack of noodles the Indian consumer is playing a spoilsport! They are equipped with the knowledge of nutrition, the easy preparation, the different tastes, what more.. noodles with soup- all is out in the market and he/she is too bored if you have nothing new to offer. Adding to the misery of the established brands are the Private Labels that are luring customers with attractive prices and schemes. They have a clear advantage in the following ways:</div><div><ul style="text-align: left;"><li style="text-align: justify;">They can stock anywhere they want- home shelf advantage?? [:P]</li>
<li style="text-align: justify;">They have observed and understood the consumer behaviour - The customer strolls around and makes choices, walk in and out of their premises a million times- Pan India! [What better Market research?]</li>
<li style="text-align: justify;">Higher Margins- More flexibility in terms of cost</li>
<li style="text-align: justify;">Existing reach- and robust supply chain!</li>
</ul></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;">While all this action is happening. I <strike>am</strike> was a maggie loyal who switched to some other brand. The new brands played on my mind and stole me from maggie! Now lets see.. what all maggie tried and how I can firmly say- it will be pushed aside with a bowl of two minute noodles toppled over it's head if it doesn't pull its socks up!</div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;"><b>The flavour fiasco-</b> Rememeber when maggie changed its flavour? The angry loyals ditched the brand and it had to run a campaign (look at next point) to win them back! Why change the base flavour..? Isn't there something known as line extension or adding new variants..? Well, they did that too.. just a little late in the fleeting market!</div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;"><b>Meri Wali Maggie</b>- Good move for short term. Now the nostalgia won't do the trick anymore as the loyals are reaching their mid twenties to sixties (it has been here for decades!) while the fresh blood in the target segment -the kids.. have got tongue teasing flavours and more to choose from other brands entering the segment. Meri Wali Maggie - is grandma's tale now!</div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;"><b>Maggie sitting over Soupy noodles</b>- While the consumers and loyals were crying out loud as to they like to lick the maggie noodles masala.. maggie which also has a soup segment infact it is the 2nd leading brand of soup in India sat on the idea till Knorr( Market leader in soups) came up with soupy noodles and swept away the market!Remember how maggie had to save its den by adding vegetable atta noodles for the growing health conscious consumers..? What did they do with the soup segment? Knorr also have the advantage of being associated with healthy food- soups. They had to be an INSTANT [:P] hit! They are selling noodles.. in disguise! Open your eyes! They have carved out a comfort zone in the cluttered market and have positioned themselves in the minds of the consumer as a healthy trusted alternative!</div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;"><b>Guess the flavour? - </b>Have you seen this...? No..? Rush to a MORE or BigBazzar and stand near the noodle stand. You will see packages with question marks[?].. It says- guess the flavour. I was amused by the idea I must say... but a little thinking could have worked in favour of the company. Imagine a maggie loyal or maggie customer. He/she is aware of "2 min noodle" and it is engraved in his/her brain! Now, they pick guess the flavour.. head home open the pack when hungry to make the 2 min noodle completely unaware of what it would taste like or hoping it would taste like the flavour of their choice. A slight deviation leaves them hungry, angry and with a bowl full of noodles they can't throw nor eat..? There could be better ways...! </div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;"><br />
</div></div><div><div style="text-align: justify;">So why have I grumbled so much..? I am just frustrated by clutter! :P</div></div></div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com0tag:blogger.com,1999:blog-1992372096920002633.post-36709940213945866582010-10-26T20:31:00.000-07:002010-10-26T20:31:00.523-07:00FDI- Walmart the other sideThis post is a interesting article I found on <a href="http://www.bizopedia.biz/">bizopedia</a>. It talks about the negative aspect of Wal-Mart. How it affects the suppliers. Very funny use of language. I am not editing it. Just sharing it here:<br />
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<h3 class="post-title entry-title" style="color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 16px; font-weight: bold; line-height: 1.1em; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><a href="http://www.bizopedia.biz/2007/10/how-wal-mart-does-its-busines.html" style="color: #333333; font-weight: bold; text-decoration: none;">How Wal-Mart does its business</a></h3><div class="post-header" style="color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px; line-height: 1.3em; margin-bottom: 0.75em; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><div class="post-header-line-1" style="line-height: 1.3em; margin-bottom: 0.75em; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div></div><div class="post-body entry-content" style="color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px; line-height: 1.3em; margin-bottom: 0.75em; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Wal-Mart is more than just the world's largest retailer. It is an economic force, a cultural phenomenon and a lightning rod for controversy. It all started with a simple philosophy from founder Sam Walton: Offer shoppers lower prices than they get anywhere else. That basic strategy has shaped Wal-Mart's culture and driven the company's growth.<br />
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The distinctive strategies adopted by the companies are given as follows:<br />
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1. Wal Mart's position starts at two ends of the spectrum - make as many things as widely available to as many people as possible with small margins. So big turn over nets big profits but lots of sales need to be made to get that profit.<br />
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2. because you have so many customers, SQUEEZE the life out of your suppliers - get them to give you even cheaper wholesale rates and advertising support - make them carry the cost of distribution and warehousing, force them to meet your IT needs. This reduces your own costs whilst forcing your suppliers to carry the can - the end result - greater margins for you.<br />
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3. Deny access to new suppliers who don't give you an even better wholesale rate. But keep them interested enough so that when one of your current suppliers goes out of business because you have milked them dry and they go bankrupt, you'll have a new supplier ready to step into the grave</div><div class="post-body entry-content" style="color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px; line-height: 1.3em; margin-bottom: 0.75em; margin-left: 0px; margin-right: 0px; margin-top: 0px;">--------</div><div class="post-body entry-content" style="color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px; line-height: 1.3em; margin-bottom: 0.75em; margin-left: 0px; margin-right: 0px; margin-top: 0px;">So now we know why the Indian Govt. had been dragging FDI in retail all this while. </div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com1tag:blogger.com,1999:blog-1992372096920002633.post-33110745992802223752010-10-14T14:18:00.000-07:002010-10-16T08:55:39.247-07:00FDI Multi Brand Retail - Sneak peek<div class="MsoNormal">Retail is predicted to be the next Boom sector in India after IT. It came changed the face of India and now retail is going to do just the same. The Indian customer is going to shop like never before and I as a normal MBA student foresee a lot of change in consumer behaviour in Retail with the FDI expanding its footprint in Indian Retail sector.</div><div class="MsoNormal"><b><br />
</b></div><div class="MsoNormal"><b>Retail Industry India –Quick Facts</b></div><div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-indent: -18.0pt;"></div><ul><li>Retail accounts for 35% of the our GDP (Gross Domestic Product)</li>
<li><span style="font-family: Symbol;"><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span>Indian Retail ranked in the top 1-3 of GRDI (Global Retail Development Index) for the past 5 years</li>
<li><span style="font-family: Symbol;"><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span>Retail Industry accounts for around 8% of the country’s employment.</li>
<li><span style="font-family: Symbol;"><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span>Market size: US $312 Billion</li>
</ul><br />
<div class="MsoNormal"><b>Why the debate over FDI?</b></div><div class="MsoNormal">There is debate over FDI in retail sector (Multi-brand retail) primarily because Indian Govt. wants to protect the huge chunk of unorganized players (kirana stores/ mom & pop stores ). The negatives they foresee are:</div><div class="MsoListParagraphCxSpFirst" style="mso-list: l2 level1 lfo2; text-indent: -18.0pt;"></div><ul><li><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span>Low prices and high variety killing the business of local players</li>
<li><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span>High power of global companies to influence prices</li>
<li><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span>Suppliers’ margins could shrink considering bulk purchases from the manufacturing company directly</li>
<li><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span>Lopsided growth in cities- FDI Retail will focus only on target markets and leave out the towns</li>
</ul><b><span class="Apple-style-span" style="font-weight: normal;">The positives would be:</span></b><br />
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<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo3; text-indent: -18.0pt;"></div><ul><li>The establishment of a DREAM Supply Chain- which will improve the efficiency of Indian retailers as well</li>
<li>An opportunity for Indian manufacturers to reach global markets</li>
<li>Indian consumer with growing disposable income has now more variety to choose from while deciding how to spend it</li>
<li><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span>A Joint Venture would be mutually beneficial for Indian as well as Foreign Investor</li>
</ul><div> My Supposition: Save money for next few years and then shop like never before. FDI will be a very good move for the consumer as well as the economy.</div><div><br />
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</div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com1tag:blogger.com,1999:blog-1992372096920002633.post-56675094167581096352010-09-28T05:00:00.000-07:002010-09-28T05:35:14.063-07:00FTA Japan-India (What it means?)<div class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Free Trade Agreement<o:p></o:p></i></b></div><div class="MsoNormal">FTA aims chiefly to remove tariffs on goods and trade barriers for services, but also covers areas such as intellectual property rights and facilitation of human exchange. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Why a FTA in the first place?<o:p></o:p></i></b></div><div class="MsoNormal">The theory of comparative advantage argues that in an unrestricted marketplace (in equilibrium) each source of production will tend to specialize in that activity where it has comparative (rather than absolute) advantage. The theory argues that the <i style="mso-bidi-font-style: normal;">net result will be an increase in income and ultimately wealth and well-being for everyone in the free trade area</i>. (Source: Wikipedia) </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">In simpler words- prices of good involving import of parts or goods being exported reduces which gives a fantastic trade opportunity for companies involved in these industries. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Usually after a FTA the immediate years affect few sectors in countries involved. At times it might lead to lifestyle changes depending upon the sector in prime focus.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Key elements of FTA with Japan<o:p></o:p></i></b></div><div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><span style="font-family: Symbol;">·<span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span>The FTA to be signed by Japan and India will phase out the tariffs on products that make up 90% of Japan's exports to India and 97% of India's exports to Japan within 10 years the main focus being auto parts. (Source: http://business.nikkeibp.co.jp) .<span style="font-family: Symbol;"><span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span></div><div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><br />
</div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Prime focus of FTA Japan-India: </i>Automotive sector<o:p></o:p></b></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><br />
</b></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">The past: FTA S.Korea-India<o:p></o:p></b></div><div class="MsoNormal">Under the FTA signed between India and South Korea the tariffs were decided to be eliminated over a span of 8years. This agreement has already been signed in 2009. Duties on Korean auto parts, the country's biggest trading item, were decided to be slashed from the average then, of 12.5 percent to 1 percent over the next eight years.<span class="apple-converted-space"><span style="color: black; font-family: Arial, sans-serif; font-size: 7.5pt; line-height: 115%;"> </span></span> The automotive company that will be benefited by it is Hyundai which is South-Korean automobile maker.</div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">The future: FTA Japan- India<o:p></o:p></b></div><div class="MsoNormal">5to 10% of automotive parts particularly electronic parts of all Suzuki car models are supplied from Japan. The elimination of tariffs will provide them a marginal competitive advantage over other car manufacturers. Another anticipated outcome is the development in Indian automobile manufacturing capabilities. Once there is no bar on import of automotive parts Indian car makers can explore the possibility to gear up their models up to global standard. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">General supposition: </b>Automatic cars to enter market because they will finally become affordable and Indian cars flooding global market. Small cars have already become a attractive segment and will become even more exciting, they are one of the major reason why Japan in pressing on FTA. <i>The automotive segment will hence become very vibrant to look out for.</i><br />
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<i><b>PS:</b> <b>This is a classic example of industry directing a Government decision. The Japanese automakers played a huge role in Japanese Government agreeing to sign FTA. </b></i></div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com1tag:blogger.com,1999:blog-1992372096920002633.post-39660856898018375942010-09-25T19:48:00.000-07:002010-09-25T23:13:05.141-07:00A cup of noodles<div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><span class="Apple-style-span" style="font-family: 'Times New Roman'; font-size: medium;">Note: The statistical data mentioned in this post was taken from various newspaper articles.</span></span></div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><span class="Apple-style-span" style="font-family: 'Times New Roman'; font-size: medium;"><br />
</span></span></div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Instant noodles segment in India seemed to have reached a phase of saturation with only one dominant player and a struggling runner up. Suddenly something happened and the instant noodles segment found its rebirth with many biggies flooding the retail outlets with new brand of Instant noodles. The Indian customer seemed to have grown demanding and was desperately seeking for alternative options. </span><span class="Apple-style-span" style="font-family: Calibri, sans-serif; font-size: 15px;">A ideal Indian family is now exposed to various kinds of information. An average Indian family spends 1.02% of their annual income on eating out. This makes the kids aware that there is more to noodles than a yellow yummy ‘<i>Maggi</i>’.</span><span class="Apple-style-span" style="font-family: Calibri, sans-serif; font-size: 15px;"> </span><span class="Apple-style-span" style="font-family: Calibri, sans-serif; font-size: 15px;">This seemed like an ideal time to hit the market for companies waiting patiently for the maggi madness to reduce. The instant noodles market in India is valued at around Rs 1,000 crore. The category is growing at 20 per cent annually. The main players are M<i>aggi, Knorr Soupy Noodles and Foodles. Other competitors are Capital Foods (Ching’s Secret and Smith & Jones), Future Group (Tasty Treat), CG Foods (Wai Wai), Cup noodles and Nissin Foods (Top Ramen)</i>. Entering the competition is ITC with its <i>Sunfeast Yippee noodle</i>s. The noodle leader isn’t keeping mum and is investing Rs 950 crore to set up two units to manufacture instant noodles and infant foods in Karnataka and Haryana.</span></div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">While the new entrants are just filling in the market gaps with different flavours and exciting new alternatives, <i>m</i></span><span class="Apple-style-span" style="font-family: Calibri, sans-serif; font-size: 15px;"><i>aggi</i> is saddled with the old flavour as it is caught in the dilemma of catering to existing huge loyal customers and redefining itself with new flavours. It had changed the flavour of the classic <i>maggi</i> and was faced with strong opposition from its customer base. It reverted back to the old flavour but managed to slip in the “Healthy calcium” tag and added a variant “Atta noodles” to avoid blows from the health watch groups in the country. It later introduced “Rice noodles” and now has introduced cup noodles. All this to remain in the market and guard its market share. It also did a ‘<i>meri maggi</i>’ campaign to reinforce the brand loyalty.</span></div><div class="separator" style="clear: both; text-align: justify;"><br />
</div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">But, did it wait too long to introduce new variants? Somehow the idea of cup noodles and ‘<i>maggi</i>’ don’t gel well. Its classic taste is so strongly positioned in the minds of the consumers that it new flavours might find it difficult to get accepted. My supposition is that the customers will retain the classic <i>magg</i>i purchases but reduce the quantity in their monthly basket to replace it with the new entrants catering to the same segment. This means <i>magg</i>i is likely to lose its ground. But, <i>maggi</i> will be a tough fight with its 70% market share.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><br />
</span></div><div class="MsoNormal" style="text-align: justify;">PS: Instant noodles were first invented in Taiwan in the 1958. For reading about the history of Instant noodles <a href="http://en.wikipedia.org/wiki/Instant_noodles">click here</a></div><div class="MsoNormal" style="text-align: justify;"><br />
</div>Sameerahttp://www.blogger.com/profile/16387105701575296119noreply@blogger.com0