Case study presentation on food world – market entry strategy Presented by Vagesh v hiremath Trimurti sannakki Shrihari shindhe Mutturaj goudar Mallik shaikh

President – pradipta k mohapatra Company – RPG enterprises Profile of foodworld President – pradipta k mohapatra Company – RPG enterprises food world Division of spencers Established – 9 may 1996(food world) Place – R A Puram (chennai) Turnover – 210 million(1996-97) RPG purchased spencers in 1989

Retail market scenario in india in 1991 Population – 846million ¼ of population lived in 3768 towns remaining 627000 villages Retail levels Formal sector Informal sector Fair price shops

In 1993 formal retail out lets in india 8.06 million Conti………. In 1993 formal retail out lets in india 8.06 million In 1998 it was about 11.1 million Estimated 2001 13.6 million Approximately 30% outlets located in urban 27% dealt with food products

Urban outlets – food/nonfood 1996 Types of products sold Number (000) Percentage(%) Food 824 26.8 Other fmcg 1,430 46.5 Non -food 820 26.7 total 3,074 100.0

Total 53% retail contribution of GDP 69% consumer expenditure Conti…. Total retail sales in india 1997 was estimated to be 6,630 billion out of which food items was 4,837 billion Total 53% retail contribution of GDP 69% consumer expenditure Estimated retail sales 2002-9,236 billion food -6,657 billion

Cruicial decission taken by the company Which target segment should be focused on ? What value proposition should be offered to the customer? Which merchandising facilities should be offered? Where the retail outlets should be located?

Insight Consumer survey conducted Conti….. Insight Consumer survey conducted Buying provision – needs and requirements Insight into consumer awareness about competition Customer perception of store names Shopping habits and benefits sought of the customers

Categories of products Category description Typical products Convenience Noodles, canned non- veg, canned fruit, canned veg,dessers,tinned milk,cigarettes,frozen foods, hardware Destination Careals,pulses,flours,edible oils, diary products, vegetables Specialty Paper goods, pet food,batteries,miscellaneous items Strategic Spices, biscuits,jams,breakfast,foods,baby foods,liquor,detergents,skin care, hair care, oral care, shaving needs, baby needs

Question& answers Draw a diagram of retailing decision for food world as given as fig. 1.2 enumerate the key success factors Using the data in the tables and figures, find out the profitability drivers for food world .what is the difference between the profitability of new and old stores? What are the reasons for this ? What is your suggestion with regard to the number of stores that food world open when it becomes a profitable stores?

Answers Retailing decision taken by the RPG in order to expand its supply chain and retail in India three insights or directions to get in to retail 1) The company should not get in to niche retailing instead they should focus on the mass market

Conti… 2) organized retailing would evolve faster in the country as retailing format was closely related to economic development of countries 3) they should focus on daily necessities of house holds- food, clothing and health

Conti….. Food Other fmcg Non -food total Types of products sold Number (000) Percentage(%) Food 824 26.8 Other fmcg 1,430 46.5 Non -food 820 26.7 total 3,074 100.0

Advantage of Indian retail scenario Non existence of competitors Key success factors Advantage of Indian retail scenario Non existence of competitors Acquisition of Spencer's company Targeting middle and upper middle class families Site selection Positioning strategies Marketing strategies

Profitability drivers for food world Pricing strategies Food Non food 2) Profitability drivers for food world Pricing strategies Food Non food Fmcg And other categories of products Perception of store name

Difference between profitability of new and old stores Facility of the stores Ambiance of the stores Variety of products available at the stores Well connected to the roads Pricing policies Marketing strategies Promotion and offers

Number of stores should open As the making profit is the main motto of the company it can new start coming up with new stores in cities and get the advantage of Indian retail scenario This will help in employment generation As the retail sector is one of the major contributor to the Indian economy this will help in developing India at the global stage