Sharp Marketing & Retailing ......Indian Landscape......

Trends & Ideas for Marketing to Customers in a Large Format Electronics Retail Context

2010-04-11T13:01:00.000-07:00

Effective Marketing would draw customers into our stores and convert the customers conviction into action. As a marketer or as a retailer, one would like to see consumption of goods from his basket and a well designed marketing programs would drive this .

In the context of Electronics or rather CDIT ( Consumer Durables , IT , Telecom) a ‘brand’ / “ vendor” / “ company” will market its products through attractive incentives / offers by highlighting the superiority of its features , technology , Pricing etc . The brand in this case is fighting for a share from its competition or growing the market / category .

In case of a retailer, more appropriately for a Electronics / CDIT retailer who in his assortment has practically all of the electronic & electrical Brands / Lines that a consumer would need at home, the concept of consumer promotion changes quite a bit. There are 2 fold objectives – one that the Customer / shopper should shop at his retail outlet for the product and 2, the shopper should think TOM of this retail outlet whenever he needs to buy and electronic / CDIT gadget.

At Reliance Digital, we recognized this at a fairly early stage. We realized that people shop at our store not just for products but solutions. Take the example of a customer who has shopped somewhere for an LCD TV of one brand. He will have a technician from the brand visiting his place to install the TV – it is fine so far. Now, the customer needs a solution – he has a DVD player of some other brand and wants to have it hooked on and synchronized with this new TV; the response from the technician will more often be negative. At Reliance we set up a team of specialists called Reliance ResQ engineers. They would not just install the TV of any brand but also help in this interconnectivity and hence provide complete solution.

Visit our large format stores and you will find the walls full of visual merchandise – a silent promotion but suggesting inputs to the shopper so that he can make appropriate choice of product/s. ( In fact making the choice , decision easy for the shopper / customer )

Having said this, let me now share with you another very successful promotion campaign that we run year after year as a part of our Anniversary celebrations. Shoppers not only get freebies but win exciting prizes on contests. The finalist drive away with a Honda Civic car , viz in 2009 Anniversary !.

Our focus is on solution and experience rather than offering discounts.

We encourage shoppers to shop for more by giving them an offer that is commensurate with their spending. This is called ‘Bill value promotion’. Shop for more and walk away with a more expensive gift. This kind of promotion also benefits a shopper and encourages him to buy products from across categories – he could be buying a home theatre system and a lap top and getting the gift.

One another interesting aspect of our promotions is that they are backed by very lively consumer engagement programmes and events at our stores. During the Diwali season of 2008, we ran a promotion christened ‘You are the king’ – riding on the popularity of the movie ‘Singh is King’. Every day during the campaign period, we distributed prizes to the content winners and they were called Saath baje ka Sikandar – the event would generate very good footfalls and motivate shoppers to buy before the strike of 7 PM and get them to participate in the day’s contest. The prizes that we gave away included LCD TVs, Mobile phones, Digital Cameras, Microwave ovens etc.

How does all this sum up and what are our learnings?

Firstly, as a CDIT retailer when you have differentiated offers for which there is a perceived value, that by itself is a strong promoter.

Next, promotions and marketing campaigns should not be just product centric (as such brands invariably have their offers on products) and should be more store centric.

Next, customer engagement programs or events actually help in enhancing the average bill value & conversion an overall experience .

Destination Branding

2010-03-20T14:34:00.001-07:00

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What to learn from TESCO , UK .....as a retailer , organization.............

2010-03-20T13:49:00.000-07:00

27 ways...you can learn from Tesco

What can a big beast like Tesco possibly teach small businesses? Loads. Here’s how Sir Terry Leahy and company came to rule the world – and how you can start to build your empire.

1 Spy on your customers

Tesco can probably second-guess what its customers are going to buy before they’ve even scribbled out their shopping lists. It gleans data from its 11m Clubcard holders to build up a precise picture of their buying patterns, meaning it can adapt to any shifts in shopping habits.

Customers are “rewarded” with vouchers that they can put towards magazine subscriptions, days trips, restaurants, even holidays. Four times a year, Tesco also sends customers discounts on the products they buy routinely and any items they might like.

Someone buying suncream might be sent vouchers for travel insurance, for example. Casual customers are converted into “brand loyalists”. And Tesco boosts its revenues – by more than £100m in extra sales each year.

2 Get a celebrity endorsement

We’re not talking page-three models here. Sign up a celebrity that resonates with your brand (look at what Jamie Oliver has done for Sainsbury’s).

Tesco’s line up includes national favourites such as Prunella Scales (remember the “Dotty” adverts?), Ronnie Corbett, Martine McCutcheon and Alan Titchmarsh, reinforcing it as a recognisably British brand.

3 Be obsessive

Tesco has a freakish obsession with making sure everything runs like clockwork. It has an in-house weather forecaster so it can make sure the right products are on the shelves at the right time.

It has heat-seeking cameras that sense the number of customers entering its stores, which in turn predicts how many cashiers each outlet will need to man the tills. And it has computers that allow a supplier 6,000 miles away to watch his or product sell through the checkout and adjust production accordingly.

4 Test the water

In 1996, Tesco cautiously entered the world of online retailing, outfitting a single store in Osterley to accept orders by phone, fax, and a basic web site, picking groceries straight from the shelves to keep costs low.

And it kept tweaking the process to get the economics right. It wasn’t until September 1999 that it rolled out the service to 100 stores. This “tortoise versus hare” approach worked: Tesco.com is the largest online grocer in the world, with sales of £700m in 2004.

5 Treat business as war

Annihilate your competitors by wiping out their resources. Tesco cherry-picks the best locations and gobbles up the land.

A recent report in the Sunday Times claimed that the retailing giant had assembled a land bank of more than 185 development sites across the country, which could create more than 4.5m sq ft of new supermarket space.

Even combined, Asda, Sainsbury’s and Morrison have only 3.7m sq ft of developments in the pipeline. Tesco is currently splurging around £2bn on new freehold assets each year.

6 Segment your customers

Tesco segments its customers according to things like age, value of shopping and lifestyle, and then adapts its branding and packaging to reflect these distinctions: Tesco Finest for the wealthier, aspirational shopper (yielding juicier margins); and Tesco Value for the budget conscious, for example.

7 Customers know best – so ask them

Tesco doesn’t just rely on its marketing department to come up with new ideas and promotions. It asks its customers.

Over the past ten years Tesco has organised over 1,600 Customer Question Times where customers are invited to come and talk to their local store management team and head office representatives about their shopping preferences.

The feedback from these meetings goes straight back to the board – it doesn’t get bogged down in layers of middle management. The beauty of this strategy? It’s free advice.

8 Get into the trenches

Sir Terry claims to spend 40 per cent of his time on the shop floor chatting and listening to customers. He says that he “attends customer panels as a way of life”. And he stacks shelves once a week. If Sir Terry can make time to get out of his ivory tower, so can you.

9 use The steering wheel

Sir Terry once credited Professor Robert Kaplan of Harvard Business School – inventor of the “balanced scorecard” – with inspiring the supermarket’s growth.

Putting Kaplan’s teaching into practice, Tesco developed its own management tool called the “Steering Wheel”, which emphasises parts of the business that do not figure in traditional accountaccounting, such as corporate responsibility, employee trust and customer relations.

The Steering Wheel divides the business into four different sections – customer, operations, people and finance – which are monitored by managers with a traffic light system: green indicates that targets are being met and red flags up a problem.

Each Tesco store has its own individual Steering Wheel. Performance is reported quarterly to the board, and a summary is sent to the top 2,000 managers in the company to cascade on to staff. This is a clever way of linking strategy to day-to-day work. After all, there’s more to running a business than financial metrics.

10 Be nasty

Tesco has a notorious reputation for using bully boy tactics to shaft its suppliers, demanding lower prices at a moment’s notice and forcing them to contribute to marketing costs.

And the suppliers dare not speak out for fear of losing their contracts. This has caused stirrings among the competition watchdogs but Tesco has so far managed to dodge any abuse claims. This approach isn’t going to win you any friends – but who cares when you’re raking in the profits?

11 Last-mover advantage

Tesco was relatively late to the overseas game compared with rivals such as Sainsbury’s, Marks & Spencer, France’s Carrefour and Wal- Mart. But it has quickly caught up.

By the end of this year, roughly 60 per cent of Tesco’s floorspace will be in stores abroad. Sir Terry’s argument is that Tesco is well placed because it arrived late.

It studied the mistakes made by its competitors (failing to adjust to the tastes of local consumers, trying to impose Western marketing strategies, etc) and avoided falling into the same traps.

12 Go undercover

Few companies are as careful in their research of international markets as Tesco. A year before Tesco announced its £250m assault on the US grocery market, 50 senior directors went undercover to understand how best to exploit the American market.

They rented an airline hanger and constructed a dummy Tesco store for focus groups, telling curious onlookers that it was a Hollywood film set. They even refrained from using their Tesco credit cards to avoid being tracked.

13 Pick on weaklings

Tesco’s unusually stealthy US expansion plans are not actually as ambitious as you might think. Its targeted competition is not the giant out-of town Wal-Marts but the smaller 7- 11 convenience stores.

By pitching itself against the weakest players in the market (family-run businesses with tight profit margins), Tesco is more likely to gain a firm foothold in the country.

14 Be flexible

Tesco doesn’t “clone” its formula or force its brand overseas. Instead, it remoulds its approach for each new market. All new Tesco Express stores in Thailand open for the first time at the seemingly strange time of 9.09, for example.

Why? Because Thais believe these numbers bring good luck. The stores even stock chicken feet and traditional gifts for Buddhist monks.

15 Don’t flog a dead horse

Tesco sold its French grocery business in 1997 after five largely unsuccessful years. It expanded into Taiwan in 2000 but then exited the market last year, exchanging its six stores for Carrefour’s 11 outlets in the Czech Republic and four in Slovakia. The lesson? Give it five years, and then cut your losses.

16 Make your customers do the dirty work

Tesco has introduced self-checkouts in 360 stores so that shoppers could scan, bag and pay for goods themselves. Staff can then get on with the job of improving product availability and customer services.

17 Act local

Tesco doesn’t attempt to run its stores in Bangkok from Cheshunt and it doesn’t ship out its senior UK managers to run the show. It recruits nationally, employing people who understand the local culture. Tesco employs 100,000 people overseas, but less than 100 of these come from the UK.

18 Get the layout right

Tesco designs its stores around local shopping trends and even the time of the day. Stores in London cater for busy professionals,selling sandwiches to office workers at lunchtime, and then readymeals in the evening, for instance.

19 Use loss leaders

As a cunning part of its marketing strategy, Tesco began selling petrol in 1974. By selling it cheaper than the traditional filling stations, the company used petrol as a “loss leader” – selling it below cost to lure shoppers and stimulate other sales.

20 Sleep with the enemy

Tesco’s petrol strategy (above) sparked a bitter battle with fuel retailers, which raged throughout the eighties and nineties.

When Tesco slashed its petrol prices, Esso fired back with its 1996 “Price Watch” campaign, pledging to match the lowest price within the local area. Tesco didn’t retaliate. Instead, in 1998, the two companies formed an alliance: Tesco operated the stores; Esso operated the forecourts.

21 Divvy up the wealth

We all know that benefits make employees happy, and that happy staff are more productive and tend to stay longer. Call it an “ego perk”: this year a pot of £110m was shared out among 45,000 of Tesco’s staff as two “Save As You Earn” share schemes matured.

Giving employees a slice of the company profits develops a sense of ownership and encourages. Employees will toil harder for the business if it affects their pockets.

22 Praise the minions

Sir Terry doesn’t credit the strong balance sheet, the state-of-the-art technology or the buying power for Tesco’s success. Nor does he credit the marketing innovation, the strategy or the senior management.

No, “the beating heart of Tesco”, according to Sir Terry, is “the checkout assistant and the shelf filler in the stores.” A strong business depends on the workers at the coalface.

23 Earn PR points

Tesco’s decision to give itself a green makeover this year won it valuable PR points and helped it claw back respect from local communities. Tesco is seeking to reinvent itself as a “good neighbour”.

Initiatives range from a £100m environmental fund to powering stores with wind turbines to its Computers for Schools scheme.

24 Push the boundaries

It started out selling groceries. Now it flogs everything from sofas and software to fridges and finance. Tesco is determined to stretch the concept of a supermarket as far from groceries as a good retail margin will permit, using the strength of its brand to gradually expand into new markets.

25 Promote from within

Tesco’s fundamental skill has been to spot and retain talented people. Today all Tesco’s executive directors have been with the company for more than 20 years with the exception of the finance director, Andrew Higginson, who joined nine years ago, and Lucy Neville-Rolfe, who came in from government ten years ago. Sir Terry is keen to encourage shelf stackers to aspire to his own level.

26 Plan your succession

Former chairman and chief executive Lord MacLaurin, who joined Tesco when he was just 22, said: “Succession planning is one of the most important jobs any chairman has to do.”

He put Leahy on the board in the mid-nineties, made him chief executive in February 1997 and then left him to it by retiring at 60.

Contrast this with Marks & Spencer’s approach: in the mid-nineties Sir Richard Greenbury – the then-chairman and chief executive – dithered with succession planning and left four hopefuls to fight it out for the top job, breeding discontent and infighting.

Choosing a successor for a key role should be done systematically and in plenty of time. Don’t leave it to the last minute.

27 Be paranoid

For years, Tesco languished behind Sainsbury’s – both in hard figures and customer perceptions. But it desperately wanted the top slot. It developed a “catching up” culture and a deeply ingrained business survival instinct.

Tesco eventually overtook its rival in 1995 – but it doesn’t take success for granted. Sir Terry reminds his colleagues to: “Keep the mindset of a number two, rather than a number one”.

International Store VM Ideas for electronics , technology

2010-03-20T10:28:00.001-07:00

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Retail understanding....from the US context ........

2010-03-20T08:39:00.000-07:00

Some info on US retailers ..............
Target:

Brand Promise of “Expect more. Pay Less” is delivered through innovative designs. They look at ways to infuse ‘design’ into every guest’s experience, building an emotional connect with him, yet affordable, in a competitive scenario.

Interesting note: The use of the term ‘guest’ rather than ‘customer’, to create a feeling of the customer being most welcome, and not just a ‘means for business’

“Expect More. Pay Less”: Expect more of everything. More great design, more choices, more conveniences, more service and more clothes, housewares and designer-created items that you’ll never find anywhere else

And pay less.

Here’s the rather short list of adjectives they use in their creative content, to describe ‘Design’:

Design is

Inspired

Captivating

Useful

Valuable

Cool

Exciting

Necessary

Utility

Accessible

Modern

Challenging

Mindful

Bold

Delicious

Inclusive

Smart

Passionate

Different

Amazing

Bright

Precious

Comfortable

Beneficial

Striking

Discerning

Real

Insightful

Impressive

Savvy

Acclaimed

Durable

Creative

Inviting

Functional

Grand

Surprising

Helpful

Fun

Affordable

Practical

Experienced

Confident

Fitting

Uncanny

Clear

Ingenious

Graceful

Elegant

Handy

Unexpected

Lasting

Intelligent

Wow

Flattering

Logical

Innovative

Curious

Better

Flexible

Remarkable

Sound

Beautiful

Pleasing

Artistic

Inquisitive

Casual

Thoughtful

Sleek

Brilliant

Rewarding

Friendly

Delightful

New

Inspiring

Courageous

Available

Stylish

Important

Diverse

Enduring

Refined

Simple

Purposeful

Original

Everyone

Everywhere

Target

What Target Offers:

• Trusted National Brands

• Exclusive Designer Collections

• Premium owned and licensed brands

• Product Innovations

• At the centre of it all, Target enjoys a ‘Discount Store Heritage’.

• Store Experience

 Through easy and intuitive to shop designs

 Racetrack aisles

 Convenient adjacencies

 Aesthetics

 Amenities such as Starbucks, Pizza Hut, pharmacies, in-store digital photo labs



• New merchandising and marketing programs to create excitement round the year – examples?

Store Design:

• Design Principles:

 Inviting and easy-to-shop

 Clean, bright, safe and accessible

 Appealing to both, the timer-starved guests and those able to shop on a more leisurely schedule

• Fresh Prototype every few years with new design elements that are aesthetically appealing, environmentally friendly, functional, innovative and responsive to the guests’ ever-changing preferences

• P2004: single-entry, general merchandise store format

• P2004+: expanded version of P2004, in higher traffic trade areas

• SuperTarget: combination general merchandise and full supermarket concept

The Brand reinforcement:

• Widely recognized logo:

 Target’s Bullseye logo is a “retail symbol as recognizable as Tiffany’s blue box” – New Yorker

 An “icon of affordable chic” – Newsweek

 97% Americans recognize the Target lgo – an independent survey

• Clever, Visual and Trend-right Marketing

• Weekly newspaper circular comprises of one-third of the annual marketing budget. It reaches out to 50 million households each week

• Traditional broadcast

• Print media

• Event sponsorships

• Guerilla marketing activities

• Contemporary media approach: Given the decline in viewership of national networks and the increase in media fragmentation, Target has shifted media spends to banner advertising and text messaging also.

• Key Marketing program elements implemented in 2005:

 Design for All campaign

 Objective: To make great design affordable and accessible for everyone

 Editors from top fashion magazines were invited at the launch of the ‘Fieldcrest collection’ in a unique way. They were invited to stay at a hotel that used this branded linen, and were offered to take away the sheets and towels home the next day, for a first-hand luxury experience.

 Back-to-College Campaign

 ‘Odds against Seven’ –webisodes of campus experiences built, and viewers could take a virtual tour and go shopping after every episode

 20 top artists created Target illustrations – the only advertising in a New Yorker issue they partnered with

 Storytelling method to support community relations efforts

• REDcard products:

 The Target Visa and Target Card are credit cards as a payment alternative for guests

 In 2005, issuance and redemption of GiftCards exceeded $1 billion

Developments in 2005:

 Expansion of ‘Super Target Stores’

 ‘Expansion of food merchandise in general merchandise stores’

 Debut of new collections:

 Fieldcrest

 Thomas O’ Brein

 ClearRx

 New owned brands introduced & existing brands strengthened

 TruTech Electronics

 Choxie gourmet chocolates

 New initiatives:

 GO International

 Smith & Hawken

 Time to Play

 Significant category reinventions in beauty and apparel

 Disciplined pace of growth at 8% or more each year to the retail square footage, building one store at a time

Philosophy of Target:

 Community Programs:

 Take Charge of Education® - For school funds

 Start Something® - Partnership with the Tiger Woods Foundation to help kids identify and achieve their dreams

 5% of pretax profits donated to good causes.

 Over $2 million a week given to education, arts and social services

• Commitment to Diversity of the team

• Protecting the Environment

 “What’s good for the environment is good for everyone”

 Waste minimization through recycling

 Reduction in energy consumption – they have introduced design elements such as solar energy roof tops and rainwater capturing cisterns in some stores already

Circuit City:

Started under the brand name, Richmond, more than 50 years ago, the store was Virginia’s first retail television store. Circuit City is committed to always providing new technology & solutions for customers, with an aim to making their lives easier and more enjoyable.

The retailer is committed to the community through the ‘Circuit City Foundation’ that is associated with providing education grants for children in public schools. In 2000, it partnered with the Boys & Girls Clubs of America by sponsoring ImageMakers, a national youth photography program. The Foundation also continues to provide annual operating support to education, health and welfare, civic, arts and cultural organizations in the Richmond, Virginia community.

Circuit City performance

Circuit City Stores, Inc.

NYSE: CC

Sector: Services

Industry: Retail (Technology)

Key Ratios & Statistics

Price & Volume

Recent Price $ 24.94

52 Week High $ 31.54

52 Week Low $ 20.21

Avg Daily Vol (Mil) (RTMA) 92.141

Beta 0.46

Share Related Items

Mkt. Cap. (Mil) $ 4,368.509

Shares Out (Mil) 175.161

Float (Mil) 173.400

Dividend Information

Yield % .66

Annual Dividend .16

Payout Ratio (TTM) % 81.88

Financial Strength

Quick Ratio (MRQ) .57

Current Ratio (MRQ) 1.65

LT Debt/Equity (MRQ) 2.52

Total Debt/Equity (MRQ) 4.54

Valuation Ratios

Price/Earnings (TTM) 35.24

Price/Sales (TTM) .45

Price/Book (MRQ) 2.27

Price/Cash Flow (TTM) N/A

Per Share Data

Earnings (TTM) $ .84

Sales (TTM) $ 63.29

Book Value (MRQ) $ 11.01

Cash Flow (TTM) $ 1.70

Cash (MRQ) $ 3.45

Mgmt Effectiveness

Return on Equity (TTM) 6.08

Return on Assets (TTM) 3.82

Return on Investment (TTM) 6.08

Profitability

Gross Margin (TTM) % 24.41

Operating Margin (TTM) % 2.06

Profit Margin (TTM) % 1.30

Mil = Millions RTMA = Rolling Three Month Average

TTM = Trailing Twelve Months MRQ = Most Recent Quarter

Asterisk (*) indicates numbers are derived from Earnings Announcements

Pricing and volume data as of 12/11/2006

Sears

Fast Facts about Sea rs, Roebuck and Co

Note: This article is purely about the various store formats that Sears has, explaining the difference in terms of the merchandise and operations for these formats.

Sears Domestic operations consisted of the following:

• 866 Full-line Stores

• Primarily mall-based locations averaging 132,000 square feet.

• Categories:

 Home Appliances

 Consumer Electronics

 Others – Tools, Fitness, Lawn and garden equipment, automotive services, Tires & Batteries, Home Fashion products, apparel, footwear and accessories for the whole family.

• ‘Sears Essentials’ & ‘Sears Grand’ (both under ‘Sears Grand’ name now)

 Offering health and beauty, pantry, household products and toys in addition to the offerings of the typical mall-based store.

 The challenge was to develop a new name for Sears to launch a midsize format which sells traditional Sears merchandise along with basic grocery items. The new stores are designed to attract time-pressed customers who prefer to avoid large malls.

 They devised a solution whereby the name Sears Essentials™ was given to reflect the idea of the essentials of everyday life. Sears Essentials™ is a streamlined version of Sears Grand™ (also developed by Nametag International, Inc.) which competes with mass merchandisers such as Wal-Mart and Target.

• 1128 Specialty Stores, located primarily in free-standing, off-mall locations or high-traffic neighborhood shopping centers, and including the operations of:

 809 Dealer Stores that carry proprietary Sears brands, such as Craftsman, Kenmore and DieHard, as well as a wide assortment of national brands.

 147 Sears Hardware Stores and 84 Orchard Supply Hardware Stores—Neighborhood hardware stores averaging 37,000 square feet that carry Craftsman tools and lawn and garden equipment, a wide assortment of national brands and other home improvement products. Approximately 120 locations also offer a limited selection of home appliances.

 16 The Great Indoors Stores—Home decorating and remodeling superstores, averaging 143,000 square feet, dedicated to the four main rooms of the house: kitchen, bedroom, bathroom and great room.

 50 Outlet Stores—Locations offering overstock and/or distressed appliances, consumer electronics and lawn and garden equipment at a discount.

• Commercial Sales—This business primarily targets home builders, remodelers and property managers for appliance purchases.

• Direct to Customer—The Direct to Customer business includes the direct merchant business of Lands' End, Inc. Lands' End is a leading direct merchant of traditionally-styled casual clothing, accessories and footwear for men, women and children, as well as home products and soft luggage.

• Home Services—Product Repair Services, the nation's largest product repair service provider, is a key element in the Company's active relationship with more than 46 million households. With over 10,000 service technicians making over 13 million service calls annually, this business delivers a broad range of retail-related residential and commercial services across all 50 states and Puerto Rico under the Sears Parts & Repair Services and A&E Factory Service brand names. Commercial and residential customers can obtain parts and repair services for all major brands of products within the home appliances, lawn and garden equipment, consumer electronics, floorcare products, and heating and cooling systems categories. Smaller items for repair can be brought into Sears Parts & Repair Centers located throughout the United States or to any Sears Full-line store. This business also offers protection agreements, product installation services and Kenmore and Carrier residential heating and cooling systems. Home Services also includes home improvement services (primarily siding, windows, cabinet refacing, kitchen remodeling, HVAC and carpet cleaning) provided through Sears Home Improvement Services.

Radio Shack

Radio Shack facts

• Fort Worth, Texas-based RadioShack Corporation (NYSE: RSH) is one of the nation’s most trusted consumer electronics specialty retailers and a growing provider of a variety of retail support services.

• More than 6,000 company and dealer stores

• Over 100 RadioShack locations in Mexico and Canada

• Nearly 800 wireless kiosks.

• Claims to cover 94% of US citizens.

Shop Online 24/7

has online business going at RadioShack.com.

Shack Facts

Quick reference information about RadioShack

Origin of the name "RadioShack" The name "RadioShack" is a nautical term that dates back to the invention of the radio at the turn of the 20th century. At the time, wireless radio equipment aboard ships was generally housed above the bridge in a wooden structure called the "radio shack." The founders of RadioShack thought the name appropriate for a new retail business that supplied electronic equipment to "ham" radio operators and ships' radio officers. RadioShack became known as the place to go for the latest technology – and it still is today.

Chairman and

Chief Executive Officer Julian Day

Day was named chairman and CEO on July 6, 2006. Day had previously served successfully in senior leadership positions at several large publicly traded retailing companies in the U.S. and played a key role in revitalizing such companies as Safeway, Sears and Kmart.

Stock symbol RSH (New York Stock Exchange)

(Stock listed as "TAN" prior to June 1, 2000)

Fortune 500 ranking 423 (previous ranking: 399)

Net sales & operating revenues $5.081 billion

(Fiscal year ending 12/31/05)

RadioShack stores 7,451 (As of 12/31/05)

Company-owned 4,972 (As of 12/31/05)

Dealers/franchisees 1,702 (As of 12/31/05)

Retail kiosks (wireless phones and accessories) More than 700 Sprint-branded in select shopping malls and inside SAM'S CLUB locations

Average size of a company store 2,529 sq. ft.

Year company began 1919, as a family leather business in Fort Worth, Texas. Click here to learn more about our history.

First RadioShack store Opened in 1921 in Boston, Mass.

Corporate Citizenship

Enhancing the quality of life in the neighborhoods we serve ... it's what RadioShack corporate citizenship is all about.

This is why corporate citizenship is a prominent part of our company's culture.

Consumer electronics courses offered to public

free of charge:

• Digital & Wireless Accessories for Your Car.

• The Wireless Mobile Office.

• Designing the Ultimate Home Theater.

• Digital Music Essentials.

Pricing Presentation@Singapore

2010-03-19T12:05:00.001-07:00

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ON LINE / DIGITAL MEDIUM ...........

2010-03-16T06:38:00.000-07:00

Brand Side of the Story: Peshwa Acharya, VP & head of marketing & consumer experience, Reliance Retail

Peshwa Acharya has over 19 years of marketing experience working across sectors like fast moving consumer goods (FMCG), consumer durables, telecom and retail. Presently, as the vice president and head of marketing and consumer experience, Reliance Retail, Acharya plays the pivotal role in driving the marketing and trade plan for around 1000 stores for the company across different formats. In an exclusive interview with AlooTechie, Acharya shares his viewpoints on digital media and how he sees Reliance Retail’s marketing objectives aligning with what the medium offers.

What is Reliance Retail’s perception and idea about launching brand campaigns on internet? What are some of the most exciting online campaigns that the company has initiated so far?

For us at Reliance Retail, marketing depends on a very simple idea. We want to be present everywhere where the target group (TG) match happens. We have several brands in our kitty including Reliance Fresh, Reliance Mart, iStore, Reliance Footprint, Reliance Jewels, Reliance TimeOut and others but we can’t do digital campaigns for each and every brand. In our perspective, online would make sense for some of our formats like that of iStore (Apple store) and Reliance Digital [specialty electronics and CDIT (consumer durables and information technology) store] because a lot of our premium audience is online.

We initiated a social networking based campaign for Reliance iStore to convert leads for our products. And the response from the campaign was very good. Our brand generated good word among the Apple audience, who are online and technology savvy people.

What percentage of the total advertising budget does Reliance Retail spend on the digital medium?

The percentage share is not fixed as it depends on what sort of business we are going to use the medium for. So, we cannot reveal an exact figure.

What are the issues and challenges that you have faced so far while promoting your brands on internet?

As far as my experience goes with the medium, reach clearly is a problem. And the problem would persist unless and until the penetration levels increase in the country. Till then, advertising on this medium will have to be limited to some specific product categories and not as standalone for large mass brands.

Another problem that I have faced is that the measurement system is not up to the mark. There are a lot of metrics present in the market but no one seems to reach a consensus while delivering results. This only proves that the measurement system of an online campaign needs to be worked upon more.

And thirdly, there is a huge lack of innovation in the internet medium. One can’t keep on doing the same stuff over and over again across all kinds of brands. Every brand has a unique feature and this needs to be attributed through innovative marketing initiatives. Unless the people working in this medium can innovate, spends will not grow on internet.

What answers do you seek from your digital advertising agencies and digital media partners while promoting your brands on internet?

The primary question that I seek is to how I can get my brand message across to the TG in an effective and measurable manner. What I would also like to see is more innovation and that too in an effective way which can help in building business of my brand and format.

There is a perception that people research and compare products online and buy them offline. Why do you think it is like that?

Presently, this is true in the case of electronics products but the perception is changing fast. There are some categories where online buying works best. Sectors like insurance payment, travel and ticketing work best for online buying. Even in the electronics category there is a huge possibility of driving shopping online, especially of accessories and small volume items.

Online retailers have to provide some sort of incentive to the consumers so that they opt for buying online. For example, my car insurance is on ICICI Lombard and every year I used to call up the insurance person in my home and make the payments through him. One day, he asked me why I don’t opt for online payments as this would not only save up my time, but also charge me less. And I actually saw that making a payment through this medium not only made me save time, but also cost me less. Hence, the incentive needs to be there for a person to make a purchase online.

As the TG becomes more time-starved, internet will serve as the appropriate medium for their social interaction, information search, connectivity and shopping. Moreover, online buying will make more sense as the credibility of the online retailer is more established. For instance, if I know about a brand well, I will not need to have a touch and feel factor before buying the product and hence can initiate the buying process on internet. But if I am not sure about how reliable the retailer is, I might opt out of the transaction. So, every online retailer first needs to establish a trust in the mind of the consumer.

How do you see the importance of social media for promoting your brands online?

Social media is very important and with the emergence of sites like Facebook and Twitter, it has become much more important for brand marketers to be present on this medium. A lot of our TG is actually using social media and we saw that as we had a great response with our lead generation exercise for iStore launch.

People are speaking high about mobile being a great medium for brand communication, but still, very less amounts are spent on this medium. What’s your take on this?

The scene in mobile marketing is changing very fast. With mobile phones growing at a rate of 20 million per month, this would be the medium of internet connectivity and would far surpass the PC penetration in the country. When this happens, spends will also increase.

How do you see your marketing objectives aligning with what the digital medium offers two years down the line?

Actually the online behaviours of consumers are changing faster than we marketers and business owners would realise. Especially if you appreciate the fact that India is a demographically young and tech savvy nation, we must understand and be present in the medium. For me, brands like electronics, leisure, books, music and toys would better reap the benefits of the medium

RETAIL RESEARCH

2010-03-15T11:32:00.001-07:00

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RETAIL RESEARCH

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Indianconsumers

2010-03-15T11:23:00.001-07:00

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Indianconsumers

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Basics of brand map

2010-03-15T11:19:00.001-07:00

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Basics of brand map

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Consumer Experience Management in Speciality Retail

2010-03-15T11:16:00.001-07:00

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Consumer Experience Management in Speciality Retail

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Dubai Retail Store Visit

2010-03-15T11:11:00.001-07:00

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Dubai Retail Store Visit

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INDIA from a prespective of an European.....

2010-03-01T10:40:00.000-08:00

Last Sunday , I had gone with my wife and her friend from southern france , to one of the malls in mumbai...It was sunday evening .,......lots and lots of footfalls / traffic @ the fairly well run MALL ........lots of noise , In MALL events @ the GF ..we are having coffee @ Coffee shop ....lots of noise .....but our friend from southern france ...completely enamoured with the people ......so many people ..so much vibrancy .....she comes from a small village in france with 30 people ..30 residents ..can u beat it .,...we have rooms / flats here where 30 people live ...
So the power of India is actually is the endless streams of people ....if we could just channelize the human energy ......

What are retailers really upto ....

2010-02-14T09:35:00.000-08:00

We never said retail is easy ...But this really is the height of Leisure retailing...was shopping / browsing @ Crossword , Kemps corner , Mumbai ....
on 14th Feb , sunday .,..quite a bit of traffic / footfalls ...

Browsed in biography section ....and all over the largish bookstpre....could not find a single book , biography ....about M K Gandhi , Bapuji ....father of our nation .....not asingle book avialable...lots of hannan montana , madonna etc avialbale .........

Brands & Consumer Marketing within Bollywood Movies ............

2010-02-14T08:33:00.000-08:00

I really liked this piece ..which essentially tries to give some perspective of Brands / In movie placement in Bollywood movies ..huge potential ,, unknow territory even for sesaoned marketing heads / professionals .........
Hence I thought this will be a good read ..

SPOT THE AD

Baa gets an INSURANCE POLICY

In-film branding is old hat. Covert advertising has pushed its way into plays, television soaps and online gaming as well

Joeanna Rebello Fernandes & Sharmila Ganesan Ram
TNN

In Koi Mil Gaya, Hrithik Roshan plays up the benefits of Bournvita when he’s offered tea or coffee, and nearparrots the product’s advertising baseline. In another radioactive branding travesty, the cast of Mission Istanbul throw each other cans of Mountain Dew in a choreographed likeness of the commercial. Again, to sweeten an already expensive deal with Pepsico (reportedly worth Rs 5 crore), the film borrows the brand’s slogan ‘Dar ke aage jeet hai’.

The ingress of brands into films has a long history, with stray beginnings as early as the 1970s. But with the birth of brand managers and media planners, cinema is no longer the only unorthodox vector of advertising. TV serials, theatre, blogs, networking sites, mobiles and games are all queuing up for a slice of ad pie.

Sajaay Moolankodan of Go Fish, one of the several intermediary companies that marry brands and films, says that film-makers today don’t mince words—they tell him bluntly that they don’t want a Yaadein. What that unfortunate film has come to represent is product placement that’s force-fitted into the script (a mouth freshener called Paas Paas was the culpable product in this case). The tide has turned (and we’re not just referring to that multiple positioning of Tide detergent in a laundry scene in Chup Chup Ke)—now brands sidle their way into cinema so surreptitiously that they almost appear intrinsic to the story.

However, such clever disguising is only the work of conscientious directors who will not have their films turned into commercials for ICICI Bank (Baghban), Frito Lays (Krrish) or Cadbury’s 5 Star (Jab We Met). Industry sources say that Ashutosh Gowarikar, Raju Hirani and Farhan Akhtar are among those who won’t sell the script for a bar of soap. That doesn’t mean their films are clean of brands. Hirani, for instance,

asked Go Fish to look for a bright, luxury SUV for 3 Idiots. Bright, to be able to stand out against the bleak landscape of Ladakh. Top-end, because the character driving it (exhibitionist Chatur) would have wanted nothing less.

With this brief, Go Fish scoured the market and met Volvo. The model they wanted, XC90, was yet to launch in India (worth a whopping Rs 58 lakh), so two car were actually hauled in from Sweden and provided to Hirani with a driver and mechanic. While there was no known exchange of money, providing the cars free actually reduced a fraction of production outlay. There’s no industry rate card that equates brand presence with cost; it’s an equation mutually settled by the film and product reps. Most brands are only after higher visibility, and the deal they strike with film-makers isn’t hinged to expected sales.

Such covert commercial breaks are visible on the small screen too. Detergent powders and insurance disclaimers that interrupt the flow of soapy emotions are now embedded within the plot. For instance, in Bigg Boss 3, a Vodafone kiosk was installed in the house, and contestants even answered a Sunsilk quiz which was followed by a Sunsilk hairstyle competition. Other products made it to the apartment’s kitchen and bathrooms, ensuring good display.

Two years ago, in an episode from Baa, Bahoo Aur Baby on Star Plus, where the serious health condition of a senior was being discussed, ICICI decided it was the best time to send in their in-house insurance agent. He came in “naturally’’ in one of the scenes to speak about the advantages of getting health insurance, says Sujit Ganguli, senior vice-president and head, marketing, ICICI Prudential. In 2005, Mona Singh of Jassi Jaisi Koi Nahin was shown buying an ICICI health insurance policy herself. “We take a brief to the producers who develop it. The serial writer then weaves the content based on our brief, and we make sure it’s portrayed positively and seamlessly in the script,’’ adds Ganguli.

Even theatre is playing to the corporate gallery. Nirav Parekh’s audience doesn’t expect gravitas and soul-searing truths from his plays. But then this theatre producer makes no bones about the fact that he isn’t staging Brecht or Tendulkar. Parekh is selling brands sewn neatly into scenes. His Hindi plays like Chanakyashastra, Mr & Mrs Karan Johar and Uncle Samjha Karo are dual-purpose fabrications that amuse the audience with plots which also update them about Kotak’s new securities and Kaya’s skin solutions. “I saw the untapped potential of marketing via plays, and decided to launch my own theatre company, Main Course Productions,’’

says Parekh. In his plays, characters intone a brand’s merits on stage, and off it the campaign continues with services and discounts offered to the audience. Parekh narrates a scene from Uncle Samjha Karo, where a character is advised to save her skin at Kaya Skin Clinic. It appears to be advice to the audience too, who emerge from the hall to skintesting machines in the lobby. Clients like Dell, HSBC, ICICI Bank, Axis Bank, Tata Tea and Nalini & Yasmin have all fallen for the plot.

Parekh, whose marketing mantra is scripted by a team of six in-house writers, claims the plays are never originally written with a product in mind. Depending on who he strikes a deal with, the lines are realigned to accommodate that brand. His plays, which travel to NRI clusters abroad, have proved to be a clever way of outstation marketing of products like Western Union Money Transfer and HSBC NRI Services.

Another modern platform for covert merchandising is online games. A popular game, which invites users to upload pictures of themselves and a friend they’d like to slap, was used by a phone company to announce the launch of its new smart phone called Joy. Alok Kejriwal, CEO of games2win.com, which hosts this game, says he receives around four inquiries a week for such in-game advertising. The game is usually the star in these cases, and the brand only latches on, he says.

Although the current ingame advertising market is India is pegged at Rs 20 crore, Vishal Gondal, CEO, Indiagames, believes this might grow into a Rs 100-crore business in the next two years. “With Facebook taking off in India and mobile growth, brands are excited about associating with the medium,’’ says Gondal, whose popular cricket games have won a lot of corporate interest from companies like Nokia and Gillete. “The goal is seamless integration, where the game is the basic element of fun and the brand is non-intrusive,’’ says Gondal. Unlike Yaadein.

HARD SELL Hrithik Roshan delivers the sales pitch for Bournvita in Koi Mil Gaya

Poor Distribution strategy by Market Leader Cadbury ......

2010-02-12T10:23:00.000-08:00

As I was walking GT stores ,,, generally asking for my favourite CDM ...cadbury dairy milk ..I was told that company is not supplying CDM but rather forcefully distributing CDN Silk..new chocolate in line with international thinking ....@ 25 % price premium ...but consumer still want CDM .....
Not right strategy...especially in GT ....

Do these Global brands really understand Indian comnsumers / India ?

2009-11-30T09:51:00.000-08:00

I was in New Delhi aiport , the new renovated one ....with lots of shopping posiblities ..books , chocloates , electronics etc etc ...
I also saw a AMEX-AIRTEL co branded credir card kiosk ..mannned or rather wommaned by a young lady ..ankita ..She was interested in my details to generate lead for selling AMEX cards etc .. so I gave her my details ....
Then I was trying to work on my lap top using her table / desk to rest my lap top ..got into chatting ..
She seemed like a enterprisng young lady ....and I asked her what was the most difficult part of her job ...She mentioned that usually working within the aiport is mnuch better than outside in malls / office complexes etc ...
The key identification role she has to perform is really to be able to identify the lead based on looks ...ie she needs to identify the TG from metros by looking at them ..So I asked her how she does that ...she said from looks , what they are carrying etc etc ..
The moot point which I wanted to point out that ...I saw at least 2-4 people come up to the lady ...ask about the promotion etc showing interest ...however all seemed to be from non metro ..and AMEX was running its buisness in India apparently by focussing on METROS only ....so much for large amercian banks , corporations , brands understanding consumers ...and undertanding India............
Possiblity of actually the non metros being the real consumers of AMEX cards .....

DIGITAL / ON LINE MARKETING ..........

2009-11-19T11:17:00.000-08:00

IAMAI Digital Marketing Roundtable: Not everything that can be counted counts; not all that counts can be counted

Biprorshee Das
afaqs!
Mumbai, November 19, 2009 Text Size –+

The digital revolution is not news anymore. The adage about a shrinking world with technology that changes by the hour is an accepted fact. More so by marketers, who recognise that the digital space provides ample options to reach out to a wider audience.

In a panel discussion titled, 'Common mistakes of digital marketing' at the Seventh Digital Marketing Roundtable organised by Internet & Mobile Association of India (IAMAI) and eBay India in Mumbai, professionals involved in both digital and traditional marketing came together to discuss the challenges in the digital marketing space.

The panel consisted of Manish Vij, co-founder, Quasar Media; Kartik Jain, head, marketing and eChannel, ICICI Lombard; Lloyd Mathias, chief marketing officer, Tata Teleservices and Peshwa Acharya, vice-president and head, marketing and consumer experience, Reliance Retail. The discussion was moderated by Ambareesh Murty, country manager, eBay India.

The session began with Vij making a short presentation on what can be learnt from the common mistakes made in digital marketing.

The first point he raised was that neither the client nor the agency spent enough time working on an account. Using an example, Vij spoke about how a digital agency is roped in a few days before a major initiative by the client; and how the agency too meekly agrees to finish the work in haste.

Vij then talked about the failure of the online and offline agencies to work on common ground, which resulted in low-quality work. He stressed on the need to provide brand custody to digital agencies and mentioned that working with multiple partners was undesired.

"Responsibility becomes high working with a single partner," said Vij. He pointed out that interactivity was being lost in trying to cater to clients' needs in a short span of time.

"We must change the way we are thinking. When we do that, a lot will change," he said.

After Vij put his points forward from an agency's perspective, Jain followed with his presentation from the client side. He focused on the 'Challenges for eBusiness'.

Jain explained how ICICI Lombard's way of tracking cost of acquisition (COA), instead of cost per 1000 impressions (CPM) or cost per lead (CPL) had yielded better results.

He also pointed out that search engine marketing worked better than content advertising.

"If you have one rupee, spend it on search. We found much better results spending on search than content," Jain said.

He said that it was imperative to understand the consumer's 'search' behaviour before advertising. He further remarked that text ads did better than banner advertising in digital marketing.

He also pointed that it was important to be relevant with the times and that communication must be put in the right context.

Jain wrapped up his presentation saying, "Not everything that be counted counts and not everything that counts can be counted. E-marketing is just one aspect of the overall marketing mix. You cannot end your game there."

In the subsequent discussion, Mathias said that brand building was very important and there were a lot of opportunities within digital marketing that facilitated building a brand.

Mathias too emphasised that while the core brand custodian was the creative agency, the digital agency must be involved early in a campaign.

On being asked if marketers tend to get a bit greedy in terms of measurability, Acharya said that the marketer must first question if he understood the digital media well.

"Things are really moving forward at a more rapid pace than we think," said Acharya. He said that a marketer must engage the consumer.

"For a traditional marketer, digital media can give a lot of opportunities to engage the consumer. Engagement though digital media is possibly higher than all other available mediums," he said.

Acharya admitted that being an offline retailer, he understood how an online retailer had much more to offer to the consumer.

On the role of the internet for fast moving consumer goods marketing, Mathias said that he expected a lot of such companies to increase their spends on social media.

"Digital must not be seen just as a medium, but a platform," he said.

The panel agreed on the power of social networking websites and how they facilitated interactivity. "The buzz within the social networking space has increased. One must make sure that the offline brand is connected and adapts to the speed in the digital world," said Mathias.

Jain pointed out the significance of Online Reputation Management (ORM) and how real time tracking and real time action were important.

At this point, Acharya said, "Online, everything is open. That is why traditional marketers are hesitant to go online. Many traditional marketers do not know how to handle ORM."

"The balance of power of owning the brand is moving more and more to the user," agreed Jain.

As the discussion drew to an end, Mathias remarked, "Over time, we have realised that digital consumers are looking for something extraordinary. They want to have fun. It is important to envelope your brand with what the audience wants."

The discussion sparked off interesting reactions from the audience, who asked if too much attention was being paid to measurability.

"Everyone is concentrating on metrics. Creativity is being lost out on," a member of the audience observed.

Vij agreed and said that it was a test being paid attention to and more thought was being put in investing in creative ideas.

CONSUMER MARKETING RESEARCH FUNDAMENTALS ..............

2009-11-15T12:34:00.000-08:00

Definition of Market Research & its Use & Limitations in Marketing Decision

Market research is the systematic and objective identification, collection analysis, dissemination, and use of information for the purpose of improving decision making related to identification and solution of problems (and opportunities) in marketingUses

Do research when you need it for taking some ‘action’

Market research is a critical input to support hypotheses, such as:

on positioning routes

on quantifying segments

on identifying key purchase drivers, etc

Limitations

Market research does not necessarily ensure success

It can only : reduce risk, not eliminate it

aid management judgment, not be a substitute for it

KEY MR tenets ........

Qualitative vs Quantitative

Syndicated vs Customised

Strategic vs Marketing Mix Research

Consumer Insights for Retail Store Design , and Retail business building .... : How do we understand the Indian consumer better .....

2009-11-14T11:59:00.000-08:00

I thought , I would share some of my experiential understanding of the Indian Consumer ...being fairly brand and category / vertical agnostic .... from my 2 decades of experience of driving various businesses and brands .....
Largely from setting up a Retail Store , Retail Store design ...point of view ..
Climatic Inputs
Temperature variations across the country: To ensure that direct sunlight is avoided in the stores in high temperature cities such as Delhi and Ahmedabad.

Monsoons in Mumbai v/s in Delhi are different. Therefore, adequate arrangement for avoiding water stagnation, through drainage systems in the car park. Large footfalls will lead to dusty floors, and wet floors during monsoons. High humidity in coastal belt and rather dry climate in hinterland.

Cultural Inputs

Some auspicious and festive colours in the Indian culture are red and its hues, such as orange, pink, magenta, to name a few. These are the most prominent colours during weddings and festivals.
Black is an inauspicious colour that is strictly avoided.
Diwali is the most important Hindu festival that falls due in October / November, and this is the time when home renovations and consumer durables sales are at the peak.
India also celebrates region-specific festivals. Dussehra (Oct) in Karnataka, Lohri in Punjab & other parts of North India (13th Jan), Navratri (Sept) in Gujarat, Durga Pooja (Sept) in West Bengal are some of the examples. Therefore, a lot of cultural variations.
There are certain inauspicious periods during which people refrain from making any new purchases or setting out on a new venture. The period of 'Shraadh' which is a 10-day period just before the festival of Diwali, and the 'Aadi-Maasa' phase in August that is considered inauspicious in the southern state of Karnataka.
Indians are traditional in general. However, they widely embrace technology today, especially if the end-benefits are communicated well.
Young India is extremely technology savvy ...possibly higher than the caucasian counterparts .....
People don't read, they mostly prefer to be guided. India has very little of the self-service concept.
Indians are fairly family-driven, and so are their purchase decisions.
Certain products, such as Home Theatres, high-end mobile phones, laptops, high definition TV's, and personal entertainment devices have a snob-value attached to them.
People aspire to own the best. Therefore, products with a demonstrable effect always attract the intender first.
Cultural elements should be used to make the store look inviting for everyone.
In the IT and Telecom categories, decisions are more personalized and information shared amongst friends or colleagues more than family.
Modern or urban India often uses 'Hinglish' which is Hindi written in English typo
Local language is important besides English.
Indians look up to western world in a aspirational way. Eg: going aboard is a big thing
Indians are money minded and want the best bargain.
Indians believe in saving but the younger generation easily spends on lifestyle. More spendthrift
Indian youth looks upto successful businessmen as their icons.
Cricket is the biggest sport , as good as a religion
Main source of entertainment is watching movies
Gold is the most bought metal
Indians are largely veg . intensity may vary across regions
Superior English capabilities
Information Technology sector continues to grow
Highly trained and experienced engineers, scientists, technical personnel and managers
In India, the interaction with neighbors is very informal. The relations with the neighbors are just like family members who can come and go anytime
In India, typically Sunday is the only holiday. On weekdays, people are busy at work and weekends are meant to enjoy, take care of household stuff, socializing etc.
Indians eat more spicy food, and the cuisines, like the other cultural aspects, are varied as well.
In india we use the Metric system for measurement.
The electricity voltage in India is 220-240 volts.
North
Flashy, Aggressive, Largely oriented towards Govt. services
West
Docile, cultural, Business minded
South
High literacy, Very different regional language, Very proud of their culture and language, rational buyers
East
The poorer and less affluent region of india, less infrastructure, calcutta clearly is arty , hi on culture , possibly value conscious ....
We must ensure that we DESIGN RETAIL STORES now keeping in mind INDIAN CONSUMERS , with INDIAN INSIGHTS ..rather than cut and paste WESTERN / EURPEAN / AMERICAN designs / concepts ........
Happy Reading and hope retail professionals and designers can create great INDIA SPECIFIC RETAIL STORE DESIGNS ........which drive buisness , sales , consumer experience and thus sustianable profitbality and growth ......
PESHWA ACHARYA

BALSARA ....FMCG company ...........

2009-11-10T11:16:00.000-08:00

Balsara Home Products Ltd.

Rustomjee Balsara started the company in the year 1925. At that time he brought smiles to the Indian consumers by importing quality bathroom and lighting fixtures and make them available to thousands of Indian at affordable prices.

After Rustomjee died at an early age the company was taken over by Mr. Aspi Balsara and under his leadership the group transformed into a professionally managed aggressive national FMCG company.

Balsara group manufactures and markets its products in India and 48 countries across the globe. The group has an annual turnover of Rs. 2 billion and a rapidly growing international business of Indian Rs. 350 Mn.

The group operates in two major product categories :-
Oral Care :-
Tooth paste
Tooth powder
Tooth brush
Household Care :-
Mosquito Repellents
Air Fresheners
Scouring Powder & Bar
Toilet Cleaners

In each of the categories Balsara has dominant and pioneering brands, which defines the category.

Oral Care

Balsara redefined the Oral Care category by launching ‘Promise Toothpaste’ in the year 1978. The brand with its unique positioning of clove became so successful that by 1984 the brand gained the no.2 status in the category after Colgate with a market share of 13%. The brand has been relaunched recently in 2004 and shall create new waves again in the premium segment of the Oral Care market.

In 1988 Balsara launched a price fighter brand ‘Babool’. The brand provided the common Indian good quality toothpaste at the most affordable price. The brand was relaunched in 2002 with a completely new positioning. Post relaunch the brand has grown by over 30% in one year. It dominates the economy segment of the Oral Care market with a market share of 5.4% which higher than that of ‘Anchor’ & ‘Colgate Cibaca’.

Balsara also manages a niche herbal brand called ‘Meswak’ toothpaste. Meswak enjoys very high loyalty among the consumers with an ‘Ayurvedic / Natural’ orientation.

Household Care

Balsara dominates the household care category with generic and dominant brands like ‘Odonil’ in Air Fresheners, which has over 90% market share in the category and ‘Odomos’ in Mosquito Repellents, which once again has over 90% market share in the personal application segment. On both the brands, new product formats & as well as attractive packaging has been introduced.

‘New Advanced Odomos Cream’ is a perfumed white cream, which is not only completely safe but also protects from mosquitoes for 12hours. ‘Odomos Cream’ has also been extended to new product forms such as ‘Lotion’ and ‘Gels’, which are the modern avatar of the Cream.

‘Odonil’ defines the air freshener category. In the block format - it is available in four perfumed variants that are Lavender, Sandal, Lemon, Rose and Jasmine. Further, the brand Odonil has also been extended in the form of ‘Aerosols’, ‘Gels’ & ‘Paper Pads’ many of which are first of their kinds.

The ‘Sanifresh’ brand was the first toilet cleaner in the country. Today, Sanifresh Liquid is the No.2 brand in the toilet cleaner category.

‘Odopic’ which contains the power of lemon is the largest scouring powder in Maharashtra. It essentially a West dominant brand.

BRAND ONION RING

2009-11-10T11:05:00.000-08:00

If we can define all our brands and its quintessence around the ONION RING ....
Then we really keep the BRAND ALIVE .....
Onion Ring Analysis of brand’s extension areas
Areas which would
seriously weaken or
confuse consumer
understanding of the brand
NO GO AREAS

INNER CORE
Functional/ Emotional
attributes central to
brand

EXTENSION AREAS / OUTER CORE
Legitimate areas for
flanker products/
services/target segments

Private labels likely to dominate shelf space...........................................................

2007-12-19T12:50:00.001-08:00

As organised retail gains strength, private labels are likely to dominate shelf space. This will also change the manufacturer-retailer dynamics and put retailers in a commanding position vis-à-vis manufacturers and brands. It will also see a lot of retail chains entering contract manufacturing.
Almost all large global retailers like Tesco, Sainsbury and Wal-Mart have their own private labels as they give better margins than selling other manufacturers’ products. Also, retailers price their brands below competitors. And as the stores are retailer-owned, they can give their own brands ample display thus saving on marketing and other intermediary costs.
According to an AC Nielsen’s global study, The Power of Private Label 2005: A Review of Growth Trends, private label sales accounted for 17% of value sales, chalking up a 5% annual growth rate fuelled by emerging market velocity. Europe is the worldwide private label leader, boasting an aggregate value sales share of 23%, with Switzerland (45%) and Germany (30%) leading the way. North America, second overall in regional private label sales, registered a 16% share for a 7% year-to-year gain.
In terms of growth rates, emerging markets emerged as the fastest-growing region, where private label sales expanded by 11%; it was also the only region to post double-digit growth. Underlying factors fueling private label growth in this sector are the increasing strength of modern trade and penetration into new categories.
In India’s case, private labels are no new phenomenon. Industry experts while chains like Big Bazaar, Food Bazaar and Vishal Mega Mart have already had a successful stint with private labels, other players with ambitions in the retail sector (Dabur and Bharti being prominent ones) are likely to join the bandwagon in the next 6-12 months.

Procter & Gamble : Understanding the consumer

2007-12-19T12:41:00.000-08:00

IN THE corner of a meeting room next to the bosses' office at the headquarters of Procter & Gamble (P&G), a large sculpture of a woman in a hat watches over proceedings with a serene smile. “She is at the centre of all our decisions,” says Richard Antoine, head of human resources and confidant of Alan Lafley, the company's chief executive.
Founded in 1837 by William Procter, a candlemaker, and James Gamble, who made soap, P&G is the world's biggest consumer-goods company. It sold $76.5 billion-worth of them in the year to June 30th. And it probably knows more about consumer marketing than any other firm on the planet. Interestingly, many people at P&G do not use the word “consumer”. Nor might they ask if a “customer” or “shopper” would buy a putative new product. They are more likely to ask: “Would ‘she’ buy it?”
Women have long accounted for four-fifths of P&G's customers. Over the years, the way P&G sells to them has changed dramatically. In the 1930s it sponsored radio shows—the original soap operas—to encourage women (usually housewives) to buy its detergent. Now radio has been surpassed by television and the internet as a means of promotion; and “she” has become ever more independent, demanding and fickle. The variety of products on offer has exploded, not just from makers of branded goods, like P&G, but also from the big supermarket chains that now dominate the retail end of the business and sell their own labels alongside the big brands.
“She is in control now,” says Mr Antoine. The consumer-goods giant is spending lots to find out what she actually wants. Staff from its Consumer and Market Knowledge division tour the world and spend entire days with women to observe how they shop, clean, eat, apply their make-up or put nappies on their babies. They try to understand how a woman reacts in the first three to seven seconds after she sees an item in a shop (the “First Moment of Truth”, in P&G-speak) and when she tries it at home (the “Second Moment of Truth”).
At first P&G struggled in the new world of empowered she-consumers. In 2000, after a big drop in profits, its share price took a tumble (see chart below). Mr Lafley, a company veteran, took over that year (P&G is a great believer in promoting from within). The company he leads has such a reputation for insularity that employees are known as “proctoids”, but Mr Lafley has been trying to open up more to the outside world and to streamline P&G's notorious bureaucracy. He also needed a clear strategy for the company's growth. That, he concluded, lay in investing more in the power of brands: the strongest brands, he reasoned, would be sought out by consumers everywhere.

Mr Lafley began with the acquisition of Clairol, a hair-dye company, in November 2001. Two years later he paid $6.9 billion for Wella, a family-owned German beauty firm. But the biggest deal, in January 2005, was the $57 billion purchase of a company known for serving men rather than women: Gillette, which controls three-quarters of the world market for razors and shaving foam.
Has the huge Gillette purchase paid off? Mr Lafley admits that he took a big risk. Four out of five mergers don't work out, he says, and big deals fail more often than small ones. But he has a list of five reasons why mergers fail. On all counts he says P&G is now doing fine.
Strategy is first on Mr Lafley's list. Mergers of companies that are either not at all complementary or pursue completely different strategies tend to fail. But both P&G and Gillette are strong companies, and their brands and international coverage match each other well. P&G is good at innovation, understands consumers and knows how to nurture brands. Gillette's strengths are technology and the ability to roll out new products within a few weeks. And of course there is the chance to learn about marketing to the other sex. This year Gillette launched Pure Divine, a body wash for women. P&G is working harder to sell High Endurance, which it claims is America's first body wash for men. New Gillette products for women and new P&G products for men are on the way.
Next comes company culture. Though they had their similarities, these two old American companies also had important differences in style. Management at P&G is consensus-driven whereas Gillette's was hierarchical. To ease unification Mr Lafley set up a special team to work out how to take the best from the two cultures. The chief of P&G North America is a Gillette man. Mr Lafley managed to keep around 95% of Gillette staff who were asked to stay. Still, many top Gillette people chose to go, their decision eased by the large pay-offs specified in their employment contracts should the firm be taken over.
Bosses are third. Gillette and P&G made such an obvious strategic fit that their chiefs had already talked a couple of times in the 1990s. In the end James Kilts, the head of Gillette, made the first move because he wanted to avoid a takeover by Colgate-Palmolive, run by Reuben Mark, his arch-rival. Mr Kilts stayed on for a year after the merger to ease the transition. He and Mr Lafley seemed to get along well.
Fourth, mergers often fail to produce the cost savings that companies promise. P&G and Gillette said that their union would yield efficiencies in manufacturing, marketing and distribution of some $1.2 billion annually by the end of the third fiscal year after the merger (ie, June 2008).
Fifth, what about revenues? Clayt Daley, P&G's chief financial officer, admits that a merger can truly be called a success only when the new entity hits its revenue targets too. P&G and Gillette promised about $750m annually by the end of the third year. Mr Daley says the merged company is on track to meet both cost and revenue targets, but is not there yet.
On August 3rd the company said that net sales were 8% higher in the fourth quarter (April to June) than a year before, and rose by 12% in the whole year. Organic growth—ie, stripping out the effects of acquisitions—was only 5% in 2006-07, compared with 8-9% in the couple of years before the Gillette deal. The pre-merger figure was atypical, insists Mr Daley. The company's long-term goal is organic growth of 4-6% a year.

Extra, extra large
Though Mr Lafley says he is meeting his chosen criteria, investors have not been grateful: in the past year P&G shares have underperformed the S&P 500 stockmarket index, although the gap has narrowed in recent weeks. This may explain P&G's decision, also revealed on August 3rd, to boost its share-repurchase programme to $24 billion-30 billion, or 12-15% of its capitalisation, at a rate of $8 billion-10 billion a year for the next three years.
Analysts, though, generally say favourable things about Mr Lafley's spending spree. William Schmitz, who follows consumer-goods industries for Deutsche Bank, is one who thinks that size can become an inhibitor of growth. “The company raised the bar very high by needing to increase sales by some $6 billion annually just to meet its targets for growth,” argues Mr Schmitz, who thinks that without its big mergers P&G would probably grow faster now. But even Mr Schmitz has a “buy” recommendation on the shares.
Scale looks more likely to be a help than a hindrance in today's consumer-goods industry. One reason is that it saves costs in procuring commodities, the prices of which have risen sharply in recent years, pushing up the cost of the foodstuffs, packaging, chemicals and energy that go into the industry's products. In the old days such price increases could be passed on to consumers, but today P&G and its peers are under pressure from gigantic retailers to keep prices low. The biggest of all, America's Wal-Mart, alone gobbles up one-fifth of P&G sales. Several hundred proctoids are stationed in Bentonville, Wal-Mart's home town, and the relationship has deepened since the Gillette takeover. Hence a second advantage of scale: as P&G gets bigger, it is becoming less dispensable for Wal-Mart.
Retailers have increased their power by developing their own brands, or private labels. In the markets where this has gone furthest, such as Britain, retailers' own brands account for 40% of grocery sales. In many countries the growth of private labels is spilling over from food to household goods and personal-care products. According to a recent report by the Boston Consulting Group (BCG), retailers' own brands are also expanding to online sales and convenience stores. And the most sophisticated own-brand producers have begun to “out-innovate” makers of branded consumer goods, says BCG, by using the insights into consumer behaviour gained through their loyalty programmes and research. By evaluating sales data and test-driving innovations in their shops they are able to adapt their innovations more quickly to consumers' needs than makers of branded goods can.
Those marketing techniques are getting more and more sophisticated. In May Wal-Mart and P&G started the rollout of Prism, a system of infrared sensors that counts the number of times shoppers are exposed to product displays, banners and televisions, in order to measure the effectiveness of in-store marketing. Typically obsessive, P&G also sends out staff to trail round after other customers' trolleys, double-checking the sensor system. “We depend on them as much as they depend on us,” explains Jeff Weedman, of P&G's external-business development team.
For retailers and makers of consumer goods alike, the complexity and cost of advertising and marketing have increased. As the world's biggest advertiser, P&G has tremendous clout in adland. It spent $6.8 billion in 2005-06 and at least 10% more in 2006-07 (Advertising Week, a trade publication, reckons $7.5 billion). It has often been a pioneer of new marketing techniques. This year Publicis, a French advertising firm, and Dassault Systèmes, a French software company, turned to P&G for advice before launching a digital-marketing joint venture in June. The scheme allows consumer-goods companies to create and adapt new products online with the input of consumers.
Mr Lafley's quest for big, valuable brands means he is prepared to sell tired ones. He got rid of Sunny Delight, an American soft-drink range, and Punica, a German juice brand, as well as Jif (peanut butter), Crisco (pastry shortening), Pert Plus (shampoo), Sure (deodorant) and P&G's towel business in South Korea. He also shed five detergents: BIZ, Milton, Sanso, Rei and Oxydol. Soon he may take a critical look at underperformers in the Gillette stable too. Growth at Duracell, its battery business, and Braun, which makes electrical appliances, has been disappointing—but “purposefully disappointing”, claims Mr Lafley, because of a focus on Gillette's razors and blades.
These disposals have made P&G more reliant on a smaller number of leading brands. Today it has 23 with annual sales of more than $1 billion. The biggest is Pampers nappies, which collected more than $7 billion last year. Gain, a detergent, is the latest to cross the $1 billion mark. It has a strong scent and is aimed mainly at Hispanics and African-Americans, who according to P&G research attach more importance to a good smell of cleanliness.
The other effect of selling off underperformers is a sharper focus on beauty and health products, which have higher margins and are less under threat from retailers' own labels. The sales helped to finance the acquisitions of Wella and Clairol, which made P&G one of the world's biggest beauty companies. Beauty accounts for $21 billion in sales, more than one-quarter of the group's global total. Seven of its beauty brands—Olay (skin care), Pantene and Head & Shoulders (shampoo), Wella (hair-care), Always (feminine hygiene), Mach 3 (shaving blades and razors) and Gillette (shaving blades, razors, gels, creams and deodorants)—all bring in sales of more than $1 billion a year. As a reward for her success as boss of the beauty business, Susan Arnold was made head of all global business-units in May: she runs beauty and household goods as well as health and well-being.
Innovation is the second area where Mr Lafley has shaken things up. Inventing new products and brands is hard in an industry that, like many of its customers, is well into middle age. According to a study by Deloitte, a consulting firm, the number of new consumer goods and product extensions increased by 80% between 2002 and 2005, but less than one-quarter of them had sales of $7m or more in the year after they were launched.
Until Mr Lafley took over, P&G made all its inventions in-house and the company's expenses for research and development were higher than those of rivals. Proctoids used to say that the phrase “not invented here” was, well, invented here. In 2001 Mr Lafley started the “Connect and Develop” programme to open up his company's innovation model. In addition to 9,000 researchers in 11 research centres around the world, P&G has 75 technology scouts who travel the globe in search of new ideas that P&G might take up and develop. He also pushed for more collaboration between the various bits of the P&G empire. For instance, when developing Crest Whitestrips, a tooth-whitener, P&G drew on the knowledge of people in the toothpaste business and those in R&D working on a novel film technology, as well as experts in bleach from fabric and home care.
After five years of “open innovation” half of the company's inventions come from outside. One-third of new patents are issued to individuals and small companies, says Nabil Sakkab, head of corporate R&D; 30 years ago most were issued to big companies. So it makes a lot of sense to reach out. The company's R&D has become more productive, partly as a result of this. P&G says that its sales per R&D employee have roughly doubled since 2000.
Mr Lafley has also developed joint ventures, such as the one set up in 2002 with Clorox, a maker of household products, to produce food-storage wraps. In addition to the use of its cling-film technology, P&G brought 20 full-time employees to the enterprise, while Clorox contributed its bags, containers and wraps business. In May, Inverness Medical Innovations and P&G formed a 50-50 joint venture for consumer diagnostics. The new company, Swiss Precision Diagnostics, based in Geneva, is the largest pregnancy-test business in the world. Its brands include Clearblue and Accu-Clear.
To continue to build up its superbrands P&G needs to focus more on emerging economies, where the scope for growth in sales of basic consumer goods is far greater than in rich countries. Already more than 40% of P&G's growth comes from emerging markets, which contribute more than one-quarter of its sales. That is a good portion, but Unilever and others sell up to half of their wares in developing countries. Gillette could be useful. It is strong in India, where P&G has long been outgunned by Unilever. China, Russia and Ukraine are already big markets with sales of some $3 billion annually in each country.
P&G has learned that it is a mistake to take a product designed for a developed market into a developing country without proper consideration of the needs and means of women without much to spend. Naturella, for instance, is a pantyliner first sold in Mexico that has become popular in Russia, Poland and other east European countries with women on similar average incomes. Downy Single Rinse, a fabric softener, was designed for parts of the world where water is scarce and rinsing clothes several times is costly or impossible. A laundry detergent called Vizir has become Poland's number one.
Still lagging its rivals, P&G forecasts that by 2010 emerging economies will account for 30% of the group's sales. Continuing to tune its products to the budgets and aspirations of local shoppers will surely be of the essence. And knowing what consumers want—and creating new wants—is still one of the things P&G does best. In the past it used this skill mainly for women in Western countries with relatively high incomes. But in future years P&G will target women, rich and poor, everywhere—as well as the other half of humanity.

HYPERMARKET ... case study & fundas on carrefour

2007-12-19T12:26:00.000-08:00

Under one roof, hypermarkets offer a large choice of food and non-food products at
discount prices.
Part of a shopping mall or retail park, hypermarkets attract a great deal
of traffic.
In 2004, Carrefour decided to capitalise on the attraction of its hypermarkets:
• by strengthening their position and price image;
• by adjusting the business model to meet customer expectations;
• by making shopping easier so that it can be a pleasure: simplification of messages,
introduction of shorter paths around the store, adaptation of the product mix
to changing customer requirements;
• by making a personal connection with each customer to serve him/her better.
Hypermarkets
47
With the major price reductions implemented in
January 2004, the Carrefour hypermarkets showed their
responsiveness and their strength over the competition.
Being the leader
on prices
48
The new pricing position
The essence of a hypermarket is to offer a very large
range of products at discount prices. In macro-economic
periods marked by low consumer confidence,
the hypermarkets have seized the occasion to
strengthen their price image.
This was particularly the case in France in 2004. Thus,
the mass consumer product panel of November 2004
placed 125 French Carrefour hypermarkets amongst
the 179 existing price leaders in their customer catchment
areas. In most catchment areas and for equivalent
products, the Carrefour hypermarkets were less
expensive than their competitors. This figure should
be compared with the 30% of stores that were first
or second in their catchment areas at the beginning
of the year.
This also applies to the hypermarkets in Belgium, the
price position and image of which have considerably
improved.
A new pricing system
The price offensive is accompanied by a new system
of assisted pricing.
The electronic tagging system makes it possible to
change prices remotely and very quickly. It also eases
stock management with very rapid indication, in front
of the shelves, of the exact stock level of merchandise.
This is a tactical tool, making it possible to respond
to local competition with great speed and flexibility.
This is carried out site by site, by monitoring the
competition in the region and within the customer
catchment area.
This tool has been deployed in a number of countries
and the tests have proven very conclusive. It will be
progressively extended to all stores.
HHyyppeerrmmaarrckheétss
49
The expansion of the hypermarkets meets customer demand for
convenience, especially through the improvement in the accessibility
of the stores. They are carefully located to be as close as possible
to the consumers and their size is adjusted to their expectations.
An organic growth
to respond to the need for shopping convenience
A strengthened price image
After a good adjustment of the price position, attention
must be focused on the price image in order
to make gains in market share. Here are a few
examples:
Price image leader in Taiwan
The hypermarkets took advantage of their leading
position by opening 3 new stores, one of which is
located in the centre of Taipei (5 new stores planned
for 2005). The modernisation of the stores is supported
by a major expansion of fresh produce. Thanks
to the launch of the “No. 1” brand and despite the hard
discount competition, Carrefour remains the leader in
price image.
Upward spiral in Spain
In a very competitive environment, the Spanish
hypermarkets have been engaged in an intense price
battle for two years. This investment is now showing
its fruits.
In 2004, the Carrefour hypermarkets once more
improved their price image and increased their market
share. More generally the Group has consolidated
its leading position as an international retailer in the
country. A similar upward spiral has been started
with the suppliers. This can be seen in the success
of large-scale, innovative operations, as exemplified
by the “Codico Magico” interactive game, broadcast
on television. The Group and, more particularly,
its hypermarkets are thus well-placed to continue
their growth in the Spanish market, one of the most
dynamic in Europe.
50
Asia: a new store model for the area
The particularly sustained expansion in Asia benefits
from the expertise and experience of the Group
with its presence in 32 countries with various store
formats. Its decentralised nature and flexibility are
particularly beneficial.
In particular, a new store model has been devised
to respond to the special characteristics of the local
markets. With a sales floor area of 3,500 to 6,000 sq.m,
these small hypermarkets will enable the Group to
establish itself quickly in the country. Furthermore,
their limited dimensions make it easier to obtain planning
permission where this might not be granted for
larger stores.
In addition, their smaller size enables these stores to
play their part in the local and social life of mediumsized
towns.
Customized hypermarkets in Latin
America
Carrefour adapts its hypermarkets to fit the country.
Thus, to respond to the requirements of the Latin
American population, they are divided into three
living standard categories. The differences are in the
number of employees on duty in the store, the number
of different mass consumption products offered for
sale and the nature of the non-food product mix.
Associated with the very aggressive offensive on lowest
prices and retailer brands, this approach has led to
a steady improvement in the price image amongst the
various populations. This is the case in Colombia, where
Carrefour has the best price image. In Argentina,
the hypermarkets hold second position.
HHyyppeerrmmaarrckheétss
51
In line with its philosophy, Carrefour
offers a wide range, giving the
customer a maximum freedom
of choice.
Three major product categories are
listed in the stores:
• the national brands;
• the retailer brands, “the best quality/
price ratio”, include the banner
brands, the Carrefour International
Products, the local products
(“Reflets de France”, “Terra d’Italia”,
“Nostra Terra” in Spain, etc.) and
the Carrefour Quality Lines;
• finally, the lowest price products
with the “No. 1” brand, at prices
near or below those of the hard
discounters.
Freedom of choice for the customer
Modernisation and enlargement
of the hypermarkets in France
In 2004, a franchised hypermarket of 7,700 sq.m was
taken on and eleven stores were enlarged, making
a total additional sales area of 41,000 sq.m. These
enlargements are very profitable and make it possible
to:
• markedly increase shopping convenience for the
customers, giving them more space and more accessible
display shelves;
• offer a wider product range and thus express the
entirety of Carrefour's habitual food and non-food
product mix.
This renewal is accompanied by a modernisation plan
for all the stores, including those that are not enlarged.
With plans for an additional 60,000 sq.m, 2005 will
see a return to expansion.
Choice, the diversity
of the product mix
52
Creating special points of attraction for optimum shopping
pleasure. The Carrefour hypermarkets stand out not only
for their prices and the quality of their product mix but
also for its variety. This has been strengthened and special
attractions have been created for the non-food products.
Several areas dedicated to non-food
products were created in France during
2004. These include the new “Techno”
concept for new technologies, sound
and vision. The areas set aside in the
hypermarkets have been redefined with
a more theatrical presentation of the
products. These special areas are now
runned by specialised sales staff, trained
for the purpose. Information panels have
also been installed at the entries to these
areas in order to improve their visibility
and offer customers a better reception.
Another example of development can
be seen in the textiles area: modernisation
of the areas concerned and restructuring
of the collections, the “Tex” own brand
in particular.
The household equipment (crockery,
small furniture, decorative items, etc.)
and general equipment (bin bags,
bulbs, batteries, ink cartridges, etc.) also
represent solid product lines and therefore
benefit from a similar approach.
The new concepts in non-food
A clear product mix
To persuade customers to visit the hypermarkets more
often, they must set themselves apart from their competitors,
not only in price, quality and adaptation to
local context but also in their product mix. To be visible
and useful, this differentiation requires a richer
and more clearly visible product mix.
Varied product ranges
The hypermarkets now offer the best price on the
20% of mass consumption products that represent
80% of sales. Furthermore, they give access to a very
significant additional product mix. In 2004, this richness
was enhanced with a rebalancing of food against
non-food which is intended to continue in 2005.
Fresh produce: our core business
A major factor in differentiation and customer loyalty,
the hypermarkets are paying particular attention to
fresh produce: cakes and pastries, meats, cheeses, etc.
To keep the teams ahead and maintain their professionalism,
a major training programme is to be rolled
out in 2005. This will affect all employees concerned,
from members of the executive committees to sales
department managers. Ten hypermarkets have been
selected as training stores for this purpose.
Points of attraction
for non-food products
In the non-food area, the product mix is
adjusted as a function of many criteria:
• the customer requirements and macro-economic
conditions in the various countries in which the
Group has a presence;
• the importance of local competition from specialists:
the hypermarkets adapt the effort invested and
HHyyppeerrmmaarrckheétss
53
An association of two collections,
one permanent and the other seasonal,
with design and purchasing in Spain
Textiles
Culture is an attraction and represents a major
line of differentiation for the hypermarkets
in mature markets by comparison with hard
discounters and other competitors. The potential
for development in this area is enormous. Already,
Carrefour is positioning itself as the leading
bookshop in France and, as such, participating
in literary life, in particular with its award of
the Young Authors’ Prize (3rd edition in 2004).
At the end of 2004, putting DVDs on sale for one
euro met with a great success. In 2005, the mix
of books, comics, mangas, DVDs, CDs and other
cultural products will be further improved, giving
a very wide choice in line with current events.
Carrefour, the leading
bookshop in France
aggressivity of their pricing to the reality of local
specialist competition. Thus, in France, Carrefour
offer a greater range of permanent textile products
than seasonal products. The Spanish model, on the
other hand, offers a more seasonal textile range;
• the size of the stores and the overall product range.
In France, Carrefour has chosen to emphasise
certain non-food product categories:
• the culture is going through major changes with
a structurally regressive disc market. Carrefour
has anticipated this fall and reduced the space
in its hypermarkets given over to discs but increased
the space allocated to books;
• technology sales that were compartmented into
telephony, computers, audio and photography have
now been integrated in the “Techno” concept. This
greatly simplifies the access to and coherence of technology.
The result is clearer and more precise advice;
• textiles combine the strength of the permanent
“Tex” collection with the progressive implementation
of the Spanish collections.
Customer loyalty
for better customer satisfaction
Numerous advantages
for the customer
The success of customer loyalty programmes is
connected with the advantages offered to customers.
In France, the hypermarket loyalty card operates
in a different way from those of competitors.
Usable in all hypermarkets under the banner, it
enables the bearer to obtain his/her personal reductions
on 25 products of their choice and obtain a
5% discount on all Carrefour brand products. Each
month, card bearers receive a cheque (8.60 euro
on average) and benefit from specific operations.
In addition, Carrefour offers loyalty reductions on
400 products every month. The return rate of the
cheques reaches 85%, a high score that demonstrates
the effectiveness of the programme.
Towards targeted marketing
Whatever the country concerned, the strategic advantage
of the loyalty card is that it permits a steady transition
from mass marketing to targeted marketing.
Thanks to the information gathered on the customers,
it becomes possible to offer customised packages
in partnership with the suppliers. Shopping vouchers
can also be offered to non-customers to attract them
to the stores.
Carrefour Quality Lines
in 18 countries, or how
to strengthen loyalty to the banner
On 31 December 2004, Carrefour had 616 product
line contracts with about half of them outside France.
54
To satisfy the diverse expectations of customers,
the Carrefour hypermarkets are deploying customer
loyalty programmes. Their success can be seen
in the sustained and strengthened links with them.
During the year, 18 of the 32 countries where the
Group has a presence signed contracts of this type.
Carrefour also plays a role in the emergence of new
agricultural or fishing practices that are less intensive
and more respectful of the environment, including
in developing countries. In this way, it participates in
the activities of more than 40,000 farmers, rearers
and fishermen.
Amongst other things, 2004 was marked by the launch
of the “Pêche Responsable” [Responsible Fishing] logo
for the Iceland cod lines – submitted to intensive fishing
techniques, the cod is now threatened with extinction.
As an example of synergy between countries,
a line for young beef stock has been set up with
French rearers to supply the Italian market.
Also worthy of note, the development
of relations with the Chinese producers
on the local and export market
for certain products, such as the
exportation of a Chinese grapefruit
to France.
HHyyppeerrmmaarrckheétss
55
Country Hypermarket Number of
transactions
in 2004
China Qingdao - Hong Kong Road 8,275,545
Poland Warszawa Wilenska 7,387,541
Czech Republic Prague Novy Smichov 7,120,224
Other European countries Dubai 6,388,547
Romania Orchidelor 5,499,222
Turkey Istanbul-Içerenköy 4,422,206
France Lyon La Part Dieu 4,272,504
Slovakia Polus 4,070,855
Tunisia Tunis 3,973,611
Korea Seoul - Worldcup Mall 3,901,633
Indonesia Lebak Bulus 3,541,257
Italy Grugliasco 3,403,300
Spain Aluche 3,318,801
Singapore Suntec 3,282,887
Transaction records on 31 December 2004
Leading hypermarkets in each country.
CARREFOUR
HYPERMARKETS
Openings in 2004
2004 sales by country
Sales after tax Openings Total
under banners 2004 2004 Hypermarkets
EUROPE
France 23,394.3 216
Spain/Portugal 8,794.9 2 133
Italy 2,788.3 1 39
Belgium 2,475.8 56
Greece 722.5 1 16
Poland 583.4 2 17
Switzerland 641.9 11
Turkey 601.7 11
Czech Republic/Slovakia 460.4 1 14
EUROPE TOTAL 7 513
LATIN AMERICA
Brazil 2,661.2 2 85
Argentina 608.2 28
Mexico 578.1 2 29
Colombia 455.7 4 15
LATIN AMERICA TOTAL 8 157
ASIA
China 1,572.5 15 56
Taiwan 1,174.1 3 34
Korea 1,258.2 27
Thailand 446.6 1 20
Indonesia 419.3 5 15
Malaysia 204.5 1 8
Japan 342.3 1 8
Singapore 90 2
ASIA TOTAL 26 170
FRANCHISED PARTNER COUNTRIES
United Arab Emirates 8
Saudi Arabia 1 1
Oman 1
Qatar 1
Egypt 2
Tunisia 1
Romania 2 4
DOM TOM 9
Dominican Republic 1
PARTNER COUNTRIES TOTAL 3 28
GROUP TOTAL 44 868
The development of loyalty
programmes is backed up by
a new geomarketing approach.
As a function of the specific
characteristics of the customers
in each catchment area
(living standard, preferences,
behaviour, etc.), the product
mixes in the stores could be
adapted to best meet their
requirements.
This approach complements
direct contact with customers
in round tables organised
by the stores themselves:
these contacts remain
indispensable to validate
with them all those decisions
that affect them directly.
Geomarketing
and round tables
Nearly 2 million transactions per hypermarket
per year on average around the world.
Country Hypermarket Number of
transactions
in 2004
Brazil Interlagos 3,086,527
Thailand Ratchadapisek 2,754,475
Malaysia KL - Mid-Valley 2,693,459
Portugal Oeiras 2,674,468
Taiwan Taichung - Ta Tun 2,255,870
Colombia Tienda Bogota Calle 80 2,209,045
Japan Kansai - Mino 2,201,067
Argentina San Lorenzo 2,083,799
Belgium Auderghem 2,080,860
DOM TOM Baie Mahault 2,073,614
Mexico Polanco 2,031,467
Greece Makedonia 1,974,411
Dominican Republic Santo Domingo 1,951,295
Switzerland Dietlikon 1,786,472
56
2,376
stores
88
stores
opened
in 2004
87,328
employees
25%
of Group
sales
57
Supermarkets
With its adaptability and its integration within the daily life
of the customers, the supermarket format is a success in those countries
where it is established. It has a number of advantages: convenience
services and the quality and freshness of its products; these enable
it to establish strong links with its customers.
Supermarkets
Operating under various banners, both in France and internationally
(Champion, Norte, GS, GB and Globi), the supermarkets have a role
to play in all the geographical areas where the Group has a presence,
complementing the hypermarket format.
Performance,
adaptability and innovation
58
The adaptability of the Group’s
supermarkets is illustrated by the
new Champion in the Rochechouart
district, opened on 4 May 2004
in Paris. Its organisation responds
perfectly to the requirements of
the Parisian customer, who has
little interest in promotions, seeks
sustained low prices, is as much
attracted by the national as by the
retailer brands and is always in a hurry.
A “fast lane” (“illico presto”) has been
set up with suitable opening hours
(the supermarket is open until 22:00),
the fresh produce is self-service to
avoid waiting at peak hours and
certain checkouts are reserved for
baskets and small, two-basket trolleys.
An urban Champion in the heart of Paris
The supermarket, a model
of flexibility
Adaptation to the locality
The supermarkets adapt to the local context by taking
account of the types of customers, their consumption
habits, the nature of the competition, etc. Their model
gives the benefit of great flexibility and leads to three
types of store:
• the in-town stores, which offer essentially food
products;
• the town-fringe stores, which often have a role that
is complementary to or even in competition with
the hypermarkets;
• the rural stores, characterised by a greater development
of the offer of non-food products (textiles,
general, etc.).
The very construction of the stores incorporates this
flexibility. Highly modular, their architecture facilitates
rapid modification.
An innovative and flexible product range…
The Group’s supermarkets are also characterised
by the presentation of a wide range of products,
especially of fresh produce and by their friendliness.
…backed up by franchising
Franchising is a major growth area for the supermarket
format. It favours rapid expansion and offers
excellent development opportunities.
Franchising meets the increasingly evident requirements
of the independents and small chains. These
have a great deal to gain from the support of a group
like Carrefour. This gives them the benefit not only
of powerful central purchasing, strong and effective
communication and high-performance logistics but
also of the Group’s commercial know-how.
With a presence in France, Belgium, Italy (where, of
23 stores opened this year, most were franchised) and
in Norway, franchising now represents a significant
growth vector for the format.
A customer loyalty model
To satisfy the expectations of its customers, the supermarket
in Europe relies on a high-performance tool:
the loyalty card.
Customer loyalty based on permanently
low prices
To gain market share and strengthen links with their
customers, the supermarkets have invested strongly
in prices and the development of own brands. From
autumn 2003 and throughout 2004, many own brand
products benefited from successive price reductions.
There were also several occasions on which the prices
of one thousand Champion products were frozen for
several months.
59
Supermarkets
On 16 September 2004, the first 5 Meny
Champion stores opened their doors in Oslo,
Norway. This operation is the result of a
partnership with the Norwegian retailer,
Norges Gruppen, the leader in its country.
It enables the Carrefour Group to establish
itself in all formats in Scandinavia. The contract
linking the partners provides for the progressive
transfer of all 136 Meny and Ultra stores to
the Champion banner as franchises and
the supply of the 1,913 Norges Gruppen stores
by the Carrefour Group.
Establishment
in Norway
More than 550 lowest price items
This aggressive pricing was reinforced at the beginning
of the year with the launch of the “No. 1” brand,
which has since been deployed in all countries.
At the end of 2004, the supermarkets offered more
than 400 food and more than 150 non-food products
under this label.
Since April 2004, the “Champion International Products” (PCI) line has been added
to the range of products on offer in the Carrefour Group’s supermarkets, an event that
was accompanied by a new reduction of prices by an average of 25% for certain items.
The introduction of products common to the various countries leads to a rationalisation
of procurement and logistics and thus contributes to financing the price cuts. At the end
of 2004, 280 PCI items were listed under various banners of the format.
Launch of the Champion
International Products
Customer loyalty, backed up by great shopping
convenience: store modernisations
In 2004, the stores were modernised. Helping customers
find their way in making their choices and in identifying
prices, the new signing systems, distinctive in each
department (butcher’s, breads and pastries, perfumery,
etc.), and the signposting contribute to strengthening
their links with the banner and its brands.
This attachment lies at the heart of several projects
now being devised or rolled out, which aim at an
even greater differentiation of the Carrefour Group
supermarkets from other retailers.
This detailed work covers the launch of niche brands
and new items (“bio”, baby and cosmetic products,
etc.), and the better exploitation of the existing product
ranges, especially the “Quality” lines and the special
recipes and fresh produce. This strategy is implemented
through the customer loyalty programmes,
which facilitate the communication and direct marketing
actions.
Loyalty schemes, the vehicle for a brand
Each supermarket regularly measures the satisfaction
of its customers through checkout surveys and
analyses the changes in their consumption attitudes
and expectations. Thanks to this attention to
the customer, it adapts, as well as possible and with
the greatest responsiveness, its product mix and
its promotions.
The loyalty cards, targeting the customers
more precisely
Offered to customers by the majority of Champion
supermarkets in Europe, the loyalty cards are eventually
to be deployed by this store format in all countries.
Their widespread use enables new customers to be won
and the frequency of their visits to be increased.
Held by 5.5 million active bearers, the Iris card represents
76% of Champion’s sales in France. Whatever
the country, the information gathered about the customers
is used to launch increasingly targeted actions
with the aid of shopping vouchers, free samples or by
working with suppliers on changes to products and
packaging.
A growth model
Here again we have a flexible growth model that
associates all forms of market penetration.
This is shown by the opening of new sales floor area.
In total, 107 supermarkets were opened around the
world in 2004 (88 new openings and 19 acquisitions),
60
On 29 April 2004, the Carrefour Group inaugurated
its first Champion supermarket in Asia. This store opening,
at Nongguangli near Beijing, was followed by that of
5 other stores near the Chinese capital. By the end of 2005,
this number should increase to 18, and then some fifty
by the time of the Olympic Games in 2008.
Start of deployment
in China
61
Supermarkets
The reduction of the management costs of the supermarkets is
the essential accompaniment of the price reduction programmes.
In Italy, for example, the GS store at Spesaidea was changed in October
2004 into a simplified supermarket with an increase in the amount
of self-service. The gains made were immediately reflected in the sale
prices of the products. This model is to be followed in contexts of
intense competition, especially with the hard discount and to develop
the banner in new areas.
Simplifi ed stores in Italy
of which 101 in Europe and 6 in Asia and representing
a total floor area of 144,000 sq.m. These openings
are carried out not only by the wholly owned stores
but also by franchises or by the takeovers of competing
franchises.
There are also enlargements of stores as a function
of customer catchment areas and local competition.
Certain supermarkets are optimised to offer a more
extended product range, especially of fresh produce
and non-food products. Remodelling the stores also
makes it possible to offer the customers greater shopping
convenience with greater legibility and a more
welcoming atmosphere.
Nearly 2,400 stores in 12 countries
On 31 December 2004, there were Carrefour Group
supermarkets in 12 countries, two more than in 2003.
In Europe, they are established in France, Spain,
Italy, Belgium, Greece, Poland, Turkey and, since 2004,
in Norway.
At the end of 2004, there was a total of 2,119 stores
in Europe. In Latin America, in Brazil and Argentina
the Group had a total of 211 supermarkets at the end
of 2004. The supermarkets are also present in the
French overseas departments and territories with 39
stores, in Tunisia with one store and, since 2004, in
China with 6 stores. A dozen of new stores should be
opened in this country in 2005.
The total number of supermarkets amount to 2,376
stores, half of which are under the Champion banner.
Different growth mechanisms
Whatever the country, the supermarkets benefit
from a growth strategy that encompasses several
mechanisms: organic development with the creation
of stores adapted to the local context, store
enlargements or tactical acquisitions to quickly gain
a significant market share. By means of franchising
and partnerships, burdensome investments can be
avoided, as in the case of the agreement signed in
Norway with Norges Gruppen, the leading retailer
in the country.
SUPERMARKETS
Openings in 2004
2004 sales by country
Sales after tax Openings Total
under banners 2004 2004 supermarkets
EUROPE
France 13,366.3 11 1,022
Spain 1,085.9 8 190
Italy 2,893.2 23 380
Belgium 2,280.9 3 263
Greece 805.9 21 120
Poland 267.3 4 70
Turkey 72.6 2 7
EUROPE TOTAL 72 2,052
LATIN AMERICA
Brazil 509.9 97
Argentina 526.4 114
LATIN AMERICA TOTAL 0 211
ASIA
China 4.6 6 6
ASIA TOTAL 6 6
FRANCHISED PARTNER COUNTRIES
Belgium 5 62
Tunisia 1
Norway 5 5
DOM TOM 39
PARTNER COUNTRIES TOTAL 10 107
GROUP TOTAL 88 2,376
62
4,934
stores
554
stores
opened
in 2004
36,943
employees
8.3 %
of Group
sales
63
Hard discount
Combining simplicity, modernity and functionality, the hard discount stores meet the needs
of customers seeking food products at the lowest price. The 3rd hard discounter in the world, Dia is
one of the driving forces of the Group expansion. Backed up by Carrefour’s purchasing power and
capabilities, Dia offers its customers an original discount.
Hard discount
64
Dia, 3rd hard discounter in the world
A very flexible model…
Their small floor area makes hard discount stores
easy to expand.
More than half the sales comes from own brands.
This is a very flexible format. The key words are speed
of adaptation, flexibility and decentralisation. The
stores are regularly re-fitted. Enlargements, changes
of location, modernisations or reorganisations are
very frequently carried out. Thus, the business model
changes with its market.
…that takes in three types of store
The hard discount store adapts to its environment
and can be divided into three types:
• the town-centre Dia with a sales floor area of less
than 300 sq.m. This format offers a range of food
products at minimum price. These rented stores
are extremely flexible and firmly anchored in the
urban environment;
• the town-fringe Dia, with a sales floor area of about
600 sq.m and a carpark. Larger than the previous
Dia has a presence in 8 countries in Europe, Latin America and
Asia. The store network comprises nearly 5,000 points of sale under
Dia, Ed and Minipreço banners. In 2004, the sales amounted
to 7.5 billion euros. The hard discount format is a model that is very
complementary to the hypermarkets and supermarkets as it can
be adapted to any local constraints
2004 saw the launch of a new concept
in Spain: MaxiDia. With a sales floor area
of about 1,200 sq.m (compared to 300 to
800 sq.m normally), it displays a wider
product range and offers more perishable
products.
6 stores of this type were created in the
country. Given their excellent results, there
are already plans to open or enlarge other
stores in Spain to convert them to MaxiDia
in 2005 and the model could be developed
in other countries.
Test in Spain:
the new MaxiDia
concept
In all countries, the hard discount
banners benefit from the power
and expertise of the Carrefour Group
in prices, brands, quality, logistics
and IT systems.
Like the other formats, the hard
discount stores started in 2003
and continued in 2004 to incorporate
international products, developed
at the Group level (PCI), in their
product range.
At the end of 2004, Dia stores were
already offering their customers over
200 PCI items. This not only helps the
hard discount stores to establish
their particularly aggressive position
in their markets but also contributes
to maintaining the high level of
quality offered to their customers.
Inclusion of the Carrefour International Products
example, its product rage is greater. It offers products
in wholesale packaging and has a fresh produce
section;
• the MaxiDia, concept close to a hard discount
supermarket, tried out in Spain in 2004.
An original model
Dia has developed an original concept, very different
from its competitors, that gives it a decisive competitive
advantage.
For example, Dia excels in its fruit and vegetable
know-how and choice. It offers a small, optimised
range of fresh produce, of excellent quality and at the
lowest possible price.
The overall product range is precisely defined to
maintain a balance of own brands and national
brands at unbeatable prices. It is also adjusted according
to country and concept maturity. The proportion
of national brands can thus vary between 40%
and 80%.
The strength of Dia is also founded on continuing
communication about quality and food safety.
The accent is on the strengthening of quality controls
and increasing frequency of supplier audits carried
out by independent laboratories. Special attention
is given to the performance of the on-line traceability
system.
The loyalty cards are deployed in all those countries
where the banner has a presence and are a great
success.
65
Hard discount
While offering their customers the lowest
prices on the market, the hard discount stores
undertake to ensure a maximum of food safety.
Priority given
to food safety
In Spain, 7 million households are holders of the “Club
Dia” card and card purchases represent 82% of sales
under the banner in the country.
In Portugal, where 1.3 million households hold a loyalty
card, a new system was inaugurated in 2004 that can
be implemented in other countries: the loyalty booklet
with coupons.
Success of loyalty cards
in Spain, Portugal and Greece
In Greece, more than 600,000 households
hold a loyalty card. Their number should
increase rapidly, in line with the sustained
growth in this country.
The customer loyalty scheme in the hard
discount stores is a great success.
66
An essential line of growth
Wherever the Dia, Ed and Minipreço banners are
present, they benefit from sustained growth. From
1999 to 2003, the total average annual growth
was higher than 10%. Outside Spain it was 18.5%.
Following the opening of 553 stores in 2003,
554 new stores were created in 2004, which represents
290,000 sq.m of additional sales floor area. The
Group plans to accelerate the expansion and has set
itself the target of opening 1,000 additional points of
sale by 2006. The hard discount business sales should
then exceed 10 billion euros.
Following Turkey in 1999 and Brazil in 2001, China
is the latest country to have adopted the Dia format.
In 2003, the first Dia opened its doors in Beijing.
24 months later, China counts more than 160 points
of sale.
Growth, a strategic priority
The Carrefour Group’s strategic priority in its hard
discount business is to continue its expansion while
remaining faithful to its philosophy. This is based on
three priorities:
• to offer the customers undisputed product quality;
• to offer unbeatable prices within the customer
catchment area;
• to maintain a constant and sustainable level of international
growth, driven always and everywhere by
the best teams of professionals.
Following the establishment
in 2003 of the first stores
in partnership with local
businesses, 2004 was the year
of consolidation of the hard
discount store in China.
By store, the growth in average
sales reached 27.3%. During
the year, 110 new points of sale
with an average sales floor area
of 256 sq.m were opened.
The objective for 2005 is
to reach 264 stores in the
country with, in particular, the
opening of a 1,200 sq.m store
in April in Beijing. 400 own
brand products are offered to
Chinese consumers with 20 at
lowest price.
As in other countries, the
ability to offer low prices is
based on the limitation of
retail costs. The warehouses
are equipped with the latest
technology, such as radio
frequency systems – these
make it possible to limit
mark-downs and to make
the logistics organization still
more effective and faster.
Strong expansion in China
67
Hard discount
The professionalisation of the vehicle
fleet and the modernisation of the
warehouse management procedures
(notably, with regard to perishable
products) have led to higher logistics
performance in all countries.
New technologies, such as the GPS,
have been incorporated in the system.
This is now fitted to the delivery lorries,
enabling better monitoring of their
routing and a reduction in transport
traffic.
Also worthy of note: for all countries,
the information system is the same.
In addition to increasing efficiency,
this harmonisation facilitates the
development of the same management
and structures for all the teams.
Shared technological developments
Strong profitable growth
Dia Spain is the Group’s 4th largest business unit and
Ed in France is the 10th.
The cost structure is optimised by means of a quasiindustrialisation
of the processes. The IT tools,
accounting processes and central decision tools are
standardised world-wide. The warehouse logistics are
optimised, thanks to a voice recognition system.
While maintaining its own position as a discounter
and operating its own commercial policy, synergies
with the other Group formats are exploited. The format
shares the best practices and benefits from the
structures already in place. To start its business in
China, for example, Dia obtained favourable purchasing
conditions by consolidating its procurement with
the Carrefour hypermarkets that had been established
in the country since 1995.
With 59 store openings in 2004, Turkey counted
239 hard discount stores at the end of the year.
The growth of sales remains high: 16%
in number of comparable stores in 2004.
The year was used to continue the improvement
to the price image and the approach to the
customer by adapting the format to the more
difficult areas. For the first time, 6 stores were
opened under franchise arrangements.
Dia is also expanding in Brazil, with 21% growth
in 2004 in comparable number of stores.
76 were opened during the year, of which
26 were franchised, and a new distribution
centre of 22,000 sq.m was inaugurated.
In Argentina, 40 stores were opened and
the growth in comparable number of stores
was 8%. In this country, too, franchising
is now being developed.
Sustained growth
in Turkey, Brazil
and Argentina
Sales after tax Openings Total
under banners 2004 2004 hard discount
EUROPE
France 2,331.6 56 642
Spain 3,676.9 136 2,651
Greece 341 57 327
Portugal 684 20 370
Turkey 121.7 59 239
EUROPE TOTAL 328 4,229
LATIN AMERICA
Brazil 137.3 76 208
Argentina 183.3 40 333
LATIN AMERICA TOTAL 116 541
ASIA
China 40.9 110 164
ASIA TOTAL 110 164
GROUP TOTAL 554 4,934
HARD DISCOUNT
Openings in 2004
2004 sales by country
68
2,902
stores
228
stores
opened
in 2004
39,336
employees
9 %
of Group
sales
The vocation of the convenience banners is to meet the immediate daily needs of their customers
with a practical product mix and speedy shopping in a friendly atmosphere. The Carrefour Group
implements store concepts, quality product mixes and innovative services in line with customers’ living
habits. It also benefits from the commitment of franchisees to increasing the profits of their stores.
Convenience
and other businesses
69
Friendly and accessible, the convenience stores offer
many services to their customers. In addition to
the quality of the welcome and products, customers
appreciate their adaptation to their shopping habits
and, more broadly, daily lives.
A part of
the daily life of the customers
70
Launched in 1994, the “Grand Jury” brand continues to be developed (now more than
1,000 references). After its extension in 2004 to domestic utensils and the sandwich range,
it will be modernised in 2005. The new “Grand Jury Equilibre” range will offer some forty
products dedicated to health and fitness.
Another innovation planned for 2005: the launch at the end of March of the “Euro Sourire”
brand with more than 200 products. Specifically for convenience stores, this price leader
brand corresponds to the “No. 1” brand in the Group’s hypermarkets and supermarkets.
To assist identification by the customers, it presents a very similar design with, in particular,
its characteristic red band.
Brand innovations
Geographical proximity
In a continually changing world, marked by an increase
in limited households in search of fast and practical
services, there is a revival in interest in convenience
stores, especially in highly developed regions.
Established in four European countries, the Carrefour
Group’s convenience stores are profiting from
this trend. In order to make them more attractive,
they extend the very concept of convenience, from
their geographical location to their friendliness and
advice.
Adaptation of prices and brands
The Group’s strategy in this area combines various
directions, above all, on prices.
Appropriate pricing
The strategy consists of a pricing policy in line with
customer expectations. In 2004, the various banners
in every country were given the means of competing
by reduced prices. In France, a survey carried out at
the end of 2004 showed that eight customers out of ten
find the pricing acceptable in the Group’s convenience
stores.
Convenience brands
The other main directions are:
• innovation in own brands: continuing refinement of
the retailer branded product mix, which is a fundamental
vehicle of brand loyalty;
• the quality of services is a key element in convenience
shopping with long opening hours and home
deliveries;
• the quality of the product range and continuity of
availability: all this relies on perfect integration of the
logistics and good mastery of purchasing, benefiting,
in particular, from the Group’s conditions.
71
In 2004, the new concepts, Shopi and
8 à Huit, launched in the previous years
continued to be deployed in France.
Together with Marché Plus, Proxi Services
and Sherpa, these banners form a
complete system. This makes it possible
to establish a network throughout the
country and, at the same time, to adapt
to the varying needs of the customers in
terms of practicality, last-minute shopping,
friendliness and even seasonality. Shopi
is thus positioned as a small convenience
supermarket, Marché Plus as a town shop
offering multiple services, 8 à Huit as a
banner that can play a role in town but also
as a small supermarket in rural areas, etc.
During the year, a global consideration
of the evolution of these concepts was
launched. One example amongst many,
the new “Convenance” concept of Marché
Plus and 8 à Huit, the launch of which
is planned during the first half of 2005.
In these urban last-minute stores, fresh
produce and ready-to-eat items will be
strongly developed.
Elaboration of new concepts
Convenience
and other businesses
The franchise, a pillar
of this convenience
Because convenience trading demands continuous
adaptation to customer requirements, practically all the
stores are managed by franchisees. They benefit from
the experience of the Carrefour Group in many areas.
Finance and accounting aspects
To strengthen the effectiveness of the model, the budgetary
forecast of each store is drawn up at the sector
and regional level. Each month, the franchisees return
their results to the Group for detailed, real-time monitoring
of the business. Various control tools have been
put in place: regional barometer, assessment of the
franchisees with regard to Carrefour services, etc.
Relations with suppliers
The convenience store addresses various types of
customer. Carrefour knows these customer types
and can share this knowledge with manufacturers,
so that their products best meet customer expectations.
This is why three days of exchange of ideas and
work were organized with the manufacturers in 2004
in order to identify the right product mix for the
convenience trade.
Food safety
With regard to food safety, the Group encourages
franchisees to call twice a year on the services of
its approved testing laboratories. To be able to act very
quickly in the event of a problem, an information
system dedicated to product withdrawals has also
been set up.
In convenience stores, customer loyalty depends
on friendliness, the development of services and
the enlargement of the range of fresh produce.
An enlarged product
range
72
Enlargement of the product range
Their location in the heart of the districts or villages
where their customers live makes convenience stores
highly visible and they can make themselves more
attractive by developing their communication: distribution
of leaflets, consumer magazines, especially
for the Shopi stores, loyalty cards (Shopi and 8 à Huit
stores in France, Dì per Dì in Italy), in-store radio, etc.
This attractiveness is increased by the offer of a wider
range of additional services. Thus, the Marché Plus stores
also offer home delivery, dry-cleaning, photo development,
the sale of stamps and telephone cards, photocopying,
a fax service, automatic ticket machines, etc.
Located mainly in the mountains, Sherpa’s range
of services is particularly adapted to its customers,
especially the seasonal trade: return of unused
products, hire of raclette and fondue appliances,
remote ordering, etc.
Development of fresh produce
In addition to this wide range of services and the
friendliness of the stores, customer loyalty depends
on developing new relations. Such relations benefit
from the introduction of new technologies and the
enlargement of the range of fresh produce.
This is why the allocation of appropriate display shelves
and the quality of the product range and supply now
represent a major investment for the modernisation
of the stores and the development of new concepts.
Continued expansion
In 2004, 52 convenience stores were created or
acquired in France and 19 were enlarged. In the other
countries, 65 stores were opened in Italy, 88 in Greece
and 18 in Belgium.
Still more should be opened in 2005.
73
The enlargement of fresh produce in convenience stores
requires appropriate logistics. In Italy, the opening in 2004
of multi-format warehouses for fresh produce was accompanied
by the creation of structures dedicated to the convenience trade.
This new organisation leads to an improvement in the service
to the stores, an improved product mix for the customers and
an overall reduction of costs.
New logistics for fresh
produce in Italy
Convenience
and other businesses
Sales after tax Openings Total
under banners 2004 2004 Convenience
EUROPE
France 3,497.6 52 1,638
Italy 1,110.6 65 695
Belgium 504.4 18 176
Greece 178.6 88 134
EUROPE TOTAL 223 2,643
FRANCHISED PARTNER COUNTRIES
DOM-TOM 2 56
PARTNER COUNTRIES TOTAL 2 56
GROUP TOTAL 225 2,699
CONVENIENCE
Openings in 2004
2004 sales by country
Other businesses
Openings in 2004
2004 sales by country
Sales after tax Openings Total
under banners 2004 2004 Cash & Carry
CASH & CARRY
EUROPE
France 1,709.4 2 157
Italy 332.7 1 14
Spain 191 32
EUROPE TOTAL 3 203
OOSHOP
EUROPE
France 46.4
Spain 21
GROUP TOTAL 3 203
The cash & carry business,
too, continues to develop
To serve restaurateurs and food trade professionals,
Carrefour is developing the cash & carry business
in France (Promocash), in Spain (Puntocash) and
in Italy (Docks Market). The cash business counts
203 stores.
Prodirest
Again this year, the banner confirmed its position
as the leading supplier to the restaurant trade, with
25 establishments and 400 vans.
Ooshop
The e-commerce Web-site continues to satisfy many
customers, offering home deliveries of products at
the same prices as the hypermarkets. The concept is
available in France and Spain.

BRAND GLOSSARY ....

2007-12-16T08:35:00.001-08:00

We often juggle and use lots of words around branding .. Are we clear what we intend to mean ..... and the specifics ..

Awareness The percentage of population or target market who are aware of the existence of a given brand or company. There are two types of awareness: spontaneous, which measures the percentage of people who spontaneously mention a particular brand when asked to name brands in a certain category; and prompted, which measures the percentage of people who recognise a brand from a particular category when shown a list.

Brand A brand is a mixture of attributes, tangible and intangible, symbolised in a trademark, which, if managed properly, creates value and influence.
"Value" has different interpretations: from a marketing or consumer perspective it is "the promise and delivery of an experience"; from a business perspective it is "the security of future earnings"; from a legal perspective it is "a separable piece of intellectual property." Brands offer customers a means to choose and enable recognition within cluttered markets.

Brand Architecture How an organization structures and names the brands within its portfolio. There are three main types of brand architecture system: monolithic, where the corporate name is used on all products and services offered by the company; endorsed, where all sub-brands are linked to the corporate brand by means of either a verbal or visual endorsement; and freestanding, where the corporate brand operates merely as a holding company, and each product or service is individually branded for its target market.

Brand Associations The feelings, beliefs and knowledge that consumers (customers) have about brands. These associations are derived as a result of experiences and must be consistent with the brand positioning and the basis of differentiation.

Brand Commitment The degree to which a customer is committed to a given brand in that they are likely to re-purchase/re-use in the future. The level of commitment indicates the degree to which a brand's customer franchise is protected form competitors.

Brand Earnings The share of a brand-owning business's cashflow that can be attributed to the brand alone.

Brand Equity The sum of all distinguishing qualities of a brand, drawn from all relevant stakeholders, that results in personal commitment to and demand for the brand; these differentiating thoughts and feelings make the brand valued and valuable.

Brand Equity Protection Is the implementation of strategies to reduce risk and liability from the effects attributable to counterfeiting, diversion, tampering and theft so that the differentiating thoughts and feelings about the brand are maintained and remain valued and valuable.

Brand Essence The brand's promise expressed in the simplest, most single-minded terms. For example, Volvo = safety; AA = Fourth Emergency Service. The most powerful brand essences are rooted in a fundamental customer need.

Brand Experience The means by which a brand is created in the mind of a stakeholder. Some experiences are controlled such as retail environments, advertising, products/services, websites, etc. Some are uncontrolled like journalistic comment and word of mouth. Strong brands arise from consistent experiences which combine to form a clear, differentiated overall brand experience.

Brand Extension Leveraging the values of the brand to take the brand into new markets/sectors.

Brand Harmonisation Ensuring that all products in a particular brand range have a consistent name, visual identity and, ideally, positioning across a number of geographic or product/service markets.

Brand Identity The outward expression of the brand, including its name and visual appearance. The brand's identity is its fundamental means of consumer recognition and symbolizes the brand's differentiation from competitors.

Brand Image The customer's net "out-take" from the brand. For users this is based on practical experience of the product or service concerned (informed impressions) and how well this meets expectations; for non-users it is based almost entirely upon uninformed impressions, attitudes and beliefs.

Brand Licensing The leasing by a brand owner of the use of a brand to another company. Usually a licensing fee or royalty rate will be agreed for the use of the brand.

Brand Management Practically this involves managing the tangible and intangible aspects of the brand. For product brands the tangibles are the product itself, the packaging, the price, etc. For service brands (see Service Brands), the tangibles are to do with the customer experience - the retail environment, interface with salespeople, overall satisfaction, etc. For product, service and corporate brands, the intangibles are the same and refer to the emotional connections derived as a result of experience, identity, communication and people. Intangibles are therefore managed via the manipulation of identity, communication and people skills.

SOME BASICS OF COLOUR

2007-12-16T08:15:00.000-08:00

Quite a basic primer of colours .. but worth pondering .. and then taking decisions on art , look , feel .. colour .. branding ...

Color Symbolism

Red Excitement, energy, passion, desire, speed, strength, power, heat, love, aggression, danger, fire, blood, war, violence, aggression, all things intense and passionate.

Yellow Joy, happiness, optimism, idealism, imagination, hope, sunshine, summer, gold, philosophy, dishonesty, cowardice, betrayal, jealousy, covetousness, deceit, illness, hazard.

Blue Peace, tranquility, calm, stability, harmony, unity, trust, truth, confidence, conservatism, security, cleanliness, order, loyalty, sky, water, cold, technology, depression, appetite suppressant.

Orange Energy, balance, warmth, enthusiasm, vibrant, expansive, flamboyant, demanding of attention.

Green Nature, environment, healthy, good luck, renewal, youth, vigor, spring, generosity, fertility, jealousy, inexperience, envy, misfortune.

Purple Royalty, spirituality, nobility, spirituality, ceremony, mysterious, transformation, wisdom, enlightenment, cruelty, arrogance, mourning.

Gray Security, reliability, intelligence, staid, modesty, dignity, maturity, solid, conservative, practical, old age, sadness, boring

Brown Earth, hearth, home, outdoors, reliability, comfort, endurance, stability, simplicity, and comfort.

White Reverence, purity, simplicity, cleanliness, peace, humility, precision, innocence, youth, birth, winter, snow, good, sterility, marriage (Western cultures), death (Eastern cultures), cold, clinical, sterile.

Black Power, sexuality, sophistication, formality, elegance, wealth, mystery, fear, evil, anonymity, unhappiness, depth, style, evil, sadness, remorse, anger, underground, good technical color, mourning, death (Western cultures).

Color Symbolism by Culture
This chart contains information on the cultural symbolism of various colors. If you have information to contribute, please let me know.
Color Cultural Significance

Red China - symbol of celebration and luck, used in many cultural ceremonies that range from funerals to weddings.
India - color of purity (used in wedding outfits).
United States - Christmas color when combined with green, Valentines Day when combined with pink, indicates stop (danger) at traffic lights.
Eastern cultures - signifies joy when combined with white.

Yellow Asia - sacred, imperial.
Western cultures - joy, happiness.

Blue China - associated with immortality.
Colombia - associated with soap.
Hindus - the color of Krishna.
Jews - holiness.
Middle East - protective color.
* Note: Blue is often considered to be the safest global color.

Orange Ireland - religious significance (Protestant).
United States - inexpensive goods, Halloween (with black).

Green China - studies indicate this is not a good color choice for packaging, green hats mean a man's wife is cheating on him.
France - studies indicate this is not a good color choice for packaging.
India - the color of Islam.
Ireland - religious significance (Catholic).
Some tropical countries - associated with danger
United States - indicates go (safe) at traffic lights, environmental awareness, St. Patrick's Day, Christmas color (red and green).

Purple Western cultures - royalty.

Gray

Brown Colombia - discourages sales.

White Eastern cultures - mourning, death.
Japan - white carnations signify death.
United States - purity (used in weddings).

Black Western cultures - mourning, death.

Saffron Hindu - sacred color. (orangish peach color)

Pastels Korea - trust.
United States - spring, Easter; pale blue (baby blue) stands for an infant boy; pale pink stands for an infant girl.

What Colors Mean
We live in a colorful world. In many countries, colors represent various holidays; they are also used to express feelings and enliven language. Find your favorite color and see what it means around the world.
Red
For the ancient Romans, a red flag was a signal for battle.
Because of its visibility, stop signs, stoplights, brake lights, and fire equipment are all painted red.
The ancient Egyptians considered themselves a red race and painted their bodies with red dye for emphasis.
In Russia, red means beautiful. The Bolsheviks used a red flag as their symbol when they overthrew the tsar in 1917. That is how red became the color of communism.
In India, red is the symbol for a soldier.
In South Africa, red is the color of mourning.
It's considered good luck to tie a red bow on a new car.
In China, red is the color of good luck and is used as a holiday and wedding color. Chinese babies are given their names at a red-egg ceremony.
Superstitious people think red frightens the devil.
A “red-letter day” is one of special importance and good fortune.
In Greece, eggs are dyed red for good luck at Easter time.
To “paint the town red” is to celebrate.
Red is the color most commonly found in national flags.
In the English War of the Roses, red was the color of the House of Lancaster, which defeated the House of York, symbolized by the color white.
The “Redshirts” were the soldiers of the Italian leader Garibaldi, who unified modern Italy in the nineteenth century.
To “see red” is to be angry.
A “red herring” is a distraction, something that takes attention away from the real issue.
A “red eye” is an overnight airplane flight.
If a business is “in the red,” it is losing money.
Green
Only one national flag is a solid color: the green flag of Libya.
Ancient Egyptians colored the floors of their temples green.
In ancient Greece, green symbolized victory.
In the highlands of Scotland, people wore green as a mark of honor.
Green is the national color of Ireland.
A “greenback” is slang for a U.S. dollar bill.
Green means “go.” When “all systems are green,” it means everything is in order.
The green room of a concert hall or theater is where performers relax before going onstage.
The “green-eyed monster” is jealousy.
A greenhorn is a newcomer or unsophisticated person.
Green is youthful.
Being “green around the gills” is looking pale and sickly.
“Green with envy” means full of envy or jealousy.
A person with a “green thumb” is good at making plants grow.
A green, or common, is a town park.
Green is a healing color, the color of nature.
Blue
In ancient Rome, public servants wore blue. Today, police and other public servants wear blue.
In China, blue is for little girls.
In Iran, blue is the color of mourning.
Blue was used as protection against witches, who supposedly dislike the color.
If you are “true blue,” you are loyal and faithful.
Blue stands for love, which is why a bride carries or wears something blue on her wedding day.
A room painted blue is said to be relaxing.
“Feeling blue” is feeling sad. “Blue devils” are feelings of depression.
Something “out of the blue” is from an unknown source at an unexpected time.
A bluebook is a list of socially prominent people.
The first prize gets a blue ribbon.
A blue blood is a person of noble descent. This is probably from the blue veins of the fair-complexioned aristocrats who first used this term.
“Into the blue” means into the unknown.
A “bluenose” is a strict, puritanical person.
A “bluestocking” used to be a scholarly or highly knowledgeable woman.
The pharaohs of ancient Egypt wore blue for protection against evil.
The “blues” is a style of music derived from southern African-American secular songs. It influenced the development of rock, R&B, and country music.
“Blue laws” are used to enforce moral standards.
A blue ribbon panel is a group of especially qualified people.
Purple, Violet
The Egyptian queen Cleopatra loved purple. To obtain one ounce of Tyrian purple dye, she had her servants soak 20,000 Purpura snails for 10 days.
In Thailand, purple is worn by a widow mourning her husband's death.
A “purple heart” is a U.S. military decoration for soldiers wounded or killed in battle.
Purple is a royal color.
Purple robes are an emblem of authority and rank.
“Purple speech” is profane talk.
“Purple prose” is writing that is full of exaggerated literary effects and ornamentation.
Leonardo da Vinci believed that the power of meditation increases 10 times when done in a purple light, as in the purple light of stained glass.
Purple in a child's room is said to help develop the imagination according to color theory.
Richard Wagner composed his operas in a room with shades of violet, his color of inspiration.
Yellow
In Egypt and Burma, yellow signifies mourning.
In Spain, executioners once wore yellow.
In India, yellow is the symbol for a merchant or farmer.
In tenth-century France, the doors of traitors and criminals were painted yellow.
Hindus in India wear yellow to celebrate the festival of spring.
If someone is said to have a “yellow streak,” that person is considered a coward.
In Japan during the War of Dynasty in 1357, each warrior wore a yellow chrysanthemum as a pledge of courage.
A yellow ribbon is a sign of support for soldiers at the front.
Yellow is a symbol of jealousy and deceit.
In the Middle Ages, actors portraying the dead in a play wore yellow.
To holistic healers, yellow is the color of peace.
Yellow has good visibility and is often used as a color of warning. It is also a symbol for quarantine, an area marked off because of danger.
“Yellow journalism” refers to irresponsible and alarmist reporting.
White
A white flag is the universal symbol for truce.
White means mourning in China and Japan.
Angels are usually depicted wearing white robes.
The ancient Greeks wore white to bed to ensure pleasant dreams.
The Egyptian pharaohs wore white crowns.
The ancient Persians believed all gods wore white.
A “white elephant” is a rare, pale elephant considered sacred to the people of India, Thailand, Burma, and Sri Lanka; in this country, it is either a possession that costs more than it is worth to keep or an item that the owner doesn't want but can't get rid of.
It's considered good luck to be married in a white garment.
White heat is a state of intense enthusiasm, anger, devotion, or passion.
To whitewash is to gloss over defects or make something seem presentable that isn't.
A “white knight” is a rescuer.
A white list contains favored items (as opposed to a blacklist).
A “whiteout” occurs when there is zero visibility during a blizzard.
A “white sale” is a sale of sheets, towels, and other bed and bath items.
A “whited sepulcher” is a person who is evil inside but appears good on the outside, a hypocrite.
“White lightning” is slang for moonshine, a homebrewed alcohol.
A white room is a clean room as well as a temperature-controlled, dust-free room for precision instruments.
White water is the foamy, frothy water in rapids and waterfalls.
Black
The ancient Egyptians and Romans used black for mourning, as do most Europeans and Americans today.
The “Blackshirts” were the security troops in Hitler's German army, also known as the S.S.
Black often stands for secrecy.
Black humor is morbid or unhealthy and gloomy humor.
In China, black is for little boys.
A “blackhearted” person is evil.
If a business is “in the black,” it is making money.
A “blacklist” is a list of persons or organizations to be boycotted or punished.
Black is associated with sophistication and elegance. A “black tie” event is formal.
A black belt in karate identifies an expert.
A black flag in a car race is the signal for a driver to go to the pits.
A blackguard is a scoundrel.
The ancient Egyptians believed that black cats had divine powers.
Black lung is a coal miner's disease caused by the frequent inhaling of coal dust.
Blackmail is getting things by threat.
Black market is illegal trade in goods or money.
A black sheep is an outcast.
“Blackwash” (as opposed to “whitewash”) is to uncover or bring out in the light.
A blackout is a period of darkness from the loss of electricity, for protection against nighttime air raids, or, in the theater, to separate scenes in a play.
When you “black out,” you temporarily lose consciousness.

Consumer Experience ...what is it ?

2007-12-13T13:42:00.000-08:00

Consumer Experience is the entire experience the consumer gets from entry to exit in any store or any brand .... It includes actual and perception based experience.

Consumer Experience is the key differentiator ……….
An excellent execution of consumer experience will lead to many direct and indirect benefits.
Consumer stay time will increase in the store
More stay time leads to more opportunity for up-sell/more-sell thus leading to increase in avg. bill value
Higher chance of repeat purchase and loyalty
Positive word of mouth
Makes the customer less price conscious
Consumer experience is very key for competitive edge.

elements
Customer Welcome
Store staff manners, grooming and availability at the right time
Store staff knowledge and helpfulness
Easy billing and product dispatch to the car/home
Staff training

Loyalty program
After sales service
Product install/demo and problem solving
Product Knowledge
This leads to repeat visit and positive WOM

Product availability
Correct product assortment based on the consumer profile
Product price and latest promotions
Demo and content running on the product
Product information
Product hygiene
Honest pricing
Competitive prices on all products and services
Latest promotions
Special Deals
Actual purchase
Simple and quick billing
Product delivery and installation

Store layout and design
Easy identifiable departments
Product adjacencies
Place to keep bags
Right height fixtures and product display
Comforts within the store
Amenities
Space to move around
Comfortable lighting and temperature
Trolley or basket
Soothing colors
Proud to visit
Store covet value
Latest Technology and Fashion display
Experience zones

Store Design is key to consumer experience and all stores should have experience zones to give the WOW effect
What percentage of the store area be allocated to the consumer experience zones ?
Recommended : 10 - 40 %.... Depending on product category

Some Tips to Store Design :

1.Shopping Science : Racetrack works
2.Comfort Zones : “ butt brushes “ avoid
3.Eyes Right : usually
4.Location, Location, Location : Product adjacency
5.Finish Line: E-POS provides data mine.

exceed expectations = experience

consumer experience is at the core of any successful Retailer’s strategy

Utilising consumer insights to build sales systems

2007-12-13T13:31:00.000-08:00

Some Sales insights .......

•The missing fifth ‘P’ of Marketing
•Goodbye Marketing Strategy & Selling Techniques
•Welcome Buyer Behaviour !
•“Do unto others …..”?

what do people want ????
•Deal with people they TRUST
•SOLUTIONS to their PROBLEMS
•Value added SERVICE

some fundas....
•Every buying is an EMOTIONAL decision
•So, buying decision may be IRRATIONAL
•Buying is a COLLECTIVE decision too
•Indian customer loves DISCOUNTS
•CLANNISH preference for salesperson
•Fascinated by Brand
•Different strokes for different folks

Channels .....

•Tied sales person
•Franchisee
•On-the-point
•Distributor
•Corporate
• Bank / Company
•Retail
•Phone
•Web

OUTCOME ....
•Consumer to get it Faster, Cheaper, Easier
•Profitable delivery for all
•No wastage of products, resources, money & time
•Lifetime customers with loyalty & advocacy
•Sustainable growth
•Enhanced standards & quality of life

Last thought ....
Will I buy
from me ?
(Being customer before
Being a buyer …)

Making Informed Pricing Decisions…

2007-12-13T13:13:00.000-08:00

PRICING .. one of the key marketing variables .. but often least understood by marketers.....

Old Indian Saying

TYPICALLY, CUSTOMER AND SUPPLIER HAVE “WIN-LOSE” RELATIONSHIPS FOCUSED ON PRICE

THE MAIN AIM OF CVM IS TO CREATE “WIN-WIN” RELATIONSHIPS FOCUSED ON VALUE

assesing customer value means evaluating and measuring what something is worth to the csutomer .. not a cost plus approach..

Does High Net Sales Realization mean
high Contribution?

High NSR does not necessarily mean high contribution. Contribution per hour is better analytical tool and reflects correct picture of profitability.

Pricing Research Models

“Peter Van Westendorp” Model
PRICE CONJOINT
BPTO ( Brand Price Trade off )

Case Study - Babool Toothpaste 2003-05
of Balsara Home Products Ltd ,India

SKU and Price Rationalisation
Marketing Challenge:- Babool Toothpaste an economy toothpaste brand faced a big challenge when new brands were launched at 30% lesser prices (Rs.7/- 50g) than Babool (Rs. 10/- 50gm).
Babool, which was the lowest brand till date suddenly, became expensive in the eyes of the consumer and market dynamics had changed.
Possible Solution: Reduce the price and bring Babool at par with the competition.
Pitfall: Reduction in prices would mean reduction in Gross Contribution, which was not acceptable for an economy brand like Babool.

Insight: Consumer do not remember prices and SKUs, however at the time of purchase they evaluate the price on the basis of ‘Price Value Equation’.
Hypothesis : Instead of reducing prices can we look at possible SKU price combinations which will provide equally good price value equation as a 50gm at Rs.7/-.

Strategy

We worked out various SKU possibilities, which were not regular category SKUs like 50,100 and 200gm. E.g. 60gm (positioned as 50+10gm) @ Rs. 10/-, 90+35gm (125gm) @ Rs. 18/-, 190+190gm etc..@ Rs.40/-
Additional volumes in a toothpaste does not increase the RM and PM cost proportionately
Hence, you end up making slightly lesser or similar profitability and also provide good price value equation to consumers.
Also consumers does not have the time to equate a non standard SKU with a standard SKU at the time of purchase hence differentiation at SKU level works.
Trade too cannot complain about reduction in prices by competition as the SKUs are different

By rationalizing the SKUs and prices Babool not only prevented any share loss but actually gained share in the fierce market.

Rs. 5/- SKU BABOOL ... CASE STIUDY WHICH CREATED HISTORY

Marketing Challenge:- Inspite of increase in advertising budgets and also increasing awareness the brands distribution was less than 1mn outlets i.e. around 25%. While competitive brands like Colgate were well entrenched at around 70% distribution. To gain market share increase in distribution was necessary.
Possible Solution: Invest in direct distribution by increasing the number of distributors and investing direct distribution techniques like Van Promo etc..
Pitfall: Distribution is a heavy investment process and hence needs deep pockets.

Insight: Consumers at the lower end of the spectrum in Small Towns and Rural markets do not go in for a monthly purchase as they do not have the money to do so. Such consumers rely more on daily purchase.
Hypothesis: To increase trials among a large gamut of such consumers it is necessary to have the lowest possible put down price but yet good enough to last few days.

STRATEGY
We wanted to launch an SKU that must give a feel of an almost 50gm SKU and hence perceived value should be higher.
But at the same the SKU must be profitable. However it can make a lesser GC than regular SKU.
Hence we worked on various SKUs like 20g, 30g and 35g in both sachets as well as carton and tubes.
Worked out the profitability of each of them at various ‘Lower Put Down Price Points’ between Rs. 1 – Rs.6/-.
30gm SKU in a carton and tube format at Rs.5/- emerged as most profitable.
One of the reasons behind Rs.5/- selection was also the fact that its easily available coin.
In consumer research too this combination came across as a winner.
Hence, 30gm@Rs.5/- was launched across India.

OUTCOME
Babool’s distribution grew from less than 1mn outlets to 1.3 mn outlets and so did its market share soared. Instead of cannibalizing the 60gm SKU share it actually added volumes and hence market share, which soared to around 6% post the launch.

Peshwa Acharya

How to Create Consumer-Centric Place Experiences

2007-12-13T12:54:00.000-08:00

Consumer Experience in the Retail world ....

“it’s all about creating consumer-centric experiences that transcend mere aesthetics and passive entertainment to touch consumers lives at the point of interaction. Experiences that can only be had by visiting the brick and mortar. Because Price, Selection and Location are no longer the only purchase triggers. Instead, it’s about how consumers React to, and interact with the touchpoints…distinct moments that drive repeat destination visits.”

True consumer - centricity begins with the consumer as the starting point for your retail development…

A Challenge to our industry: Get consumer -centric. Constantly test models that truly begin with a consumer as the center of the model.
• Remember, it’s only a test.
• “Doesn’t this increase my operating costs?” Maybe, but you also don’t yet know the level of benefit either?
CASE STUDY
Iris (Circuit City) - the first women’s electronics store vs. a home theater store
Female associates Video Taped Instructions
Install. Services SolutionVignettes/Benefit Driven

EQ Life (Best Buy) - health, wellness and technology for the conscience consumer vs. just a spa, or just a pharmacy or just a coffee shop or just a skincare store, or just a nutrition store….
Transcending retail and bridging to holistic wellness

Geoffrey (Toys ‘R Us) A store for mom and child celebrating the rituals of play and the milestones of growing up not just a toy store
Giraffic Party Party Spot Studio G R Zone
Gee Baby Nibbles Café Answer Spot

No, we think of it as a new way of approaching concept development & refinement that is proactive and timely .

Peshwa Acharya