PROJECT REPORT ON VISHAL MEGA MART

BY
SAURABH
NAINA
NEHA
RAHUL

INTRODUCTION
Vishal mega mart started as a humble one store enterprise in 1986 in Kolkata
(erstwhile, Calcutta) is today a conglomerate encompassing 51 showrooms in 39
cities. Indias first hyper-market has also been opened for the Indian consumer by
Vishal. Situated in the national capital Delhi this store boasts of the single largest
collection of goods and commodities sold under one roof in India. The group had
a turnover of Rs.1463.12 million for fiscal 2005, under the dynamic leadership of
Mr. Ram Chandra Aggarwal. The group had of turnover Rs 2884.43 million for
fiscal 2006 and Rs. 6026.53 million for fiscal 2007 the groups prime focus is on
retailing. The Vishal stores offer affordable family fashion at prices to suit every
pocket. The groups philosophy is integration and towards this end has initiated
backward integration in the field of high fashion by setting up a state of the art
manufacturing facility to support its retail endeavors. Vishal is one of fastest
growing retailing groups in India. Its outlets cater to almost all price ranges. The
showrooms have over 70, 00 products range which fulfills all your household
needs, and can be catered to under one roof. It is covering about 1282000 sq. ft.
in 18 states across India. Each store gives you international quality goods and
prices hard to match. The cost benefit that is derived from the large central
purchase of goods and services is passed on to the consumer.
Ram Aggarwal started Vishal Mega Mart in Kolkata in 1986, in a 100 sq ft shop in
Lal Bazaar. It was a struggle in the beginning, but within two years his store had
taken off, and today Vishal Mega Mart has branches all over the country. With a

turnover of Rs 89 crore (Rs 890 million), Vishal Mega Mart has been one of the
pioneers of bargain retailing in India, and now it is diversifying to become an allpurpose departmental store. His family had a business in Calcutta (now Kolkata)
when he was growing up, but he wanted to do something different, so he got a
job instead. However, by 1984, he got bored and decided to start something by
himself.
At that time, especially in Calcutta, there weren't really any retail stores. People
would buy fabric and get their clothes stitched. He was one of the first people to
put forward the idea of a large departmental style retail store that early on. He
started with around Rs 100,000, for which he had to take out a loan as well as dip
into some family savings. This went into renting our workspace, which was an
office and a workshop rolled in one, and hiring the three people he had working
for him. They sourced all our material from Calcutta itself, and stitched our
garments in-house.
It took two years for them to really take off -- until then it was a continuous
learning process for him, since he was relatively inexperienced in running a
business. He had to learn various tricks along the way, especially in terms of
selling.

HISTORY OF THE COMPANY

We interviewed store manager Niraj Jaiswal. It has been in business since
2002. Their business has changed over the years as it was standalone
earlier but now fashion has changed. Earlier only cheaper clothes were
available but now fashion clothes are also available.

MISSION STATEMENT:
Value store, Value Fashion
Yes, they plan to expand, penetrate, diversify, or change their retail format
in the near future. They have 13 stores across Bihar and Jharkhand and they
are expanding in Ranchi, Muzzaffarpur etc. They are penetrating in Buxar
and Siwan and their diversification is in life style product and ladies
accessories. They will not change their retail format in their near future.

RETAIL STRATEGY:-

CUSTOMER - Vishal mega mart has been pioneer in retail revolution it

is aimed at changing the mindset of consumer to bring change in
shopping pattern. It wanted people to do bulk shopping. Vishal Mega
Mart emphasis to continuously reduce their cost through a variety of
measure, they focus on customer of lower income group and they have in
house production of apparel such as pink valley(apparel) and for people of
higher income group they have their own manufacturing brand like Viveza
and Mavie, moreover, and the customers are of age group 18-55.
TRADE AREA
Primary-Frazer Road
Secondary-Boring Road
Tertiary-Patna City
MERCHANDISE ASSORTMENT
Vishal carry general brands in FMCG sector and is not specified. They have
own manufactured unit in apparel which is private label i.e. Pink Valley
(apparel), Tendom, Emlitreat (spices pickle), Gobbara namkeen. They prefer
value store. They focus on backward integration and in specialty goods they
were having crockery item earlier but Big Bazaar have now penetrated and
introduced that recently.

HUMAN RESOURCES
Human Resource Management (HRM) means employing people, developing their
resources, utilizing maintaining and compensating their services in tune with the
job and organizational requirement . The industry needs skilled manpower to fit the
diverse roles at the front-end and back-end of the new and complex retail formats.
It is estimated that over 2.5 million jobs will be created in the sector by 2010. The
complexity of the operations requires trained personnel. The modern formats
require

staff

to

handle

administration,

public

relations,

advertising,

store

management, sourcing, and merchandising and information management. A

number of reputed institutes have started offering specialized courses in retail
management.
The Company places a huge emphasis on fostering a culture of innovation and
enterprise that allows people within the Company to realize human beings' infinite
potential. The Company continues to increasingly focus on internal growth and
development of its associates, cutting across levels and functions, through focused
developmental efforts and growth opportunities. For the year under review, the
Company has provided 66 hours of training per associate. Apart from regular
training in skills enhancement and customer engagement, the Company also

emphasizes on building a sense of pride, belonging and self-confidence among its

employees working at the stores.The store hires and trains their sales people

by displaying floor inch through campus whose head office is at Gurgaon. At

lower level, there is store manager and there is a local associates cashier to
whom 15 days training is given and also HR come for two day training every
3 months. They paid commission to lower level employees who are unskilled
labour are paid more than minimum wage. The higher level employees are
paid packaged commission and incentive is based on store target. The sales
people are allowed to cross sell for impulse shopping. They do not outsource
any activities in their business.
The salient features of Vishal Mega Mart staff are: -

1. Well-trained staff, the staff employed by Vishal Mega Mart is well-suited for
modern retail.

2. Well-dressed staff improves the overall appearance of store.

3. Employees are motivated to think out-of-the-box. Retail sector is in growth
stage, so staff is empowered to take innovative steps.

4. Multiple counters for billing, staff at store to keep baggage and security
guards at every gate, makes for a customer-friendly atmosphere.

5. The employees are motivated to work efficiently and effectively towards the
achievement of organizational goal by satisfying their personal needs.

6. The employees were given bonus and gifts during the festivals like diwali,
etc.

STORE LOCATION:

Vishal Mega Mart is located at Frazer road in Patna, it is a CBD as it is

located in residential area and many companies are also operating through
this particular area. The major reason behind selecting the location was that
it was located at the centre of the city to attract more customers.
They also want to attract those customers who are passing by the road to go
to Gandhi Maidan as many people come from outside the city come to
Gandhi Maidan

to celebrate festivals like dussehra and to attend any

political rally. Being located in the centre of the city it is accessible for most
of the customers. As this store is located near railway station so it has better
connectivity from all parts of the city.
PRICING STRATEGY:
Vishal Mega Mart promises its consumers the lowest available price. The concept of
psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Vishal
Mega Mart also caters on Special Event Pricing (Close to Diwali, Christmas, New
Year etc.). Selling combo-packs and offering discount to customers. The combopacks add value to customer. Through Bundling, they also reduced the price of the
products. In addition to VRPLs strategy to continue procurement of goods from
small and medium size vendors and manufacturers which leads to cost efficiencies,
VRPL intend to procure FMCG and apparels from low-cost production centers
located outside India. Towards this objective, VRPLs propose to increase their
procurement of finished and semi-finished goods from China and thereby realize
economies of scale and pass on the benefits so accrued to their customers. The
efforts of VRPLs retail business are targeted towards families having total income

which can be classified under the lower middle and middle income groups.
VRPL follow uniform pricing policy across their stores in respect of private labels
and non-branded products sold by them. This enhances brand loyalty, encourages
customer confidence and results in operational convenience. In relation to the other
products, the prices may vary between stores on account of state-specific taxation
and vendor policies.

They work on the model of economics of scale. Their pricing objective is to

get "Maximum Market Share". The various techniques used at Vishal Megamart are:
-Value Pricing (EDLP - Every Day Low Pricing): Vishal Mega-mart promises
consumers the lowest available price without coupon clipping, waiting for
discount promotions, or comparison shopping.
-Promotional Pricing: Vishal Mega-mart offers financing at low interest rate.
The concept of psychological discounting(Rs. 99, Rs. 49, etc.) is used as
promotional tool. Vishal Mega-mart also caters on Special Event Pricing
(Close to Diwali,Holi, RakshaBandhan and DurgaPooja).
-Differentiated Pricing: Time pricing i.e. difference in rate based on peak and
non-peak hours or days of shopping is alsoa pricing technique used in Indian
retail, which is aggressively used by Vishal Mega-mart.
-Bundling: Selling combo-packs and offering discount to customers. The
combo-packs add value to customer.

- The pricing strategy also differs according to different seasons like in

dushera Vishal mega mart focuses on apparels and in dhanteras and Diwali
they focuses on appliances and crockery.
Other pricing strategy used by vishal mega mart is:
-Din Ki MahaBachat, din Ki Maha Loot, Dhan-terasDhamaal ETC

COMMUNICATION MIX:
Vishal mega mart uses mainly print media for their advertisement. They give
their advertisement only in local hindi newspaper as their target customers
are mainly lower income group and hindi newspapers like Hindustan, Dainik
Jagran , Dainik Bhaskar as they have major reach in local market. Vishal
Retail Pvt Ltd. also uses communication through auto rickshaws, billboards,
banners, pamphlets to connect to their customers. They earlier used to
promote through local hindi channels but it was not found effective, so they
dumped the idea of television promotion.
For publicity they organize events within their store, they have tie up with
Hindustan papers for free promotion as they provide place to Hindustan
newspaper for organizing event and in return Vishal gets free space in their
newspaper for advertising. They do

cooperative advertising mainly with

FMCG products mainly with beverages companies like coca cola.

Companies like Nescafe give demos of their coffee during winter and nestea
during summers. They have their private label in spices imli treat, they
give demos in cooking events they organize.
STORE LAYOUT:
Vishal Mega Mart stores are located in 110 cities with more than 180 outlets. Vishal
Mega Mart has presence in almost all the major Indian cities. They are aggressive
on their expansion plans. VRPL intend to increase their penetration in the country
by setting up new stores in cities where they already have presence, as also
entering into new areas in the country. In particular, they intend to focus on
expansion in Tier II and Tier III cities. VRPL target locations with good infrastructural
facilities such as easy accessibility, provision for water, electricity, parking, security
and other basic amenities.The layout of vishal mega mart is finalized in head

office.In selecting location for a new store, VRPL start by identifying the city/town.
VRPL target primarily cities/towns which may be classified as Tier II or Tier III cities.
In this regard, an analysis of the demography, literacy levels, nature of occupation
and

income

levels.

Within

city/town,

VRPL

target

locations

with

good

infrastructural facilities such as easy accessibility, provision for water, electricity,

parking, security and other basic amenities. VRPL prefer to locate their stores in
areas where real estate is available at reasonable prices. The efforts of VRPLs retail
business are targeted towards families having total income which can be classified
under the lower middle and middle income groups. Accordingly, VRPL plan their
strategy to search for areas within cities where such customers are domiciled in
large numbers and make efforts to locate themselves within the reach of such
customers.VRPL believe that adoption of standard formats for their stores has led

to their brand establishment and identification among their customers and will
increase their base of loyal customers. In pursuance of this, they have adopted
standard

parameters

for

store

planning

and

establishment.

For

ensuring

standardized formats of their stores, VRPL consider various factors, such as internal
and external dcor and colour schemes, allocation of store space, stock mix and
pricing and accounting methods . However they change their layout and

designs according to competitors vies. The layout of the store is grid.

The design and layout is organized in such a way that each customer when
get inside the store at least once visit to the apparel section. The food and
grocery items are the biggest revenue contributor to vishal mega mart. To
visit to the food and grocery section everyone has to go through the women
apparel section. Vishal mega mart is aggressively focusing on their apparel
brand like mavie, viveda, etc.Vishal use LED lightening to give attractive
looking to their products and to attract consumer towards the apparels and
other section. One more reason of using LED lightening is cost effectiveness.
And for creating attractive ambience they use their own radio i.e., Vishal
radio for songs and announce attractive offers to the customer inside the
store. The radio is used continuously in the store. The music played in the
store is mixed songs like romantic, instrumental etc. For an attractive
ambience they use perfumes two times in a day. The perfume used by the
store is not so good because after an hour or two the scent used cannot be
felt by the customer.
CUSTOMER SERVICE:

customer services like parking, trial rooms, signage to easily locate the
products, gift wrapping, acceptance of credit cards and shopping assistance
when asked are given major focus. They were giving services of alteration of
apparels in its early days, but they discontinued this as they were facing
problem in meeting demand of the customer on customization of apparel.
Customer 1 ( manish kumar)- he was happy with the products and services
that the store is providing. He loves to shop here because it is comparatively
cheaper then big bazaar.
Customer 2 ( sunita devi)- she was satisfied with the services provided by
the store like assistance provided by the staff.
Customer 3 ( shakti yadav)- he prefer to shop here because of the location
and sufficient parking area but dissatisfied with the billing, as customers
have to wait for a long time in queue for billing.
Customer complaint book is available in the store where customers can
communicate their complaints or they can directly contact to store manager
and the store gives assurance to look into the matter within 48 hours.
To check the service quality level head office sends mystery shoppers in
order to check the operation and all the problems are noted by the auditing
team.
The salespersons are not empowered to make decision; all the decisions are
taken by the management. Salesperson have been told by the management

that if situation comes when any decision making is required then

communicate with the store manager to look into the matter.

COMPETITIVE ADVANTAGE:The competitive advantage that this retailer enjoys over its competitors is
the diverse customer segment that it caters to. It caters a wide segment of
customers ranging from the lower income groups to the middle income
groups. Due to this the retailer is able to build huge footfalls which
ultimately helps it to achieve huge sales. But this also has a flip side to it as
many customers tend to pick up the products from their places and drop it
at other places. This makes it cumbersome for the store staff to locate the
products and put them back at their proper places. In order to tackle this
problem, they can specifically ask the customers to refrain from doing so.
They can also come up with various other measures to optimize the
efficiency of the overall operations of the store which will help it in
maintaining its competitive advantage over its customers.