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PROJECT REPORT ON TO ANALYZE THE DISTRIBUTION CHANNEL OF VISHAL MEGA-MART

SUBMITTED BY AKANKSHA MISHRA

SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION, UNIVERSITY OF PUNE.

THROUGH DR. D.Y.PATIL INSTITUTE OF MANAGEMENT & RESEARCH PIMPRI, PUNE-18

DECLARATION
It is hereby, declared that all the facts and figures including dissertation is a result of my own research and investigations including formal analysis of entire project work and the same has not been previously submitted to any examination of this university of anywhere else. This declaration will hold good and in my wise belief with full consciousness.

DATE: PLACE: - PUNE AKANKSHA MISHRA

ACKNOWLEDGEMENT
At the outset, I would like to thank VISHAL RETAIL LTD. for giving me the approval to do this project in the organization. I am grateful to MR. PUSHKAR DAS (Asst. Mall Manager) for the moral support, encouragement and generous assistance. I thank my study guide, MR. GAURAV PUROHIT (Purchase Manager) for his encouragement and contribution of time, counsel to me. I am also thankful to MR. VIKAS SHRIMALI (EDP Executive), for coordinating the project work and giving me the guidance. This project would not have been possible without his co-ordination. I am thankful to many individuals of Vishal Retail Ltd. for the encouragement and professional assistance. My thanks to those local transporters who helped me by giving me all information regarding my needs.

I extremely gratitude to RUNU MONDAL (Project Guide) for his guidance to choose me the topic and give brief idea for making a good project report.

_________________ AKANKSHA MISHRA

TABLE OF CONTENTS
S. NO. 1. 2. 3. TOPIC Executive Summary Introduction Company Profile About Distribution Channels Review of Literature Research Methodology Analysis of Data Findings Conclusion 9. 10. Suggestions Bibliography Annexure 82-83 84-90 PAGE NO. 6-9 10-12 13-34 35-40 41-49 50-60 61-76 77-81

4.
5. 6. 7. 8.

SECTION -1 "EXECUTIVE SUMMARY"

EXECUTIVE SUMMARY
The objective is to analyze the distribution channel of VMM. The study is to know about the process of delivering the goods & products to retail stores. The channel through which the whole process is completed & the various intermediaries who plays important role to maintain the proper supply of goods. The method of data collection used was survey method & the data collection tool used for the survey was questionnaire. The sample population consists of the distributors outlet who keeps all the documents and general information about supply & distribution. RM adopted Sampling Element Sample Size : Convenient Sampling. : Local distributors. : 23 Distributors..

In analysis of data section there are following items which are included, they are: - SWOT analysis of VRL, - Present & Future Retail sales in India, - Graphical representation of Questionnaire.

Findings were: The Company has its own manufacturing products except FMCG & Toys section. Company has its own transportation system. Many distributors are not satisfied with the payment service of the company. Company purchases in bulk or in large quantity, thats why the cost becomes low. When Mall purchases on Head office level, sometimes they delivered excess stock than the requirement. There is no action for complaints, suggestions & problems of salesman, floor manager & even top level of VMM

Conclusion was: The Company has its own manufacturing products that are why good quality products are manufactured at low cost. As company is also using its own transportation, thats why the transportation cost also becomes low & the profit becomes high. There is delay in making payment thats why the distribution channels is not so effective. Sometimes there is a mistake while preparing Purchase Order at local level, there is a problem of excess stock of perishable products on FMCG section There is a demand of FMCG products is higher in comparison to other products & some of them are perishable, so company purchases these products at local level.

Suggestions were:
The Company should take action to improve their payment policy, if company makes prompt payment to the distributors. As Company receives excess stock, proper action should be taken by the company to solve out this problem by reducing the excess stock at every level. There should be some precautions while preparing the Purchase order to reduce the excess stock of perishable products. The Company should implement the suggestions given by the customers & the management in order to improve the services provided by them.

Annexure is
IT iscalled as the last section of project report which includes: - Format of questionnaire, - Any format given by the company,

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SECTION -2 "INTRODUCTION"

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{A}

INTRODUCTION TO THE SUBJECT:

A channel of distribution or a distribution system is a key external

resource. It is important with key internal resources like manufacturing, research etc. Distribution channels cab be viewed as set of interdependent organization involved in the process of making a product or services available for use or consumption. The basic role of distribution channels is to transform the consistent supply in to assortment of goods that people want to buy. Manufacturers produce large quantity of similar goods, whereas consumers usually desire only limited quantity of wide range variety of goods. This gap is bridge by channels.

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{B} WHY THIS TOPIC?

IMPORTANCE OF DISTRIBUTION CHANNEL:
Distribution channels often require the assistance of others to reach its target market. A company needs others to help with the distribution of their product. A company that handles its own distribution functions be in a better position to exercise control over product sales and potentially earn higher profits. While on the surface it may seem to make sense for a company to operate its own distribution channel (i.e., handling all aspects of distribution) there are many factors preventing companies from doing so. While companies can do without the assistance of certain channel members, for many marketers some level of channel partnership is needed. For example, marketers who are successful without utilizing resellers to sell their product (e.g., Dell Computers sells mostly through the Internet and not in retail stores) may still need assistance with certain parts of the distribution process (e.g., Dell uses parcel post shippers such as FedEx and UPS). In Dells case creating their own transportation system makes little sense given how large such a system would need to be in order to service Dells customer base.

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Thus, by using shipping companies Dell is taking advantage of the benefits these services offer to Dell and to Dells customers.

SECTION -3
"COMPANY PROFILE"

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{A} "COMPANY INTRODUCTION":It was incorporated on July 23, 2001 under the Companies Act, 1956 as "VISHAL RETAIL PRIVATE LTD". The man behind this company is Mr. Ram Chandra Agarwal. It was converted to a public limited company by a special resolution of the members passed at the annual/extra ordinary general meeting held on November 18, 2005. The fresh certificate of incorporated consequent on change of name was granted to our Company on February 20, 2006, by the Registrar of companies, West Bengal at Kolkata. As of April 2007, it operates 51 retail stores, including 2 stores which are operated by its franchisees. These 51 stores are spread over about 12,82,000 square feet & are located in 18 states and 39 cities across India. By the end of March 2007, it'll expand its outlets 61 companies owned outlets & many franchise operations. Its loyalty programme gives the Indian consumer of being rewarded every time he makes a purchase at any of its stores anywhere in the country. Consumers can make purchases at any store and accumulate points at a central level. These points are redeemable at any of its stores. He can accumulate points even when he makes a purchase while traveling and redeem points at any store.

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So no matter where he is in India, he can partake in its loyalty programme. In its efforts to strengthen its supply chain, it has set up 7 regional distribution centres and an apparel manufacturing plant. It started as a retailer of ready-made apparels in Kolkata in 2001.

In 2003, it acquired the manufacturing facilities from Vishal Fashions Private Limited & M/S Vishal Apparels. Currently, it sell ready-made apparels & a wide range of household merchandise and other consumer goods such as footwear, toys, watches, toiletries, sports items, crockery, gifts and novelties. It endeavors to facilitate one-stop-shop convenience for its customers & to cater to the needs of the entire family. Mr. Ram Chandra Agarwal has been ranked as the 28th most powerful person in the retail industry. Its apparel manufacturing plant is located at Gurgaon, Haryana. For ensuring efficient supply chain, it has set up 7 regional distribution centres located around:

- Kolkata (W. Bengal) - Thane (Maharashtra) - Jaipur (Rajasthan) - Ghaziabad (U.P) - Ludhinana (Punjab) - Gurgaon (Haryana) & Delhi

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COMPETETIVE STRENGHTS: It believed that its primary competitive strengths are: Understanding of the 'Value Retail' segment, Supply Chain Mgt., Logistics & Distribution network, Geographical spread, Identifying new locations, Private labels, Information Technology systems, & Experienced & skilled mgt. team.

ITS STRATEGY: It intends to pursue the following strategies in order to consolidate its position as an operator in the 'Value Retail' segment in India: Increasing its penetration in the country by leveraging its supply chain, Distribution & logistic network, Emphasis on backward integration,
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 Expansion of FMCG, Procurement from low-cost production centres outside India,

Its category management system is used to plan promotional schemes. It launches promotional schemes weekly (i.e.-Discount, Buy1 Get1, Combo Packs, Cross tie-up etc.). Apart from general sales promotion, the category manager formulates promotional plans for 'Slow Movers'. In addition, to promote sales, it focuses on layout of the stores & positioning, presentation & display of merchandise, in order to appeal to the customers. work force. It has 6,801 employees both employed in its stores as well as in its manufacturing unit & other facilities. Description is as below: * According to Age AGE 18-24 25-35 35 & Above TOTAL NO. OF EMPLOYESS 3,793 2,178 830 6,801

* Increasing customer satisfaction & Its base of loyal customers.

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SALES PROMOTION & CUSTOMER SERVICE: Its category management system is used to plan promotional schemes.

It launches promotional schemes weekly (i.e.-Discount, Buy1 Get1, Combo Packs, Cross tie-up etc.). Apart from general sales promotion, the category manager formulates promotional plans for 'Slow Movers'. In addition, to promote sales, it focuses on layout of the stores & positioning, presentation & display of merchandise, in order to appeal to the customers.

HUMAN RESOURCE: Its H.R policies are aimed towards creating a skilled & motivated

work force. It has 6,801 employees both employed in its stores as well as in its manufacturing unit & other facilities. Description is as below: * According to Age AGE 18-24 25-35 35 & Above TOTAL NO. OF EMPLOYESS 3,793 2,178 830 6,801

* According to Qualification -

QUALIFICATION NO. OF EMPLOYESS Under Graduate 4,060 Graduate 2,498 Post Graduate 243
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TOTAL

6,801

QUALITY CONTROL: Its dedicated professional Quality Control team ensures the quality of

its products. Its quality checks start the basic cloth and accessories and end with its doing a full inspection on the finished items. It believes that Quality Control is the key to success. Basic goal is to give the customer with the best quality and value for his money.

INFORMATION TECHNOLOGY SYSTEM: It focused on acquisition & implementation of advanced information

technology systems, processes and business applications in order to handle all stores operations including inventory management & billing. Its office processes are also computerized which support procurement, supply chain logistics, distribution centres management & inventory control. All the locations are connected through company-wide virtual network connection which helps to efficiently manage its network of outlets throughout the country. Based on its existing I.T system, they are able to generate daily reports covering the various aspects of its business such as division wise sales per store, inventory movement & position at stores & distribution centres & generation of purchase and delivery orders.

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In August 2005, they had entered into a software end-user license agreement with Systems Applications & Products in Data Processing Private Limited ("SAP India") for grant of a non-exclusive & perpetual license to their company to use the SAP software, document & other information related thereto. They have partly implemented their I.T set up & are currently in the midst of completing the process of upgrading their I.T set up & have entered into an agreement dated September 6, 2005 with Tata Consultancy Services Limited for providing I.T services including implementation of more advanced ERP applications such as SAP, rendering services inter-alia for MIS on reports related to: Stock Management, Receipt Processing, Picking & Packing, Project Systems, Merchandise Assortment Management, Pricing & Promotion, Sales Controlling & Financial Accounting.

COMPETETION: They face competition from other retailers of similar products &

services. These include stand-alone stores in the organized and unorganized sector, as well as other chains of stores including departmental stores. They focus on offering their customers a vast variety of products and services catering to their diverse requirements & needs.
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COMMITTEE OF THE BOARD: They have constituted the following committees of their B.O.D for

compliance with corporate governance requirements: - Audit Committee, - Shareholders/Investors' Grievance Committee & - Remuneration Committee.

INCENTIVE SCHEMES: Latest incentive scheme of VRL is as follows:

90% to 99.99% Target achieved 100% to 109.99% Target achieved 110% to 119.99% Target achieved 120% to 129.99% Target achieved 130% to 139.99% Target achieved 140% to 149.99% Target achieved 150% to 159.99% Target achieved 160% and Above

: 5% of Salary. : 10% of Salary. : 15% of Salary. : 20% of Salary. : 25% of Salary. : 30% of Salary. : 35% of Salary.

: 40% of Salary.

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{B} "COMPANY HIERARCHY":-

BOARD OF DIRECTOR S
Mr. Ram Chandra Agrawal {Chairman, Executive Director & M.D}

Mrs. Uma Agrawal {Executive Director & Whole Time Director)

Mr. Surendra Kumar Agrawal {Executive Director & Whole Time Director}

Mr. Bharat Jain {Independent Director}

Mr. Jay Prakash Shukla {Independent Director}

Mr. Rakesh Agrawal {Independent Director}

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"MALL HIERARCHY":-

MALL MANAGER

FLOOR MANAGER

SUPPORT FUNCTION

Asst. Floor Manager

Asst. Mall Manager

Purchase Manager

E.D.P

Salesman

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{C} "PRODUCTS RANGE":The main 5 categories or sections are as follows:

1) HOME FURNISHING: Drawing Room Door Mat Carpet Curtains Kitchen Aprin Kitchen Napkin Bedroom Bed Sheet Pillows Pillow Cover Bathroom Bath Mats Towel Gift Sets

2) FOOD MART: Food Staples Biscuits Health Drinks Papad Sugar (Own Manufacture) Tea/Coffee Edible Oil Maggi Flour Snacks Chocolates Non-Food Soaps Hair Oil Washing Powder Fairness Cream Detergent Powders Hair Colour Face Wash Detol(Soaps & Liquid wash) Wrap Napkins Shampoo

3) SPORTS & FITNESS: INDOOR GAMES OUTDOOR GAMES 24

Basket Ball T.T. Bat Boxing Kit Swimming Costumes Water Ball

Cricket Bat Football Lawn Tennis Tennis Racket Tennis Ball

4) BOYS & GIRLS ACCESSORIES: BOYS: Lower Jeans Cotton Trouser Winter Wear Suit Blazer Windcheater Jacket

Upper Shirt Casual Shirt Formal Ethnic & Sports Night Suits T-Shirts Dupatta Sherwani Upper Kurta Skirt Top Ethnic Nighty Lancha Sharara Salwar Suit GIRLS:

Lower Pants Jeans Capri Winter Wear Jackets Stawl Blazer Track Suit

5) HOUSEHOLD: Acrylic Ware Dinner Set Home Aids Floor Wiper Sanitary Brush General Plastic Goods Coffee Mug Copper Jug Pressure Cooker Cooker Pressure Pan Electrical App. Chopper 25 Steel Cake Server Non Stick Handi Dosa Tawa Bone China Soup Set

Bucket Glass Ware Cup Lemon Set

Microwave Oven Thermo Ware Tiffin Container

Dessert Set Porcelain Cup & Saucer

NOTE:

In order to maximize the value that the customers derive in spending on goods bought in their stores, they undertake variety of measures to provide them quality goods at reasonable price like in-house production of garments, procurements of goods directly from he manufacturers & customized products mix at their stores depending on the regional customer behavior & preferences. They have a number of in-house brands (these are called private labels) such as: - Zepplin - Paranoia - Chlorine, - Kittan Studio, - Famenne, - Fleurier Women & Rousea These all brands contributing 9.68% of their income in Financial Year 2007. It helps in their brands building exercise as well as to improve margins. --------------------------------------------------------------------------------------------

{D} "COMPANY WORKING STYLE IN THIS SUBJECT":-

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PURCHASE PROCESS:
VRL has a policy to purchase goods & products on two different levels,

as VRL also manufactures its own products like Home appliances, Apparels, Women accessories, Pulses etc. So these above explained products are purchased by each store on HEAD OFFICE LEVEL. So the process of purchase of products on H.O level is under mentioned:

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PURCHASE ON H.O LEVEL

Requisition form

Merchandiser

Warehouse In charge

Stock to central w.house

Creation of Packages

Outbound delivery

Goods Transportation

Received by Store Gate Entry Inbound Entry/Delivery

Stock-in by Software

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1. Requisition Form: - It is prepared by various floor managers, and then

these products which are required received to H.O, then they send the requirements through its (VRLs) own transportation services. In this way, whatever requirements are received from various floors are to be sent to H.O & then they supplied required goods to those particular outlets. 2. Merchandiser: - Whatever requirements received at H.O level, all are fulfilled by the merchandisers according to category. They collect the requirements & then send to warehouse incharge. These warehouse incharge works on product category, so they collect & send the requirements to the central warehouse. These merchandisers work according to the products category. 3. Stock to central warehouse: - It receives the requirements from various warehouses which work according to various products category. In this way, various category like FMCG products, home appliances, mens apparels & all other categories are collected together & then after dispatch to the particular outlets. So, this central warehouse supplies according to needs. 4. Packages for showroom: - As central warehouse receives the various requirements from different warehouses, then all products are packed in aluminum boxes. These boxes are transported through VRL own transportation services at the particular outlet.

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5. Outbound delivery for stores: - As all the required products are packed in boxes, the outbound entry is done at central warehouse after outbound entry these boxes are dispatched & then transported to various outlets. 6. Goods Transportation: - As all outbound delivery done & goods properly dispatched, then after only the transportation is done to the various outlets. 7. Received by Store: - After above procedure is completed finally goods received by the store, they check all the formalities regarding transportation & about the received goods. On this level various formalities are done at store level regarding the goods receivable procedure. 8. Gate Entry: - Just after reaching the goods at outlet, first of all the gate entry regarding to the goods receivable is done & goods are also checked whether they are properly received or not. 9. Inbound Entry: - As goods received by the particular outlet, gate entry is done after this inbound entry is done in respect to whatever goods are received. They check all the documents regarding to transportation of goods, how much quantity, how many boxes & what products are received are checked. 10. Stock-in by Software: - Then after, as the goods are manually received by the store & as all inbound entries are done the stock-in entries through software called SAP is done. In other words whatever goods are received manually is should be entered in software.
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After completing whole process of goods receivable the goods are displayed for sale. In this way, the purchase procedure on H.O level is completed.

The second procedure is of LOCAL LEVEL. It is as follows:

PURCHASE ON LOCAL LEVEL

Requisition form

Purchase Order

Requirements to Vendor

Gate Entry

G.R.C

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1. Requisition Form: - It is prepared by various floor managers, and

then these products which are required received to H.O, then they send the requirements through its (VRLs) own transportation services. In this way, whatever requirements are received from various floors are to be sent to H.O & then they supplied required goods to those particular outlets. 2. Purchase Order (P.O): - These are prepared only when goods are purchased through local vendors. The P.O consists of: Vendor Purchasing Org.: VRL Purchasing Group: SER for services Company Code: VRL Account assignment Category: K (Cost Center) Item Category: D (Services) Article Short text: description of Type of service PO quantity: 1 Order unit: au (activity unit) Merchandise Category: Services
Site: name of site where we want services.

3.Requirements to Vendors: - As the P.O is prepared, it is send to the concerned vendors & then he sends the required goods to the store according to the P.O information.

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4. Gate Entry: - As vendor sends the requirements, the goods are

received & gate entry is done before goods entered into the store. 5. Goods Received Challan: - Basically its a document which is filled at the time of received of goods by software (SAP). It contains the goods description such as quantity, rate, brand etc.

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DOCUMENTATION:

There are 2 types of transportation: - Within the state, - From one state to another state. a) Documents which are required while transportation within the state are as below: - Bill of goods, - RST & CST number & - Challan. b) Documents which are required while transportation from one state to another are as follows: - Bill, - Form no. 18 (Sales Tax), - TIN no., - Builty, - Challan & - Labor charges receipt. Contents in documents: - Builty: Description of consignor, Description of consignee & Description of material. - Challan: Fair & Freight. - Labor Charges: These are varies according to materials (whether it is heavy or domestic)
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SECTION -4
"ABOUT DISTRIBUTION
CHANNELS"

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The distribution channel:Frequently there may be a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the allimportant end-user.

Channels
A number of alternate 'channels' of distribution may be available: Selling direct, such as with an outbound sales force or via mail order, Internet and telephone sales Agent, who typically sells direct on behalf of the producer Distributor (also called wholesaler), who sells to retailers

Retailer (also called dealer or reseller), who sells to end customers

Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

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Channel members
Distribution channels can thus have a number of levels. Kotler defined the simplest level that of a direct contact with no intermediaries involved, as the 'zero-level' channel. The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for industrial goods a distributor. In small markets (such as small countries) it is practical to reach the whole market using just one- and zero-level channels. hoy hoy In large markets (such as larger countries) a second level; a wholesaler for example, is now mainly used to extend distribution to the large number of small, neighborhood retailers or dealers. In Japan the chain of distribution is often complex and further levels are used, even for the simplest of consumer goods. In Bangladesh Telecom Operators are using different Chains of Distribution, especially 'second level'. In IT and Telecom industry levels are named "tiers". A one tier channel means that vendors IT product manufacturers (or software publishers) work directly with the dealers. A one tier / two tier channel means that vendors work directly with dealers and with distributors who sell to dealers. But the most important is the distributor or wholesaler.

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The internal market:Many of the marketing principles and techniques which are applied to the external customers of an organization can be just as effectively applied to each subsidiary's, or each department's, 'internal' customers. In some parts of certain organizations this may in fact be formalized, as goods are transferred between separate parts of the organization at a `transfer price'. To all intents and purposes, with the possible exception of the pricing mechanism itself, this process can and should be viewed as a normal buyerseller relationship. The fact that this is a captive market, resulting in a `monopoly price', should not discourage the participants from employing marketing techniques. Less obvious, but just as practical, is the use of `marketing' by service and administrative departments; to optimize their contribution to their `customers' (the rest of the organization in general, and those parts of it which deal directly with them in particular). In all of this, the lessons of the non-profit organizations, in dealing with their clients, offer a very useful parallel.

Channel decisions: Channel strategy Product (or service)<>Cost<>Consumer location

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Managerial concerns:The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier: Channel membership Channel motivation Monitoring and managing channels

Channel membership:Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'.

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Channel motivation
It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a competition is offered to the distributors' sales personnel, so that they are tempted to push the product. Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products.

Monitoring and managing channels:In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain. In practice, many organizations use a mix of different channels; in particular, they may complement a direct sales force, calling on the larger accounts, with agents, covering the smaller customers and prospects.

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SECTION -5
"REVIEW OF

LITERATURE"

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WHAT IS RETAILING?

Retailing can be defined as a set of business activities that adds value to the products & services sold to the final consumers for their personal, family or household use. From the marketers point of view: It can be defined as a set of marketing activity designed to provide satisfaction to the end consumers & profitably maintain the customer base by continuous quality improvement across all areas concerned with selling goods & services.

Retailing Involves:

- Understanding the needs of customers, - Developing goods assortment of merchandise, - Displaying the merchandise in an effective manner so that consumers find it easy & attractive to buy.

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BENEFITS OF RETAILING:

It plays major role in transfer of goods & services from the manufacturer to the end consumer. In this process, retailers deliver many benefits to customers, manufactures & wholesalers.
a) Benefits to customers:

- Breaking bulk, - Providing assortment(variety), - Holding inventory, - Providing after sales services, - Providing information.
b) Benefits to Manufacturers & Wholesalers:

Retailers provide the Retailing can be defined as a set of business activities that adds value to the products & services sold to the final consumers for their personal, family or household use. From the marketers point of view: It can be defined as a set of marketing activity designed to provide satisfaction to the end consumers & profitably maintain the customer base by continuous quality improvement across all areas concerned with selling goods & services.

Retailing Involves:

- Understanding the needs of customers, - Developing goods assortment of merchandise, - Displaying the merchandise in an effective manner so that consumers find it easy & attractive to buy.

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It plays major role in transfer of goods & services from the manufacturer to the end consumer. In this process, retailers deliver many benefits to customers, manufactures & wholesalers. - Breaking bulk, - Providing assortment(variety), - Holding inventory, - Providing after sales services, - Providing information.

c) Benefits to Manufacturers - manufactures with great revenues, which could be re-invested in production. - Retailers gather information regarding taste & preferences of customers. - Retailers provide feedback on the goods & services. - They help manufactures to make modification to the existing products or launch new products to satisfy needs of customers.

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WHAT IS DISTRIBUTION CHANNEL?

A channel of distribution or a distribution system is a key external

resource. It is important with key internal resources like manufacturing, research etc. Marketing channels cab be viewed as set of interdependent organization involved in the process of making a product or services available for use or consumption. The basic role of marketing channels is to transform the consistent supply in to assortment of goods that people want to buy. Manufacturers produce large quantity of similar goods, whereas consumers usually desire only limited quantity of wide range variety of goods. This gap is bridge by channels.

WHY MARKETING NEED INTERMEDIATARIES?

Manufacturers dont always need marketing Intermediaries perform certain functions better than most

intermediaries to sell their goods to consumer and industrial markets. manufacturers. These functions include transportation, storage, selling, advertising, and relationship building. Companies often outsource distribution to others. BROKERS are marketing intermediaries who bring

buyers and sellers together and assist in negotiating an exchange, but do not take title to the goods.

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DISTRIBUTION DECISIONS?

Product decisions may be the most important of all marketing decisions since these lead directly to the reasons (i.e., offer benefits that satisfy needs) why customers decide to make a purchase. But having a strong product does little good if customers are not able to easily and conveniently obtain it. With this in mind we turn to the second major marketing decision area distribution. Distribution decisions focus on establishing a system that, at its basic level, allows customers to gain access and purchase a marketers product. However, marketers may find that getting to the point at which a customer can acquire a product is complicated, time consuming, and expensive. The bottom line is a marketers distribution system must be both effective (i.e., delivers a good or service to the right place, in the right amount, in the right condition) and efficient (i.e., delivers at the right time and for the right cost). Yet, as we will see, achieving these goals takes considerable effort. Distribution decisions are relevant for nearly all types of products. While it is easy to see how distribution decisions impact physical goods, such as laundry detergent or truck parts, distribution is equally important for digital goods (e.g., television programming, downloadable music) and services (e.g., income tax services). In fact, while the Internet is playing a major role in changing product distribution and is perceived to offer more opportunities for reaching customers, online marketers still face the same distribution issues and obstacles as those faced by offline marketers.

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In order to facilitate an effective and efficient distribution system many decisions must be made including (but certainly not limited to):

Assessing the best distribution channels for getting products to

customers

Determining whether a reseller network is needed to assist in the

distribution process

Arranging a reliable ordering system that allows customers to place

orders

Creating a delivery system for transporting the product to the customer For tangible and digital goods, establishing facilities for product

storage

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TYPES OF CHANNEL MEMBERS:

Channel activities may be carried out by the marketer or the marketer may seek specialist organizations to assist with certain functions. We can classify specialist organizations into two broad categories: resellers and specialty service firms.

Resellers These organizations, also known within some industries as intermediaries, distributors or dealers, generally purchase or take ownership of products from the marketing company with the intention of selling to others. If a marketer utilizes multiple resellers within its distribution channel strategy the collection of resellers is termed a reseller network. These organizations can be classified into several sub-categories including:

Retailers Organizations that sell products directly to final consumers. Wholesalers Organizations that purchase products from suppliers,

such as manufacturers or other wholesalers, and in turn sell these to other resellers, such as retailers or other wholesalers.

Industrial Distributors Firms that work mainly in the business-to-

business market selling products obtained from industrial suppliers.

Specialty Service Firms These are organizations that provide additional services to help with the
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exchange of products but generally do not purchase the product (i.e., do not take ownership of the product):

Agents and Brokers Organizations that mainly work to bring

suppliers and buyers together in exchange for a fee.

Distribution Service Firms Offer services aiding in the movement of

products such as assistance with transportation, storage, and order processing.

Others This category includes firms that provide additional services

to aid in the distribution process such as insurance companies and firms offering transportation routing assistance.

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SECTION -6

"RESEARCH
METHODOLOGY"

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DEFINITION OF RESEARCH:
According to Clifford Woody Research comprises defining the problems, formulating hypothesis, collecting organizing & evaluating data, making deductions and reaching conclusion & testing the conclusions to determine whether they fit the formulating hypothesis.

OBJECTIVE OF THE RESEARCH:

There are various objectives of the research, they are follows: - To gain familiarity with a phenomenon or to achieve new insights into it. - To show accurately the characteristics of a particular individual, situation. - To determine the frequency with which something occurs or associated. - To test a hypothesis of a casual relationship between variables.

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RESEARCH PROCESS:

PROCESS

Define the problem & research objective

Developing the research plan

Collection of data

Analyze the data

Research findings

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(i)Defining the Problem and the Research Objective:The research objective states what information is needed to solve the problem. The objective of the research was to derive the comparison between VRL & other retailers.

ii) Developing the Research Plan: Once the problem is identified, the next step is to prepare a plan for getting the information needed for the research. The present study adopted the exploratory approach wherein there was a need to gather large amount of information before making a conclusion.

iii) Collection and Sources of data: Market research requires two kinds of data, i.e., Primary Data and Secondary Data. Data gathering involved the usage of both primary and secondary data though there was an extensive usage of primary data. Well-structured questionnaire was prepared for the customers. There were personal interview surveys mostly by cold calling (door-to-door) surveys. The questionnaires contained both open-ended and close-ended questions. Here, open-ended questions were more useful as it was an exploratory research that was conducted wherein the main objective was to get an insight into how people think rather than measuring how many people think in a particular way. Secondary data was collected from various journals, books and web sites.

53

iv) Analyze the Collected Information: This involved converting raw data into useful information. It involved tabulation of data and using statistical measures on them for developing frequency distributions and calculating the averages and dispersions.

v) Report research findings: This phase marked the culmination of the marketing research effort. This report with the research findings is a formal written document. The research findings and personal experience were used to propose the recommendations to develop the services of VRL.

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B. Data Collection Methods:

All data sources available to the researcher can be classified as either Secondary Primary.

Primary Data can be collected through: Survey, Experimentation, Observation, Focused group interview & Projected technique. Secondary Data can be collected through: Companys Literature, Annual Reports, Sales Reports, Magazines, Journals, Legal Documents & Government Gazettes.

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 RESEARCH METHODOLOGY ADOPTED FOR THE STUDY RM adopted for the study was Convenient Sampling. Research design refers to plan, structure and strategy on which the researcher has to work. In other words we can say that a research design is a blue print of a research. It lays down the methods and procedures for collection of requisite information and its measurement and analysis with a view to arriving at certain meaningful conclusions at the end of proposed study. After setting the research design the next step is of data collection. To collect the relevant data we have to keep in mind two aspects determining relevant data source and designing data collection form Filling up of questionnaire from the distributors and recorded the responses in the designed schedule for further analysis and processing.

PROCESSING AND ANALYSIS OF DATA: -

This step includes prepare questionnaire and processing of collected data. The schedules are required to be edited during the survey for necessary corrections. After the survey was completed they are required to be checked again for completeness, accuracy and uniformity.

56

 LIMITATIONS OF THE STUDY:

There are some limitations regarding this project, which are as follows: - VRL is using its own transportation system from Head Office level (New Delhi), so the mall was unable to provide data regarding the distribution of the company. - As only selected FMCG products are purchased at local level so there are limited distributors. - No particular department at the mall level to provide proper information regarding distribution. - Data collection is limited due to close-ended questionnaire. - As Head Office is situated at New Delhi, so information is collected from local distributors only.

57

 SAMPLE DESCRIPTION:

Convenient sampling was chosen as the sample selection procedure. The sample size was taken to be as 23 existing distributors. 3-4 distributors were interviewed individually everyday and asked to fill the questionnaires. These interviews and questionnaires were mainly aimed at 4 things: a) To assess perception of the existing distributors. b) To get some idea about the image of VRL in the minds of the existing distributors.

Convenience Sampling:-

Convenience sampling, as the name implies, is based upon the researcher who is to select a sample. This type of sampling is also called as accidental sampling as the respondents in the sample are included in it merely on account of their being available on the spot where the survey is in progress. Sampling units- Who are to be surveyed? The marketing researcher must define the target population that will be sampled. Sample size- How many people should be surveyed? Large samples give more reliable results than small samples. However, it is not necessary to sample the entire target population Field Area- It is geographical area under which the research is being done.

58

Convenient sampling method was used. It was the best sample selection procedure as individual distributors were chosen and requested for an interview and filling of the questionnaire. Sample size of 23 distributors was taken so that the conclusion is not biased and care was taken while getting the questionnaire filled so that the distributors does not misunderstand the question and check the option that is not applicable.

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METHOD

OF

DATA

COLLECTION

IN

SURVEY:
Here, in project the method of data collection is as follows:
Primary Data:

- Questionnaire by which various questions were asked to distributors to know about their perception (It is attached with annexure).
Secondary Data:

- Companys bulletin through which general information was taken about the company. (It is mention in bibliography) & - Internet.
Sampling Element

: Various Distributors.

Sampling Method

: Convenience Sampling was taken because distributors were not interested to discuss

some about their policy. Their response was not positive.

Sample Size

: 23 Distributors.

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SECTION -7

"ANALYSIS OF
DATA"

61

SWOT ANALYSIS OF COMPANY: SWOT MEANS: S = STRENGTH, W = WEAKNESS, O = OPPRTUNTIES, T = THREATS. HERE S W IS INTERNAL T IS EXTRNAL ELEMENTS FOR ANY COMPANY. a) STRENGTH: First of all it is a part of Vishal Retail Ltd. capital and its capital is very huge. Its return is very high compare to other companies in retail sector because of its huge capital. Company goodwill is very strong in market. Its products are flexible enough according to need of customers. Its management and working team is also very strong. Its working process is very fast. Due to huge capital, purchasing power is also strong in comparison to other retailers. b) WEAKNESS:
62

 Local or rural people are not very much aware about Vishal MegaMart.

c) OPPORTUNITIES: Now a days retail sector is on boom in India so it is very good opportunities for company in this sector. Its very good opportunities to growth in this sector because of higher returns on its products. d) THREATS: Now days there are many competitors in this sector. Other companies are also offering same or high benefits.

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-----------------------------------------------------------------------------------------------------------

RETAIL SALES IN INDIA:

The figure explains about the retail sales in India below: 30000 25000 20000 15000 10000 5000 0 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009

NOTE: Above figures are indicated in Rs. Crore. ANALYSIS:

- Above graph denotes about the present & future sales in India by various retailers. - It shows a regular increase in retail sales year-by-year. - It also defines that there is only increase in sales in future period.
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 ORGANIZED SECTOR SHARE IN INDIA :

FIELD Clothes & Textiles Watch & Jewellery Food & Grocery Footwear Durables Others

SHARE 36% 17% 11% 13% 10% 10%

10% 10% 36%

Clothes & Textiles Watch & Jewellery Food & Grocery Footwear Durables Others

13%

11%

17%

ANALYSIS: - This graph denotes shares of various sectors.

65

- It mentions how much expenditure done by an individual out of various sectors. - On this basis, clothes & textiles have the highest share whereas durables & others are comparatively lowest.

GRAPHICAL PRESENTATION OF QUESTIONNAIRE

1) What is your promotional scheme for the company? OPTIONS Salesmens visit Advertisement Others
Sample size: 23 Distributors

PERCENTAGE 48% 21% 31%

NO. OF DISTRIBUTORS 11 5 7

31% 48% 21%

Salesmen's Visit Advertisement Others

Analysis: - Most of the distributors opine that salesmens visit is more effective tool for the promotion. - While only 21% prefers advertisement.
66

- But 31% prefers various tools like visit of distributors, frequent telecommunication etc 2) What discount policies have you adopted for the company? OPTIONS Cash Discount Quantity Discount Regular Order Sample Size: 23 Distributors PERCENTAGE 18% 47% 35% NO. OF DISTRIBUTORS 4 11 8

35%

18%

Cash Discount Quantity Discount Regular Orders

47%

Analysis: - Since company purchases in bulk or huge quantity, thats why the distributors mostly provide quantity discounts. - 35% of the distributors provide discounts if regular Orders are placed by the company - Only 18% of the distributors give cash discount to the company.
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3) What is the scheduling for delivery to the company? OPTIONS PERCENTAGE NO. OF As per demand Regular basis Others Sample size: 23 Distributors. 54% 33% 13% DISTRIBUTORS 12 8 3

13% 33% 54% As per demand Regular basis Others

Analysis:
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- Large group of distributors delivered on the basis of demand of the company. - 33% prefers the delivery on the regular basis. - As there is flexibility in contracts & transactions sometimes the delivery is done on that basis itself 4) On which basis schemes & offers are provided to the company? OPTIONS Bulk Purchase Regular Order Payment Sample size: 23 Distributors PERCENTAGE 63% 28% 9% NO. OF DISTRIBUTORS 14 6 3

9% 28% 63% Bulk Purchase Regular Order Payment

Analysis: - The distributors offer schemes to the company mostly for their bulk purchasing as they required the products in large quantity.
69

- Sometimes the schemes & offers are provided on regular basis, it depends on the transactions done by the company. - Very few distributors allow offers & schemes on the payment service. 5) Is there any formal/informal meeting with the company? OPTIONS Weekly Monthly Quarterly Sample size: 23 Distributors PERCENTAGE 13% 61% 26% NO. OF DISTRIBUTORS 3 14 6

26%

13% Weelky Monthly Quaterly 61%

Analysis: - Only few distributors prefer weekly meetings because it is not convenient for both the company & distributor. - But very high % of distributors prefers monthly meetings because it maintains the relation between both of the parties.
70

- On the other hand 26% distributors prefer the quarterly meetings to discuss the policies & their personal opinions. 6) What customers feedback do you have regarding your product? OPTIONS PERCENTAGE NO. OF Quality products Compitible Rate Non-Acceptable Sample size: 23 Distributors 40% 47% 13% DISTRIBUTORS 9 11 3

13% 40% 47%

Quality Products Compitible Rate NonAcceptable

Analysis: - The distributors provide quality products to the company to maintain the positive image. - Whereas 47% distributors provides products on compitible rates as there is very strong competition in the local market.

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- But only few or less distributors are facing the problem of delivering the non-acceptant products to the company. 7) What is the most preferable method for placing an order? OPTIONS Ready Stock Pre-sale Others Sample Size: 23 Distributors. PERCENTAGE 35% 57% 8% NO. OF DISTRIBUTORS 8 13 2

8% 35% Ready stock Pre-sale 57% Others

Analysis: - It is surveyed that 35% distributors prefers ready stock delivery. - Mostly distributors prefer Pre-sale delivery which is 57% because it is more convenient for them to supply the required needs. - Only few distributors opt for others like telephonic orders , mail etc which is only 8%

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8) Are the products available on time/demand? OPTIONS Yes No Sample Size: 23 Distributors. PERCENTAGE 73% 27% NO. OF DISTRIBUTORS 17 6

27% Yes No 73%

Analysis: - Here it is found that 73% distributors claims that they deliver the products on time. They are providing the prompt service to the company. - 27% of the distributors have failed to make prompt deliveries because of the various reasons which are mentioned. 9) If No, then what are the reasons?
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OPTIONS Shortage of product Source problem Salesmens visit Sample size: 23 Distributors.

PERCENTAGE 46% 16% 38%

NO. OF DISTRIBUTORS 11 4 8

38%

46%

Shortage of product Source problem Salesmen's visit

16%

Analysis: - The main reason behind failure of prompt delivery is the shortage of the products from the distributor which is 46% - Due to infrequent visit of salesman the distributor faces problem in delivering the products - 16% of the distributor faces problem regarding unavailability of the sources. 10) What is the mode of payment by the company? OPTIONS PERCENTAGE
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NO. OF

Postpaid Prepaid On the spot Sample size: 23 Distributors

73% 27% 0%

DISTRIBUTORS 17 6 Nil

0%

27% Prepaid Postpaid On the spot

73%

Analysis: - 73% of the company prefers postpaid payment which means making payment only after the delivery of goods been made.
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- In case of bulk purchasing the company has to made advance payment. - It is also found that the company doesnt make on the spot payment.
11)

Are you satisfied with the companys policies? OPTIONS Yes No PERCENTAGE 77% 23% NO. OF DISTRIBUTORS 18 5

Sample size: 23 Distributors.

23% Yes No 77%

Analysis: - From the survey it is found that 77% of the distributors are satisfied from the company.

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- 23% of the distributors are not satisfied with the company due to the irregularity of making payment.

SECTION -8

"FINDING
SUGGESTION CONCLUSION"

77

A} OBSERVATION & FINDINGS:

Various observation & findings are as follows:
Manufacturing: The Company has its own manufacturing products

except FMCG & Toys section. Thus the own manufactured product are transported from Head office.
Transportation System: Company has its own transportation system,

thats why the cost of products is lower than local market.

Payment: As many distributors are not satisfied with the payment

service of the company, thus sometimes conflicts arise between both the parties.
Purchase: The Mall purchases products on 2 levels:

- Head office level & - Local level.

Type of Purchase: As Company purchases in bulk or in large

quantity, thats why the cost becomes low & it benefits the company in sales point of view.
Excess Stock: When Mall purchases on Head office level, sometimes

they delivered excess stock than the requirement.

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 Payment Policy: Basically, Company prefers post-paid basis for

making the payment to the vendors. So, first payment is clears from Head office then they send cheque to the company in the favor of distributors. This procedure takes long time.
Suggestions & Implementation: There is no action for complaints,

suggestions & problems of salesman, floor manager & even top level of VMM from board level.
Delivery: Company prefers delivery according their need or demand,

so there is no problem of excess stock at local level purchase.

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{B} CONCLUSION:
There are various points regarding conclusive points, they are as follows: The company has its own manufacturing products that are why good quality products are manufactured at low cost. As company is also using its own transportation, thats why the transportation cost also becomes low & the profit becomes high. As the distributors are not satisfied with the payment system of the company & there is delay in making payment thats why the distribution channels is not so effective. As there is problem of excess stock at mall, the warehousing is also negatively effected. Sometimes there is a mistake while preparing Purchase Order at local level, there is a problem of excess stock of perishable products on FMCG section. There is a demand of FMCG products is higher in comparison to other products & some of them are perishable, so company purchases these products at local level. As there is no implementation for suggestions given by the management & customers, so company is lacking in some areas. The mode of payment is time consuming, so company is facing dissatisfaction from distributors side.
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{C} SUGGESTIONS:
From the above project report, there are various suggestions for the company, which are as follows:
Payment Policy: The Company should take action to improve their

payment policy, if company makes prompt payment to the distributors, itll benefit them to have effective distribution system & relationship with distributors.
Stock: As Company receives excess stock, proper action should be

taken by the company to solve out this problem by reducing the excess stock at every level.
Precautions: There should be some precautions while preparing the

Purchase order to reduce the excess stock of perishable products. Itll also help in reducing the misunderstanding between distributor & the company.
Implementation: The Company should implement the suggestions

given by the customers & the management in order to improve the services provided by them.

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SECTION -9 BIBLIOGRAPHY

82

BOOKS:(1)C.R.KOTHARI, research methodology,2nd edition,New age international (p) ltd. Publishers,2004. (2)Retail Management,ICFAI centre for management & research,2003. (3)M.V. Kulkarni,physical distribution management,3rd edition,2002,everest publishing house. WEBSITES:(1)WWW.WIKEPEDIA.COM (2)WWW.vrl.org AUTHORS:(1)VRLs yearly bulletin

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SECTION -10 ANNEXURE

{A} FORMATS:
84

1) PURCHASE ORDER: (Format)

Select Vendor

Select Purchase Group: Like (004) Select Purchase Org. : VRL

Select Company Code: VRL

2) GOODS RECEIPT AGAINST P.O:

85

GOODS RECEIPT AGAINST PO T Code: MB01

Posting date: This date will come as default when we are posting GR

Document date : This date will come as default when we are creating this document (GR)

86

3) GOODS RETURN CHALLAN: (Format)

Reason for Movement: Select the reason of movement.

87

4) PAYMENT VOUCHER:
PAYMENT VOUCHER

Dr. Vendor No. Vendor Name Vendor Address AMOUNT Cr. Bank City Paying Co. Code Cheque No. AMOUNT Prepared by: ______________ Authorized sign______________ Received Sign: ______________

Date

Enclosures: - Cheque, - Purchase Order, - Bill of Vendor.

{B} QUESTIONNAIRE:
1) What are your promotional schemes for the company? a) Salesmans visit b) Advertisement
88

c) Others

2) What discount policies have you adopted for the company? a) Cash discount b)Quantity discount c) Regular order

3) What is the scheduling for delivery to the company? a) As per demand b) Regular basis c) Others

4) On what basis schemes & offers are provided to the company? a) Bulk purchase b) Regular order c) Payment

5) Is there any formal/informal meeting with the company? a) Weekly b) Monthly c) Quarterly

6) What customers feedback do you have regarding your product? a) Acceptable b) rate Compatible c) Quality product

7) What is the most preferable method for placing an order?

a) Ready stock

b) Pre-sale

c) Others

8) Are the products available on time/demand? a) Yes b) No

89

9) If No, then reason? a) Shortage product 10) of b) Source problem c) Salesman visit

What is the mode of payment by the company? b) Prepaid c) On the spot

a) Postpaid 11) a) Yes 12)

Are you satisfied with the companys policies? b) No If No, then why?

______________________________________________________________ ______________________________________________________________ ______________

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