INDEX

Chap. Particulars Page No.

No.

1 INTRODUCTION

2 REVIEW OF LITERATURE

3 FIELD STUDY

4 FINDING AND ANALYSIS

5 CONCLUSION

6 ANNEXURE

7 BIBLIOGRAPHY

CHAPTER-1
INTRODUCTION
The 'marketing concept' proposes that in order to satisfy the organizational objectives, an organization
should anticipate the needs and wants of potential consumers and satisfy them more effectively than
its competitors. This concept originated from Adam
Smith's book The Wealth of Nations, but would not
become widely used until nearly 200 years later.
Marketing and Marketing Concepts are directly related.
Given the centrality of customer needs and wants in
marketing, a rich understanding of these concepts is
essential .
Needs: Something necessary for people to live a
healthy, stable and safe life. When needs remain
unfulfilled, there is a clear adverse outcome: a
dysfunction or death. Needs can be objective and physical, such as the need for food, water, and
shelter; or subjective and psychological, such as the need to belong to a family or social group and the
need for self-esteem.
Wants: Something that is desired, wished for or aspired to. Wants are not essential for basic survival
and are often shaped by culture or peer-groups.
Demands: When needs and wants are backed by the ability to pay, they have the potential to become
economic demands.
Marketing research, conducted for the purpose of new product development or product improvement,
is often concerned with identifying the consumer's unmet needs. Customer needs are central to market
segmentation which is concerned with dividing markets into distinct groups of buyers on the basis of
"distinct needs, characteristics, or behaviors who might require separate products or marketing
mixes." Needs-based segmentation (also known as benefit segmentation) "places the customers'
desires at the forefront of how a company designs and markets products or services." Although
needs-based segmentation is difficult to do in practice, it has been proved to be one of the most
effective ways to segment a market. In addition, a great deal of advertising and promotion is designed
to show how a given product's benefits meet the customer's needs, wants or expectations in a unique
way.
 Marketing Mix

Marketing Mix is to analyse what is the need of marketing mix in a company and how it works.
Marketing is simplistically defined as ‘putting the right product in the right place, at the right place, at
the right time.’ Though this sounds like an easy enough proposition, a lot of hard work and research
needs to go into setting this simple definition up. And if even one element is off the mark, a promising
product or service can fail completely and end up costing the company substantially. The use of a
marketing mix is an excellent way to help ensure that ‘putting the right product in the right place’ will
happen. The marketing mix is a crucial tool to help understand what the product or service can offer
and how to plan for a successful product offering. The marketing mix is most commonly executed
through the 4 P’s of marketing: Price, Product, Promotion, and Place. The 4P’s were formalized and
developed over the years by experts to ensure the creation and execution of a successful marketing
strategy. Through the use of this tool, the attempt is to satisfy both the customer and the seller. When
properly understood and utilized, this mix has proven to a key factor in a product’s success. When you
market, you also have to strategize about who to target with your messages. Your primary customer
group becomes the target customers of your marketing campaign. Your product and price offer some
direction in identifying the right audience. For instance, cutting-edge mobile technology ads often are
targeted to young consumers. Identifying the media used by these customers is also important, which
brings the "promotion" P into play. Tangibly, the promotion P addresses the actual process of creating
and distributing messages about your brand and products. Selecting the right media within television,
radio, newspapers, magazines, the Internet, billboards and other support media is another critical part
of successful promotion. In a general sense, the marketing mix allows you to understand how to build
and sell value to your customers. Ultimately, customers buy what they perceive is the best value for
their money in a purchase situation. Implementing marketing campaigns that show off great products
at fair prices gives you an opportunity to succeed. Finding affordable marketing options also helps
you get better return on your investment from marketing.
 Chapter -2 REVIEW OF LITRATURE

Marketing mix is originating from the single P (price) of microeconomic theory (Chong, 2003).
McCarthy (1964) offered the “marketing mix”, often referred to as the “4Ps”, as a means of
translating marketing planning into practice (Bennett, 1997). Marketing mix is not a scientific theory,
but merely a conceptual framework that identifies three principal decision making managers make in
configuring their offerings to suit consumers’ needs. The tools can be used to develop both long-term
strategies and short-term tactical programmes (Palmer, 2004). The idea of the marketing mix is the
same idea as when mixing a cake. A baker will alter the proportions of ingredients in a cake
depending on the type of cake we wishes to bake. The proportions in the marketing mix can be altered
in the same way and differ from the product to product.
The marketing mix management paradigm has dominated marketing thought, research and practice,
and “as a creator of differentiation” since it was introduced in 1940s. Kent (1986) refers to the 4Ps of
the marketing mix as “the holy quadruple…of the marketing faith…written in tablets of stone”.
Marketing mix has been extremely influential in informing the development of both marketing theory
and practise (Möller, 2006).
The main reasons the marketing mix is a powerful concept are It makes marketing seem easy to
handle, allows the separation of marketing from other activities of the firm and the delegation of
marketing tasks to specialists; and - The components of the marketing mix can change a firm’s
competitive position (Grönroos, 1994).
The marketing mix concept also has two important benefits. First, it is an important tool used to
enable one to see that the marketing manager’s job is, in a large part, a matter of trading off the
benefits of one’s competitive strengths in the marketing mix against the benefits of others. The second
benefit of the marketing mix is that it helps to reveal another dimension of the marketing manager’s
job. All managers have to allocate available resources among various demands, and the marketing
manager will in turn allocate these available resources among the various competitive devices of the
marketing mix. In doing so, this will help to instil the marketing philosophy in the organisation (Low
and Tan, 1995).
However, Möller (2006) highlighted that the shortcomings of the 4Ps marketing mix framework, as
the pillars of the traditional marketing management have frequently become the target of intense
criticism. A number of critics even go as far as rejecting the 4Ps altogether, proposing alternative
frameworks. Since its introduction, developments on the commercial landscape and changes in
consumer and organisational attitudes over the last few decades (1940s – 2000s) have frequently
prompted marketing thinkers to explore new theoretical approaches and expanding the scope of the
marketing mix concept. Thus, the main objective of this study is to review the present marketing mix
applies particularly to the marketing.
HISTORY Borden (1965) claims to be the first to have used the term “marketing mix” and that it was
suggested to him by Culliton’s (1948) description of a business executive as “mixer of ingredients”.
An executive is “a mixer of ingredients, who sometimes follows a recipe as he goes along, sometimes
adapts a recipe to the ingredients immediately available, and sometimes experiments with or invents
ingredients no one else has tried” (Culliton, 1948).
The early marketing concept in a similar way to the notion of the marketing mix, based on the idea of
action parameters presented in 1930s by Stackelberg (1939). Rasmussen (1955) then developed what
became known as parameter theory. He proposes that the four determinants of competition and sales
are price, quality, service and advertising.
Mickwitz (1959) applies this theory to the Product Life Cycle Concept. Borden’s original marketing
mix had a set of 12 elements namely: product planning; pricing; branding; channels of distribution;
personal selling; advertising; promotions; packaging; display; servicing; physical handling; and fact
finding and analysis.

Chapter – 3rd
FILED STUDY

DMart is a one-stop supermarket chain that aims to offer customers a wide range of basic home and
personal products under one roof. Each DMart store stocks home utility products - including food,
toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and more -
available at competitive prices that our customers appreciate. Our core objective is to offer customers
good products at great value.
DMart was started by Mr. Radhakishan Damani and his family to address the growing needs of the
Indian family. From the launch of its first store in Powai in 2002, DMart today has a well-established
presence in 168 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka,
Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan. With our mission to be the lowest
priced retailer in the regions we operate, our business continues to grow with new locations planned
in more cities.
The supermarket chain of DMart stores is owned and operated by Avenue Supermarts Ltd. (ASL).
The company has its headquarters in Mumbai.
* The brands D Mart, D Mart Minimax, D Mart Premia, D Homes, Dutch Harbour, etc are brands
owned by ASL.

Emergence and growth

The origins of the 4 Ps can be traced to the late 1940s. The first known mention of a mix has been
attributed to a Professor of Marketing at Harvard University, Prof. James Culliton. In 1948, Culliton
published an article entitled, The Management of Marketing Costs in which Culliton describes
marketers as 'mixers of ingredients'. Some years later, Culliton's colleague, Professor Neil Borden,
published a retrospective article detailing the early history of the marketing mix in which he claims
that he was inspired by Culliton's idea of 'mixers', and credits himself with popularising the concept of
the 'marketing mix'.] According to Borden's account, he used the term, 'marketing mix' consistently
from the late 1940s. For instance, he is known to have used the term 'marketing mix' in his
presidential address given to the American Marketing Association in 1953.

Although the idea of marketers as 'mixers of ingredients' caught on, marketers could not reach any
real consensus about what elements should be included in the mix until the 1960s. The 4 Ps, in its
modern form, was first proposed in 1960 by E. Jerome McCarthy; who presented them within a
managerial approach that covered analysis, consumer behavior, market research, market
segmentation, and planning. Phillip Kotler, popularised this approach and helped spread the 4 Ps
model McCarthy's 4 Ps have been widely adopted by both marketing academics and practitioners.

The prospect of extending the marketing mix first took hold at the inaugural AMA Conference
dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to
many important limitations of the 4 Ps model. Taken collectively, the papers presented at that
conference indicate that service marketers were thinking about a revision to the general marketing
mix based on an understanding that services were fundamentally different to products, and therefore
required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps,
comprising the original 4 Ps extended by process, people and physical evidence, as being more
applicable for services marketing.

Since then there have been a number of different proposals for a service marketing mix (with various
numbers of Ps), most notably the 8 Ps, comprising the 7 Ps above extended by 'performance'.

 Opt-in e-mail advertising

 Social media marketing, starting and participating in customer to customer, customer to

company interaction through social media.
 McCarthy's 4 Ps
The original marketing mix, or 4 Ps, as originally proposed by marketer and academic E. Jerome
McCarthy, provides a framework for marketing decision-making. McCarthy's marketing mix has
since become one of the most enduring and widely accepted frameworks in marketing.

Table 1: Brief Outline of 4 Ps

Category Definition/ Explanation Typical Marketing Decisions

Product A product refers to an item that satisfies  Product design – features, quality
the consumer's needs or wants.
 Product assortment – product range,
Products may be tangible (goods) or
product mix, product lines
intangible (services, ideas or
experiences).
 Branding

 Packaging and labeling

 Services (complementary service,

after-sales service, service level)

 Guarantees and warranties

 Returns

 Managing products through the life-

 cycle.

Price refers to the amount a customer  Price strategy

pays for a product.
 Price tactics
Price may also refer to the sacrifice
consumers are prepared to make to  Price-setting
acquire a product.
Price  Allowances – e.g. rebates for
(e.g. time or effort)
distributors
Price is the only variable that has
implications for revenue.  Discounts – for customers
Price also includes considerations
 Payment terms – credit, payment
of customer perceived value.
methods

 Strategies such as intensive

distribution, selective distribution,
exclusive distribution.

 Franchising;

 Market coverage
Refers to providing customer access
Place Considers providing convenience for  Channel member selection and
consumer. channel member relationships

 Assortment

 Location decisions

 Inventory

 Transport, warehousing and logistics

Promotio Promotion refers to marketing
n communications  Promotional mix - appropriate
balance of advertising, PR, direct
May comprise elements such
marketing and sales promotion
as: advertising, PR, direct marketing
and sales promotion.  Message strategy - what is to be
 communicated

 Channel/ media strategy - how to

reach the target audience

 Message Frequency - how often to

communicate

The 4Ps have been the cornerstone of the managerial approach to marketing since the 1960s

Product refers to what the business offers for sale and may include products or services. Product
decisions include the "quality, features, benefits, style, design, branding, packaging, services,
warranties, guarantees, life cycles, investments and returns".

Price refers to decisions surrounding "list pricing, discount pricing, special offer pricing, credit
payment or credit terms". Price refers to the total cost to customer to acquire the product, and may
involve both monetary and psychological costs such as the time and effort spended in acquisition

Place is defined as the "direct or indirect channels to market, geographical distribution, territorial
coverage, retail outlet, market location, catalogues, inventory, logistics and order fulfilment". Place
refers either to the physical location where a business carries out business or the distribution channels
used to reach markets. Place may refer to a retail outlet, but increasingly refers to virtual stores such
as "a mail order catalogue, a telephone call centre or a website".

Promotion refers to "the marketing communication used to make the offer known to potential
customers and persuade them to investigate it further". Promotion elements include "advertising,
public relations, direct selling and sales promotions.
 Modified and expanded marketing mix: 7 Ps

By the 1980s, a number of theorists were calling for an expanded and modified framework that would
be more useful to service marketers. The prospect of expanding or modifying the marketing mix for
services was a core discussion topic at the inaugural AMA Conference dedicated to Services
Marketing in the early 1980s, and built on earlier theoretical works pointing to many important
problems and limitations of the 4 Ps model. . Taken collectively, the papers presented at that
conference indicate that service marketers were thinking about a revision to the general marketing
mix based on an understanding that services were fundamentally different to products, and therefore
required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps,
comprising the original 4 Ps plus process, people and physical evidence, as being more applicable for
services marketing..

Table 2: Outline of the Modified and Expanded Marketing Mix

Category Definition/ Explanation Typical Marketing Decisions

Facilities (e.g. furniture, equipment,
access)
Spatial layout (e.g. functionality,
efficiency)
The environment in which service occurs.
Signage (e.g. directional signage,
The space where customers and service
symbols, other signage)
personnel interact.
Physical Interior design (e.g. furniture, color
Tangible commodities (e.g. equipment,
evidence schemes)
furniture) that facilitate service performance.
Ambient conditions (e.g. noise, air,
Artifacts that remind customers of a service
temperature)
performance.
Design of livery (e.g. stationery,
brochures, menus, etc.)
Artifacts: (e.g. souvenirs, mementos,
etc.)
Human actors who participate in service
Staff recruitment and training
delivery.
Uniforms
Service personnel who represent the
Scripting
People company's values to customers.
Queuing systems, managing waits
Interactions between customers.
Handling complaints, service failures
Interactions between employees and
Managing social interactions
customers.
Process The procedures, mechanisms and flow of Process design
activities by which service is delivered. Blueprinting (i.e. flowcharting)
service processes
Standardization vs customization
decisions
Diagnosing fail-points, critical
incidents and system failures
Monitoring and tracking service
performance
 Analysis of resource requirements
and allocation
Creation and measurement of key
performance indicators (KPIs)
Alignment with Best Practices
Preparation of operations manuals
People are essential in the marketing of any product or service. Personnel stand for the service. In the
professional, financial or hospitality service industry, people are not producers, but rather the products
themselves. When people are the product, they impact public perception of an organization as much
as any tangible consumer goods. From a marketing management perspective, it is important to ensure
that employees represent the company in alignment with broader messaging strategies. This is easier
to ensure when people feel as though they have been treated fairly and earn wages sufficient to
support their daily lives.
Process refers to a "set of activities that results in delivery of the product benefits". A process could be
a sequential order of tasks that an employee undertakes as a part of their job. It can represent
sequential steps taken by a number of various employees while attempting to complete a task. Some
people are responsible for managing multiple processes at once. For example, a restaurant manager
should monitor the performance of employees, ensuring that processes are followed. They are also
expected to supervise while customers are promptly greeted, seated, fed, and led out so that the next
customer can begin this process.
Physical evidence refers to the non-human elements of the service encounter, including equipment,
furniture and facilities. It may also refer to the more abstract components of the environment in which
the service encounter occurs including interior design, colour schemes and layout. Some aspects of
physical evidence provide lasting proof that the service has occurred, such as souvenirs, mementos,
invoices and other livery of artifacts. According to Booms and Bitner's framework, the physical
evidence is "the service delivered and any tangible goods that facilitate the performance and
communication of the service". Physical evidence is important to customers because the tangible
goods are evidence that the seller has (or has not) provided what the customer was expecting.
 Lauterborn's 4 Cs (1990)

Robert F. Lauterborn proposed a 4 Cs classification in 1990. His classification is a more consumer-

orientated version of the 4 Ps that attempts to better fit the movement from mass marketing to niche
marketing:

4 Ps 4 Cs Definition
A company will only sell what the consumer specifically wants to buy.
Consumerwant
Product So, marketers should study consumer wants and needs in order to
s and needs
attract them one by one with something he/she wants to purchase.
Price Cost Price is only a part of the total cost to satisfy a want or a need. The total
cost will consider for example the cost of time in acquiring a good or a
 service, a cost of conscience by consuming that or even a cost of
guilt "for not treating the kids". It reflects the total cost of ownership.
Many factors affect cost, including but not limited to the customer's
cost to change or implement the new product or service and the
customer's cost for not selecting a competitor's product or service.
While promotion is "manipulative" and from the seller, communication
is "cooperative" and from the buyer with the aim to create a dialogue
Promotio Communicatio with the potential customers based on their needs and lifestyles. It
n n represents a broader focus. Communications can include advertising,
public relations, personal selling, viral advertising, and any form of
communication between the organization and the consumer
In the era of Internet,catalogues, credit cards and phones, consumers
neither need to go anywhere to satisfy a want or a need nor are they
limited to a few places to satisfy them. Marketers should know how the
target market prefers to buy, how to be there and be ubiquitous, in
Place Convenience order to guarantee convenience to buy. With the rise of Internet and
hybrid models of purchasing, Place is becoming less relevant.
Convenience takes into account the ease of buying the product, finding
the product, finding information about the product, and several other
factors.

Shimizu's 4 Cs: in the 7Cs Compass Model

After Koichi Shimizu proposed a 4 Cs classification in 1973, it was expanded to the 7Cs Compass
Model to provide a more complete picture of the nature of marketing in 1979. The 7Cs Compass
Model is a framework of co-marketing (commensal marketing or Symbiotic marketing). Also the Co-
creative marketing of a company and consumers are contained in the co-marketing. Co-marketing
(collaborate marketing) is a marketing practice where two companies cooperate with separate
distribution channels, sometimes including profit sharing. It is frequently confused with co-
promotion. Also commensal (symbiotic) marketing is a marketing on which both corporation and a
corporation, a corporation and a consumer, country and a country, human and nature can live.
The 7Cs Compass Model comprises:
(C1) Corporation – The core of 4 Cs is corporation (company and non profit organization). C-O-S
(competitor, organization, stakeholder) within the corporation. The company has to think
of compliance and accountability as important. The competition in the areas in which the company
competes with other firms in its industry.

The 4 elements in the 7Cs Compass Model :

A formal approach to this customer-focused marketing mix is known as 4

Cs (commodity, cost, communication, channel) in the 7 Cs Compass Model. The 4 Cs model provides
a demand/customer centric version alternative to the well-known 4 Ps supply side model
(product, price, promotion, place) of marketing management.
Product → Commodity
Price → Cost
Promotion → Communication
Place → Channel

"P"
"C" category
category "C" definition
(broad)
(narrow)
(Latin derivation: commodus=convenience, happiness) :Co-
Product (C2) Commodity
creation. The goods and services for consumers or citizens.
(Latin derivation: constare= It makes sacrifices) : There is not
Price (C3) Cost only producing cost and selling cost but purchasing cost
and social cost.
(Latin derivation: communis=sharing of meaning) : marketing
communication : Not only promotion but communication is
Promotion (C4) Communication important. Communications can include advertising, sales
promotion, public relations, publicity, personal selling, corporate
identity, internal communication, SNS, MIS.
Place (C5) Channel (Latin derivation: canal) : marketing channels. Flow of goods.

The compass of consumers and circumstances (environment) are:

(C6) Consumer – (Needle of compass to consumer)
The factors related to consumers can be explained by the first character of four directions marked on
the compass model. These can be remembered by the cardinal directions, hence the
name compass model:
N = Needs
S = Security
E = Education: (consumer education)
W = Wants
(C7) Circumstances – (Needle of compass to circumstances )
In addition to the consumer, there are various uncontrollable external environmental factors encircling
the companies. Here it can also be explained by the first character of the four directions marked on
the compass model:
N = National and International (Political, legal and ethical) environment
S = Social and cultural
E = Economic
W = Weather

EXHIBIT: Shimizu's 7Cs Compass Model (Courtesy: © Koichi Shimizu, Japan)

These can also be remembered by the cardinal directions marked on a compass. The 7 Cs Compass
Model is a framework in co-marketing (symbiotic marketing). It has been criticized for being little
more than the 4 Ps with different points of emphasis. In particular, the 7 Cs inclusion of consumers in
the marketing mix is criticized, since they are a target of marketing, while the other elements of the
marketing mix are tactics. The 7 Cs also include numerous strategies for product development,
distribution, and pricing, while assuming that consumers want two-way communications with
companies.
An alternative approach has been suggested in a book called 'Service 7' by Australian Author, Peter
Bowman. Bowman suggests a values based approach to service marketing activities. Bowman
suggests implementing seven service marketing principles which include value, business
development, reputation, customer service and service design. Service 7 has been widely distributed
within Australia.

Digital Marketing Mix

Digital marketing mix is fundamentally the same as Marketing Mix, which is an adaptation
of Product, Price, Place and Promotion into digital marketing aspectDigital marketing can be
commonly explained as 'Achieving marketing objectives through applying digital technologies'.
Product
Thanks to the interaction and connection of the Internet, Product has been redefined as 'virtual
product' in the digital marketing aspect, which is regarded as the combination of tangibility and
intangibility. Through the form of digital, a product can be directly sent from manufacturers to
customers. For example, customers could buy music in the form of an MP3 rather than buy it in the
form of a physical CD. As a result, when a company is making strategy for Internet marketing, it is
necessary to understand how to vary their products in the online environment. Here are some
indications of adapt the product element on the Internet.
Modifying the core product: In this case, it particularly refers to the products that can be remodeled
into digital forms including movies, music, books and other publishing etc. Take Netflix as an
example. The wide use of Internet has changed its form of products from selling and renting DVDs
through retail stores into selling and renting video online.
Providing digital products: In order to gain market shares in the Internet, companies need to widen its
product range. For example, a psychological counseling could offer online consultation via video
calls.
Building the whole product: Apart from selling products online, Amazon.com also provides a paid
subscription service called Amazon Prime, with which customers could enjoy free delivery and
videos on Amazon.
Conducting online research: The Internet offers a low-cost and convenient way of making marketing
researches, which is helpful for companies to find out what products or services do customers prefer.
Price
Price concerns about the pricing policies or pricing models from a company. Due to the widely use of
the Internet, many applications could be found in both consumer's and producer's perspective. From
consumers' side, the Internet enables people to make a comparison to a real-time prices before they
make a consumption decision, which is time-saving and effort-saving for the consumers. As for the
suppliers, they can adjust prices in the real-time and provide higher degree of price transparency with
customers. Besides, the Internet is more likely to ease the pressure on price because online-producers
do not have to put budget on renting a physical store. Hence, making new or adjusting pricing
strategies is essential for the company that wants to enter the Internet market.
Pricing strategies and tactics see also: Pricing
Place
With the application of the Internet, place is playing an increasingly important role in promoting
consumption since the Internet and the physical channels become virtual. The major contribution
from the Internet to the business is not only making it possible to selling products online, but also
enabling companies to build relationships with customers.Furthermore, since the convenience of
navigating from one site to another, place from the digital marketing perspective is always linked
with promotion, which means retailers often uses third-party websites such as Google search engine
to guide customers to visit their websites.
Promotion
Promotion refers to select the target markets, locate and integrate various communications tools in
the marketing mix. Unlike the traditional marketing communication tools, tools in digital marketing
aim at engaging audiences by putting advertisements and contents on the social media, including
display ads, pay-per-click (PPC), search engine optimisation (SEO) etc. In order to help in making
online marketing campaign, Chaffey and Smith suggested that they can be separated into six groups.
Searching marketing, including search engine optimisation(SEO), pay-per-click(PPC).
Online PR, enlarging good comments on one's products or services while reducing negative
comments.
adverse comments.
Online partnerships, building relationships between third-party webs to promote products or services.
Interactive advertisingn installments"; etc.), the attributes of the products sold by the other producers,
and the attributes each producer can give to its products, the problem of deciding the attributes of our
product to maximize the number of customers who will prefer it is Poly-APX-complete. This implies
that, under the standard computational assumptions, no efficient algorithm can guarantee that the ratio
between the number of customers preferring the product returned by the algorithm and the number of
customers that would prefer the actual optimal product will always reach some constant, for any
constant. Moreover, the problem of finding a strategy such that, for any strategy of the other
producers, our product will always reach some minimum average number of customers over some
period of time is an EXPTIME-complete problem, meaning that it cannot be efficiently solved.
However, heuristic (sub-optimal) solutions to these problems can be found by means of genetic
algorithms, particle swarm optimization methods, or minimax algorithms.

CHAPTER-4
FINDINGS & ANALYSIS
 Marketing Mix of D-Mart – D-Mart Marketing Mix

D-Mart is a private company and is associated with the retail industry. It was launched in the year
2002 in the month of May by its esteemed founder R. K. Damani. It is a chain of supermarkets and
hypermarkets established in India. It is designed for providing maximum customer convenience and
offers a diversified choice at affordable rates. Some of its competitors are as follows-
Big Bazaar
Reliance Fresh

Product in the Marketing Mix of D-Mart :

D-Mart is a one-stop outlet that offers a wide range of choice in home and personal products to its
customers. It believes in mass commodities and therefore its products are available in different sizes
and colours. Apparels are displayed in a systematic manner in accordance with their size options.
Retail price, actual discount and offer price are displayed on the tags for the convenience of
customers. Area of the outlet is divided in accord with products as every product has a separate
section from which a customer can easily make a choice. Each D-Mart outlet has following products
in its portfolio-
Food items including vegetables, fruits, dairy products, frozen eatables
Grocery items like flour, rice, dal, sugar, salt
Apparels for kids, male and females
Beauty products and personal care including soap, shampoo, cleanser, toner
Kitchenware including crockery, utensils, plastic containers
Toys and games for children
Home appliances like iron, mixer grinder, grill toaster
Bed and bath linen
Luggage like trolley bags
Footwear for everyone including children, men and women
Daily essentials like biscuits

Place in the Marketing Mix of D-Mart :

D-Mart has a reach in most of the important cities in India including Ahmedabad, Surat, Rajkot, and
Bhuj in Gujarat, Tirupathi in Andhra Pradesh, Hyderabad in Telangana, and Bangalore in Karnataka,
Mumbai and Kolhapur in Maharashtra. It is able to provide its products through a network of one
hundred and ten stores and has its headquarters base in Mumbai, India. D-Mart has set up its stores at
very strategic points to gain maximum advantage from its locations because easy accessibility and
proper transportation facilities are very important for the survival of any outlet.
Exceptional service is not the vital factor for such outlets. They have reliable and trained employees
to help customers in hours of need but the consumers are generally self-sufficient and are likely to
pick up items from various shelves themselves in a walking trolley basket and take it to billing
counter for payment.
Price in the Marketing Mix of D-Mart :

D-Mart is a departmental store and believes in levying an economic pricing policy for its products.
The company has taken a low-cost approach to target that group which is price sensitive. As mass
merchandise is its mantra it has kept prices at reasonable and economic rates so that a customer can
easily purchase it. D-Mart has adopted a simple strategy of garnering huge sales through affordable
prices and keeping price range within reach of customers is its top priority.
It offers a 5% of minimum discount on MRP at any given time on all items except fruits, grocery,
vegetables and medicines. D-Mart has also adopted a discount pricing policy and it periodically offers
its customers various incentives and lucrative discounts, especially during festival seasons. Customers
at such times buy in bulk quantities resulting in a huge volume of sales. This is the reason why such
stores are able to earn greater revenues.

Promotions in the Marketing Mix of D-Mart :

D-Mart is one of the largest multi-brands in India and to maintain its position as one of the best,
company has adopted several promotional activities. It offers gift coupons to reward its employees
and during certain periods to boost its sales, coupons are also allotted to customers when they meet
certain standards of bulk purchase. Discounts are offered during festive seasons, for example, there
was a 10% off on prices of Cadbury products during Raksha Bandhan. D-Mart also
creates brand awareness and visibility through hoardings. Latest offers and schemes can be easily
known through its promotional activities that are published in newspapers.

Chasing growth, D-Mart rethinks store strategy

Avenue SupermartsNeville NoronhaRadhakishan DamaniD Mart share priceretail sector

Mumbai: India’s most valuable retailer is choosing to veer away from its time-tested business rules
as it chases growth. Avenue Supermarts Ltd, owner of D-Mart, is looking to accelerate profit and
revenue growth by opening 30 stores annually from an average of 20 stores in the last two fiscals. For
this, it is willing to compromise on certain basic tenets of its business such as owning its stores and
focusing only on brick and mortar.
“We have progressed from opening around 10 stores per annum historically to 15-20 stores. There is
an opportunity for us to at least reach 30 per annum. That much is possible," said Neville Noronha,
managing director and chief executive officer of Avenue Supermarts.
The firm, which listed in March 2017, shot into the limelight with 114% gains on listing day as
investors welcomed its rather unadventurous but highly profitable business model.
In the first nine months of this fiscal, D-Mart posted a 28% gain in revenues and a 60% jump in net
profit. Yet investors are hungry for more. The D-Mart stock is trading at 71.37 times expected
earnings for the next 12 months and has seven “sell" ratings compared to four “buy" and “hold"
ratings.
To accelerate growth, Noronha said D-Mart is willing to forgo owning its stores.
So far, the company has followed an ownership or long-lease model, which has helped cut costs and
boosted margins. Since the beginning of fiscal 2018, D-Mart has maintained gross margins of at least
7.5%, compared to the 3-4% margins of its nearest rival, Future Retail Ltd.
The firm is best known for its “everyday low cost, everyday low price" strategy, allowing it to extend
near-permanent discounts to customers on a daily basis. This helps it to churn inventory quickly and
aids profitability.
However, challenges in acquiring land at suitable locations, getting necessary permissions and
requisite approvals has prompted the shift in strategy.
“That’s why we’ve been a little less stringent," Noronha said, adding, “if you would have said eight
years back, whether we want to do a lease, we would have downright refused. Today... we are open to
it."
D-Mart is eyeing the states of Andhra Pradesh and Telangana for its next round of expansion. As of
31 December, the company had 141 stores. At the end of fiscal 2017, as many as 68% of its stores
were located in Maharashtra and Gujarat.
The push comes at a time when the pace of store addition hasn’t been particularly impressive. For the
nine months ended December, D-Mart added 10 stores.
“Speed of opening new stores has to improve. There is an opportunity to do better there," Noronha
had said when the December quarter results were announced.
By compromising on the firm’s basic tenets, he has addressed analysts’ concerns.
“Slippage in store additions as seen in 9 months FY18 (and) limited ability to increase store additions
to maintain growth contribution from new stores" will constrain sales growth, wrote IIFL analysts in a
1 February report.
D-Mart is also looking to ramp up its e-commerce presence.
In January this year, Avenue Supermarts turned its e-commerce venture, Avenue E-commerce Ltd,
from an associate company (related to the parent via promoters) to a wholly owned subsidiary. D-
Mart promoter Radhakishan Damani owns a controlling stake in this firm.
D-Mart has also recently stepped up promotional activity, and the company is seeing more traction at
its “click and collect" kiosks.
Apart from click and collect, the company is running home delivery pilots in “D-Mart dark areas" in
Mumbai—neighbourhoods in the city where D-Marts don’t exist. The company charges for its home
deliveries and is mainly focused on groceries.
 A Study on Innovative Marketing Strategies in Retailing Giants Big
Bazar & D-Mart

As the competition is getting stiffer and stiffer, product innovativeness and product modification
becomes the backbone in sustaining and attracting new customers. To do this systematically, market
requirements and knowledge of rivals plays a pivotal role. For this study the four major marketing
variables such as product, price, promotion, and place are being considered as major parameters of
innovativeness which could bring about customer satisfaction, customer loyalty and helps to a great
extent in customer acquisition. This study focuses on the enquiry of the magnitude of adoption of
innovative marketing strategies by retailing giants Viz., Big Bazaar and D-Mart. With the intention to
know the wide range of marketing elements which play important role to get competitive advantage
in retail sector and to identify the importance of four marketing strategies namely product, price,
place, promotion. This has been explored in the Indian retail context. This study makes an attempt to
compare in terms of revenue they generates by adopting innovative means of marketing strategies.
The retailers will be done. By this study it is identified that 4 marketing elements namely product,
price, place, promotion greatly influence modern marketing and customer satisfaction. Keywords:
Marketing Strategies, Product, Price, Place, Promotion, Retailing
.RESEARCH OBJECTIVES
To understand the wide range of marketing elements, which play important role to get competitive
advantage in retail sector. To identify the importance of four marketing strategies namely product,
price, place, promotion. This has been explored in the Indian retail context. A Study On Innovative
Marketing Strategies In Retailing Giants Big Bazar &D-Mart
RESEARCH METHODOLOGY
To achieve foresaid objectives the following methodology has been adopted. The information for this
report has been collected through the secondary source.
SECONDARY SOURCE This is already existing data which collected by sources such as internet,
text books and various published national and international marketing journals. .
1)Product in the Marketing Mix of BIGBAZAR: Big Bazaar offers the maximum variety for every
category of product. The product is the same in every store in the city but the brand options are more
in Big Bazaar and the quantity for each product is not limited to large packs only. The commodities
sold by the retail chain includes its "own products" which get a ready distribution network. The own
products of Big Bazaar include My World fashion magazine which is not available anywhere else. So
costs are very low for such products.
2)Price in the Marketing Mix of BIGBAZAR: Price is the critical point in a competitive industry.
Big Bazaar works on a low cost model. It considers its discounted price as its USP. There is an
average discount of 6-8% on all items in respect to their MRP. Prices of products are low because it is
able to secure stock directly from the manufacturer. There are huge synergies in terms of bulk
purchasing, transportation and central warehousing. These all factors are very helpful for the retailers
to keep low pricesTable Styles.
3)Place in the Marketing Mix of BIGBAZAR: Place means the location of the business. Big
Bazaar has always worked on cheap locations. It targets semi-urban population with its placement. Its
strategy is to find a lowcost location and it never goes for hot spots in the city. It relied on
promotional activities to make up for unattractive locations. Another strategy used by Big Bazaar to
overcome location disadvantage is use of internet. It has launched a merchandise retailing website
www.futurebazaar.com which targets high-end customers ready to use credit cards. The promotion of
this website is done through advertisement on Google. The website is put as sponsored link.
4)Promotion in the Marketing Mix of BIGBAZAR: Big Bazaar has huge promotion budgets. The
biggest idea behind all advertisements is to make people do bulk shopping. There are 2 types of
promotional strategies of big bazaar. One is the advertisement which promotes the brand and creates
awareness towards people. It is not targeted at promoting each store but only creates an image of Big
Bazaar as low-cost shopping option. The store has advertised through TV, road shows and also started
reality show-typed promotional campaign "The Big Bazaar Challenge." Promotions like "Sabse Sasta
Din"(Cheapest Day) are a very successful strategy to get good results. In these products across
categories such as furniture, electronics, utensils, apparels and food products at the lowest possible
prices, coupled with attractive promotional schemes. Some of the most attractive offers being a 20-
litre branded microwave oven with grill for Rs 2,399, jeans and trousers for Rs 199 and HCL laptops
for Rs 22,800. Buy 2 Get 1 Free types of promotions are very common. Original prices are cut down
and new prices are shown, of which customer takes quick notice. There are loyalty schemes which
reward regular clients.
5)Product in the Marketing Mix of D-Mart: D-Mart is a one-stop outlet that offers a wide range of
choice in home and personal products to its customers. It believes in mass commodities and therefore
its products are available in different sizes and colours. Apparels are displayed in a systematic manner
in accordance with their size options. Retail price, actual discount and offer price are displayed on the
tags for the convenience of customers. Area of the outlet is divided in accord with products as every
product has a separate section from which a customer can easily make a choice. A Study On
Innovative Marketing Strategies In Retailing Giants Big Bazar&D-Mart.
Each D-Mart outlet has following products in its portfolio-
• Food items including vegetables, fruits, dairy products, frozen eatables
• Grocery items like flour, rice, dal, sugar, salt
• Apparels for kids, male and females
• Beauty products and personal care including soap, shampoo, cleanser, toner
• Kitchenware including crockery, utensils, plastic containers • Toys and games for children
• Home appliances like iron, mixer grinder, grill toaster
• Bed and bath linen
• Luggage like trolley bags
• Footwear for everyone including children, men and women
Daily essentials like biscuits
6)Place in the Marketing Mix of D-Mart : D-Mart has a reach in most of the important cities in
India including Ahmedabad, Surat, Rajkot, and Bhuj in Gujarat, Tirupathi in Andhra Pradesh,
Hyderabad in Telangana, and Bangalore in Karnataka, Mumbai and Kolhapur in Maharashtra. It is
able to provide its products through a network of one hundred and ten stores and has its headquarters
base in Mumbai, India. D-Mart has set up its stores at very strategic points to gain maximum
advantage from its locations because easy accessibility and proper transportation facilities are very
important for the survival of any outlet. Exceptional service is not the vital factor for such outlets.
 They have reliable and trained employees to help customers in hours of need but the consumers are
generally self-sufficient and are likely to pick up items from various shelves themselves in a walking
trolley basket and take it to billing counter for payment.
7)Price in the Marketing Mix of D-Mart: D-Mart is a departmental store and believes in levying an
economic pricing policy for its products. The company has taken a low-cost approach to target that
group which is price sensitive. As mass merchandise is its mantra it has kept prices at reasonable and
economic rates so that a customer can easily purchase it. D-Mart has adopted a simple strategy of
garnering huge sales through affordable prices and keeping price range within reach of customers is
its top priority.It offers a 5% of minimum discount on MRP at any given time on all items except
fruits, grocery, vegetables and medicines. D-Mart has also adopted a discount pricing policy and it
periodically offers its customers various incentives and lucrative discounts, especially during festival
seasons. Customers at such times buy in bulk quantities resulting in a huge volume of sales. This is
the reason why such stores are able to earn greater revenues.
8)Promotions in the Marketing Mix of D-Mart:D-Mart is one of the largest multi-brands in India
and to maintain its position as one of the best, company has adopted several promotional activities. It
offers gift coupons to reward its employees and during certain periods to boost its sales, coupons are
also allotted to customers when they meet certain standards of bulk purchase. Discounts are offered
during festive seasons, for example, there was a 10% off on prices of Cadbury products during
Raksha Bandhan. D-Mart also creates brand awareness and visibility through hoardings. Latest offers
and schemes can be easily known through its promotional activities that are published in newspapers.

Table: Comparative Analysis in terms Innovative Marketing Mix

Innovative marketing strategies

Bigbazaar Dmart
Product Different range of products
Place Density populated area Density populated area
Price Affordable price Affordable price
Promotion Cheapest Day promotion, Gift coupons, Rewards to
Wednesday bazaar, Attractive marketing employees,
Offers, Loyalty Schemes, Hoardings, New Offers and
Promotional collaboration Schemes advertisement in
with SBI Credit Card news paper, Daily Discount,

Table 2. Comparitive analysis in terms of revenue generation Mix.

 Revenue generated inquarter 2
Year Bigbazaar dmart
Quarter 2 Financial Year 4506.3 crore 3508 crore
2017-18
Growth rate 7.50% 26.30%

A Study On Innovative Marketing Strategies In Retailing Giants Big Bazar &D-Mart

| Page Graph-1&2 Revenue Generation and Growth Rate

Series 1 Series 2
300%
6000
250%
5000
4000 200%
Series 1 Series 2
3000 150%
2000 100%
1000 50%
0 0%
Bigbazaar Dmart Bigbazaar Dmart

VI. CONCLUSION From this study it can be concluded that innovativeness and modification is very
essential especially in sectors like retailing. The major retailers viz Big Bazaar and D-Mart striving
hard to increase their market share by adopting innovative means of attracting and luring customers.
This study focuses on the innovativeness in marketing strategies by the retailing giants and the tug of
war between them, the innovative marketing strategies have been identified with the help of four
major marketing variables each retailer is implementing and succeeding to pull the customers towards
them, and the outcome of adoption of innovative marketing strategies has been measured in terms of
the revenue generated by them disciplines (consumer marketing, relationship marketing, services
marketing, retail marketing and industrial marketing) and an emerging marketing (E-Commerce).
Most of researchers and writers reviewed in these domains express serious doubts as to the role of the
Mix as marketing management tool in its original form, proposing alternative approaches, which is
adding new parameters to the original Mix or replacing it with alternative frameworks altogether.

Flexible Concept
The marketing mix is a fluid and flexible concept and the focus on any one variable may be increased
or decreased given unique marketing conditions and customer requirements. Constant Monitoring It is
vital to keep an eye on changing trends and requirements, within the company as well as in the market
to ensure that the elements in marketing mix stays relevant and updated. Role of Marketing Manager
A mature, intelligent and innovative marketing manager needs to be at the helm of the marketing mix.
This pivotal role means that this manager is responsible for achieving desired results through the skill
manipulation of these variables. Customer as a focal point A vital feature of the marketing mix is that
the customer is the focal point of the activity. The value of the product is determined by customer
perceptions and the goal is to achieve a satisfied and loyal customer. Developing a marketing mix
Intuition and creative thinking are essential job requirements for a marketing manager. But relying on
just these can lead to inaccurate assumptions that may not end up delivering results.
To ensure a marketing mix that is based in research and combines facts with innovation, a
manager should go through the following systematic process:
Step 1: The first item on the marketing manager’s agenda should be to define what the product has to
offer or its unique selling proposition (USP). Through customer surveys or focus groups, there needs
to be an identification of how important this USP is to the consumer and whether they are intrigued by
the offering. It needs to be clearly understood what the key features and benefits of the product are
and whether they will help ensure sales.
Step 2: The second step is to understand the consumer. The product can be focused by identifying
who will purchase it. All other elements of the marketing mix follow from this understanding.
Step 3: The next step is to understand the competition. The prices and related benefits such as
discounts, warranties and special offers need to be assessed. An understanding of the subjective value
of the product and a comparison with its actual manufacturing distribution cost will help set a realistic
price point.
Step 4: At this point the marketing manager needs to evaluate placement options to understand
where the customer is most likely to make a purchase and what are the costs associated with using
this channel. Multiple channels may help target a wider customer base and ensure east of access. On
the other hand, if the product serves a niche market then it may make good business sense to
concentrate distribution to a specific area or channel. The perceived value of the product is closely
tied in with how it is made available.
Step 5: Based on the audience identified and the price points established, the marketing
communication strategy can now be developed. Whatever promotional methods are finalized need to
appeal to the intended customers and ensure that the key features and benefits of the product are
clearly understood and highlighted. Step 6 A step back needs to be taken at this point to see how all
the elements identified and planned for relate to each other. All marketing mix variables are
interdependent and rely on each other for a strong strategy. Do the proposed selling channels reinforce
the perceived value of the product? Is the promotional material in keeping with the distribution
channels proposed? The marketing plan can be finalized once it is ensured that all four elements are in
harmony and there are no conflicting messages, either implicit or explicit.
 Chapter – 5
CONCLUSION

The we can conclude that Marketing research, conducted for the purpose of new product
development or product improvement, is often concerned with identifying the
consumer's unmet needs. Customer needs are central to market segmentation which is
concerned with dividing markets into distinct groups of buyers on the basis of "distinct needs,
characteristics, or behaviors who might require separate products or marketing mixes." Needs-
based segmentation (also known as benefit segmentation) "places the customers' desires at the
forefront of how a company designs and markets products or services." Although needs-based
segmentation is difficult to do in practice, it has been proved to be one of the most effective
ways to segment a market. In addition, a great deal of advertising and promotion is designed to
show how a given product's benefits meet the customer's needs, wants or expectations in a
unique way.
The original marketing mix, or 4 Ps, as originally proposed by marketer and academic E.
Jerome McCarthy, provides a framework for marketing decision-making. McCarthy's
marketing mix has since become one of the most enduring and widely accepted frameworks in
marketing
 D-Mart: India’s Walmart

A Case Analysis of an Unbeatable Retailer

EXECUTIVE SUMMARY

“It is always somebody outside (the customer) who decides whether the
efforts become economic results or whether they become so much waste
and scrap.”

- Peter Drucker

Retail markets & shops have a very
ancient history. Over the centuries, retail
shops were transformed from little more
than “rude booths” to the sophisticated
shopping malls of the modern era. To
understand the business transformation of
the Retail Industry, it becomes extremely
important to know the potential of the
Industry. As per IBEF Report it is expected
to grow to US$ 1,100 trillion by 2020 from
US$ 672 billion in 2017. The expected
growth is manifolds making it imperative
to study it further.
National players such as Reliance Retail &
Future Retail have a greater influence on
the retail market as they are present in
each and every state of the nation. But still
in this cut-throat competition, D-Mart, the
chain of retail supermarkets, being a
regional player in west & little in south,
stands highly profitable than its competitors.
This case study‟s the progress of the D-
Mart. Its challenges, strengths and
potentials, which will prove to be the best
learning source for every company that finds
key competitors in the market. Established
in the year 2002, D-Mart, though a valued
brand has its own share of challenges. The
case highlights the entry and journey of D-
Mart, its strategies & progress, challenges &
corresponding strengths and the surrounding
dilemma.

RETAIL INDUSTRY IN INDIA
Retail industry is one of the largest and the
fastest growing industries in the global
economy. Retail industry in India has been
present through history. It is only in the
recent past that it has witnessed so much
dynamism. It is slowly giving way to
international formats of retailing.
According to IBEF report (2017), retail
sector in India accounts for about 10% of
countries GDP and is the world‟s 5th
largest global destination in the retail
space. India‟s retail sector is experiencing
exponential growth, with retail
development taking place not just in major
cities and metros, but also in Tier-II and
Tier-III cities. It is expected to grow to
US$ 1,100 trillion by 2020 from US$ 672
billion in 2017 as per IBEF Report.
CONSTRUCT OF THE CASE
Every Organisation is formed with definite
objectives. This case revolves around the
formation and functioning of
unbeatable retail store operating mostly in
the west and south in India. The pillars of
the organisation, the respective challenges,
strengths & weaknesses, the dilemma
associated with survival and relevant
recommendations are part of this case
study. The case highlights the business
model of the organisation which makes it
unbeatable by its competitors and also the
SWOT analysis of the Organisation, both
leading to the construction of strong base
towards understanding the functioning of
the Organisation. The attempt with this
case has the scope of resolving
inquisitiveness towards running a company
in highly competitive era. The complexity
of Retail Industry, the preference of
consumers towards supermarkets and the
market dilemma associated with such
businesses signifies the rationale behind
constructing the case.
OWNER’s PROFILE
Mr. Radhakishan Damani - Mr.
WHITE & WHITE
Mr. Radhakishan Damani is an astute
Stock market Investor, Stockbroker, Trader
and the Founder & Promoter of D-Mart.
He is popularly known as Mr. White White
as he always dresses in white shirt & white
trousers.Much before D-Mart was
established; Mr. Damani was known to be an
ace investor in the stock market much like
Rakesh Jhunjhunwala. Due to his Midas
touch, he has successfully earned the
an
reputation of being one of India‟s finest
value investors, and as a matter of fact, he
was a mentor to Rakesh Jhunjhunwala. At
98th position on Forbes list of the
wealthiest, he is valued
 stake in the parent company of D-Mart
$1.1 Billion, which has been earned all called – Avenue Supermarts Ltd. and also
from absolutely almost no wealth. Mr. Bright Star Investments – his investment
Damani had begun his career as a trader in company, holds another 16% stake.
ball bearings, with no intentions to enter the
The company was started by Mr.
stock market. But fate had something else
Radhakishan Damani with the objective of
in store for him. Post his father‟s death, he
offering value-based products to families
was forced to close down that business and
across the country at affordable rates. The
had to join his brother in the stock broking
company that is headquartered in Mumbai
business, which was inherited from their
also sells a lot of its private labels such as
father. He had absolutely no knowledge
D-Mart Premia and D-Mart Minimax. Mr.
about that end of the world, or how that
Damani is widely known for maintaining a
market functioned. So he began as a
low profile in media, and so very little is
speculator at the stock market. Within no
known of the man. He likes to let his work
time, he understood that watching was not
speak for itself, and it indeed speaks
the best way to make or grow capital, and
volumes.
hence, taking inspiration from the legendary
value investor Chandrakant Sampat, he D-MART: THE UNBEATABLE
started playing for the long term. It took Mr.
RETAILER
Damani some time to gain a foothold, &
Owned and operated by its parent
quite a few of his initial bets tanked too.
company – Avenue Supermarts Ltd (ASL),
But since the time, he decided not to follow
D-Mart is a chain of hypermarket and
the strategies of the herd, he began to
supermarkets in India which was first
succeed and within the next couple of years
he was standing at par with the ranks of the started in 2002 in Mumbai by Mr.

biggies on Dalal Street. Radhakishan Damani. The company has

After reaching such great heights, in 2001,
he suddenly quits the markets and decided
to enter the retail industry & the journey of
D-Mart begins. His retail chain is the 3rd
biggest in the industry. He owns 52%
141 stores located across more than 40
cities in India and it operates and manages
all of them. The company also operates
distribution and packing centres which
form the backbone of the supply chain to
support its retail store network. It has 22
distribution centres and 7 packing centres
 products including – Home utility
in Maharashtra, Gujarat, Telangana and products, Foods, Toiletries, Beauty
Karnataka. products, Garments, Kitchenware, Bed and
Bath linen, Home appliances, Toys &
Games, Stationery, Footwear, and a lot
more these stores are designed keeping
D-Mart is among the largest and the most
customer convenience in mind.
profitable retailer in India. It is widely
known to be a one-stop shopping
destination to meet all the household needs
of a family. It offers a wide variety of

Source: NNM Securities Pvt. Ltd.

 Table 1: USP & STP of D-Mart

Unique Selling Proposition Heavy discounts and has managed to sell cheap

Market Segment Price sensitive group

Target Market Middle income households

Market Positioning One-stop value retail store chain

THREE PILLARS FOR SUCCESS

D-Mart‟s success is focused on 3 pillars – “Customers, Vendors and Employees”

Source: http://www.forbesindia.com/blog/supermarket-wala/how-dmart-
became-a-solid-homegrown-regional-supermarket-chain-in-india/

Customers: Since D-Mart is targeting
middle income households, all their stores
are in, or close to, residential areas and not
in malls. Their idea is not to meet every
consumer needs like other competitors, but
instead, D-Mart aspires to meet most
regular consumer needs, while providing
value for their money.
Vendors: Vendor relationship is the
second pillar of the model. Since he comes
from a trader background, his vendor
relationships have been his biggest
strength. The FMCG industry has a
payment norm of 30-60 days, but D-Mart
pays its vendors on 11th day itself. This
helps it stay in the good books of the
vendors and avoids stock outs. Other than
that, D-Mart also receives a good amount
of discount by 2-3% from the vendors for
quick payments. Since D-Mart buys in
bulk and pays its vendors well in time,
they also get to earn higher margins.
Employees: Human resource is the third
pillar of the model. D-Mart offers good

money, flexibility, empowerment, and
relaxed & efficient work culture. They
prefer hiring raw talent, and then invest
heavily in training, to mould them as per
their requirement. Employees are just told
once about the value system and policies at
D-Mart and then are empowered by giving
them the freedom to operate without
somebody constantly looking over at them.
There is absolute clarity on what needs to
be achieved & need not to fear targets.
DATA FACTS
When most retail chains are struggling to
make profit, D-Mart has impressed the
market with its stellar performance. In a
market where most recognized and larger
counterparts such as Spencer‟s, Reliance
Retail, Future Retail, Star Bazaar and
Hypercity too are struggling for earning
profit, D-Mart has successfully managed
to crack the code in just about a decade.
 The prices that D-Mart offers are 6-
7% lower than its competitors.
 D-Mart saves a huge chunk of
money in lease and rental which is
main cost in retail industry as already
they run on paper thin margin so
saving on lease helps D-Mart to
maintain margin with giving heavy
discounts on products.
 Out of the all the stores it runs, D-
Mart owns majority of the properties,
which helps them to save a huge
chunk of money on rent which could
increase its operating cost on average
5.68%.
 Table No. 2: Percentage of Lease / Rentals of operating cost

Retailers D-Mart Hyper City Spencer More Big Bazaar Future Retail

Lease /
0.2% 5.5% 5.3% 5.3% 3.9% 8.4%
Rentals
  D-Mart‟s average sales turnover
 They also avoid opening stores per store is much higher than its
competitors as below:
inside malls unlike other
hypermarkets to avoid high CAM
(Common Area Maintenance)
As per NNM SPL report, over the last five
charges and highly inflated rents
years, it has expanded its total area of
which is almost 6-10% of the
operations at a CAGR of 21% and grown
operation cost.
its Sales and PAT at a CAGR of 40% and
51% respectively.

 They have also cut their advertising

budget by 30-40% in the last
Moving on to 2015 – with revenues worth
couple of years to save costs and
Rs. 6450 crores, D-Mart booked a profit of
focuses on “Word of Mouth”
Rs. 211 crores in FY14-15, which was
publicity.
higher than Reliance Retail‟s Rs. 159
crores and Future Retail‟s Rs. 153 crores.
In just a span of 13 years, D-Mart had also
 Unlike bigger retailers, costs are
managed to achieve profitability, and was
further kept low by keeping a basic
making around 4% in 2017.
and economical layout without any
flashy
 Table No. 3: Average sales turnover per store

Average
Sales Stores
Retailer Sales / store
(in Cr.) (in India)
(in Cr.)

Reliance Retail 26112 3634 7

Future Retail 13808 1315 11

D-Mart 11201 141 79

SWOT ANALYSIS 3) People-centric management
better control and deeper
D-Mart has positioned itself as a one-stop understanding of its supply chain
retail store chain, catering to value seeking and also helped it manage the
retail customers, largely from the lower- bottom line better.
middle, middle and aspiring upper middle
income segments. It has gained its own
strength and has some areas to improve as
follows:

Strengths of D-Mart

Strengths are defined as what each

business does best in its gamut of
operations which can give it an upper hand
over its competitors. The following are the
strengths of D-Mart:

1) Focus on long-term: Mr. Damani,

the founder of D-Mart, is an
investor and thus the company has
been focused entirely on long-term
gains. This has made the company
maximise its returns through a
value driven pricing strategy.

2) Slow scaling up: D-Mart started

off on a very low key note and
slowly took its time to move up the
ladder. This gave the company a
 style: D-Mart has a very good 5) Clear price based differentiation:
employee policy in place and is D-Mart never followed the trends set
very transparent in its employee by other competing retail brands but
relations. They also have a good believed in setting their own trends.
relationship with vendors and They captured the market through a
suppliers and the stakeholders are clear price based differentiation and
happy. priced their goods at significantly
lower prices than competitors.

4) Discount Policy: One factor that

delineates D-Mart from its
competitors is its huge discount
Weaknesses of D-Mart
policy. The retailer sells essential
goods at a flat discount price which
Weaknesses refer to the areas where the
most competitors cannot match and
business or the brand needs improvement.
this helped it penetrate the market.
Some of the key weaknesses of D Mart
are:
 on which it can capitalize to increase its
returns. Some of the opportunities for D-

1) Focus on certain places: Quite

unlike their competitors, who are
present everywhere, D-Mart has
focused more on the Western States
and has a very low presence in the
South. This has restricted them
from gaining market prominence.

2) Sustainability of low pricing: The

company has a zero credit policy
and thus vendors and suppliers give
them at much better price which is
how the company is able to afford
the low prices that the competitors
cannot imagine.

3) No frills: D-Mart follows a no-

frills approach where the focus is to
cut costs wherever possible. Their
facilities are basic and lack the
frills of most upmarket retailers.
The customers who come here
essentially look at the low prices of
products on offer. So thus

the sustainability of this

differentiator is questionable.

Opportunities for D-Mart

Opportunities refer to those avenues in the

environment that surrounds the business
 increase the quality of their
services.
Mart include:

1) Technology: Technology has a lot Threats for D-Mart

to offer to retailers in terms of in-
store experiences and retailer can Threats are those factors in the
use IoT, artificial intelligence, etc. environment which can be detrimental to
to create value-adding services to the growth of the business. Some of the
their customers for which a threats for D-Mart include:
premium can be charged.

1) Online retailers: People in cities

2) Personalization of services:
especially are highly lethargic
Customers are looking for
about leaving their homes and
personalized services for which
prefer to shop online today.
they are willing to pay extra.
Companies like Amazon and
Retailers should capitalize on this
Flipkart thus become major threats
propensity to pay more and
to most retailers.

2) Online Start-ups: The hottest
trend in India is online start-ups.
Many of them are aggregators who
bring together the supplier and the
customer cost effectively. These
companies are the emerging threats
more so because many new brands
are cropping up in the aggregation
market primarily because of lower
barriers to entry.
CHALLENGES
D-Mart is a huge brand in retail market.
But it also faces certain challenges in the
long run which are as follows:
Competition: D-Mart is confined to a few
states in west and south India and operates
141 stores. It has not scaled up to the level
of its other competitors, such as Reliance
Retail, run by business tycoon Mr. Mukesh
Ambani which operates more than 3600
retail stores & Future Retail, run by Mr.
Kishor Biyani which operates more than
1315 retail stores. The challenge it might
face is to keep up its model of local
supplies and cheaper prices working when
it expands, as it has not yet scaled up to
their level.
Chart No. 1: SWOT Analysis of D-Mart
 Retail Store Bubble: While surveys point
out a phenomenal growth in e-commerce
in India, USA has reported 'Retail Store
Technology: Future of retail does not „Bubble‟, once considered a competitive
seem to be the brick-and-mortar retail. And advantage, store footprints have now
D-Mart‟s slow and steady pace enterprise
can run into formidable challenges brought
in by fast evolving technology. India is
witnessing enormous usage of smart-
phones.

Cheaper devices and data, expanding

telecom infrastructure and the

governments big push for digitization is
not exactly conducive for the growth of
retail stores. According to the Global
Payments Report by payments firm World
pay, India will be the world‟s second-
largest e-commerce market by 2034. This
is a run for survival of offline retail stores
in future if technology is not adopted
wisely.

Consumer behaviour: Total Retail

Survey 2016 of PwC says online shoppers
around the world are fundamentally
disrupting retail. In India, 55% consumers
compares prices using mobile in store
while 53% were likely to buy from
offshore online retailer for better prices.
 commerce is a big challenge in long run
for offline retailers. See Chart No. 2
become a burden for many chains as more
shopping moves online. According to a
Bloomberg report, chain store like Bebe in
STRATEGIES
the US is closing all 170 of its stores to
focus on online sales. More than 3,500
D-Mart has adopted Cost Leadership
stores are expected to close in the next
strategy under Generic strategy as its
couple of months in the US, says a report
primary strategy to target that group which
in Business Insider. These include big
is price sensitive. It has also adopted
names such as JCPenney, Macy's, Sears,
Expansion strategy under the umbrella of
Kmart, Crocs, BCBG, Abercrombie &
Grand strategy in order to grow and spread
Fitch and Guess. The big reason for this
its presence. D-Mart has set up its stores at
shutdown is growing e-commerce.
very strategic points to gain maximum
advantage from its locations because easy
accessibility and proper transportation
What is happening to the brick-and-mortar facilities are very important for the
retail in the US today might happen in survival of any outlet. D-Mart never
India too, sooner or later. Thus e- planned of opening a store in a mall and

sticks to what it knows best. It uses one of
two formats of stores whose size is
calculated based on location and shopper
density. This strategy pays off for the
company. D-Mart has also consistently
followed the ownership model strategy,
owning most of the stores or having them
on 30-year long-term leases. Since real
estate leasing usually eats up 4-6 % of
revenues, the ownership model has kept
costs low. Basically, their strategy is to
“Buy it low, Stack it high and sell it
cheap”! See Chart No. 3

Chart No. 2: Challenges faced by D-Mart

Chart No. 3: Strategies adopted by D-Mart

D-Mart adopts following winning formula
as its strategy towards cost leadership
strategy:
3) Sourcing efficiency: D-Mart

E. D. L. P.: A WINNING FORMULA

Making products available at Every Day purchases directly from

Low Price (EDLP) is D-Mart‟s winning

formula in value retailing. For EDLP, the manufacturers and primary

company focuses on Every Day Low Cost

(EDLC), the key ingredients of which are: vendors, thus saving on
intermediaries margins. Upfront
1) Right product assortment: D-
payment to suppliers helps in
Mart focuses on the most popular
availing cash discounts, which is
SKU‟s (from the perspective of its passed to end consumers. Its
target customers monthly purchase logistics partners earn lower
basket) in each product category. revenue per km but the turnover
This helps to improve sales offered is higher and payment is
velocity, lower pilferage and ensure immediate.
fresh products on the shelf. D-Mart
4) Centralized sourcing: 40% of D-
enjoys revenue per square foot of
Rs. 29,019 against less than Mart‟s total sourcing is
Rs.17,500 (FY16 data) for peers. centralized, giving it greater
bargaining power. It stocks faster
2) Owned stores model: Its strategy
moving products like food and
of expanding through owned stores
grocery in warehouses closer to its
ensures savings in rent costs (5-6%
stores and slower moving products
for peers) and protects it from
like apparel further away, thus
escalation in rentals. D-Mart
optimizing storage costs.
presently owns 85% of its total
outlets which helps it to keep well 5) Lower employee cost: D-Mart
capitalised and debt-light, while its works on a variable employee
operations generate spare cash. All model, which ensures low
the money that is saved using this employee costs – below 2% of
strategy is eventually offered back
sales. Only around 4,200
to the customers in the form of
employees are on its direct payroll.
discounts.
The balance staffs are third-party party hire
in short run but in long run along with
6) Input metric focus: D-Mart rates
scaling business, cost burden also
its managers based on number of
increases and that creates a dilemma for
idle cash counters, empty shelves
D-Mart. It is not possible for bigger chains
(especially when stocks exist in
to own stores as it requires huge capital
warehouses), and level of pilferage.
expenditure, which is why D-Mart is
It allots ESOPs to deserving
growing slowly.
employees, creating a sense of
ownership amongst employees. See

Chart 4
Also, the future of retail does not seem to
be the brick-and-mortar retail & D-Mart‟s
slow and steady pace enterprise is a
DILEMMA dilemma as against the fast evolving
technology. People in cities especially are
Businesses face challenges in the highly lethargic about leaving their homes
environment which marks a set of dilemma and prefer to shop online today. Hence, D-
surrounding its functioning. D-Mart‟s cost Mart experiences the dilemma of survival
efficiency model is achievable in future of technology.

Chart No. 4: D-Mart’s EDLP model for Cost Leadership

 Chart No. 5: D-Mart’s Dilemma

I. https://www.ibef.org/industry/retail
CASE IMPLICATIONS -india.aspx, accessed on 25th Jan
2018
D-Mart‟s case study makes one aware
about the techniques it uses especially for
cost efficiency. Their strategy has marked
difference from nearly every other Indian
retailer. Whereas other companies have
expanded quickly into multiple segments
with differentiated retail chain, D Mart has
restricted segmentation. This makes D-
mart more profitable than others. It has
certain challenges but the founder is
always prepared with some out of box
strategy & gives stellar performance. The
inferences drawn from the case may lead
to possible understanding of a company‟s
performance, the way it differentiates from
its competitors. The company is working
on its dilemma by pilot testing some online
services & home delivery services in metro
cities keeping in mind its cost efficiency.

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 Chapter – 7
BIBLOGRAPHY

https://marketingmixx.com/marketing-mix-of-d-mart/
https://thewire.in/business/indian-walmart-making-explains-d-mart-success
https://en.wikipedia.org/wiki/Marketing_mix
BOOKS:SERVICE MARKETING -ROMEO.S