PROJECT REPORT ON
Retailers role in Demand Creation
(With respect to Car Audio systems)
BY
Rahul Prasad
H.T. No. 332-09-01824
A PROJECT REPORT ON
RETAILERS ROLE IN DEMAND CREATION
(With respect to Car Audio systems)
PROJECT SUBMITTED
TO
OSMANIA UNIVERSITY
IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE
OF BACHELOR OF COMMERCE [HONOURS]
BY
RAHUL PRASAD
[332-09-01824]
CERTIFICATE:
This is to certify that, the project work titled “RETAILERS ROLE IN DEMAND
CREATION (with respect to Car Audio systems)” is being submitted by
RAHUL PRASAD bearing Roll number 332-09-01824 in partial fulfillment for the
award of the Bachelor of Commerce (Hons) at St. Joseph’s Degree College to the
Osmania University is a record of the bonafide work carried out by him under the
guidance and supervision of Internal Guide.
This project work has not been submitted to any other university or institute for the
award of any degree or diploma.
CERTIFICATE
This report is an authentic work done by him under my guidance. This project work
has not been submitted to any other university or institute for the award of any
degree or diploma.
DECLARATION
I RAHUL PRASAD hereby declare that the project titled “RETAILERS ROLE
IN DEMAND CREATION (with respect to Car Audio systems)” is my
original work and is submitted towards the partial fulfillment for the award of
Degree in Bachelors of Commerce (Honours) of Osmania University. The project
has not been submitted to any other university for the awards of any other degree or
diploma.
I further declare that this is an original work done and this has not been submitted to
other university/institution for award of any degree/diploma.
Date: Ht.No.332-09-01824
6
ACKNOWLEDGEMENT
This Project would not have been completed without the support from the following
eminent personalities.
I am acknowledging my thanks to Mrs. Nisha Mathur (Internal Guide) for her close
guidance, encouragement and great suggestions for critical points during my project
study period.
In the due course I was encouraged and inspired by many other close associates, I
am thankful to one and all who have extended their help in the completion of this
project work.
7
INDEX:
1. INTRODUCTION 1
1. Introduction 1
2. Literature Study 1
3. Objectives 4
4. Research Methodology 4
5. Limitations 4
6. Scope 5
2. OVERVIEW 6
1. Retail 7
2. Consumer Durables 18
3. Demand Creation 19
4. Market Players Under Car Audio Segment 21
BIBLIOGRAPHY 56
ANNEXURE 57
8
Chapter 1
Introduction
9
Chapter 1
1. Introduction
This research is done to find out the role played by Retailers in the retail
industry, basically the role of Retailers in the Consumer Durable segment
(Consumer Electronics: Car Audio). The retail industry in our country is at
boom and getting organized day by day, the demands of customers are not just
great products but also great shopping experience and to make this possible a
retail outlet should have efficient sales force. This study is made to know how
efficiently the sales people of retail industry in Car Audio segment are in
promoting Consumer Durables.
The retail industry in INDIA has changed its face and approach. Sales people
working in this industry play major role in handling the customers effectively.
This study is done to evaluate the retail industry in Consumer Durable Segment
and also to understand how the organisations in Car Audio market is partially
dependant upon the Retailers in achieving their sales objectives.
2. Literature Study
The Indian retail industry is thriving today. There is stiff competition among Indian
and foreign retailers to attract customers and retain them. In this tug-of-war, quality
retailing has emerged as the solution. The retailer who provides quality products and
services along with a quality shopping experience succeeds in the long run.
The quality of the product offered by the retailer has two aspects - the perceived
quality and the actual quality. Perceived quality or point of sale quality refers to the
10
image that the customer has about the product while buying it. The actual quality
or the point of use quality is the quality of the product that the consumer experiences
while using it. The retailer plays a very important role in building up perceived
quality with the use of attractive display. The retailer is in direct contact with the
customers and so he can play a significant part in helping the manufacturer reduce
the gap between actual and perceived quality. The retailer should also ensure quality
at the various stages of the supply chain so that the quality of the product is not
affected.
Another important factor to be considered for quality retailing is the quality of the
services provided to the customer. Today's customer wants a unique shopping
experience. Retailers are striving to help customers enjoy their shopping expedition
as much as possible. The difference between shopping in India and shopping abroad
is reducing gradually, particularly with several large malls coming up all over India.
Customer mentality is different in different countries. Particularly in India, there are
huge cultural differences among the people of different states, which in turn affect
their buying behavior. In this scenario, it becomes necessary for the retailer to
survey the customers' culture and expectations so that he can train his staff to
appropriately meet these expectations.
11
Role of Retailers in Shaping a Firm’s Strategic
Direction:
Objectives
To study the working of Car Audio market.
To know various strategies by the organisations on the Retailers.
To study sales promotion by retailers.
Research Methodology
12
Data Collection:
Data collection consists of two. They are:
Primary Data: “Data originally collected in the process of investigation are
known as primary data.”The primary data has been collected through
Questionnaire.
Secondary Data: “Secondary data are those already in existence from some
other purpose than the answering of the questions in hand.” The secondary
data has been collected through internet, magazines, news papers and Field
Professionals.
Data Analysis:
Data Analysis can be done by various methods; statistical tool employed in
analysing data is Column Diagram.
Limitations
Due to time constrain the sample size has been limited to 50.
Study relates only to Car Audios.
As no survey was made on this segment lack of information was another
limiting factor.
Retailer’s knowledge is biased.
Scope
The scope of this study is limited to retailers. This study has been conducted to
know as to how retailers help organisations reach customers, who are not aware
of Mobile entertainment.
13
14
Chapter 2
Overview
1. Retail
Retail consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. In commerce, a "retailer"
buys goods or products in large quantities from manufacturers or importers, either
directly or through a wholesaler, and then sells smaller quantities to the end-user.
Retail establishments are often called shops or stores. Retailers are at the end of the
15
supply chain. Manufacturing marketers see the process of retailing as a necessary
part of their overall distribution strategy. The term "retailer" is also applied where a
service provider services the needs of a large number of individuals, such as a public
utility, like electric power.
• Liberalization of the Indian economy which has led to the opening up of the
market for consumer goods has helped the MNC brands like Kellogg’s, Unilever,
Nestle, etc. to make significant inroads into the vast consumer market by offering a
wide range of choices to the Indian consumers.
• Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
18
• The internet revolution is making the Indian consumer more accessible to the
growing influences of domestic and foreign retail chains. Reach of satellite T.V.
channels is helping in creating awareness about global products for local markets.
About 47% of India’s population is under the age of 20; and this will increase to
55% by 2015. This young population, which is technology-savvy, watch more than
50 TV satellite channels, and display the highest propensity to spend, will
immensely contribute to the growth of the retail sector in the country. As India
continues to get strongly integrated with the world economy riding the waves of
globalization, the retail sector is bound to take big leaps in the years to come. The
Indian retail sector is estimated to have a market size of about $ 180 billion; but the
organised sector represents only 2% share of this market. Most of the organised
retailing in the country has just started recently, and has been concentrated mainly in
the metro cities. India is the last large Asian economy to liberalize its retail sector.
In Thailand, more than40% of all consumer goods are sold through the super
markets and departmental stores. A similar phenomenon has swept through all other
Asian countries. Organised retailing in India has a huge scope because of the vast
market and the growing consciousness of the Consumer about product quality and
services. A study conducted by Fitch, expects the organized retail industry to
continue to grow rapidly, especially through increased levels of penetration in larger
towns and metros and also as it begins to spread to smaller cities and B class towns.
Fuelling this growth is the Growth in development of the retail-specific properties
and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of
retail space is being developed and will be available for occupation over the next 36-
48 months. Fitch expects organized retail to capture 15%-20% market share by
2010. A McKinsey report on India says organised retailing would increase the
efficiency and productivity of entire gamut of economic activities, and would help
in achieving higher GDP growth. At 6%, the share of employment of retail in India
is low, even when compared to Brazil (14%), and Poland (12%).
• Popular Formats:
• Hypermarts
• Large supermarkets, typically (3,500 - 5,000 sq. ft)
• Mini supermarkets, typically (1,000 - 2,000 sq. ft)
• Convenience store, typically (750 - 1,000 sq. ft)
• Discount/shopping list grocer
• Traditional retailers trying to reinvent by introducing self-service formats as
well as value-added services such as credit, free home delivery etc. The Indian
retail sector can be broadly classified into:
a) Food Retailers
There are large number and variety of retailers in the food-retailing sector.
Traditional types of retailers, who operate small single-outlet businesses mainly
using family labour, dominate this sector .In comparison, super markets account
for a small proportion of food sales in India. However the growth rate of super
market sales has being significant in recent years because greater numbers of
higher income Indians prefer to shop at super markets due to higher standards of
hygiene and attractive ambience.
20
b) Health &
Beauty
Products
With growth in income levels, Indians have started spending more on health and
Beauty products .Here also small, single-outlet retailers dominate the market.
However in recent years, a few retail chains specializing in these products have
come into the market. Although these retail chains account for only a small share
21
of the total market , their business is expected to grow significantly in the
future due to the growing quality consciousness of buyers for these products .
Beauty products being displayed in a departmental store & a body care store.
e) Durable Goods
The Indian durable goods sector has seen the entry of a large number of foreign
Companies during the post liberalization period. A greater variety of consumer
Electronic items and household appliances became available to the Indian
customer. Intense competition among companies to sell their brands provided a
strong impetus to the growth for retailers doing business in this sector.
Leisure Goods:
25
Definition of a Retailer:
“a business which sells goods to the consumer, as opposed to a wholesaler or
supplier which normally sell their goods to another business.” Retailers
include large businesses such as Wal-Mart, and also smaller, non-chain
locations run independently such as a family-run bookstore.
2. Consumer Durables
Consumer durables are the products whose life expectancy is at least 3 years. These
products are hard goods that cannot be used up at once. Consumer durables involve
any type of products purchased by consumers that are manufactured for long-term
use. As opposed to many goods that are intended for consumption in the short term
Consumer Durables are intended to endure regular usage for several years or longer
before replacement of the consumer product is required. Just about every household
will contain at least a few items that may be properly considered to be of a
consumer durable nature. One of the most common of all consumer durables would
be the furniture found in the home. This would include items such as sofas, chairs,
tables, bed frames, and storage pieces such as chests of drawers and bookshelf units.
While once thought to be limited to only items made of sturdy metal or wood, any
type of furniture today that is intended for use over the period of at least a few years
can rightly be classified as consumer durables.
3. Demand Creation
The business process flow is: Business plan to potential customer; potential
customer to sales; sales to product design (if applicable), product design to produce
and deliver (if applicable); produce and deliver to customer and customer to bank.
The exact flow depends on the particular business model adopted. With this
approach, there would be one process that creates a demand for the organizations
products and services and another that fulfils that demand. These are often referred
to as marketing and production but these are labels given to departments therefore
we need a different term to avoid confusion. A suitable name for the process that
creates a demand might be Demand creation process. Other names might be
marketing process or Sales and Marketing Process.
Purpose:
Penetrates new markets and exploits existing markets with products and a
promotional strategy that influences decision makers and attracts potential
customers to the organization. New product development would form part of this
process if the business were market driven.
28
4. Market Players under Car Audio Segment
29
Sony’s Story
It was in 1946 that Masaru Ibuka and Akio Morita together with a small team of
passionate and committed group of employees started to build “Tokyo Tsushin
Kenkyujo” (Totsuko), or “Tokyo Telecommunications Research Institute” to the
billion dollar global conglomerate that it is today. The main objective of the
company was to design and create innovative products which would benefit the
people.
Overview
One of the most recognized brand names in the world today, Sony Corporation,
Japan, established its India operations in November 1994, focusing on the
sales and marketing of Sony products in the country. In a span of 15 years
Sony India has exemplified the quest for excellence in the world of digital
lifestyle becoming the country’s foremost consumer electronics brand.
With relentless commitment to quality, consistent dedication to customer
satisfaction and unparalleled standards of service, Sony India is recognized
as a benchmark for new age technology, superior quality, digital concepts
and personalized service that has ensured loyal customers and nation wide
acclaim in the industry.
Sony India also has a strong service presence across the country with 20 company
owned and 190 authorized service centers and 16 exclusive demonstration
centers. A distinctive feature of Sony’s service is its highly motivated and well-
trained staff that provides the kind of attentive and sensitive service that is rare
today.
Sony is committed to ensuring that both the products and the marketing
activities employed truly make a difference to people’s lifestyles and offer them
new dimensions of enjoyment.
In-Car Entertainment
If you spend long hours in your car everyday, it’s important to equip it with enough
entertainment so that you’ll have nary a dull moment. Car audio entertainment need
not be limited to just your favourite radio stations or CDs. Thanks to Sony Xplod
mobile entertainment technology, you can enjoy music from more sources. You now
can even experience visual entertainment with our innovative Touch-Screen
Multimedia Centre receiver. Riding the car is never the same experience again.
31
SONY Products
32
Company Overview
Pioneer Electronics (USA) Inc. designs, develops, manufactures, and sells audio and
video products for home, car, and business markets. It offers home entertainment
products, such as displays, TVs, monitors, projectors, and accessories; car
audio/video products, which include in-dash receivers, speakers, subwoofers,
amplifiers, and accessories and add-ons; and Blu-ray discs and DVDs, satellite
radios, home theater systems, headphones, iPod/iPhone accessories, tabletop and
dual players, media players/controllers, mixers, effectors, and software, as well as
car navigation products. The company also provides business products, including
professional video products and speakers, replacement parts, A/V receivers, audio
33
components, plasma displays, and professional DVDs, as well as multi-format
digital turntables for laptops to access music files. It sells its products through
authorized dealers and Internet stores in the United States and Canada, as well as
sells its products online. The company was incorporated in 1982 and is based in
Long Beach, California. It operates retail stores in Orange County, California; and
Phoenix, Arizona. Pioneer Electronics (USA) Inc. operates as a subsidiary of
Pioneer North America, Inc.
Global Vision
Group Philosophy
“Move the heart and touch the soul.”
Group Vision
To become a company that encourages all its members to work as a team, with
everyone customer-focused, integrating each one’s professionalism in pursuing
innovations one after another.
Pioneer aims to continuously provide excitement and passion to customers around
the globe, searching new ways to push the boundaries of what “sound, vision and
information” can offer beyond expectations.
34
With that goal in mind, each and every member in all corners of the Pioneer
Group is being asked to keep generating ideas for improvement in their respective
areas.
Pioneer is committed to turning one idea after another into solid reality for its valued
customers through innovations that make the unthinkable thinkable and the
impossible possible.
The Vision
Pioneer Products
35
36
Corporate goal
Since its establishment in 1927, JVC has upheld a corporate philosophy
to contribute to culture and to serve society through its products and business
practices. This philosophy also guides us at the heart of everything we do in JVC
ASIA.
With the digital age changing the way information and entertainment are being
experienced, JVC ASIA is fast positioning itself as a leading entertainment solution
company in Asia. Our greatest corporate asset is the synergistic power of advanced
hardware technology with our extensive expertise in entertainment software and
media. We are making every effort to link this asset with user needs in order to
create a new generation of products and services that enrich lives around the region.
37
While technology development is our core strength, our superior brand
performance is built through the combined effort of all our corporate activities. At
JVC, our people are focused on delivering our brand promise throughout the value
chain covering high-quality manufacturing, astute formulation of lifestyle ideas,
outstanding response to customer needs and much more.
Today we have eight sales subsidiaries in Asia, Oceania, the Middle East and Africa
and collaborate with seven other manufacturing companies. Each of these operations
is committed to making a vital contribution to its respective local community,
including sponsoring artistic, cultural and sporting Endeavour’s that inspire and
excite.
JVC is a global entertainment solution company from Japan. Since 1927, we have
created new ways to communicate through music and images through a diverse
array of innovative audio-visual products and services. Our technological leadership
is now recognised throughout the world.
JVC Products
39
40
Company profile
Spread across the country through a robust sales network we aim to continuously
excel in sales and service support to our millions of satisfied customers.
In a short period the team at Sahil International has grown exponentially, backed by
41
a unique work ethic of informality and empowerment. We are the fastest growing
company by revenue and income in all our product segments due to innovations in
marketing, infrastructure development and prudent financial management.
JBL Products
Chapter 3
Data Analysis
42
&
Interpretation
Figure: 3.1
43
SONY
16 Pioneer
JVC
14 JBL
Kenw ood
12 Xenos
10 Polkaudio
Fosgate
8 Rockford
Infinity
6 Alpine
Panasonic
4 Hertz
2 Blaukpunkt
Delphi
0 Prosound
Frequency Kicher
Chinese
Interpretation:
Figure: 3.2
70
60
50
40
Yes
30 No
20
10
0
Frequency
Interpretation:
70% of the retailers agree that the customers have knowledge of the products,
30% of the retailers say that the customer comes with no knowledge of products.
45
Figure: 3.2.1
70
60
50
40 Good Knowledge
30 Average Knowledge
No knowledge
20
10
0
Frequency
Interpretation:
Figure: 3.3
40
35
30 Mp3
25 USB
20 I Pod
15 Bluetooth
10 DVD
All
5
0
Frequency
Interpretation:
38.89% of the customers are aware of features like Mp3 & USB.
5.56% of the customers are aware of I Pod features.
5.55% of the customers are aware of DVD features, and about
11.11% of the customers are aware of almost all the features of the product.
47
Q5. If the customer has the knowledge of the products which brand he/she asks
for?
Figure: 3.4
40
35
30
25 SONY
20 Pioneer
15 JVC
JBL
10
5
0
Frequency
Interpretation:
Figure: 3.5
80
70
60
50
40 Yes
No
30
20
10
0
Frequency
Interpretation:
80% of the retailers think that the pricing policy of companies affects the sales.
20% of the retailers say that there is no effect on sales
49
Figure: 3.6
70
60
50
40
Yes
30 No
20
10
0
Frequency
Interpretation:
30% of the retailers say yes they sell products that yield more profit,
70% of the retailers say no they do not sell products that yield more profit.
50
Figure: 3.7
50
45
40
35
Schemes
30
Foreign Trip
25
Discounts
20
Free Demo Rack
15
Commission
10
5
0
Frequency
Interpretation:
47.37% of the retailers say companies come out with various schemes,
31.58% of the retailers say companies implement foreign trip schemes,
10.53% of the retailers say companies give commission to the retailers and
5.26% of the retailers say companies give free demo samples to persuade the
customer.
51
Figure: 3.8
35
30
Suggesting Brands
Depending on Budget
25
Extra Discount
20 Demonstration
0
Frequency
Interpretation:
Q10. What is the criteria on which the customer decides to buy a particular
brand?
Figure: 3.9
45
40 Brand
35
30 Quality &
Features
25
Price
20
15 Requirement &
10 Budget
5 Retailers
Experience
0
Frequency
Interpretation:
Chapter 4
Summary
54
1. Findings
Out of the brands available in the market Sony, Pioneer, JVC, JBL are the
common brands sold by every retailer. Brands like Kenwood, Xenos, Polk
Audio, Rock Ford, Infinity, Alpine, Panasonic, Blaukpunkt, etc are not
commonly sold by every retailer. This is because, a major part of consumers
having access to this segment have good knowledge of products and are
Premium Brand customers.
70% of the retailers agree that the customers have knowledge of the products,
and
30% of the retailers say that the customer comes with no knowledge of products.
38.89% of the customers are aware of features like Mp3 & USB.
30% of the retailers say that they try to sellout brands with higher margins
of profit and are successful at doing that.
70% of the retailers say that they do not try to push out brands with higher
margin of profit. They believe that customer satisfaction is the ultimate tool to
earn profit. Once a customer is satisfied, an already existing customer may refer
the retailer to others, indirectly attract new customers.
47.37% of the retailers say market players come out with various schemes
by which a retailer decides as how much of stock should he maintain and
accordingly try persuading and selling brands in order to yield more profit.
31.58% of retailers say that competitors come out with gift packages on
achieving target sales volume on such brands, which encourage them to sell a
56
particular brand. It is left to the retailer as to what gift package he desires to
target. 5.26% of the retailers say, competitors offer them discounts. This enables
them to earn a higher margin of profit and they try to sell only those brands.
5.26% of the retailers say that fewer organisations give out free demo samples.
This attracts the customer to buy that product.
26.67% of the retailers give extra discounts to the customer, which a customer
generally looks for.
6.67% of the retailers try suggesting the customers, the brands that offer more
features at less price.
13.33% of the retailers try to mould the mind of the customer, shifting his
preference from one brand to other brands.
57
43.75% of the customers decide to buy a product by their brand name,
12.5% of the customers decide to buy a product based on their Quality and
Features,
31.25% of the customers decide to buy a product by based on their requirements
and budget,
12.5% of the customers decide to buy a product via retailers own experience.
2. Conclusions
1. Foreign trip schemes: Retailers are awarded with all expenses paid
foreign trip (only boarding and stay charges). These schemes are
awarded to only those retailers who achieve a specified turn over in
selling a particular model of product.
2. Glow signs: Retailers are provided with company glow signs with
retailers name printed on it. This enables the retailer to attract the
customers by glow signs and ask for that particular brand.
58
3. Branding: The retailers are branded with company’s name and give
attractive discounts to the retailers on product models. As discussed
earlier a premium brand customer who always looks out for premium
brand can easily notice these retail outlets and ask for that particular
brand.
7. Demo rack: The retailers are provided with company’s demo rack.
Demo rack consists of all the models of the company displayed so that
the customers can have a practical experience of the products and the
customers can decide as what they want to buy.
59
Apart from the above strategies the organisations also implement promotional
strategies on the customers. They are customary offers like free pendrives, Mp3
CD’s, free t-shirts.
There are three types of customers existing in this type of market. They are:
a. Premium Brand customers
b. Feature and Technical based customers
c. Economical customer
Customers who possess knowledge are generally those customers who have
purchased these products earlier.
Market leaders like SONY, JVC, Pioneer, JBL, and Blaukpunkt can afford
to advertise their products; this is because these are the market players who
occupy a major market share.
Products sold by Market players are economical in price and fits into the
common budget for Economical customers.
3. Suggestions
Customers do not tend to buy certain brands because of their bad after sale
service. The organisations should focus on improving it’s after sales services for
the customers. This is essential to occupy a large market share and creating a
brand image in the market.
Bibliography
The Secondary data has been collected through the following sources:
• www.google.co.in
• www.businessdictionary.com
• www.wikipedia.com
• The Retailer's Role in Quality Retailing - The Emerging Scenario in India.
(www.ezinearticles.com)
• Automobile magazines.
• Newspapers: Times of India.
63
Annexure
Questionnaire
Retailers Role in Demand Creation
(In Case of Car Audio segment)
2. Brands he sells:
5. If the customer has the knowledge of the products which brand He/She asks
for:
10. What is the criteria on which the customer decides to buy a particular brand: