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Case study presentation on food

world market entry strategy

Presented by
Vagesh v
hiremath
Trimurti
sannakki
Shrihari
shindhe

Profile of foodworld
President

pradipta k mohapatra
Company RPG enterprises
food world Division of spencers
Established 9 may 1996(food
world)
Place R A Puram (chennai)
Turnover 210 million(1996-97)
RPG purchased spencers in 1989

Retail market scenario in india in 1991


Population

846million
of population lived in 3768
towns
remaining 627000 villages
Retail levels
1. Formal sector
2. Informal sector
3. Fair price shops

Conti.
In

1993 formal retail out lets in


india 8.06 million
In 1998 it was about 11.1 million
Estimated 2001 13.6 million
Approximately 30% outlets
located in urban 27% dealt with
food products

Urban outlets food/nonfood 1996


Types of products
sold

Number (000)

Percentage(%)

Food

824

26.8

Other fmcg

1,430

46.5

Non -food

820

26.7

total

3,074

100.0

Conti.
Total

retail sales in india 1997


was estimated to be 6,630 billion
out of which food items was
4,837 billion
Total 53% retail contribution of
GDP
69% consumer expenditure
Estimated retail sales 2002-9,236
billion
food -6,657 billion

Cruicial decission taken by the company

Which target segment should be


focused on ?
2. What value proposition should
be offered to the customer?
3. Which merchandising facilities
should be offered?
4. Where the retail outlets should
be located?
1.

Conti..
Insight

Consumer survey
conducted
Buying provision needs and
requirements
Insight into consumer awareness
about competition
Customer perception of store
names
Shopping habits and benefits
sought of the customers

Categories of products
Category description

Typical products

Convenience

Noodles, canned non- veg,


canned fruit, canned
veg,dessers,tinned
milk,cigarettes,frozen foods,
hardware

Destination

Careals,pulses,flours,edible
oils, diary products,
vegetables

Specialty

Paper goods, pet


food,batteries,miscellaneous
items

Strategic

Spices,
biscuits,jams,breakfast,foods,b
aby
foods,liquor,detergents,skin
care, hair care, oral care,
shaving needs, baby needs

Question& answers
Draw

a diagram of retailing decision for


food world as given as fig. 1.2
enumerate the key success factors
Using the data in the tables and figures,
find out the profitability drivers for food
world .what is the difference between
the profitability of new and old stores?
What are the reasons for this ? What is
your suggestion with regard to the
number of stores that food world open
when it becomes a profitable stores?

Answers
1.

Retailing decision taken by the


RPG in order to expand its
supply chain and retail in India
three insights or directions to
get in to retail
1) The company should not get
in to niche retailing instead they
should focus on the mass
market

Conti

2) organized retailing would


evolve faster in the country as
retailing format was closely
related to economic
development of countries
3) they should focus on daily
necessities of house holds- food,
clothing and health

Conti..
Types of products
sold

Number (000)

Percentage(%)

Food

824

26.8

Other fmcg

1,430

46.5

Non -food

820

26.7

total

3,074

100.0

Key success factors


1.
2.
3.
4.
5.
6.
7.

Advantage of Indian retail


scenario
Non existence of competitors
Acquisition of Spencer's
company
Targeting middle and upper
middle class families
Site selection
Positioning strategies
Marketing strategies

2)
Profitability

drivers for food world


Pricing strategies
Food
Non food
Fmcg
And other categories of products
Perception of store name

Difference between profitability of new and old


stores
Facility

of the stores
Ambiance of the stores
Variety of products available at
the stores
Well connected to the roads
Pricing policies
Marketing strategies
Promotion and offers

Number of stores should open


As

the making profit is the main


motto of the company it can new
start coming up with new stores
in cities and get the advantage of
Indian retail scenario
This will help in employment
generation
As the retail sector is one of the
major contributor to the Indian
economy this will help in