FUNDAMENTALS OF MARKETING
(MKT 101)
Term Assignment
On
“ANALYSIS OF MARKETING ENVIRONMENT”
(Retail and D-Mart)
POST GRADUATE DIPLOMA IN MANAGEMENT
(Term-I; Batch 2019-21)
Under the Supervision of
Dr. DEEPAK SINGH
Associate Professor- Marketing & Strategy
Submitted by
Reshma Chauhan
PGFC1927
JAIPURIA INSTITUTE OF MANAGEMENT
A-32 A, Sector 62, Institutional Area, Noida- 201309 (U.P.)
AUGUST 7, 2019
PESTEL Analysis
Force Summary of impact Environmental forces
Using Visa/master card for cashless transactions.
Under GST, over 1300 goods and 500 services taxed at
rate of 0%,5%,12%,18% and 28%.
Political 100% FDI in online retail and 51% FDI in offline retail
Under Digitalisation, nearly 70% of Indian shoppers
prefer digital devices rather than sales personal for in-
store activities
A total income of US$ 2.86 billion in FY2019.
The penetration of organized retail is at 2 per cent in
Economic India compared to other developing Asian countries.
Revenue growth is at 22.6%
No-frill approach which means to cut cost wherever
possible
Generation Y and Z are the more attractive target
population
for online shopping.
Less number of D-Mart chains are available in tier-2
cities as compared to tier-1.
Sociocultural India’s population is taking to online retail in a big
way mall culture is also increasing in India.
D-Mart is using AI in Store Inventory Management,
Supply and Logistics and in Personalized Shopping
Experience.
Technological Under Robotics, D-Mart is also using ‘smart screens’ in
shops to display different contents.
Going for LED lightning and printing less stuffs are
initiatives under Green Technologies.
Under consumer protection act, D-Mart follows the
different consumer laws.
D-Mart also provides Goods and Services that are safe
and contribute to Sustainable Development.
It maintains equal opportunities during recruitment and
Legal active employment irrespective of caste, creed etc.
Under Shops and Establishment Act, employees are
benefited with different regulations which include
payment of wages, hours of work etc.
Retail industry accounts for 8% employment rate
and D-Mart also accounts a markable share in
employment.
Environment Under Health and safety laws, Shop and
Establishment act is designed to regulate payment
of wages, hours of work, leaves, holidays of
employees in different D-Mart outlets.
D-Mart
Planning horizon 3 to 5 years (Industry forces Analysis)
Industry Important Potential impact on the
Forces Players firm/Business unit
Current Direct Big Bazaar Each D-Mart outlet offers various
Competitors Reliance Fresh products in its portfolio ranging
from groceries, apparels,
kitchenware, footwear etc.
It keeps prices at reasonable and
economic rates so that customer
can easily purchase it.
New Direct Big Basket D-Mart is providing different
Competitors Reliance fresh customer-oriented services
which helps customer to meet
their short term and long term
needs.
Indirect Amazon It is planning to retain its lower
Competitors price modal on everyday
household items to play the
volume game.
Suppliers Parle Agro These are the suppliers that provide
Nestle raw materials and various services
ITC ltd for the products.
D-Mart maintains a solid
relationship with the suppliers so
that it can offer its own customers a
consistently high-quality product or
service.
Buyers Potential The customer is the foundation
customers of the business.
By taking customer importance
Individuals in consideration, D-Mart ensures
greater customer satisfaction
and increases its long-term goal.
Strengths
It provides a vast range of products and services under one roof, from
groceries to food and beverages, that helps in attracting customers to shop
together.
It has a diversification in business that operates all over India.
Online retailing has helped in acquiring both Generation Y, and Generation
Z.
Healthy work environment and introduction of legal laws, such as Shop
and Establishment Act, attracts employment in retail sector.
It is also considered as the most successful grocery retail chain.
Weakness
D-Mart is established in year 2005, but it is not able capture the market as
compared to the many later entrants in the retail sector. This implies the
slow growth od D-Mart.
It generally focuses on certain number of places. The retail outlets of D-
Mart are present mostly in western states and in south India and in North-
East India.
No-frills approach is followed by D-mart. It lacks the frills of upper market
retailers.
Planning horizon: 3 to 5 years
Challenges for the firm? Business unit
Challenges are those obstacles that a company or a business faces in a race to
increase the customer value. According to my Pestel analysis, these are the major
challenges-
Online retailers
Nowadays for any retailer, it has become difficult to cope up with the increasing
e-commerce and online retailers. Especially people in cities feels so lazy so
they prefer online shopping over visiting to any retail outlet. Example,
Amazon and Flipkart are major threats.
New online start-ups
Online start-ups are trending in India. These online start-ups have lower
barriers to entry and they also don’t have to establish an offline retail outlet.
They bring supplier and the customer cost-effectively. So, these
companies are the emerging threats.
Opportunities for the firm? Business unit.
According to the PESTEL analysis these are different areas of opportunities in D-
Mart-
Technologies
With the advanced use of Artificial intelligence, D-Mart can offer retailers in
terms of in-store experiences and retailers can use loT to create value-adding
services to their customers
For which they can charge a premium and can make a good profit.
Personalization of services
Personalization means meeting the customer’s need and increasing the
customer satisfaction by providing some value to the services. Personalized
services are so much trending these days.
Expand the business
D-Mart can expand the business in rural areas or in small cities as it has a lot
of opportunities in those areas. It can also expand in global markets with tie-
ups.
Internal environmental analysis (Future Retail)
Future Retail
Resources/Structure/Culture H M L Remarks
Physical resources Total 1,035 stores
Big Bazaar is one of the largest
hypermarkets chain of 250+ stores
in 120 cities spread over 10.1
million sq. feet
Financial resources Total income of Rs. 201.85 billion
in FY2019
Human/Intellectual Capital Resources It is a family of 4,56,920
employees.
Technological resources It is about to launch a new Point-of-
Sale (POS) system with payments
technology that will empower
merchants to grow their business
with better inventory
management.
It also has its personalised e-wallet
‘Future Pay’ for online
transactions.
4-P’s -Product -Integrated foods and other FMCGs
-Price -Price starting from INR 5-50,000
-Spread over 321 cities
-Place -Effective advertisement and
-Promotion famous taglines
Company culture & Incentive system They consider people as their most
valuable asset. With an average
age of 27 years, they have the
most skilled and qualified
professionals.
Quality like leadership motivates
them to never stop learning.
Brand, Co-image, Reputational Assets The famous tagline of Big Bazaar
& other resources/competencies “Isse Sastaa Aur Achaa Kahin
Nahi” attracts huge number of
customers. Consumers are
influenced by various social and
cultural situations.
D-Mart
Resources/Structure/Culture H M L Remarks
Total 176 stores across
Physical resources India
Spread over 5 million
square feet.
Total income of Rs.
Financial resources 199.68 in year 2019
Total employees 164
Human/Intellectual Capital
Resources
There is no particular e-
Technological resources wallet for payments of
goods, but they do accept
debit/credit cards for
payment and in future
there is a scope of
introducing POS system.
-Home utility products
4-P’s -Product -It goes with Buy Low Sell
-Price
Cheap policy
-Place -Spread over 163
-Promotion locations
-Inspirational ads
It has been a retailer
Company culture & Incentive system leader in innovation and
community friendly
standards. It has a great
community, amazing
growth opportunity and
creative atmosphere. It
has an atmosphere of
professionalism.
It is considered as the
Brand, Co-image, Reputational most successful grocery
Assets & other
retail chain. The tagline
resources/competencies “Daily Savings Daily
Discounts” offers various
products and services at a
discounted range that
attracts a huge number of
potential customers.
News Articles:-
On Aug6’2019, D-Mart’s owner Mr. Radhakishan
Damini is planning to sell 6.23million shares or approx.
1% of the total share capital
On August20’2018, Deepak Shenoy, CEO of Capital
Mind, made a very conflicting statement about D-Mart
growth rate in coming fiscal years
-In an interview with Economic Times, Deepak Shenoy said that he
does not see D-Mart as massive profit mover in upcoming two or three
years. He also considered the facts that D-Mart has been a remarkable
player in moving up the price chain. It is not an attractive proposition
for the long term.
He also had a question in mind that what if D-Mart comes with a
blockbuster profit in future years?
In comparison with the context, Reliance retail could also show the
similar kind of profit growth. Many of the business minds also consider
that Reliance is undervalued.
