STUDY ON
A PROJECT REPORT ON
CROMA
SUBMITTED IN PARTIAL FULFILEMENT OF THE
REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTERS OF MANAGEMENT STUDIES
SUBMITTED TO
N.L. DALMIA INSTITUTE OF MANAGEMENT STUDIES AND
RESEARCH, MIRA ROAD
SUBMITTED BY
VIVEK NARESH MEHTA ROLL NO. 741
SUPERVISED BY
DR. PROF. BAISAKHI MITRA
MARCH 2020
MUMBAI UNIVERSITY
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ACKNOWLEDGEMENT
I would like to place on record my deep sense of gratitude to Prof. Dr.
M.R. Koshti, HOD- Dept. of Part Time MBA, Mira road India for his
generous guidance, help and useful suggestions.
I express my sincere gratitude to my guide Dr. Prof. Baisakhi Mitra,
Dept. of Part Time MBA, Mira road for his simulating guidance,
continuous encouragement and supervision throughout the course of
present work.
VIVEK NARESH MEHTA (741)
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CERTIFICATE
I hereby certify that the work which is being presented in Part time MFM Project
report entitled “CROMA”, in partial fulfillment of the requirements for the award
of Masters of Management Studies and submitted to University of Mumbai is an
authentic record of my own work carried out during a period of December 2019 to
March 2020 (II Semester) under the supervision of Dr. Prof. Baisakhi Mitra, Part
Time MBA Department.
The matter presented in this Project Report has not been submitted by for the
award of any other degree elsewhere.
Vivek Naresh Mehta (741)
This is to certify that the above statement made by the student is correct to the best
of my knowledge.
Signature of Guide Signature of External Guide
Signature of HOD Signature of Principal
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INTRODUCTION
Croma: Electronics MegaStore: Tata group's Infiniti Retail
Owned and managed by Infiniti Retail, a 100 per cent subsidiary of Tata Sons,
Croma receives technical and strategic sourcing support from Woolworths India, a
subsidiary of Woolworths. The latter is an Australian retail giant with over 2,000
stores in 12 different formats in Australia.
The above 20,000 sq feet chain at Juhu in Mumbai retails products in eight
categories. These are white goods, home entertainment, small appliances,
computers and peripherals, communication, music, imaging and gaming software.
In each of these categories, the buyer is spoiled for choice, with nearly 6,000
products and 180 brands to choose from.
Currently organised retail is only 3 to 6 per cent whereas the total retail turnover in
India was 250 million dollars last year. But organised retail is growing at a speed
of 40 per cent. The pie is large enough." These facts were disclosed at an AT
Kearney summit held in Mumbai recently.
There are other measures that he hopes to use to attract the customer. These
include job-related training and motivational programmes to ensure that the sales
staff is able to give optimum service to customers, and extended warranties on
products from Tata AIG General Insurance. These measures help give further
credence to Croma's claim of "We don't sell, we help you buy."
Ties-up with Microsoft: MS@Retail
The joint initiative of the two companies brings for the first time networking
solutions for every room of a house.
The technology available at Croma, Juhu, will showcase Microsoft connected
homes which bring together music and movies, thereby enriching and enhancing
the lifestyles of consumers, he said. The MS@Retail shop in shop pilot project
kiosk at Croma Juhu would showcase technology that will create homes where
everyone is connected to everything.
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The technology will help in assisting to connect camera to a Xbox and put up a
show for the whole family, watch movies by connecting Xbox to the LCD, as also
convert the PC to a gaming machine, thereby providing the unique technology for
a completely networked home.
The company is also planning a change in the business model under which it seeks
to bring in the franchisee model for stores’ expansion and is doing pilots in two
locations. Currently, existing stores are operated by the company.
Investment in improving the order management systems, customer experience
related measures and being more effective in poaching footfalls from online
businesses that have some gaps, are some of the other major initiatives of the
company.
OUR VISION
“To be a world class socially responsible retail company that consistently
enhances stakeholders value.”
OUR MISSION
“To be an organization offering Unmatched Customer Experience through
continuous Learning & Innovation”
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Marketing Mix
Marketing Mix of Croma analyses the brand/company which covers 4Ps (Product,
Price, Place, Promotion) and explains the Croma marketing strategy. The article
elaborates the pricing, advertising & distribution strategies used by the company.
Product:
The product strategy and mix in Croma marketing strategy can be explained as
follows:
Croma, a brand of Tata group, is a leading retail brand specializing in consumer
electronics & accessories. Croma offers around 6000 multi-brand products across
many categories. Croma also has many more products in its marketing mix and
some of them are as follows -
Communication - Mobile Phones, cordless, Power Banks, accessories, Memory
Cards etc
Computing – Laptops, Tablets & iPads, personal computers, speakers, Network
Components, Computer Storage, Computer Software, Printers, Tablet and iPad
Accessories, Computer Accessories, Office Solutions2 in 1
Entertainment – Televisions, Home Theatre and Audio Systems, Headphones and
Earphones, audio systems and iPods, game consoles, DVD Players, Value Cards,
Cables and Connectors, Accessories
Hygiene - Washing Machines and Dryers, Air Purifier and Dehumidifier, Health
Care, Water Purifiers and Dispensers, Dishwashers, Vacuum Cleaners, Garment
Care
Photography – Cameras, Filters and Lens, Digital Photo frames, Memory Cards,
Camera Accessories, Binoculars, Educational Kit
Cooking - Food Processor, Microwaves and Ovens, Stoves and Cooktops, New
Age Cooking, Coffee & Tea Makers, Toasters & Sandwich Makers, Steamers &
Cookers, Vegetable & Fruit Purifiers, Utensils
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Comfort - Air Conditioners, Refrigerators, Fans, Lighting Products, Electrical
Appliances, Safety And Security, Irons, Geyser, Room Heaters, Cooler
Grooming and Wellness - Hair Care, Female Grooming, Male Grooming,
Connected Fitness, Lifestyle, Massagers
Price:
Below is the pricing strategy in Croma marketing strategy:
Croma follows promotional pricing strategies and offers discounts like 10% to
15% even on premium products. This helps in increasing the footfall as well as
increased sales during festivals. The trust of TATA group provides customers to be
confident about the quality of the products as well as competitive prices. Croma
provides attractive discounts for bulk buyers which leads to greater revenue. One
of its biggest competitors is Reliance Digital but the customer service and in store
experience of Croma helps to differentiate itself even though pricing wise they are
pretty close to each other.
Place:
Following is the distribution strategy of Croma:
There are more than hundred Croma stores across various cities throughout India.
One can easily find a Croma store in most of the big malls. They sell directly to the
customers through their stores but one can also order online through their website.
The first store was opened in Juhu in Mumbai.
There stores located in Mumbai, NCR, Chennai, Bengaluru, Hyderabad,
Ahmedabad, Surat, Rajkot, Aurangabad, Vadodora.
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Promotion:
The promotional and advertising strategy in the Croma marketing strategy is as
follows:
Croma follow ATL strategies like newspaper and radio advertisements. Now they
have started social marketing with Facebook and google ads. They try to portray
the brand trust of TATAs and provide excellent customer support. They have
Authorised Croma Care Center to provide after sales support to all products
purchased at Croma during any time of the day. The ads of Croma generally focus
on the value for money aspect of the products. They provide quality products at a
discounted price which appeals to the middle class population. They sometimes do
in store promotions like “Croma Loves You” campaign where the store employees
start dancing to the tunes of the song and explain the benefits of shopping with
Croma retail. It’s fun and entertaining while at the same time the catchy tune
attracts attention and promotes store products.
Since this is a service marketing brand, here are the other three Ps to make it the
7Ps marketing mix of Croma.
People:
Infinity retail runs Croma which is owned by the TATA group. The store provides
special discount to the TATA group employees. The sales people at Croma are
very friendly and help the customers in zeroing in on a product that best satisfies
their needs. The brand is associated with TATAs and as a result customers trust
them. They pride themselves on providing excellent customer service.
Process:
Croma sell their products through online website where they provide promotional
discounts and also through about 100 odd stores throughout India. They have a
customer focused approach and have a 24-hour call centre support.
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Physical Evidence:
Croma has large stores in most malls clearly displaying the Croma brand on the
top. There are large glass displays showcasing variety of electronic products and
customers can come in and try the display units. They also have smaller stores
called zip stores at airports etc with a different layout so that they could target
specific travelling customers. They also have their own label called Croma Life
accessories which provides some unique and essential products. Hence this gives
an overview of the Croma marketing mix.
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Advertising and Marketing Strategies
Infinity retail owned multi-brand consumer electronics retail chain, Croma claims
to have ended FY19 on the back of a 16% rise in advertising and promotional
expense to Rs 37 crore, Ritesh Ghosal, CMO, Croma, told ETBE. “We plan to
further up our advertising and marketing spend by to Rs 41 crore in the current
fiscal,” he added.
According to Ghosal, while the company had invested more in print advertising in
FY19, this year TV is where the buck is going. “For this financial year, we plan to
invest 65% of our marketing spend on TV, followed by 20% on digital and 15% in
print. On TV we will advertise on English and Hindi news channels as well as
regional general entertainment channels (GEC),” he explained.
Croma Electronics posted a profit after being operational for 12 years. According
to the filings sourced by business intelligence firm Tofler, the company’s revenue
stood at Rs 3,759 crore, as it posted net profit of Rs 16.7 crore in FY18.
As for FY19, Ghosal claims that the company’s profits will remain conisistent.
“Due to constant growth Croma is going through, there will be a miniscule rise in
profit, if any,” Ghosal said. Furthermore, Ghosal added that the company makes
6%-7% of profit on every transaction. “We look at unit economics- wherein every
store should be profitable,” he added.
The company claims that it ended FY19 with 27% rise in revenue to Rs 4,774
crore.
Last October Croma launched three hours delivery (3 Hour Delivery) service,
which allows a consumer to buy light consumer electronic items on the app. The
product is delivered within three hours. “With an average ticket price (ATP) being
Rs 6,000 - Rs 7,000, there has been a huge increase in the number of orders being
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placed through the app. The app clocks 60-80 orders per day,” Ghosal said.
The multi-brand retail outlet claims that online currently contributes to 3% - 4% of
the overall revenue. According to him, nearly 38% of its customers prefer to visit
croma.com to browse for electronics, before coming to the store for touch-and-feel
experience. Post which they buy,” he explained.
As per Ghosal, the stores witnessed 3% growth in footfall in FY19.
Furthermore to expand its presence Croma plans to open 70 large format stores in
FY20, of 10,000 sq. ft in size. Currently, Croma has 131 stores operational in 25
cities. All the stores, barring one, are company owned stores.
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SWOT Analysis
Ever since specialty retail has grown in popularity there have been many new
players who have come in to occupy that space in the market. Croma is one such
player and the specialty retailer is primarily into consumer durables and currently,
they have also expanded into categories such as online retail, Croma Zip and
Croma kiosks.
The Croma retail chain is owned by the Tata Group and there are a total of 110
stores in most of the top cities of India. Croma is giving a tight run to other
competitors like Reliance Digital and has registered a revenue of Rs 3200 crores.
Croma is also into aggressive promotions to beat their online counterparts but still
continues to struggle to beat them.
The group has predicted a growth of 6 to 7 percent annually and this is expected to
grow slowly yet steadily in the next few years since Indian market is on an
upswing.
Strengths in the SWOT analysis of Croma :
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 Croma :
Wide product Portfolio: The Croma Group under Infiniti Retak has the presence
in most areas of consumer durables like consumer electronics, communication,
entertainment, hygiene, home appliances and digital devices.
The Tata Support: Croma is a 100 % owned subsidiary of the Tata Group. The
Tata Group has a rich history of business strategy about them and this has helped
them build a huge empire of their own.
Steep growth: Croma was established in 2010 when specialty retail
business started booming. IN the past seven years Croma has grown into a retailer
that tops the charts and has a market share of 58 %.This steep growth shows that
the customer trusts this brand.
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E-store: Croma understood that the real business was with an online retailer and
recently launched their online store under the label ecroma.com. Though it is
slowly picking up eventually this will be the saving grace of the retailer.
Private Label Brands: In comparison to other private labels Croma is seen to be
more trusted and this has resulted in people preferring to invest in the private label
which promises quality similar to those of brands. Strong private label brands are
one of Cromas strengths and this is there across most of their product categories.
Tie-Ups: Croma has entered into product development partnerships
with Amazonand Apple and created some innovative product lines which are also
customer friendly.
Weaknesses in the SWOT analysis of Croma :
Weaknesses are used to refer to areas where the business or the brand needs
improvement. Some of the key weaknesses of Converse are:
Poor customer service: Croma has been often alleged with lack of empathy for
customer needs. The company has also been facing a lot of complaints lately about
the behavior of their in-store personnel. All this have affected the quality of
customer service of Croma Retail.
Inadequate advertising: The mainstream media have been highly supportive of
online retailers like Amazon who also spend a lot on the advertisement. Even
smaller startups who are in the online space spend profusely on endorsements and
advertising. In comparison to this Croma seems to be low key.
Over-reliance on Brand Tata: Croma is depending excessively on the image that
Tata has carved for itself in most of the markets for its business. This may not be
the right strategy always and it is critical that the brand carves its own independent
image for long-term sustenance.
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Opportunities in the SWOT analysis of Croma :
Opportunities refer to those avenues in the environment that surrounds the business
on which it can capitalize to increase its returns. Some of the opportunities include:
Specific Need: The needs of the customer has not just grown but have become
more specific. The result is the emergence of a lot of specialty stores There is more
scope for growth in various specialty segments and this may be what each retailer
needs to look into for expansion.
Disposable Income: Globally there is a surge in per capita income with the
increase of people in workplaces and dual income households. This has increased
the disposable income and people are spending impulsively. This is creating new
needs and new markets and segments.
Growth in online shopping: Convenience is making more and more customers go
the online way. This can be both an opportunity and a threat.
Threats in the SWOT analysis of Croma :
Threats are those factors in the environment which can be detrimental to the
growth of the business. Some of the threats include:
Competition: The company is facing stiff competition from Vijay Sales ,Reliance
Digital, Videocon Retail and online retailers such as Amazon and Flipkart.
Startups: There has been a serious threat to online start-ups today in the Indian
Market and most of these are online businesses and many of them are retailers or
aggregators. Both these categories are serious threats to retailers.
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Croma Defensive Strategies Against Online Retailers
At the newly-opened Prabhadevi store of Tata-owned consumer durable and
infotech chain Croma, a toy train with toy animals in the middle. But the toys are
not to entertain children when their parents are busy shopping for gadgets. They
are for prospective camera or lens customers to zoom in and take sample shots.
Croma is also looking to launch portable kiosks in railway stations, offices and
factories, where people can check out and order products. It already has a few
small stores under the name of Croma Zip and stores at airports. At 16 of its stores,
the chain has staff with handheld card-swipe devices for customers to beat the
queue at its cash counters.
One of the largest chains in home and consumer gagdets, Croma is making such
moves to turn into a zannier avatar. It faces intense competition from not just other
brick and mortar chains such as RIL-owned Reliance Digital and Kishore Biyani's
Ezone, but e-tailers such as Flipkart, Snapdeal and Pepperfry. Marketing experts
say e-retailers pose a bigger challenge.
Ajit Joshi, CEO and MD of Infiniti Retail says the stores and its e-commerce site
are coming up with ways to take on competition.
Croma's website is offering same-day delivery. Customers placing an order before
2 pm, will receive them the same day or early next day. It is planning to start this
service in two stores in Mumbai in April, and extend it to other stores in the city,
Delhi and Bangalore by May.
E-tailers have a headstart in home-delivery logistics. Snapdeal will extend its
same-day delivery services to more cities, after the National Capital Region.
Orders placed before 1 pm would be supplied the same day, free of cost. Flipkart
charges Rs 90 per product for delivery the next day, in seven cities.
"Online retailers are giving tough competition to physical retailers in IT and
mobiles. The big chains have expanded their reach well but it needs to be see how
they handle the competition from online ventures," says Abhishek Malhotra,
partner and vice-president at Booz, a management consultant.
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Croma will have an edge over other offline stores, says Joshi. Ezone's site takes a
couple of days to deliver the orders and Reliance Digital does not have an e-
commerce site.
Joshi believes Croma would also have an edge over e-tailers due to its combination
of offline and online stores. "We have often seen customers flip-flopping between
online and offline stores of ours," he says, and for them, Croma has something
called 'OOPS' (order online and pick up at store). It does not require customers to
completely vest faith in online buying of durables and retains a component of
touch and feel before the product is finally brought home.
Croma stores would also sport service desks to help customers transfer data from
their old phones, explain accessories that go with mobiles or laptops etc. "You do
not get these kind of services on pure-play e-commerce sites," he adds.
Though Croma has missed its target to achieve a Rs 2,000-crore revenues from its
online business by FY-2014, Joshi says the brand is clocking Rs 1 crore in sales
every month.
"The price-points at our stores and e-commerce site are the same. You can even
ask for a refund on goods bought online," he adds.
Some marketing experts believe that retailers such as Reliance Digital has beaten
Croma in scaling up the business.
While Croma, which set up its first store in 2006, has 101 stores, Reliance Digital,
which debuted a year later in Ghaziabad, has around 250 stores including Digital
Express, Digital Express Mini and iStore. Ezone has over 40 stores.
"After intense competition from online retailers and after they ended the
partnership with Woolworths, Croma has consolidated its presence in 2013 and
2014," says Rajeev Karwal, founder director at Milagrow Business and Knowledge
Solutions, who was the first CEO of Reliance Digital. In 2012, Croma bought out
Woolworths Wholesale, its back-end supplier for Rs 193 crore.
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Challenges for Croma
Croma brought drastic change in its product display technique and remodeled its
existing stores into experiential theater to win over e-commerce race.
Not only India, worldwide, the traditional retail has been hit by mammoth growth
of e-commerce. Over the years the retailers have set the way about how consumers
shop from their retail shops. However, now the there is a tremendous shift from the
traditional approach due to transformation brought in by smartphones, arise of
social media and inception of new sales channel. Moreover, this digital innovation
caused radical shift in consumers’ behavior. And, pure traditional retail started
battling with these newly emerged trade channels including ‘e-commerce’. But,
few retailers such as ‘Croma’ have won the race with their innovative strategies.
Let’s shed light on retailer’s journey the way they streamline with e-commerce.
So, what was the challenge?
Electronics as the industry or market is clearly the most happening retail market.
This industry may be quite different; however, the basics of the trade remains the
same. Speaking on same Maneesh Mittal, Head - eCommerce and Big Data at
Infiniti Retail Limited (Croma) - A Tata Enterprise, said, “We take some time to
understand the ground reality of the market, once the online players started to
coming in. We like to believe that we have overcome that obstacle, now we
manage to turn around our sales and footfall and double digit growth.”
Going further he added, “We did a lot of research on marketplaces model, and we
found that people were going online primarily for three reasons including price
(though, that alone cannot drive loyalty but does drive transactions), convenience,
thirdly the factor of range (physical store regardless the size comes with certain
restrictions). These three were huge differentiators with whom we were unable to
compete.”
‘Focus’ is the key..
Croma did a lot of research to figure out a strategy to compete with e-retail.
Informing on same Mittal said, “We bought the focus sharply to our customers, we
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started understanding that customer better, we spoke a lot to our customers, we did
a lot of research in terms of getting back to the basics.” Through the research the
retailer understand, customers might be purchasing online, but they were walking
to physical store to gain firsthand experience.
“Our footfall was never decline but the conversions that was subject to question.
We relied customer want to touch, feel and try the product, they still want to
explore firsthand experience before making the purchase. We relised that the
customers were looking for curated assortment, the customer wanted to choose
from the products that is better suited to him rather than exploring thousand of
products which are similar to each other, that only create more confusion than
clarity.”
“ Accordingly, we changed the assortment now we have gone wider from we
actually used to be, now we have started our products displaying in different
format that allows better clustering of our product which allows customers to
better compare the product with similar products. We have started remodeling our
stores and made them more experiential theatre. Now, we believe store will stop
becoming point of sale and will emerge as point of experience,” he concluded.
Clearly, alike to Croma traditional retailers should consider capitalising on their
traditional strengths when competing with online and should bear in mind that
going ‘innovative’ is only key to success.
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Suggestions
Increase merchandise & sale of private labels over a period of time
In house after sales service
Display of new technological innovations (working of Smart Appliances)
Strategic tie-ups with local companies (e.g Zapak games etc)
Explore B 2 B markets (e.g. Tie ups with hotels, resorts etc for electronic
and electrical items)
They should work on their Logistics facility of customer products in time.
Online Payment should be accepted by croma, in order to be more
convenient and effective.
Real time solutions should be provided by customer care to their customers,
for their precise problems
Process should be minimize in order to be more effective, it helps employees
to work more efficiently.
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Bibliography
https://www.thehindubusinessline.com,accessed on 21 march 2020
https://www.business-standard.com ,accessed on 23 march 2020
www.croma.com accessed on 22 march 2020
www.indianreatiler.com accessed on 24 march 2020
https://www.youtube.com/watch?v=_piIrzxhqI8 accessed on 26
march 2020
www.indiefolio.com accessed on 26 march 2020
https://www.youtube.com/watch?v=79h0SHJxJZ4 accessed on 27
march 2020
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