BATCH: 2021-23

 
ASSIGNMENT-3

BUSINESS Analysis

CROMA
 

Submitted To-
Prof. Prabhakar Nori

Submitted by-
Sushmita Pal N20211076
Sakshi Jha N20211067
Aditya Khandelwal – N20211004
Chaturvedi Narsingoju – N20211022
Daksha Soni – N20211023
Deepam Kundu – N20211024
About Croma:

Croma is an Indian retail chain that sells consumer electronics. It belongs to the TATA group.
It was started in Mumbai in 2006. It is run by Infiniti Retail Ltd.

Croma is India’s Leading Retail Store in Consumer Durables segment.  It is a TATA

Enterprises Subsidiary in Retail segment. Competing with Reliance Digital, Ezone and other
Electronic Retail players.  Croma has been launched by Infiniti Retail Limited, a 100%
subsidiary of Tata Sons. It efficiently and successfully runs Croma's retail operations in India.
In addition, one of the world's leading retailers.Launched in 2006,  Croma was the first one-
of-its kind large format specialist retail store that catered to all multi-brand digital gadgets
and home electronic needs in India.  Technical and strategic support : Woolworth Group
(Aus)  6000 products across 200 brands with 112 stores across 19 major cities of India.
CROMA- SWOT ANALYSIS

STRENGTHS

Trusted Brand TATA and first large format specialist in retail chain for consumer durables.
Trusted service offered. Strong presence in Indian consumer durable market. Attractive
promotional offers for bulk buying. Wide reach all over India with over 70 stores.

WEAKNESSES

Still hasn't been able to reach across all major cities which might be potential market. Despite
being a strong player in India, faces market share competition from international and
unorganized market.

OPPORTUNITIES

Opportunity to enter into other services like hypermarket. Domestic expansion as well as
going global More advertising to increase brand visibility

THREATS

International and domestic players entering the market. Continuous improvement in

technology means difficult inventory management.

SEGMENTATION

Demographic: Students in the age group of 20 to 30 and Working professionals having high
income who focuses on quality and price

TARGET GROUP : High Class, Upper Middle class and Middle class: The high class and
upper middle class usually tend to invest more. Middle class involves Semi-professionals and
craftsmen with a roughly average standard of living. Most have some college education and
are white-collar in the age group of 20 to 30.

POSITIONING : Quality with style: Offering enhanced performance and more features will
help target the more affluent as will creating a brand image of superior quality. Croma store
provide wide display of items allow the ‘touch and feel’ experience for customers and ensure
that trained staff are always there to help customers to make their right choice.
Croma Marketing Strategy & Marketing Mix (4Ps)
Marketing Strategy of Croma analyses the brand with the marketing mix framework which
covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like
product innovation, pricing approach, promotion planning etc. These business strategies,
based on Croma marketing mix, help the brand succeed in the market.

Croma Product Strategy:

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
 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

Croma Price/Pricing Strategy:

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.
Croma Place & Distribution Strategy:

Following is the distribution strategy in the Croma marketing mix:

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.

Croma Promotion & Advertising Strategy:

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.

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.
FINANCIAL ANALYSIS

 Tata-owned Infiniti Retail Ltd, which owns the electronics and white goods retail
chain Croma, posted its maiden Net Profit in FY 2018 after 12 years of operation and
the company is now confident of progressive reduction in the accumulated losses due
to profitability which it expects will get even better with growth plans in place as it
said in its latest regulatory filings. 
 Croma is focusing on margins to turn the 97-store venture profitable and its growth
rate reduced, reflecting the slower expansion of the white goods and television
industry. Infiniti Retail’s net loss widened to Rs 98 crore in the previous financial
year from Rs 82 crore in 2013-14.
 Infiniti Retail posted a net profit of Rs 16.64 crore during 2017-18 compared with a
net loss of Rs 57.16 crore in the fiscal before as per filings made with the Registrar of
Companies. The company’s accumulated losses have thereby been reduced to Rs
756.08 crore.
 Defying intense competition from pure-play e-commerce players, the company has
cut down its losses by 68% in the year ended March 2017 to Rs 61.4 crore down from
Rs 195.6 crore in the previous year on the back of a 12% jump in revenue.
 The company’s accumulated loss in 2017-18 has been higher than its paid-up capital
and reserves. Last month in November 2018, it has been reported that Infiniti Retail
has received Rs 250 crore equity infusion from parent Tata Sons to undertake rapid
expansion and opening the highest ever new stores from this fiscal year.
 According to its latest regulatory filings, Infiniti Retail, which owns and operates the
Croma stores, posted revenues of Rs 3,268.7 crore for 2016-17 against Rs 2,918.2
crore in the previous year thereby defying the effects of the government’s
demonetization drive and ecommerce discounts. Infiniti Retail CEO Avijit Mitra said
same-store sales grew 13% last fiscal. A year before, Croma was on top with sales of
Rs 3,198 crore compared with Reliance Digital’s Rs 3,044 crore.
 After an 11% decline in 2015-16, due to the last year’s growth, sales almost returned
to 2014-15 level. The company had then attributed the fall in sales to the growth of
ecommerce. 
 Infiniti Retail’s filings to the Registrar of Companies also revealed that the company
this year increased its borrowing limit to 700 crore. The company took an additional
limit of 100 crore purely for short-term flexibility in the festival period.
 The Company has also received board approval to issue non-convertible debentures
on private placement basis in one or more tranches up to Rs 150 crore.
 The current year 2018-19 is looking strong with 20% same- store growth as of
October and 30% overall growth with last year launches firing as per plan, as said by
Avijit Mitra, CEO, Croma India
 The retail chain’s total income in FY18 went up by 15% to Rs 3813.74 crore while its
same store sales were higher by 13.1% in 2017-18, compared with the previous
period. 
 There are sufficient sources of funds to pursue a growth plan that would improve
profitability and hence it does not expect material threat to its going concern status
due to the negative net worth.
 Croma started aligning itself since FY16 as per the new customer who accesses digital
and physical options while shopping based on his/her comfort level.
 In the filings made with ROC, the brick and mortar retail chain’s said that it made
considerable progress in improving its performance with its Omni-channel strategy, a
push for exclusive product partnerships, and focus on prompt after-sales service
delivery in the past two financial years. The changes which it undertook was to take
advantage of the paradigm shift in consumer behavior whereby it would actively
compete for the digitally influenced shopper and focus on Omni-channel.
 The improvement which is shown in Croma by shutting of unprofitable stores,
focusing on less capital-intensive expansion, and its Omni-channel initiative that
helped it compete better with ecommerce majors Amazon and Flipkart.
 Some of the changes the company undertook as part of transformation was to focus on
online marketplaces as the key competition, actively compete for purchases from the
digitally engaged and influenced, younger shoppers, build a store-first, Omni-channel
proposition and elevate the customers’ experience in the stores.