Retail Strategic Planning Essay

Organized retailing in home and building sector was expected to face stiff challenge from the existing small, independent, and powerful local retailers. Many international retailers like Home Depot, IKEA and Lowe were also eyeing the Indian market which was untapped by organized retailers. They provided all the product categories and services that were required to build a new home or for home improvement or renovation under one roof. Muebles belonging to Casa Moblaje group was a pioneer in this segment. Homepro was the first building mall, which offered a wide range of building materials, home improvements products, and furnishings. They provided information about land availability and selection, and housed offices of architects, designers and financiers. The Home Store and Zeba were in home furnishing segment; Gautier dealt in furniture; and Johnson Tiles was in the sanitary ware sector. Identify Strategic Alternatives Ansoff’s Matrix Muebles had captured a large market of the home building and construction business in Ahmedabad as well as the home improvement business of the surrounding cities and towns. The ideal strategy for Muebles would be to develop the market. The areas surrounding Ahmedabad like Baroda, Surat etc is highly industrialized and lot of construction takes place in these areas. Muebles can target these cities and can increase the size of the market to get larger sales. Retail Mix Variables Product The store stocked products under five major categories Kitchen accessories: Appliances, Crockery, Glassware, Ovens etc Furniture and furnishing: Sofa set, bed, linen etc Bathroom: Tiles, Sanitary ware, Fittings, Taps, and accessories Hardware visible: Door, Window, Safety equipment, Gardening Tools, Washing Machines Electrical equipments: Lights, Luminaries, Chandeliers, Switches, Fans, Generators etc They mainly stored branded products. The store policy was to use the number one brand or the aggressive second. If this was not possible the company entered in to contracts to with smaller players who provided with in store brands. The store stocked approximately 12000 SKUs and had 120 suppliers. As the store move upward in the retail wheel, it took the invisible and les involved products out of the shelf. The visible and high involvement products replaced the invisible. They also increased the share of storing impulse goods in the relevant home decoration and furnishing category. Price The pricing policy of the store varied across the product categories. Pricing was competitive and benchmarked against the traditional hardware and home building material stores in product categories which were usually available in traditional hardware stores . In the destination product categories, the store charged premium price. Store Layout The store was laid out in a grid format. It was functional in nature and was based on a do-it-yourself model. Thirty percent of the shop space was given to 12 partners (vendors) who complete freedom of operation. The store atmosphere was attractive. The format of the store aided the customer to find the right the product. Some products like kitchen fittings were merchandised in simulated conditions to give the customer a feel of the complete range of the store’s offering. Promotion In order to increase the levels of awareness, they were communicating by using a mix of me. dia for brand and tactical advertising. They used the Gujarati and English media to reach out to their target segments. They developed two communication packages, one for the lay consumers with low comprehension of Muebles’s value proposition, and another for the professionals (home builders) who had a relatively higher awareness of the concept. In order to increase the sales of the invisible products, Muebles decided to educate the home builder. The home builder package consisted of developing a critical mass of professionals by rewarding their purchase and then working towards giving them accreditation through a professional course so that they would buy all the materials from Muebles. The apartment package consisted of using direct mails and tie-ups with companies like Electrolux, Pergo, and ICI to give special deals to five different apartment owners. Muebles targeted the HR departments in various companies and offered special deals. The problem in this deal was the acquisition of database of apartment owners. Customer Service Muebles policy was to satisfy the customer. Managers were supposed to visit the shop floor 3 hours a day to understand shopper’s behavior and needs better. Each category had 4 personnel. The total floor level employees were around 20. The floor employees tracked the customer right from the entry to the store and observed them carefully from a distance. The motive was to help the customer in the selection without interfering. The staff was instructed to respect the privacy of the customers. Muebles provided a unique shopping experience to the customer. Consumers were provided a wide range and assured quality, competitive prices, and world class service. They provided value added services to the consumers like * Comprehensive design assistance by a panel of professionals and design consultants * Apartment Packages * Installation service and support * Info mediation through website * Home loan consultancy and loans * Certification programmes for electricians, masons, plumbers and carpenters * Educational programme on do-it-yourself techniques and procedures * Customer loyalty programmes