kirana store strategy

The retail industry in emerging economies such as India presents challenges that are typically not seen in these contexts. Make sure this place you choose is accessible by people easily. Third, you often see retailers offering extra price and quantity benefits at the store level like discounts or bundled products. Ashutosh Patil is Assistant Professor of Marketing, Robert J. Trulaske, Sr. College of Business, University of Missouri. window.mc4wp.listeners.push({ Click here to see Forbes India's comprehensive coverage on the Covid-19 situation and its impact on life, business and the economy​, [This article has been reproduced with permission from ISBInsight, the research publication of the Indian School of Business, India], For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you, Donald Trump exits White House at a lowest approval rating of his team, How 80/20 helped Simba brew the survival keg in 2020. Most FMCG manufacturers do not picture the Indian retail landscape this way and often either disproportionately allocate resources depending on the size of the city or extensively focus on strengthening their supply chain and sales infrastructure in large cities rather than building new supply chain and sales infrastructure in the rural areas. Sharad Borle is Associate Professor of Marketing, Jones Graduate School of Business, Rice University. The traditional kirana stores are here to stay and FMCG manufacturers should not neglect the huge potential of this channel. In a marked change in its strategy, Reliance Retail will rope in kirana stores as franchise partners to sell products while completely moving away from the direct sale of packaged food, grocery and FMCG products on its JioMart platform. It has tied up with nearly 60,000 kiranas, and has plans to enroll more by April. ISBInsight: What motivated you to investigate the Indian retail industry? In doing so, the direct benefits through increased sales are obvious. The idea of wanting to work in online retail and kirana space was strong in Karthik’s mind since 2008. 6. Walk through a street and you will find more kirana stores than organised retail outlets like Big Bazar or Reliance Fresh. In many cases, several stores from the same chain do business in neighboring areas. Data Protection Bill: Can it ensure your privacy online? Walk through a street and you will find more kirana stores than organised retail outlets like Big Bazar or Reliance Fresh. About the Researchers: An Empirical Investigation of Unique Aspects of Retailing in India: The Perspective of Consumer Packaged Goods Manufacturers. By 2021, in just a year from now, the share of traditional trade in the retail industry will likely reduce to 75 percent from the present 88 percent. listeners: [], Netflix will no longer borrow, ending its run of debt, The next Tesla? First, the retail space is dominated by traditional kirana stores. Majority of the store owners find it difficult to match the requirements as keeping such a large inventory is not possible for them. Kirana stores have understood that they are an all-season business. A Kirana store is a general department store that stocks and sells all kinds of household items, especially the ones that belong in the kitchen like groceries. callback: callback What are the lessons for Kirana stores from the Covid-19 crisis? These consumers might not be attracted to organised retail stores. The promotion in the rural network is through celebrity marketing, with a youthful image (teenage/child actor), catchy jingles on the radio and TV. A promotion in the pasta category can not only affect pasta sales but also the sales of other categories such as pasta sauce and canned vegetables. July 17, 2010; By Azaz Motiwala; Once again Indian Government is in the dilemma for allowing FDI in multi brand retail sector. Working Paper, Indian School of Business. Get your visiting cards designed. Second, the government regulation requires fast moving consumer goods (FMCG) manufacturers to print the “Maximum Retail Price” or MRP on the package of the product. } What would be the key insights that your research can provide to FMCG manufacturers in India?FMCG manufacturers can take advantage of the Indian retail landscape and achieve higher profits if they stop excessively focusing on premium products, larger cities and organised retail. For FMCG manufacturers, the differences across cities in terms of sales in traditional kirana channel and organised retail channel is decreasing. Another common mistake most global FMCG manufacturers make in India is to ignore the traditional kirana stores. Thus, they lose the business in the long run. FMCG manufacturers should understand, and many of them do, the consumer goodwill and flexibility of traditional kirana channels. In your paper, you mention that promotions have both within-category and cross-category effects. In the offline market, more people know you, greater will be the chances of acquiring customers. In the US, the retailer decides the price paid by the consumer but here the MRP is printed on the package. Manufacturers can customise their products based on size or packaging. All classes of cities are growing equally when it comes to profitability for the FMCG manufacturer. In the US, the retailer decides the price paid by the consumer but here the MRP is printed on the package. A large chunk of potential in terms of customer relationship personalisation offered by the traditional kirana channels remains relatively untapped by the FMCG manufacturers. That led to the birth of kisan.co, which didn’t take off. Very rarely would you see Unilever India or a Proctor & Gamble offering a 15% extra for their regular 180ml shampoo.Finally, we have the diversity of rural areas and cities of different sizes spread across the country. if (!window.mc4wp) { If your store is up and running, you likely have a lot of resources that you can use in your marketing efforts. We analysed over a million sales transactions of a large FMCG manufacturer with traditional kirana as well as organised retail channels for over three years. (function() { Mostly Kirana stores consist of daily needs and commonly used grocery items. Pur-posive sampling method is used in the areas of Baner, Aundh, Pashan, and Pimpri-Chinchwad areas of Pune City. Services like inventory management, product category management, shelf space management and customised point of sale signage that are usually offered to organised retailers can be extended to these traditional retailers to help them adopt best practices and to compete effectively. “Kirana store owners have taken a beating from ecommerce players over the last few years and are ready to fight back now,” he says. Salespeople should be trained to offer specialised services to build a better relationship. These unique value-added services create superior value for many consumers. An Empirical Investigation of Unique Aspects of Retailing in India: The Perspective of Consumer Packaged Goods Manufacturers. Manufacturers can customise their products based on size or packaging. They provide personalised services such as ordering special items/quantities for consumers or allowing purchases on credit. In return, the kirana store owners are paid a commission to ensure the order is picked up or delivered at customer’s homes in time. This strategy makes distribution to each store cheaper, as well as making multiple deliveries per day possible. It will expand the reach of these store by enabling them to cater to a larger area and it will give their customers the convenience to go online or open the app to see the inventory of their nearest store. A kirana store only provides discount for a few rupees and, that too, for consumers who are frequent buyers. Where does OTT vs exhibition stand after a rough 2020? } Kirana King - Empowering Grocery Retail. What are some of the unique aspects of the Indian retail industry? Determine the reasons behind these things, then use those insights to steer your retail marketing strategy. The kirana store owners have taken a lot of effort to keep up with the changing demands of the crisis and managing their day-to-day supplies. Keep an eye on competitors around and the goodwill they have earned from the … Depending on the funds you have available or raised, you can decide the grandeur of your store or shop. How Can Firms Cope and Even Thrive In A Shifting Political Environment? The traditional stores are very flexible and have often built personal relationships with members of the local community that they serve. His pricing strategy was something mind-boggling to me! Thank you for your comment, we value your opinion and the time you took to write to us! Our results show that FMCG manufacturers must cultivate the traditional kirana channel and help strengthen their business. on: function (event, callback) { Very rarely would you see Unilever India or a Proctor & Gamble offering a 15% extra for their regular 180ml shampoo. Siddharth Singh: There is a lot of academic research in Marketing on retailing and most of it looks at the retail industry in North American and European countries. Sample size consists of 101 Kirana Store retailers. Challenges of Managing Conglomerates: Lessons From the Tata Group. Promote your business in the nearby locations. Walk through a street and you will find more kirana stores than organised retail outlets like Big Bazar or Reliance Fresh.Second, the government regulation requires fast moving consumer goods (FMCG) manufacturers to print the “Maximum Retail Price” or MRP on the package of the product. Siddharth Shekhar Singh is Associate Professor of Marketing and Associate Dean – RCI Outreach and Engagement at the Indian School of Business. There are more than 15 million traditional kirana stores in India. Image: Shutterstock ISBInsight: What motivated you to investigate the Indian retail industry? * Enjoy Express 2 Hour Home Delivery! He decided to put up his shop in an area where 10 big Kiran stores were already there. Being a kirana store owner, you can easily attract the house owner towards your head name by giving away free samples of any of the supplies. A kirana store can never compete with the kind of discounts and deals a supermarket offers to consumers. This creates a win-win for everybody. Increasing urbanisation, increasing incomes, and rising aspirations for a better quality of life are reshaping the Indian retail space.Most FMCG manufacturers do not picture the Indian retail landscape this way and often either disproportionately allocate resources depending on the size of the city or extensively focus on strengthening their supply chain and sales infrastructure in large cities rather than building new supply chain and sales infrastructure in the rural areas.Another common mistake most global FMCG manufacturers make in India is to ignore the traditional kirana stores. The store size of any shop depends on the kind of funds available to a local merchant. How Can You Transition from Merely a Good Manager to a Great Leader? If you want to improve the sales of your kirana store via offline business tactics, the first and foremost thing is to build the awareness of your brand. This is to make sure that as many stores as possible may be covered from different locations and information collected is not bi-ased or skewed. These small shops stocks up with vide range of groceries and daily need products like sanitary products, snacks, tobacco etc. The learning from the developed world cannot be applied directly to the retail industry in the emerging economies. Could you explain? } As more and more customers are placing orders by phone call, WhatsApp, online … FMCG manufacturers can take advantage of the Indian retail landscape and achieve higher profits if they stop excessively focusing on premium products, larger cities and organised retail. Kirana stores and the power of big data. © 2018 – Indian School of Business (ISB). These convenience stores are also found at petrol pumps or gas station to satisfy the basic needs of consumer while traveling. This anchors the final retail price for a product.Third, you often see retailers offering extra price and quantity benefits at the store level like discounts or bundled products. Kirana.Store emphasizes on quality at reasonable prices to all consumers. Before looking at fancy retail marketing tactics, start by leveraging the assets you already have. The Indian retail industry has certain key features that make it unique. Patil, A., Borle, S., Singh, S., 2018. MyKirana lets you buy groceries from your local Kirana store, with 2 Hour Home Delivery! But what is unseen is the enormous consumer goodwill garnered by these stores. 4 INVENTORY MANAGEMENT. Ace of Club: How Mahindra Holidays & Resorts rode the Covid storm, US startups struggling to hire when times are tough, News by Numbers: How Indian singles look to mingle in 2021, Timeline: Joe Biden, from youngest senator to oldest president. Contrary to common belief, the profitability of traditional kirana stores is already higher than that of modern trade outlets.Our results show that FMCG manufacturers must cultivate the traditional kirana channel and help strengthen their business. Is a focus on organised retail justified on the basis of profitability or volume rationales?The traditional kirana stores are here to stay and FMCG manufacturers should not neglect the huge potential of this channel. Is government's frenzy for world's largest vaccination programme misplaced? In doing so, the direct benefits through increased sales are obvious. Could you tell us more about this?The traditional kirana channels might have very limited bargaining power due to constraints in assortment, products, price or location. How Reliance is targeting kirana stores in India with an online-to-offline strategy. Hailing from Madurai and having served in the Indian Army for 10 years, he believes that if there is something to be done for the country, it should be done pronto. Most of the supermarkets have some or the other offer running. First, the retail space is dominated by traditional kirana stores. Investors bet big on electric truck startup, Champ, Major, and all the presidents' pets in US history. it is a revolutionary idea of standardization, digitization & centralization to traditional Grocery system. Services like inventory management, product category management, shelf space management and customised point of sale … Kirana are typically family-owned stores that operate in fixed locations and carry both basic food and non-food items. Rol-a-Cola can be pushed in the rural market by making it an easily available alternative at each kirana store, through a strong distribution network, by increasing the margin for kirana stores and distributors based on volume of sales. Bulk purchase always comes with discounts and deals. Eventually, the entrepreneur realised that the work needs to start from demand aggregation and not supply aggregation beca… To find the impact on their employment due to growing organised retail. When all the other stores are closed, the Kirana and Pharmacy store owners are continuing to serve the community by taking all the precautions required to safeguard their staff. Increasing urbanisation, increasing incomes, and rising aspirations for a better quality of life are reshaping the Indian retail space. It provides clear catalogue of products available and gives clear and concise information to buyers to decide on the products they intend to purchase. The retail industry in emerging economies such as India presents challenges that are typically not seen in these contexts. In your paper, you mention that promotions have both within-category and cross-category effects. Understanding how the intensity of promotions in one category affects that category and other category revenues is important for an effective and profitable promotion campaign. Having said that, kirana stores are easy accessible (open for longer hours than organized retail in most cases), deliver at home at convenient time (saving the buyers time wasted in traffic or long queues at check-out counters) and, of course, friendly service where the buyer and sellers know that it a mutually beneficial long-term relationship (you don’t see new faces every time you walk into an organized retail … Although this strategy seems reasonable and may have worked in the past, our results highlight the need for a more balanced approach. Unity in diversity – Survival Strategy for Kirana Stores. Get in Touch. Finally, we have the diversity of rural areas and cities of different sizes spread across the country. Therefore, a skewed approach focusing primarily on the large cities is no longer justified. To receive Management Briefs in your inbox, and other special content for subscribers, please sign up. Objectives 1. We analysed over a million sales transactions of a large FMCG manufacturer with traditional kirana as well as organised retail channels for over three years. The learning from the developed world cannot be applied directly to the retail industry in the emerging economies.The Indian retail industry has certain key features that make it unique. ISBInsight is the Flagship Research Periodical of the Indian School of Business. Kirana store is the small neighborhood shop in India. Don't always crave for new customers, rather it is important that you have more loyal … All classes of cities are growing equally when it comes to profitability for the FMCG manufacturer. However, with consumer preferences shifting to shopping online or at supermarkets and the rise of modern retailers across Tier I, II and III cities, Kirana store owners are facing the music. 2. Manufacturer-led promotions are relatively infrequent. Manufacturers can customise their products based on size or packaging. The power of Kirana stores has stood the test of time smoothly for centuries, from monarchical ages to 2020. FMCG manufacturers should train their sales-force personnel to be more receptive to the needs of the traditional kirana stores. This results in more selling and also making a decent return, anyway. About the Research: Several retailers are planning collaborative strategies to address this market. In this paper, we shall examine what the small kirana shops perceive about the growing corporate organised retailers in relation to their business and employment. The traditional stores are very flexible and have often built personal relationships with members of the local community that they serve. The products at his shop are Rs.5-6 lesser than the other Kirana stores. Moreover, the way that these kirana store owners have adopted to innovation and digital technologies, such as digital payments, changing operating models and reduced friction towards technology, to cope up with the pandemic is highly commendable. The wise way to choose your Kirana store location is to go to a shop that is accessible by the larger community. From Shubman Gill to Rishabh Pant, young turks of India's historic cricket win in Australia. Although this strategy seems reasonable and may have worked in the past, our results highlight the need for a more balanced approach. Mentioned below are the key steps that you need to take in order to build a Kirana store of your own. Online Grocery Shopping in Jalgaon, brought to you by Kiranastore.co.in initiative by Live Media Ventures. Professor Siddharth Singh discusses insights from a recent analysis of FMCG marketing in India. Understanding how the intensity of promotions in one category affects that category and other category revenues is important for an effective and profitable promotion campaign.Q. Also, be open to moving little out of the city where the real need for people is and they travel to far off places for purchasing simple daily provisions. There are more than 15 million traditional kirana stores in India. Salespeople should be trained to offer specialised services to build a better relationship. Glory George is a Research Associate at ISB.

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