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Retail Management

A project on Retail Management of Jewellery Store

Section - AB Submitted by: Aakash Kishan (2012002) Aashima Dua (2012005) Abhishek Dua (2012011) Achinthyo Das (2012016) Amey Mairal (2012035) Anurupa Banerjee (2012059) Apoorv Dwivedi (2012061)

KOHINOOR Jewellers: Vision:

To be amongst the most reputed and leading jewellery companies in India.

Mission:

To provide high quality jewellery and exquisite designs and excellent customer service at affordable prices. Our Values: Honesty Integrity Transparency Friendliness

History: Kohinoor Jewellers, with a heritage of 75 years, is one of the oldest jewellery organizations in India that started its operation in 1938. Over seven decades, the company has managed to keep its jewellery designs contemporary considering modern needs and preferences, yet sustained the core values and essence. With more than 45 showrooms in India covering 80000 square feet, with more concentration on west. It has maximum stores (15) in Nagpur. Kohinoor Jewellers, export operations covers countries like USA, UK, Singapore and Middle East. It has a manufacturing unit in Mumbai that employs more than 300 karigars and creates 10000 pieces of jewellery every year.

Current Industry Scenario: The gems and jewellery industry occupies an important position in the Indian economy. It is a leading foreign exchange earner, as well as one of the fastest growing industries in the country. The two major segments of the sector in India are gold jewellery and diamonds. Gold jewellery forms around 80 per cent of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamond and gemstone studded jewellery. Besides, India is world's largest cutting and polishing Industry for diamonds, well supported by government policies and the banking sector with around 50 banks providing nearly $3 billion of credit to the Indian diamond industry. Gems and jewellery is one of the fastest growing sectors in the Indian economy with an annual growth rate of approximately 15 per cent. The gems and jewellery industry accounts for nearly 20 per cent of the total Indian exports and employs over 1.3 million people, directly or indirectly.

Todays consumers like innovative design patterns with a traditional touch, which adds to variety and range. The industry is poised for growth and development because of increased demand for styled variety. Both men and women today are steadily moving away from conventional styles of adornment and ornamentation and are gradually adopting modern patterns, which are better suited for their busy life-styles. With the arrival of international branded jewellery in the domestic market, the industry is subject to stiff competition and is expecting a gloomy growth. The retail market is extremely competitive, and the failure rate of such establishments is relatively high. Price is the most important arena of competition. The Indian retail market has been gaining strength, riding on the sound vibes generated by a robust economy. The increase in disposable income in the consumers is making them to ask for better products and services, and a better shopping environment. Organized retailing in the countrys small towns is already growing at over 50-60 per cent a year, compared to 35-40 per cent growth in the large cities.

The major challenges faced are from the branded jewellers. They have dominated the market for years, although their pricing is slightly expensive than ours. Since the customers are price sensitive and brand conscious, they would give more preference to the brands. We have done a lot of hard work to magnify this opportunity and to rise in the list of top jewellers. Todays consumer wants to lead a life full of luxury and comfort. The market for luxury products in India is growing at a phenomenal rate as compared to a decade back. The reason behind this is, the purchasing power of people in India is rising steeply. The Indian consumers are highly aware about the product, price, quality and the options available with them. The purchasing is done by keeping all these factors in mind. Today, price is not the only consideration as it was a few years back, when prices used to play a major role in purchasing. The Government has already fixed 1 per cent tax for the jewellers. We need to state that, in this competitive world, we usually do not derive much profit out of it and survive only because of our showrooms. Since we are not gaining anything, we can't afford to lose our customers by quoting extra-ordinary prices for our pieces. Marketing Strategy:

Marketing is a choice that has to be made at the level of strategy, depending on the tactics. In view of factors like good demand for gold jewellery among Indians, higher scope for organized players in the jewellery space, improved sales and profitability over the years coupled with higher margins, our ability to effectively manage our expanded operations or pursue our growth strategy and our business prospects is the main tool of our business growth. We are keen to expand our store network and striving to be among the top five jewellers. Therefore our future focus is to open more franchisee outlets by the end of FY 14 to gain panIndia footprint and to establish a national brand for exclusive designs and craftsmanship with affordable prices. After booming in Western India, having more than 40 retail outlets across the country and also exporting to Dubai, Singapore, the US and the UK, we foresee rapid growth in the organized gold jewellery market which could be the key success factor for us to expand our

business more and to grab the opportunities which are coming our way. Our thrust is to capture the retail gems and jewellery market, considering our present store network. We are now focusing more on further scaling up of our stores. We are planning our all India expansion and along with that we will promote the all India ad campaign. Kohinoor Jewellers has been established new showrooms with the world class ambience promises to provide customers an easier access to one of the most admired and popular brand of jewellery in India. When the phenomenon of online shopping exploded, Kohinoor Jewellers not only promoted Online through Facebook, Twitter but also made our exclusive collection available online, and our website is currently among the countrys most popular jewellery websites. We invested in staff training and styling. We hired style gurus to help our staff to make the most of ourselves. Staffs are encouraged to wear contemporary clothing and express some style. The management team are fully onboard with our objectives and fully committed to our vision. We also made changes in brochures according to current market need. The brochures now contain far less product and the look is cleaner, more stylish and contemporary. Our old print ad was crammed full of product, with no people and lot of words. Now, the print ad features a single piece of diamond jewellery and a woman. A double page spread instead of single, it is confident but discreet. The window displays on stores are sleeker and shows only the icon products available in that store.

Merchandizing and Procurement How to build store traffic The experience of buying at your shop has to support your shops brand image, and it has to appeal to all of your clients. No matter how beautiful your merchandise, or how skilled your staff, customers will not increase the frequency of their visits if the experience is not enjoyable. Theyll come in when they absolutely have to, but thats it. Since women are the most likely jewellery-shop shoppers, We have created an environment that will naturally excite and make them feel welcome. Manufacturing / procurement To a great extent, successful marketing depends upon manufacturing the right product, at the right time for the right price. Next to the store and the goodwill, inventory is the most important part of the store. It has set up a state-of-the-art jewellery manufacturing unit at Mumbai. The factory has been specifically designed to suit the most demanding needs of jewellery manufacturing; special emphasis has been laid on security, minimizing Gold wastage and worker welfare. The peak out-put capacity of the factory is to produce 10,000 pieces per annum and has following merchandizing mix :

DIAMOND JEWELLY DESIGNS Diamond Arcade has conducted extensive research to develop a range of diamond jewellery. Diamond Arcade has developed eight diamond design ranges each with distinctive workmanship. In each of these ranges REL manufactures: Earrings, Rings, Pendants, Bracelets and Necklace Sets. The diamond jewellery is manufactured in 18 cts gold and VVS quality of diamonds in GH colour are used in the diamond jewellery.

The following are the categories of diamond jewellery manufactured by Diamond Arcade.

EARRINGS

Diamond Arcade manufactures a unique range of earrings comprising of studs, hoops, danglers etc. Earrings are available in the weight range of 1.5 gms to 28 gms of 18 cts gold and from 2 cents to 100 cents of diamond weight. It has a design portfolio of 274 designs of earrings in the diamond jewellery segment.

RINGS

Diamond Arcade manufactures a unique range of diamond studded rings. Rings are available in the weight range of 1 gm to 15 gms of 18 cts gold and 1 cent to 125 cents of diamond weight. It has a design portfolio of 246 designs of rings in the diamond jewellery segment.

PENDENTS

Diamond Arcade manufactures a unique range of diamond studded pendents. Pendents are available in the weight range of 1.5 gms to 15 gms of 18 cts gold and 1 cent to 80 cents of diamond weight. Diamond Arcade has a design portfolio of 101designs of pendents in the diamond jewellery segment.

BRACELETS

Diamond Arcade manufactures a unique range of diamond studded bracelets. Bracelets are available in the weight range of 5 gms to 45 gms of 18 cts gold and 9 cents to 150 cents of diamond weight. Diamond Arcade has a design portfolio of 45 designs of bracelets in the diamond jewellery segment.

NECKLACE SETS

Diamond Arcade manufactures a unique range of diamond studded necklace sets. Necklace sets are available in the weight range of 18 gms to 54 gms of 18 cts gold and 45 cents to 300 cents of diamond weight. Diamond Arcade has a design portfolio of 34 designs of necklace sets in the diamond jewellery segment.

PRODUCT RINGS EARINGS PENDENTS AND PENDENT SETS BANGELS NECKLACE

PRICE RANGE 5850-76680 6165-188100 4000-200000

MARGIN 8% 10 % 13 %

60200-111350 130000-700000

12 % 13 %

RESEARCH AND DEVELOPMENT Research and Development (R&D) is the core focus of the company. REL has an advanced R&D department comprising of senior designers, metallurgists, chemists and specialized artisans. The R&D division has developed several processes and systems for the gold jewellery industry which have become norms for the industry.

The primary objective of R&D division is to develop new concepts, designs, technology and toreduce the cost of production. The R&D division has developed several alloys to ensure malleability and ductility to the alloyed Gold which results in lower wastage of Gold in the production process. The specialized alloys also ensure better color, shine and tarnish-resistance to the jewellery. Chemists and metallurgists are constantly working towards upgrading the alloys.

The design division has developed some of the world's finest jewellery designs. The designs are developed based on regular feedback from the marketing division. New designs are prototyped by senior artisans at the manufacturing facility and are then presented to the product committee which decides on the positioning of the designs. R&D division also actively works towards developing new methods for mass production of jewellery. Due to the efforts of this division, the company has been able to achieve the highest production per person in the jewellery industry. Constant efforts of the R&D, has enabled the company to achieve unique finish, color and shine for the jewellery. The R&D also works towards developing better findings and mountings which ensure comfortfit and durability to the consumer.

RETAIL OPERATIONS

STORE ADMINISTRATION AND MANGEMENT OF PREMISIS

Timing of our store is 11 AM to 8 PM. We operate Monday- Saturday. Transaction/ hour = number of transaction/no of hours = 12/9 = 1.33

This help to keep track of the number of transaction that they are carrying out in an hour. Hourly variation in sales activity is important for setting store hours and for staff schedule, particularly for cashier. The information has been gathered with cash registers, which keep track of the time of the sales or by having periodically record the number of transaction at selected period of time. Sales per transaction = net sales / number of transactions = 2,10,000/360 = 58,333 This measure gives the rupee value of the average sales, net of return and allowances this is used to study sales trends over time, in combination with other measures, decide a high volume of sales is more important than a high rupee value on each sales.

Hourly customer traffic = customer traffic in / number of hours=40/9= 4.44

This measure is used to track total number of customer traffic per hour, day, week or season this can be applied to a entire store or to a single department to schedule hours and establish staff level.

STORE ADMINISTRATION Cleanlinessof the store has been taken care of very well. Moreover the stock in the display windows are changed every week. Administration is also beresponsible for utilizing the store personnel effectively. The premises of the store need to be maintained as per the standards decided upon by the management. This involves the task of cleaning the store and arranging the merchandise before the first customer can walk into the store. For this, at 10 AM the store manager arrives and start with the setting up and arrangement of the stock. MANAGING INVENTORY AND DISPLAY As the store, the store staff manages this inventory. To enable them to work efficiently, the complete procedure for the handling of merchandise at the store level needs to be documented. Responsibility with respect to merchandise at the store level involve receiving

and in warding the goods. Once the merchandise is received at the store, the quantity and other details like weights and sizes have to be checked with the document accompanying the goods, to detect any discrepancies. Proper documentationis to be done when returning goods to the various locations as and when required. MANAGING RECEIPTS We accept cash, draft, credit card, debit card and credit facility to trusted customers.

LOCATION OF THE STORE: Our shop is located at Poonam Chambers, Byramji town. It is basically a secondary business unit. The reason why it is secondary business unit is over period of time Nagpur has evolved and the population density has increased subsequently. So the location we have chosen is very near to residential areas. Also there is easy convenience available for our customers to reach the shop. It is very near to our central business district. Our shop is situated where purchasing power of buyer is on higher side. This is our 45th shop and 10th in Nagpur. It is a speciality store. FORMAT: It follows the format of chain store. Since it is another store under same ownership. The main advantage of chain store is that bargaining power lies with us as the it carries the experience of 75 years. Store Structure
Store Manager

Sales Person

Technician

Cleaning Staff

Role of Store manager: Person will be entitled to have a look on day to day operations. Person will be entitled to have a look on record keeping Motivation of sales force and all the back end staff Individually meet the premium customers. Decision making

Role of Sales Person: Focus on good customer relationship. Match customers interest to speciality. Good communication skills.

Budgeting and financing


The store being 500 sqft in area will have a rent of Rs1, 20,000 per month and employ 4 ladies as jewellery experts who will be assisting the shoppers in buying the jewellery and they will be paid a salary of Rs 7000 per month and the two jewellery technicians who will be working in the back end and draw a salary of Rs 12000 per month.The store will have a store manager who will draw a salary of 18000 per month.The housekeeping staff will have 2 people and draw a salary of 3000. The security cameras installed in the shop will cost around Rs 1500 per camera and we plan to install 5 cameras, 3 inside the shop, one each at the entrance and one inside the technicians workspace. The guard appointed at the entrance of the shop will be drawing a salary of Rs 5000 per month. The electricity bill would be amounting to close to approx Rs 40000-50000 per month and the initial setup cost of shop would include the decor of the shop and this would consist of painting, the furniture, glass displays and this would incur a cost of Rs 4,00,000 . The average sales expected to be are Rs 7,00,000 per day and go upto Rs 20,00,000 per day on special occasions, this involves a manufacturing cost of 4-5 lacs per day and profits of approx 1.5 to 2 lacs per day which are used for meeting out other expenses resulting in a net profit of 30-40000 per day.

Competitive analysis
The Nagpur market is dominated largely by a number of market players other than Das jewellers. These jewellers are Tribhovan Das Bhimji Zaveri jewellers, Tanishq

jewellers,Batukbhai jewellers, Sathe jewellers , Parekh jewellers, Gili , and Londe jewellers. These jewellers are all located in dharampeth , sadar and sitalbuldi area where they have a number of retail stores operating.

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