For this discussion, the organization, which is taken into consideration, is D-Mart. D-Mart is a chain of supermarkets in India in the year 2012. This organization is reaching in the retail market with a clear objective of offering best quality products and services with competitive prices. This company works with the concept to launch maximum stores all over the country. This discussion includes various analyses about the D-Mart organization. It offers the products and services, which fulfill the needs of entire family. The purpose of the project report is to examine external environment and branding of the company. It is very important to analyze the factors, like; political, economic, social, technological and legal factors. It will assist in analyzing the growth and position of company in the industry. It includes the brand analysis using the Rolex Brand audit. D-Mart is respects customer’s intelligence by offering variety of brand and pack sizes. Moreover, it includes the brand audit to make the tactical and strategic recommendations for marketing and advertising its brand.
D-Mart is a chain of supermarket in India which is founded by R.K. Damani in the year 2002. As of 2016, the company has 132 stores, which spread across Gujarat, Madhya Pradesh, Chattisgarh, Karnataka, Telangana and Andhra Pradesh. The organization is showing a good speed in expanding the business across India. The revenues of the company in 2017 is $1.35 billion. Avenue Super Marts Ltd. (ASL) owns and runs the supermarkets and hypermarkets by the name of D-Mart. The company seeks to provide the products to fulfill the needs and preferences of an entire family. It offers a variety of home utility products, including foods, beauty products, garments, toiletries, kitchenware, home appliances and many more (D-Mart, 2017). This organization has grown as a trusted and well-established sopping store in various states of India. Now, it is looking forward to opening its stores allover India. The promoter of the company designed it for providing maximum customer accessibility and provides different choices at affordable costs.
Preliminary Marketing Audit
External Market Environment
External market environment analysis examines the market conditions and gives the idea about the growth of an organization in respective industry and it includes the factors and consideration, which might impact the profitability and future success of the company. For this, secondary research can be used to understand the global attributes and other factors like; political, economic, social, legal, cultural and demographic considerations as well. This part includes these factors and considerations regarding D-Mart Organization.
In India, there are many to retailers, which are engaging in the business of lifestyle, garments and apparel stores. D-Mart is followed by the grocery stores. By following the past market trends and business models, the retailers like; Big Bazar and Reliance Fresh are likely to cover various metro cities and other small cities with almost doubling the number of stores. There are various competitors in the market, which poses intense competition for D-Mart. According to the report in Business Standard, D-Mart created a topline of the Rs. 3400 crore in the year 2013. It makes the company the third largest among the retail chains in all over the country, after Big Bazar (Future Retail) and Reliance Retail. When the Future Retail earned the turnover of Rs. 14,201 crore in the last year and Reliance earned 10,800 crore Rs. turnover. Both the companies are having a good number of stores, whereas D-Mart operates just 65 outlets (The Economic Times, 2017). In the retail market, D-Mart is said to be profitable, as it is making approximately 2.5% of sales. In comparison to other large players like; Aditya Birla Retail’s and Spencer’s are still at break even.
Political and legal considerations
There are some political and legal factors, which may impact the growth and future success of D-Mart Supermarkets. A stable government will enable the economic recovery at fast pace and develop an inspiring investment climate in the industry. The taxation structure is less complicated on the horizon, but it may face the issues of getting funds on different taxes like; water taxes and land taxes. The country imposes easing restrictions on Foreign Direct Investment by the government leading to import the foreign consumer products, thus carrying the variety of products to the Indian industry. There are some problems of taking over or hiring the properties and real estate for opening the stores.
India is one of the increasingly growing economies, after China. It is successfully recovered from the recession. The retail industry is growing with a good rate by the next few years. There is an increase in the contribution of the service industry to Gross Domestic Product of company. If there will be enhanced focus on infrastructural growth in the current 5 year plan, then it will assist in reducing some blocks in the retail industry (Ho, 2014).
Social and cultural factors are very important for the growth and success of company. There is the increase in the nuclear families in the country (Hitt, Ireland & Hoskisson, 2009). Generally, the people prefer to buy the products from local stores with the affordable and reasonable prices. Increase in the proposition of working women is beneficial for the company. The life style of the people is changing and preferences for products and services are changing.
Advancement in information technology is very good for the organizations in retail industry. Like other companies in the industry, D-Mart is also using fast billing services at their outlets. There is a better application of the advanced technologies in the business processes, like; store management, supply chain management, customer relationship management and purchase and sales management.
Changes in the life style and perception of people are good for the growth of the company in respective industry. Increase in the young population is giving demographic advantage to the country. The income level of people is also increasing, so they prefer to shop the products from Hypermarkets and supermarkets (Ho, 2014).
Current Market Strategy
The Mission of D-Mart is very clear. The mission is “to become one of the lowest priced retailers in the area of operations. With this, the vision of D-Mart is to provide the products and services for the customers’ daily use at the best value chain. So, the company is expanding its business across the country (D-Mart, 2017).
Goals and Objectives
The major goals and objective of D-Mart is to provide the customers best consumers goods at great value. It is offering the products to the customers at competitive prices (Anderson, Narus & Narayandas, 2009). The company makes research, recognize and offer the products and services, which fulfills the needs of an entire family. The goal is to provide the great value possible for its consumers, so that the money, which they spend on shopping with the company, gives them better value for money than they will have from anywhere else.
Segmenting, Targeting and Positioning (STP)
In order to promote the products in market, STP has become the foundation of many organizations, which are looking to introduce new products in the market and redefine their product categories. D-Mart has targeted the market segment by focusing on the demographic and socio-economic characteristics of the customers. It entered in the industry with supermarkets with the sense of Indianess. The company wanted to appeal the customers, who previously went to local departmental stores for daily shopping (Zott, C., & Amit, 2013). The target group for D-Mart is lower and middle level customers, who are very conscious about the value of products. The tag line of the company is “Daily Discount Daily Savings”. The positioning statement of the company indicates that D-Mart is the store for each member of the family. This is setting up its image as a discount store and provides value for money. It is providing various offers, from which some are for any specific period and some goes throughout the year.
D-Mart offers variety of personal and home products to its customers. The company believes in mass commodities and thus it offers the products in different colors and sizes. In the stores, the apparels are presented in systematic way according to their sizes (Tirunillai & Tellis, 2014). The outlet is divided according to the products. Every product has distinct section, so that the customers can choose the product easily. D-Mart deals in the products, such as; food items, apparels for each age group, grocery, beauty products, home appliances, kitchenware and other many product lines.
D-Mart is the supermarket that believes in implementing a cost-effective pricing policy for its products. The company has implemented a low-cost strategy to target the segment, which is price sensitive. D-Mart has implemented a simple strategy of bringing in huge sales from affordable prices (Begemann, 2008). It provides minimum 5% discount on its MRP at all the products except, grocery, fruits and vegetables. It has adopted discounting pricing policy and it offers various discounts and incentives during the festival seasons. This is the major reason why D-Mart is able to make higher revenues.
D-Mart has a reach in most of the important cities in India. It is able to offer the products via a network of 132 stores and headquarter of the store is situated in Mumbai. It has established it stores at strategic points to get the advantage from different locations, as easy approach and proper conveyance are significant for the survival of any store.
D-Mart is one of the largest supermarkets in India. It maintains its position as one of the best retail outlets. It has implemented many promotional and advertising activities. It gives gifts and coupons to reward the employees. It also offers the coupons to the customers, when they make bulk purchase (Kouvelis, P., & Tian, 2014). In festive seasons, discounts are offered. It creates visibility and brand awareness through posters and billboards. The schemes and offers can be known though it’s advertising in the newspapers.
D-Mart is implementing many effective strategies for setting affordable prices of its products and services. This chain of supermarkets offers the prices, which are 7-8% less than its competitors. It assists in attracting more customers. The company follows Everyday Low Pricing (ELP) strategy (The Economic Times, 2017). It offers discount on many of its products. It uses bundled price policy also. In this, two or more products are packed together and are available at discounted price.
D-Mart is a retail chain of a parent company, i.e. Avenue Supermarts Limited, which was found by billionaire Radhakishan Damani. The owner of D-Mart retail chain is a 61 year old stock broker, who turned into entrepreneur with its business operations. He started this chain with his family to address the needs of an Indian family. It launched its first store in Powai in 2002. Mr. Damani has created D-Mart brand into a large, profitable and efficient retail chain, which is highly valued by the employees, partners and customers. This is the public company, which is operated under its parent company, i.e. Avenue Supermarts Ltd. It is one of the biggest brands to fulfill the daily household requirements of Indian people (Moon, 2010).
Avenue Supermarts Ltd. operates its business under different retail brands, like; D-Mart, D-Mart Minimax, D-Homes, etc. The below diagram indicates a wide range of products, which are provided by D-Mart:
All of these brands focus on the lower and middle income people and offers a wide range of products (Keller, 2015).
Brand Logo and tagline:
Yes, each of these products helps the company in creating brand image and contributing to the brand equity. By these elements, the company is able to maintain a strong position in the market. There are some more banding elements, which have given better result to the success of company.
The company is satisfying many of the six criterions of Keller for identifying the brand elements; like it is setting the name and logo, which attract the customer’s attention, like; it provides discounts on products. It is first criteria, i.e. memorability (Aaker, 2009). Moreover, it is satisfying likability criteria. It means the name of the company does not reveal about the products, but its logo and tagline appeal the customers. The third one is adaptability, in which it is introducing the business according to the needs and opinions of customers (Srivas, 2017).
Brand Exploratory Customer knowledge:
For the customers, D-Mart is one of the most inexpensive supermarkets in the retail industry. It is providing the products and services at most affordable prices. It is offering high quality products with great value. It is assisting the organization in gaining brand image and creating brand awareness all over the country. Under current brand positioning, the target group is low and middle income level people. Company is considering four aspects; like demographic, geographic, psychographics and others (Huang & Sarigöllü, 2014). It is focusing on the income level of people in a specific area.
Brand Resonance Pyramid
The aspect salience shows that the company is selling quality products on cheapest prices. The brand captures the mind of people when it is about buying the cheap and easily available products. So, considering the wide range of products and huge market segment, it can be concluded that brand awareness is high. The company has medium brand salience and better position in retail industry.
Imagery shows that the company is targeting the price sensitive segment and offering various discounts to the customers. So, the image of D-Mart has been that of the outlet, which helps the customers to save their money. The performance of the company is quite good. There are three elements, which can be seen at D-Mart, i.e. better quality products, reliability and value of money. By purchasing cheap products and saving the money, the customers get the feelings of fun and excitement. They feel positive about the brand. In the next aspect, i.e. judgment, the company is perceived as strong connection of the brand with customers, credible and high quality products at affordable prices. Resonance includes the factors like; sense of community, active engagement of target group, loyalty and positive attitude towards brand (Keller, 2016)
D-Mart frames itself as a supermarket, which provides the best prices and best offers, which they give value for money to its customers (Fleisher & Bensoussan, 2015). It is offering more cheap products in comparison to its competitors like; Big Bazaar and Reliance Fresh.
Strategic and Tactical Recommendations
There are some strategic and tactical recommendations for the company, which can assist it in future growth and success. It should adopt some effective strategies. The company should introduce some new products or deal in some other sections. They should use the attractive displays at the stores. It will encourage the impulse buying. In the festive seasons, the company may offer some combo packs on heavy discount or sale. There should be an exchange offer for customers. It should introduce the loyalty programs. The pricing strategy of the company is quite good. It should use some more marketing activities for promoting the products. It should use some other media for promotion like; online media, television etc. Introducing new marketing practices will help in increasing brand awareness and brand equity. Company should expand its business in some other cities in India, so that customer can identify the brand. It should expand its business globally.
However, D-Mart is launched its operations in the year 2002, but it has positioned itself as an identified brand in the retail market. There are many competitors in the market, but still it covers good market share of the retail industry. It has understood the needs and preferences of Indian people and developed a unique product mix by understanding the consumer behavior, income level, beliefs and attitude of the people. Now, the organization is considered as one of the largest supermarkets in India. There are some external factors, which impact the company and all over the industry. The STP and branding strategies of company are also effective, which helps in creating brand awareness among customers.
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