Rajiv Mohan

OPERATIONS
MANAGEMENT

2015JULB01080, Sec- A

Croma Retail Outlet TATA Group

CONTENTS

SLNO

TOPIC

PAGE
NO

1
2
3
4
5
6
7
8
9
10
11

INTRODUCTION
PRODUCT TYPES
PRODUCT RANGE
SELECTION OF PRODUCT
DISTRIBUTION CHANNEL
CUSTOMER SUPPORT SYSTEM
PRICING STRATEGY
CRITERION FOR NEW STORE
SWOT ANALYSIS
CONCLUSION
BIBLIOGRAPHY

Operations Management

1
2
3
5
7
9
10
12
13
14
15

Introduction
Croma is one of the Indias first electronics and consumer retail outlet started out by the Tata
group company Infiniti Retail. Infiniti retail is a 100% subsidiary of Tata sons. The first
Croma store was started in the year 2006, October 9 at Juhu, Mumbai. Croma has over 180
brands and around 6000 products. As of now Croma had over 101 stores in 25 cities in India.
The stores are spread across the states of Maharastra, Tamilnadu, Karnataka and various other
states.

Operations Management

Croma was well accepted among the customers as it was the first of its kind. The wide range
of products which was not available in the market was introduced through Croma helped in
attaining the customer trust and satisfaction. The slogan we help you buy was also put into
practice efficiently. The store also helps the customers in choosing the right product to satisfy
their needs. The best customer satisfaction and product variety available through Croma
stores gave Croma its breakthrough in the customers mind.
Many of the latest trends in the retailing was first introduced by
Croma. The concept of offer on products not only increased the customers but the identity of
the company also helped in conquering customer loyalty. The parent company being one of
the oldest and most trusted company helped in the same. Being in electronics sector Croma
was also able to provide a 24 hours support to its customers through their customer support
system.

Product Types
The advantage of Croma over the other competitors in and out of the sector was the wide
collection of products. In Croma, the customer gets the luxury to choose between 180 brands
and over 6000 products. Some of the products offered in Croma are given below;

Mobile phones
Laptops
Home appliances
Television
Air conditioners
Camera
Personal grooming and wellness
And other appliances

Croma is maintaining the availability of all the above mentioned products at all time with
their efficient inventory system. The other important aspect is that, they also have recognised
brands of theirs own and other associated brands within their product types.

Operations Management

Product Range
The product available to the customer in all range starting from the base level which is
affordable for the common people to the luxury products affordable to rich category of the
society. The product range is carefully organised and maintained to keep the sale on the go.
The various forms of sales tactics like flat off and various other techniques are applied to the
existing price range of products.

Operations Management

Some of the product ranges are given below.

Television (15000 and below to 60000 and above)

Microwave (5000 and below to 20000 and above)
Air conditioner (20000 and below to 75000 and above)
Camera (10000 and above to 50000 and above)
Male grooming products (1000 and below to 5000)
Mobile phones (5000 and below to 30000 and above)

Top brands are also associated with Croma. Some of the well-known brands available in
Croma are

Operations Management

Selection of Products
Like most of the retail stores, Croma also displays those products of their associates in their
stores. The shelf space is given to the product or the manufacturing company to launch the
products. Appropriate promotion is to be given from both the retail and manufactures side.
Cromas management believes in providing an adequate environment for the launching and
sale of their product. Selection and display of products is more than just merely putting them
up in the shelves. Croma sells their product with margin of retail level and this is inclusive of
all the activities of sales like advertising, display and promotion.
According to Croma, Poor merchandising not only stops
potential customers from opening the door and coming in but it also puts up a wall, stopping
customers who come in from buying.

Operations Management

The merchandising is carried out by sustain 7 different steps. The steps followed by the retail
stores of Croma is given below.

Right Product
Right Quantity
Right Place
Right Time
Right Price
Right Appeal
Right Service

Modern marketing studies shows that in every kind of

sale customer is the king and the most important criterion that determines the sale and sales
following in the future are based only on the customer satisfaction. Croma emphasis on
educating the employees about the product, specifications, company etc. Certain tips have
been used in Croma stores to maximise the sales and to increase the customer satisfaction.
Some of the steps which has been introduced and followed in Croma retails are;

Develop enthusiasm about your products

Be kind and friendly
Understand the customer by asking questions
Avoid asking questions like can I help you

Operations Management

Distribution Channels
A distribution channel is a set of firms that facilitates the movement of products from the
point of production to the point of sale to the ultimate consumer. In some distribution
channels, the manufacturing wholesaling and retailing activities are performed by
independent firms but most distribution channels have some vertical integration.
In Croma retail store, they operate on the basis of Hub and
Spoke model, which is commonly known as a Star network. Here the product from the
manufactures are stored in a central hub. The hub is basically warehouse with huge capacity
(approximately 1 Lakh sq. feet). The location of hub is strategically determined to minimise
the distance of the stores from their hub. The hub feeds the stores on the requirement basis.
The location of the hub and stores are determined on the basis of certain criterion that can
give a competitive advantage over the competitors. The criterions for the location of stores
are;

Operations Management

The distance from the hub

Potential customers
Economic factors
Government policies

In Croma the centrally located hub distributes the inventory of product to their stores by
means of transportation. The inventory is maintained both at store level and hub level, even
the quantity is different. Various effective methods of inventory management are used in the
store to keep the products available to their customers. The inventory at hub level is
maintained by continuously monitoring and updating with respect to demand and supply.

Customer Support System

Operations Management

Customer feedback is information coming directly from customers about the satisfaction or
dissatisfaction they feel with a product or a service. Customer comments and complaints
given to a company are an important resource for improving and addressing the needs and
wants of the customer. The information is procured through written or oral surveys, online
forms, emails, letters, or phone calls from the customer to the company.
Croma is privileged to receive a lot of compliments on the
wide range of products and the prices provided to the customers. On the Croma website they
have given out a request to the customers on filling a feedback form.
As they are a well-known retail store, they are interested in feedback that compliments great
service. Though highlights areas in which the store needs to improve as a store brand is
important. In case of no response after registering in the website the customers can contact
the support team. The 24 hours support team maintain a hot line. The contact number is
072076 66000.

The customers can give feedback on any of the following through Cromas website:

Operations Management

10

Our stores
Our customer services
Our products
Site browsing experience
Any feature you want to see on this site?
A happy ending? Please share your experience of dealing with us

Pricing Strategy
The competition from online retailers are at the peak level, still Croma stores are making
enough sale through their various pricing strategy. The various pricing techniques used by
Croma is;

Value based pricing: is a type of pricing technique in which the price of the

product is fixed on the basis of benefits that the product offers.

Promotional pricing: is a type of pricing technique were the price is reduced for a
short period of time to attract customers and increase sales volume.

Different types of promotional pricing are:

Low interest financing
Psychological financing
Special event financing
Low interest financing: Instead of cutting its price, the company can offer customers lowinterest financing. Automakers have even announced no-interest financing to attract
customers.

Operations Management

11

Psychological pricing: Psychological pricing is the practice of setting prices slightly lower
than rounded numbers, in the belief that customers do not round up these prices, and so will
treat them as lower prices than they really are.

Special event pricing: Special event pricing involves advertised sales or price cutting that is
linked to a holiday, season, or event.

Operations Management

12

Bundle pricing: is a frequently used demand-oriented pricing practice is

bundle pricing the marketing of two or more products in a single package
price.

Criteria for new outlet

One of the proactive part of any business in profit generation. The potential market of any
business should be explored with expansion. In retail sector, new markets are acquired by
setting up new stores. The challenge in setting up a new store is identifying the sweet spot.
The location is competitive advantage as it cannot be snatched away by the competitor. The
main criterions while setting up a new store by Croma are given below:

Market potential
Distance from hub
Competitors
Government policies
Appropriate location
Human resource

Operations Management

13

SWOT Analysis

Strength:

We get wide range of products i.e more than 6000 products

Give EMI facilities to the customer
Strategically located
Effective customer support system
Efficient inventory policy

Weakness:

They dont do advertisements

No of showrooms are less
Cost of some products are high

Opportunity:

They can increase their number of outlets

They can invest in advertisements
They can put some hording on roads
Home delivery system
Credit sales
More associate brands

Croma has tough competitors

Online retailers
Increasing number of customer expectations

Threat:

Conclusion

Operations Management

14

Croma retail stores are offering products of 180 different brands all across India with an
effective inventory management and distribution system. The competition from the
competitors are well tackled with effective pricing strategy and offers. The efficient hub
spoke network system of Croma helps in centralising the operations and reducing the
operations cost. The Croma is tied up with various relevant brands to rise up to the
expectations of the customers. The use of customer support system helped Croma in attain
loyal customers that eventually helped in the existence of the entire firm. The heavy
competition from online retail sector has effected the sales of the organisation. The online
experience has been tried to brought into Croma stores by adapting to the latest trend and
converting into online website. The threat is at its highest as the number of stores has been
reduced and have been stagnant for past few years. The future of the retail sector is depending
on diversification from the existing strategy as the penetration level in tier 2 cities is
significantly low. The latest online retail hurdles are a brighter phase for Croma as the retail
giants are put in to chains by the government.

BIBLIOGRAPHY

Operations Management

15

www.croma.com
Croma, Bangalore, India
Chopra, Sunil, and Peter Meindl. Supply Chain Management: Strategy, Planning,

and Operation. Upper Saddle River, NJ: Pearson Prentice Hall, 2007. Print.
Panda, Tapan K., and Sunil Sahadev. Sales and Distribution Management.

Oxford: Oxford UP, 2005. Print.

"Promotional Pricing Definition | Marketing Dictionary | MBA Skool-

Study.Learn.Share." MBA Skool-Study.Learn.Share. Web. 01 Apr. 2016.

"Google." Google. Web. 02 Apr. 2016.

Operations Management

16