Pooja shrimali SYBMS-88

APNA BAZAAR Introduction The consumer cooperatives are playing an important role in providing essential and other commodities to the consumers at reasonable prices. The consumer cooperatives have continued to help in strengthening the distributive network of essential commodities and stabilizing price line to the extent possible for protecting, the interest of the consumers against artificial scarcity, overcharging of prices, supply of sub standard goods and the unfair trade practice restored by private traders. The democratically elected management of consumers cooperatives also help them to gain better acceptance with the consumers. Definition According to the Maharashtra Cooperative Societies Act, 1960 Sec. 2 (9), defines, a consumer cooperative society as a society the object of which is (a) the procurement, production or processing, and distribution of goods to or, the performance of other services for its members as also other customers, and (b) the distribution among its members and customers, in the proportion prescribed by rules or by bye laws of the society, of the profits accruing from such procurement, production or processing and distribution. A consumer cooperative society is formal for the promotion of the interests of the consumers, where as a producer cooperative society promotes the interest of the producers. History of Apna Bazaar The Mumbai Kamgaar Madhyavarti Grahak Sahakari Mandal Limited was established on 9th May 1948. This is the parent organisation governing Apna Bazaar and other organisations. The founders of Apna Bazaar were freedom fighters and textile mill workers. They came up with the concept of forming a cooperative society because of the following reasons: 1. 2. 3. 4. 5. Due to shortage of necessities during post independence period (1948 onwards). Shortage due to World War II (1939 1945). The Indo China and the Indo Pak wars. To increase the standard of living of the common man. To sell products of good quality at less than MRP.

Initially, 77 mill workers came together to from Apna Bazaar with an initial capital investment of Rs. 5000 /-. The NCDC provided finance to Apna Bazaar only at that particular time but nowadays it is not providing them with any help.

The first Apna Bazaar department store was started on 29th March 1968 at Naigaon by The Naigaon Kamgaar Grahak Sahakari Mandal Limited which is a part of The Mumbai Kamgaar Madhyavarti Grahak Sahakari Mandal Limited. Later, the Apna Bazaar chain of stores expanded to the District level, Taluka level and the Village level. Chain of Apna Bazaar stores 6 Super Markets (ranging between 1000 2500 square feet storing grains, personal care products etc.) 8 Departmental Stores (ranging between 5000 20000 square feet storing all products including shoes, textiles, plastics, furniture, crockery etc.) 30 Retail Outlets (ranging between 300 750 square feet) 14 Medical Stores 20 Franchisee Stores Policy of Apna Bazaar Sell articles without adulteration Assure correct weight Sell at reasonable price but less than MRP Medicines to be sold after 8% discount (6% local tax is exempted and 2% discount offered) Apna Bazaar strives to provide the best quality goods to their customers at the most reasonable prices. The following is a policy statement put up at all the Apna Bazaar stores: Let Us All Strive For Profits. P Productivity and Efficiency R Readiness to Change O Optimum Utilisation of Resources F Fairness to all concerned I Income, Innovation, Industriousness T Team Work S Service Oriented Approach Facts about Apna Bazaar The Andheri branch of Apna Bazaar was the first superstore in India to reach the sales of Rs. 2 crores in a year. The first departmental store of Apna Bazaar was opened in Ghatkopar. The medical sales are of the highest quantity due to the tax exemption of 8%. The commodities sold at Apna Bazaar are got from states like Gujarat, Andhra Pradesh, Madhya Pradesh and Kerala depending on the best quality. They sell all items from provisionary items to electronic equipments. First AGMARK in India was given to Apna Bazaar brand of masalas. They have never advertised their products, as they believe in word -of - mouth publicity. Their only print ad was in the 1980s for their masalas. They also buy commodities from the market at a lower price, for their customers, if they are facing a shortage. They can afford to buy at a lower price since they buy in huge commodities.

Registration State level: Apna Bazaar has to obtain permission from the Directorate of Marketing of the Government of Maharashtra. District level: Apna Bazaar has to obtain permission from the District Deputy Registrar (DDR). Apna Bazaar has to register with the Cooperative Commissioner (Registrar of Societies) under the Cooperative Societies Act, 1960. Elections Elections are held every 5 years for the post of the Chairman and the Board of Directors (BOD) in the presence of the District Deputy Registrar. The shareholders elect the BOD who elects the Chairman who elects the members. The BOD and the Chairman are the policy makers of the society. Organisation Structure General Manager Deputy General Managers 9 Assistant General Managers (Personnel, Marketing, Development, Administration etc.) Department Store Managers Branch Managers Supervisors Staff Departments Purchase Department Apna Bazaar buys its products from reputed suppliers. They insist on quality products, as it is of utmost importance to them and in no case do they compromise on Quality. In case, any consignment is found to have bad quality, the whole consignment is returned back to the supplier. Apna Bazaar also acts as a launch pad for new products. They buy new products on a consignment / approval basis. This is because, if the newly launched product does not appeal to the customers, they can

send the product back to the company. Thus, the company can test launch their product before it is actually launched. The procedure for purchase is as follows: Agricultural products, Food grains etc. Masalas, sugar, dals, coconuts etc. are bought from the states of Gujarat, Andhra Pradesh, Madhya Pradesh, Kerala etc. These products are sent to the Agricultural Produce Marketing Committee (APMC) market located at various places in Maharashtra. For example the APMC market located at Navi Mumbai caters to the demands of stores in Mumbai. The rural producer sends his produce to the APMC at Taluka level, which sends it to APMC at Navi Mumbai. All the Apna Bazaar outlets then send their requisitions to the APMC warehouse. Then the goods are sent to the various outlets according to their demand. Agricultural produce is also purchased from the wholesale market. The sales turnover for last year for these products was Rs. 20 crores. Products of daily use: Products like soaps, oil, salt cosmetics etc. are purchased directly from companies who have their sales persons going to Apna Bazaar everyday and taking their requirements. Certain common products are brought in bulk, wherein the Apna Bazaar branches send the indent of their requirement to the Head Office in Naigaon. These products are collected in the Spring Mill Warehouse of Apna Bazaar. They are then sent to the department store warehouse, where they are unpacked, repacked and arranged in the respective sections for sale. Licensed Products: They do not store products that are not licensed. They also do not stock cigarettes, alcohol etc. Stock Taking Stock taking is done quarterly, half yearly, three quarterly and yearly. During the stocktaking, they find out, which product is moving (selling fast) and which is not. The FSN (Fast moving, Slow moving, Non moving) Analysis is done periodically to know the excess or shortage of a particular product. If the product is fast moving or Slow moving, it is kept in the store but if it is Non moving, it is not kept. Sales Apna bazaar has a daily turnover of about Rs. 35 lakhs. Sales are done on a First In First Out basis (FIFO). Thus, the purchasing policy of Apna Bazaar is to buy goods in bulk quantity. Due to this, they get large discounts from their suppliers. This enables them to keep a low profit margin and thus all the commodities are sold at less than MRP. This is the unique selling preposition of Apna Bazaar. The annual sales turnover of Apna Bazaar is of Rs. 130 crores. The sales of Apna Bazaar are mainly on cash basis. The customer will get a bill even for a product that is extremely low priced. 99% sales are on

cash basis. They have recently introduced credit card systems for the benefit of customers, which account for the remaining 1% of the sales. In the case of medicines, there is an overall discount of 8% to the customer. Life saving drugs (insulin for diabetes) are also provided free of cost to senior citizens. Finance As profit is not the main objective of Apna Bazaar, the overall profit margin on commodities is low. The face value of Apna Bazaars share is Rs. 100. There are about 15,000 shareholders. The profit left is divided among the shareholders by way of dividend (nearly 20%). A very less amount is kept for reserve funds and investment. There are less or nearly no sources of funds. Therefore, they cannot raise capital as private companies. Thus they cannot earn interest, and hence cannot invest more. Thus, there is a viscous circle of non-availability of funds where due to no investment; no further generation of funds is possible. The Mumbai District Central Cooperative Bank is the apex bank providing finance to Apna Bazaar along with Bank of Maharashtra. If they want to open a new branch, they take land on rent / lease. They cannot afford to buy land or building, but have to required manpower and management expertise to set up a new branch. Auditing is done on a yearly basis by internal auditors and by the Auditors coming from the Department of Cooperatives of the Government of Maharashtra. Marketing Apna Bazaar does not advertise. They feel that they are in business because of their brand name and goodwill. The word of mouth of the customer speaks for them. However, they have calendars printed every year, which are sent to their shareholders. The companies from where they buy their goods, place advertisements in the calendar. Hence, not much amount is spent on marketing. Personnel Apna Bazaar employs a total of about 1200 employees all over Maharashtra. The Officers agree they pay low wages to their employees but that is because Apna Bazaar is a non profit making organisation. The wages paid are not below the minimum amount as specified in the Minimum Wages Act of the Government of Maharashtra. Promotion is done on the basis of merit. Transfers and promotions are done yearly or bi - yearly. Apna Bazaar gives periodical training for newcomers and existing employees in the fields of Principles and History of Cooperatives, History and reputation of Apna Bazaar, Accounts, How to deal with new customers etc. The Ashok Mehta Institute at Vashi gives the required training to the employees. Apna Bazaar expects its employees to be faithful to the organisation. If any employee is caught doing an illegal activity on the premises, he is removed. Thus various schemes are offered to the employees. Employee State Insurance, Public Provident Fund, Gratuity for Employee Bonus is some of the schemes offered.

Sister Concerns Apna Sahakari Bank During the last few years the Apna Sahakari Bank has made remarkable progress. In the 33 years of its existence, the bank has predicted an increase in its deposits to Rs. 274 crores. For the year ended 31 st March 2000, the bank had a growth of 20.26% in its deposits. Providing efficient service towards the customer and up gradation of technology is of utmost importance to the bank. This has helped them to survive in the banking sector despite the presence of stiff competition. Ashok Mehta Institute Ashok Mehta Institute is located at Vashi and Vaikhunt. This institute provides training for newcomers and existing employees of Apna Bazaar in the fields of Principles and History of Cooperatives, History and reputation of Apna Bazaar, Accounts, How to deal with new customers etc. it offers other courses like D.B.M, P.G.D.B.M., D.I.T., etc. which range from 6 months to 1 year duration. Employees and helpers attend workshops on various subjects organised by this institute. These courses provide employees an opportunity to deal with customers professionally. Goodwill of Apna Bazaar Apna Bazaar is a brand name that is in customer service since the last 50 years and is constantly expanding. They are strict on the quality of products for the customers and low price products since the main objective in not profit. The shareholders are paid dividend regularly. If the product is not proper, then the customer is reimbursed with another product or cash. The employees are paid wages even when the store does not make profit. Sales Tax, Income Tax etc. is paid regularly on the billed amount. They organise health camps for the poor where free diagnosis and medicines are provided. Due to a strong goodwill, Apna Bazaar also enjoys various benefits like 30 days credit period from its suppliers. Thus it reduces any problems that could be caused to a shortage in Working Capital. Competition & Development Plans Apna Bazaar faces stiff competition from local ration shops (PDS), MNCs, retailers of MNCs, corporate companies, other big departmental stores etc. Their target audience is mainly middle and lower income groups. Thus they are the best marketing place for companies who want to test market their new products as Apna Bazaar has everything under one roof. As part of their development plans, Apna Bazaar has opened branches mainly in the Konkan region (Thane, Chiplun, Ratnagiri etc.). They believe that their target customer is situated in these areas. Strengths:

o Huge chain of stores: there are a total of 60 stores in Mumbai giving them various benefits like economies of scale, good distribution network, etc. o Economic Pricing: to provide customers with good quality gods at the lowest prices under one roof and charge below the MRP level. o Opportunity for middle class consumer to try out new products as that are prices economically, in a price bracket which they can afford. o They also enjoy credit facilities to a period of 30 days from suppliers and can get commodities at a very short notice in case there is a fluctuation in demand. o They enjoy several Government Subsidies and grants under the Cooperative Societies Act. o The mini- bus facility, although restricted serves as a free home delivery in certain ways. Problems:

Theft / Shoplifting: The Apna Bazaar stores are large in size. Therefore, it is difficult to keep a check on the customers. Also the lack of any security gadgets makes it more tedious for the staff to notice any malpractices that might be occurring on the premises. Thus, thefts occur at least 2 3 times a month. Defaulters are charged a fine of Rs. 501. o Lack of Personal Attention: Apna Bazaar stores a large number of commodities and has around 2500 3000 customers visiting it daily. Thus it is almost impossible for the staff to give personal attention to the customers. o Electronic Items Turnover: While buying an electronic appliance, a customer wants a guarantee for it in the form of an After Sales Service Contract and a Warranty. The absence of such provisions results in a low turnover of electronic items, compared to other stores. This could also be due to the brand image of Apna Bazaar. o Store Layout: Over the years, Apna Bazaar has strived to become a one stop shop for its customers by storing all commodities from Fast Moving Consumer Goods to utensils to electronic items and also seasonal products like mangoes and Ganpati idols. Due to this the store has become very crammed and there is no proper layout followed throughout. o Ration Restrictions: This has led to a fall on the net profits of Apna Bazaar Ration Shops. The introduction of 3 tier cards led to a cut in the quota. o Mini - Bus Facility: Apna Bazaar has limited funds. Thus due to high petrol prices, this facility had to be stopped in 3 places in Mumbai which led to a reduction in profits to the tune of Rs. 3 crores. Other problems include: o Lack of proper communication. o No free home delivery. o Drive to create employment leading to low productivity. o Too many counters. Suggestions: o Train the employees Though Apna Bazaar offers self-service, the staff needs to be more customer friendly, and interact with the customers. There is also a need for professionalism.

Proper Division of staff This is necessary as there can be overcrowding of staff at some places. o Introduction of a bar coding system - to mark items would make things easier for billing and payment procedures. The management of accounts would also be easier. o Going Global in the fast moving market of consumer commodities, it is very essential for Apna Bazaar to understand the importance of making their customers happy and thus they must adopt reforms in their approach to work.