Shopper Stop 3u4c2r

CASE-STUDY ANALYSIS OF

SHOPPER’S STOP

SUBMITTED TO:

PROF.RAHUL GUPTA CHOWDARY

SUBMITTED BY:V.C.THRIVEEN 08PG206 AJAI SACHCHAR 08PG146 PRITIKA AGARWAL 08PG181 SIDDHARTH KAUSHIK 08PG161 B.K VENKATAKRISHNA 08PG158 SANDEEP MAHESHWARI 08PG191

BACKGROUND

Shopper’s Stop Ltd is a professionally managed and system driven organization promoted by K Raheja Corp Group, one of the leading players in the country in the business of real estate development and hotels. Pioneer of organized retail in India, Shopper’s Stop Ltd has been instrumental in bringing about revolution in India. Since it opened its doors, the chain has become the highest benchmark for the Indian retail industry. Since its inception in 1991, Shopper’s Stop Ltd has introduced various retail formats in India.

PRODUCTS Shoppers Stop retails products of domestic and international brands such as Louis Philippe, Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie, Nike, Reebok, LEGO and Mattel among others, through our stores. Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish, LIFE and Vettorio Fratini, Elliza Donatein, Haute Curry, I Jeanswear, Insense, Mario Zegnoti, Acropolis and Indi-Visual. The designer section show cases some of India’s prominent fashion designers (Ritu Kumar, Satya Paul and LABEL), retailing affordable designer wear.

LARGE BASE OF THE LOYAL CUSTOMERS It had 19.9 million customers enter the stores in the year ending March 31, 2007. It believes that the emotional connect that they have been able to create with our customers through their service offering and special promotions has helped them convert many of them into loyal customers. This is clearly proven by their large and constantly growing base of First Citizen . To enhance the shopping experience of customers and offer the ‘ultimate shopping experience,’ shoppers stop started a loyalty program named first citizen. LOYALTY PROGRAM Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior. Shoppers' Stop's customer loyalty program is called The First Citizen, with these customers being part of The First Citizen's Club. A person can become a First Citizen club member by submitting an application form along with the application fee of Rs. 150. The club provided hip to the frequent customers in three stages- Classic Moments, Silver Edge and Golden Glow. It was the second largest loyalty program in India after Air India. We get Reward Points every time you shop, exclusive offers ever so often, and updates on what you can look forward to at the store. Exclusive cash counters let you spend more time shopping rather than waiting in a line. And you don't have to worry about parking any more.

Shoppers stop also launched a co-branded card named First Citizen Citibank Master Bank in collaboration with Citibank in 2001. The customer of shoppers’ stop who ed the First Citizen club would get the First Citizen Citibank Master Bank. This is the first co-branded card in India. As a First Citizen Citibank Credit Card member, you get the benefits of the Shoppers' Stop loyalty program, First Citizen. The First Citizen Program hip entitles you to exclusive privileges such as product previews, priority billing and other special benefits. Add to this the fabulous experience of shopping at the premier Shoppers' Stop outlets across the country. For every Rs. 100 spent at Gold Facet at Shoppers' Stop stores in Mumbai, First Citizen Citibank Golden Glow Card will earn 3 points while First Citizen Citibank Silver Edge Card will earn 2.5 points. Further, using your Card elsewhere will bring you one Point for every Rs. 100 you spend. All Rewards Points are redeemable at Shoppers' Stop. The First Citizen Citibank Credit Card truly means more rewards. SAMPLE VALUE CHART

MONTHLY EXPENSES Shopping at Shoppers' Stop

COST ( Rs. ) 3,000

REWARD POINTS 120

Restaurant / Entertainment

9,000

Grocery

3,000

Travel

5,000

170

Total for the month

20,000

190

Full year

190 * 12 = 2,280

* Every Rs. 100 that First Citizen Citibank Golden Glow Card spend at Shoppers' Stop will get them 5 Rewards Points and every Rs. 100 that First Citizen Citibank Silver Edge Card spend at Shoppers' Stop will get them 4 Rewards Points. Every Rs. 100 that is spent elsewhere will earn them 1 Rewards Point.

It also had a loyalty program, called ‘SKIDS’ for children of First Citizen Club who were of the age group 4 to 14. This is a program offering an opportunity to avail of a variety of special benefits, by amassing points on their purchases, and it also offers them privileged shopping experiences. Shoppers' Stop, at present, has a database of more than 2.5 lakh whose purchases for nearly 50% of Shoppers' Stop's total sales as per the data of year 2007.

QUESTION & ANSWERS

Q 1. What are the benefits that a holder of the ‘first citizen’ card was entitled to? First shoppers’ stop outlet was set up in 1991 at Andheri in Mumbai. It started a loyalty program named first citizen. The benefits included: • They were entitled to various offers at selected departmental stores in other countries. •

The card holders can also earn a point if they used their cards even at places other than stoppers’ stop.

• Accident insurance up to Rs. 20,00,000 for first citizen golden glow Citibank card holders and Rs. 10,00,000 for first citizen silver edge Citibank card holders. • They received invitations to exclusive preview sales, discounts and other promotional activities.

•

All stoppers’ stop outlets across the country featured Citibank financial centers at which the first citizen card holders could avail of the various services offered by Citibank like loan facility for homes and automobiles.

Q 2. In the light of Shoppers’ Stop’s loyalty programs, evaluate the influence that loyalty programs can have on the purchase decision of customers. From the earliest days of commerce, merchants have rewarded their most loyal customers with perks from the baker's dozen to S&H Green Stamps. But in the modern era, customer-loyalty programs become an industry all their own. Nearly 90% of Americans participate in some type of rewards program, and most are enrolled in more than one. As look at the data of Shoppers’ Stop’s customers i.e. in the March 2000 about 40% and in the march 2204 about 50% of the company sales were through First Citizen Club . The number of First Citizen Club of Shoppers’ Stop’s had touched 4.1 lakhs in the March 2005. So it can be clearly stated that loyalty programs have benefited the company in several ways and helped the company to retain their customer and also increase their number year by year. Therefore we can say that loyalty programs influenced the customer’s purchasing decision in various prospect like  If the customers seek the benefits from loyalty programs then he/she tends to make more utilization of such programs.  His/her number of visit to the particular store increased considerably.

 Purchasing decisions of customers under such loyalty programs is confined and they visit the company’s store when the customer wants to purchase certain items which are sold in the company.  Customers also tend to involve their family , friends and others in such programs so that they can also enjoy the benefits of the programs and ultimately it increases the customer base of the company which runs such loyalty programs.  Since all the time customers get one or more benefits from these programs, so there is inclination in purchasing of products and services from the same company.  Other than financial benefits customer also get the privilege of insurance and make purchase of goods from other stores etc.

Recommendations

 There is no differentiation among loyalty programs from one company to the others. Therefore, it is recommended that marketing managers should provide soft benefits rather than merely rewarding financial benefits for the customers. It is believed that soft benefits which provide extraordinary benefits for customers such as value-added services, special treatment and personal reward will be able to build personal relationship between customers and the organization.

 In order to make loyalty program more significantly influence customer loyalty, it is very

important to understand which group are targeted, because different groups will respond differently toward the programs where in turn impact on their loyalty towards the companies.

 Finally, the level of customer involvement with the product might influence the customer

responds toward the loyalty programs. Therefore, it is recommended that management should consider the contribution of this aspect as well.