Croma - Analysis

Opportunity Statement:
Opportunities for impacting footfalls -
the role of mobile, ecommerce and social
media

Opportunities for impacting footfalls - the role of mobile, ecommerce and social media
2
Group C8
Group Members:
Abul Hasan Rajani
Lakshmi Ramakrishnan
Juhi Parekh
Gopeekrishnan Pillai
Smit Shah
Amruta Thaly
I. Introduction:
India is emerging as the third largest internet market and its e-commerce business is
likely to touch Rs. 4,000 crore (US$ 742.76 million) in 2015 against Rs 1,200 crore (US$
222.83 million) at present. Also, with mobiles becoming a major medium for advertising
and content delivery, every three out of four users in the country are expected to access
the net through a mobile phone by 2015.
Some key digital trends as per Comscore report as follows:
India is now the world’s third largest internet population riding on a 31% year-on-year
increase, India’s online population grew to 73.9 million. With an extended online
universe in excess of 145 million the market is at a tipping point for online businesses.
Online Retail is on the rise and approx 60 percent of web users in India visit online retail
sites. Time spent on shopping sites still has huge growth potential. The space is
dominated by local retailers led by Myntra, Flipkart and Jabong among others.
Social Networks capture the largest percentage of consumers’ time in the region.
Facebook continues to be the number one social network with a 28% increase in traffic
and a reach of 86%. LinkedIn emerges as number two, while Pinterest and Tumblr are
the fastest growing networks

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Younger males and women aged 35-44 emerge as power users. Three-quarters of India’s
online population is under 35. Males in the segment and women aged 35-44 are amongst
the heaviest users
Consumers are quickly becoming platform agnostic in their digital media consumption
and in today’s world they can choose when and how they’d like to consume content. It
might be that they started watching a film at home on their TV, continued watching it on
their smartphone on the way to work, and finished watching it in bed at night on their
tablet.
Consumers have already adopted multiple platforms and devices – now it’s the
businesses that need to follow if they desire a unified, platform-agnostic view of
consumer behaviour.
II. Industry Research:
a. Overview:
Urban markets account for the major share (65 per cent) of total revenues in the
consumer durables sector in India. Rural and semi-urban markets currently contribute 35
per cent to total sales; their combined size is set to post a CAGR of 25 per cent over
2010-15.
The penetration of modern retail is 12 per cent in consumer durables segment. By 2020,
the electronics market in India is expected to increase to USD 400 billion from USD 69.6
Urban
65%
Rural
35%
Shares in consumer durable market India
(FY 11)

4
billion currently. By 2025, India would rise from the twelfth to the fifth largest position
in the consumer durables market in the world; the market is expected to reach USD12.5
billion by 2015.
Demand growth is likely to accelerate with rising disposable incomes and easy access to
credit. Increasing electrification of rural areas and wide usability of online sales would
also aid growth in demand.Demand for nonessential products such as LED TVs, laptops,
split ACs and, beauty and wellness products is likely to increase in the urban markets.
The durables like refrigerators and also consumer electronic goods are likely to witness
growing demand in the coming years in the rural markets.
The growth in the size of the consumer durable market is depicted by the following graph
b. The Key categories:
2.9
3.2
3.5
3.8
4.2
4.7
5.2
6.3
7.3
0
1
2
3
4
5
6
7
8
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Size of the consumer durable market (USD billion)
Consumer durable
segment
White goods Brown goods
Consumer
electronics

5
The Indian Consumer Durables segment can be segmented into the above three groups.
Air conditioners, refrigerators, washing machines, watches, cleaning equipment and
sewing machines are considered as white goods. Microwave ovens, cooking range,
chimneys, grinders, irons, electronic fans and mixers are considered as the brown goods
while TVs, audio and video systems, electronic accessories, mobile phone, digital
camera, laptops and personal computers are considered are considered as consumer
electronics.
c. SWOT Analysis:
STRENGHTS:
The domestic market is entering a rapid growth phase, with projected double-digit growth
of key products such as notebook computers and mobile handsets
Low rates of penetration for key products such as computers (2%) and mobile phones
(43.5%).
Rising incomes and GDP growth are increasing affordability
WEAKNESS:
Large grey market for 'illegal products
Infrastructure deficiencies, with only 20% of Indian houses capable of receiving
broadband
OPPORTUNITIES:
Rapid growth in mobile subscriber penetration to 145% by 2015 will drive booming
mobile handset market.
There exists big opportunity for expansion in underpenetrated semi-urban and rural areas.
Hardware sector is set to grow faster after a number of government measures to
encourage domestic manufacturing and new investment incentives under consideration.
The government's efforts to get India connected to the modern world will provide the
frame for electronics market development over the next few years.
THREATS:
Global economic slowdown may affect consumer spending.
Moves to stimulate the hardware sector having mixed results.
Falling prices of the electronic products
Cheap Chinese substitutes present in bulk in the Indian market

6

7
III. Process followed to understand the 3 opportunity spaces:
We conducted our primary research in three parts.
The first part consisted of visiting the Croma stores across Mumbai and observing the
customers at these stores. We tried to identify the various touch points during the whole
buying process.
The second part was to visit the competitor stores such as Vijay Sales, Reliance Digital,
NEXT, Sony Mony etc. and ascertain the competitor strategies and areas where the
croma can improve.
The third part was a survey of sample size of 100. The respondents were asked to answer
fifteen questions on their electronic buying preferences.
Our primary research gave us valuable insights on price sensitivity, brand trust and the
role of opinion leaders in decision making process. These insights enabled us to identify
our opportunity spaces.
From the three opportunity spaces, we narrowed down to one solution which integrated
the aspects of social media, mobile commerce, store walk-ins and customer engagement
and interaction.
IV. The 3 opportunity spaces identified:
The three opportunity spaces identified by us on the basis our insights are:
1) Facebook Check-in by the customers once they visit the stores. Some redeemable
reward points can be provided for this check-ins to the customers.
2) Croma based interactive game can be designed to engage the young shoppers who
currently prefer online purchase at the cheapest price.
3) Ask the customers to shoot their own video with the products they have purchased
from Croma and share their experiences.

8
V. Final solution Recommended:
We have integrated all of our opportunity spaces into our final solution. Our final
recommended solution is to create a mobile application that will have the following
features:
a. Facebook/Twitter check-in: Users can Check-In into their Facebook account as well
as post their comments and reviews through social media sites like Twitter, Google+
etc.
b. Sharepictures: Users can share their Pictures within the Croma Stores or with the
Croma products as “My Croma Moments” on facebook pages. Currently there is only
one croma facebook page, but location specific pages will be created for this feature.
c. Play games: Users can play some popular games with which croma can have a tie-
up. Presently launching an engaging game by croma can be a big risk, but by using
tie-ups a mind space can be created in the consumer’s mind by linking croma with
games and thus opening prospect to engage the customers in future using Croma’s
own games.
d. Technical Reviews of electronic gadgets given by the experts
e. Keep it Simple: The User has to type in the product code and the application will
display the features in simple language (Instead of stating Clock rate of a processor, it
will tell you the benefit)
f. Product Launch Event details: As many companies launch their product first at
croma, this feature will fetch the interested individuals to the store
The application users will be given redeemable reward points for facebook check-ins.
They will also be rewarded with some additional reward points on clearing certain levels
of the games. These reward points will have a maximum of three month validity.
Promotion plan for the mobile application:
We propose to open kiosks at colleges, corporate offices & malls for first 10 weeks from
the launch of the mobile application. This will help in creating awareness for the mobile
application as these locations are most frequently visited by our target group
Instant reward points will be given on first download of the mobile application. This will
act as an incentive to the price sensitive customers to download the application

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My Croma Moments is a promotion campaign for first three months from the launch of
the mobile application. In this campaign we will be clicking pictures of willing customers
with their friends and family at the store. The customer will be mailed a copy of the
picture immediately. These photos can be used to enrol the customer for the lucky draw.
Every evening for three months, one picture from each store will be uploaded as croma
moments of the day on the Croma store facebook page,e-commerce website, and also be
displayed on the LED’s at the store
VI. Why has it been recommended?
a. Our targetgroup:
The target group for the above stated marketing plan is students and/or Working
professionals in the age group of 20 to 30.These individuals are active on social media
(facebook, twitter etc.), use smart phones, and have purchased electronics online, read
technical reviews before purchasing their electronic product, take their friends advice on
which brand to buy and which store to purchase the product from. Theyarealso influenced
by the electronic advertisements on social media and e-commerce web sites.
b. Objectives:
The mobile application will help in engaging the young customers of the age group of 20
to 30 years of age, who currently perceive croma to be very costly. This age group is
found to be always in look out for good deals online, before buying any product. Thus
our solution will help in creating a larger loyal customer base for croma.
c. Reasonsfor recommending this solution:
One of the key insights evolved out of the primary research was “price sensitivity” of the
customers. Almost every customer compares the prices online and at other competitor
stores before making the final purchase decision. The prices at Croma are slightly higher
than the competitors due to the elaborate customer service provided. To ensure that
customers avail the product at the best possible price and receive the benefits of the
services offered by Croma, we have suggested this plan.
The youth have been found play a dual role of a customers and an influencer.

10
24 percent of our survey respondents said that they visit the electronic stores with their
friends. 84 percent of the respondents agree that they read online product reviews before
making the buying decision and 40 percent say that they have visited an electronic store
after looking at the product advertisement on facebook or mobile application.
Apart from the above statistics, it has also been identified that this young age group
influences the product purchase decision of their parents.
V. The financial feasibility
a. The overallcosts:
Particulars Amount across 90 stores
(Rs)
Amount/store
(Rs)
Application Development 1,00,000 1,111
Promotions (5000 * 10* 90) 45,00,000 50,000
Technical Experts recruitment ( 30000*12) 3,60,000 4,000
Discounts allowed over App download 7,00,000 7,778
Total 56,60,000 62,889

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b. The Sales projections:
(The percentages shown below are obtained from the primary research)
Overall percentage of Croma Loyal Customers is 41 %
Overall percentage of people influenced by advertisements on social media and e-
commerce websites is 40%
Thus our target group accounts to (0.59 x 0.4) x 100 = 23.6%
Assumption: We will be able to engage 60% of target group by the end of the year
Therefore,
Expected Increase in footfall is (0.236 x 0.6) x 100 = 14 %
The Current conversion rate is of 22% at the croma stores.
Thus, projected increase in sales is (0.14 x 0.22) x 100 = 3.1%
VI. Conclusion:
Thus, considering the flat same store footfall growth, the marketing idea will help in
increasing the footfalls at Croma which was our main motive to achieve.
We will succeed in engaging new customers for croma via the facebook check-in,
games and also the pictures on the social media websites
Facebook check-in and uploading pictures on the social media will help in targeting
the friends of the existing customers and drawing them to the store
Thus, customer engagement will drive up the store footfalls which in turn will help to
increase the sale
VII. References:
 Comscore report: India digital future in focus 2013 - Key insights and digital trends
shaping the online space
 A brief report on consumer durable industry in India, March 2013 (CCI report)
 IBEF report on consumer durables, August 2013

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VIII. Appendix:
A. The Insights & observations gathered
a) Price:
1) Customer is very price sensitive for electronics products.
2) Teenagers are more inclined to purchase only from that store which gives them the
best price deal.
3) Croma has not yet achieved a connect with these individuals, reason being not willing
to pay higher prices at Croma for the purchase of the electronic item that they get
online (mainly mobile phone) at a lower price. There is no transparency as to why
they have to pay higher charges and then judge that it is worth the price.
4) These people are not willing to pay additional prices only in the name of the customer
service
5) Price sensitive customers bargain by asking for accessories and software.
6) Show-rooming happens to a large extent due to cheaper prices online
7) Many of the customers compared prices of Croma with other competitors before they
could make their purchase decision.
8) CROMA does not have the lowest prices.
9) People donot mind paying higher prices at the store with the store experience and the
free gifts make up for the price.
b) Brand Loyalty:
1) Only Croma loyal customers were found closing the deal and purchasing, this goes in
sync with the insight given of ‘flat store growth’
2) The final deals that were closed in the store , were done by the people in the age
group of 35 years and above
I. These people are technology savvy
II. But prefer Croma, as they relate the Tata brand name with Croma and
associate the characteristics list quality and trust with the purchase
III. They responded with reason, since it is Tata, we are confident about the
Quality of the product and the after sales service Croma will provide. We
believe in Tata
3) Teenagers have greater brand loyalty than store loyalty

13
4) Reliability is one of the main factors for customers to choose Croma
5) Most of them are loyal customers and have been buying products from Croma for a
long time. For them, price is not an important factor. They look at reliability and
location as important factors.
c) Product:
1) Many customers plan the purpose of their visit. They observe and choose the product
accordingly
2) Consumer electronics products such as television, laptop, and small accessories were
found among the fast moving items from the store
3) It was found that consumer is hesitant to buy Croma in-house brand product. The
consumer likes the product design, look and features. However, customer is hesitant
to buy it due the fear “If it was branded we know whom to go for service, but that
cannot be the case for this product“
4) Teenagers and youth are found around gaming section and sound systems even if they
have no intention to buy
5) Product assortment is one of the factors which help customers.
6) More crowds observed near gaming, cell phone and laptop categories.
7) The low priced private labels look lucrative to consumers.
8) Fast moving categories and brands available in the zip stores.
d) Customers:
1) Customers within the 25 to 35 years of age group as well as the teenagers
2) Usually they were found shopping with their friends
3) They have already browsed through online sites as part of their product search and
done the ground work
4) They know the technical features of the product they plan to buy
5) They do not need much assistance from the salesperson in closing the deal and taking
buying decisions
6) Customer service is the main reason of purchase
7) It was observed that footfall increased during weekends than weekdays
8) Most of them do thorough prior research (R&D) before visiting the store
9) Many of them are unaware of new sales campaigns

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10) Few of them visit store just to update themselves about new schemes
11) Most of the customers are office going people or upper middle class people.
12) 80% of the customers are window shoppers.
13) Dual income groups visit the stores during the weekends.
14) Nuclear families buy frequently for setting up their home.
15) Customers expect comparative product knowledge from employees.
16) Older people most of the times indulge in impulse buying.
e) Location:
1) Location is one of the factors why people prefer Croma. For them Croma was more
convenient than any other similar store.
2) Locating the stores near the service provider customer care centre acts as additional
convenience for mobile buyers.
f) Salesperson/Staff/Employees:
1) The teenagers who visited Croma have faith in the salesman and confer to his/her
opinions for the buying decisions
2) Many were eager to know more about frontline staff.
3) The staffs in Croma do not influence buying decision. They provide information only
if asked for and let you decide.
4) There are three types of employees i.e. company appointed employees, contract
employees and permanent employees.
5) The different employees are differentiated by dress codes.
6) Employees are expected to be updated with technical knowledge.
g) Décor and Ambience:
1) Elderly prefer sitting spaces within the store.
2) The store layout is in the grid form and thus it is easy to navigate.
3) The store décor, colour combination and lighting are pleasant and induces purchases.
h) Mode of payment:
1) There is more debit card user than credit card users.
2) Purchase decision seems to be based on instalment terms and conditions.
3) Cash –on-delivery is the preferred online transaction mode.

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i) Promotion:
1) In store employees are the most effective medium to create awareness about new
offers and promotions.
2) CROMA aggressively promotes their private brands through T.V. shows like “Sab
Khelo, Sab Jeeto”.
3) The end objective to promote through social media is for engaging fans and
converting this to loyalty by getting them to buy more and more often.
4) Discount coupon codes can be redeemed online.
5) Daily review available online for all categories.
6) The online portal has a separate tab showing the trending products across various
categories.
7) In a friends group, purchase of a new phone by one drives few others to change their
existing phones. Thus friends view is a trusted opinion.
j) Online (e-tail):
1) The store locator tab helps the customers to locate their nearest branches.
2) Comparative product analysis by tech expert “Mr Rajiv Makhni” who is known as
tech guru of the country
3) Blogs about the latest products that may launch shortly in the market helps the
customers get the review
4) This blogs also help customers to share and connect with each other through various
social networks.
5) They provide free shipping of products around the country with no limit on price
floor
6) They have a recently sold column which tells the new customer about the latest sales
happening every minute.
7) Croma in house products are separately placed on the website in order to make
customers aware of the wide range of products which are manufactured by them
8) Menu based search option is provided on the website which is based on customers
buying criteria like price range, brand & categories
9) Top selling tab talks about the most sold item of the day

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10) They do not offer festival discounts to the customers but offer fluctuating
discounts.
B. Survey Results:
The demographics of our sample are as follows:
Age range:
Gender distribution:
Occupation wise distribution:
The findings:
1. Rate the following factors that influence your electronics purchase decision
a. Price
b. Level of Service
c. Product Brand
d. Store Location
e. Peer Review & feedback
2. From which of the following online stores do you buy electronics from?
3. You are active on which of the social networking sites?
4. Given an option, from which one store would you purchase electronics from?
5. With whom do you go for electronics purchase
6. “Sales persons at the store influences my electronic purchase decision”
7. How do you get to know about new electronic gadgets & appliances?
8. I buy electronics from electronics showrooms because
9. “I read through online electronics product reviews before purchase”
10. “I am aware about the different brands for an electronics product before my
purchase”
11. Have you ever visited an electronics store after looking at its ad on facebook or
mobile application?

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C. Customer Interview responses
Questions Croma Vijay Sales Next
1. What do you
like in..........?
The variety and
assortment and also
the prices of their
home brands.
Even if the prices are
not lower than other
stores but the free
gifts and accessories
that they provide
result beneficial for
the customers.
The ambience, decor,
wide-spacing, interaction
of the sales people with
the customer & also the
prices which they offer.
The brand name,
convenience, &
the pleasant
behaviour of the
sales people etc.
2. Before buying,
do you compare
the prices with
other stores?
No other stores but I
prefer checking the
prices on the internet.
Yes I compare prices &
also I refer to the internet,
newspaper ads, & other
social media regarding
the price status.
Yes I compare
prices & also
consult with my
friends &
relatives before
buying.
3. What is the
decision
making factor?
First of all the quality
of the products as it
is a TATA product.
Then the other
benefits such as
servicing, buying
ambiance and
assistance from their
salesmen & also the
brand name.
The brand name,
competitive pricing, wide
range of products, skill &
technical know-how of
the staff, immediate
attention by the people
there, & their patience &
courtesy & good &
efficient customer service
coupled with their
excellent after sales
service.
Convenience for
haphazard
buying, less lead
time, bargain
pricing, hassle
free shopping
etc.
4. Were the sales
person able to solve you
queries & explain all
the nitty-gritty’s ofthe
particular appliance to
you?
Their behaviour was
not satisfactory &
they didn’t have
much information
regarding most of the
functions.
Yes. Yes.
5. Would you
recommend this store
to anyone else?
I would recommend it
only to those who
already have all-round
details & information
regarding the product
which they wants to
Yes. I’m not sure.

18
buy otherwise they
would still be as
ambiguous as they
were earlier.
D. Customer testimonials:
Respondent Number 1:
Name: Nikita Pawar Mobile no: 8652583442 Location: Thane
Visited Store Location: Thane
1. What did you like in Croma?
Ans: The variety and assortment and also the prices of their home brands even if the
prices are not lower than other stores but the free gifts and accessories that they provide
result beneficial for the customers.
2. Were the sales person able to solve your queries & explain all the nitty-gritty’s of
the particular appliance to you?
Ans: Their behaviour was not satisfactory & they didn’t have much information
regarding most of the functions.
3. Would you recommend this store to anyone else?
Ans: I would recommend it only to those who already have all-round details &
information regarding the product which they want to buy otherwise they would still be
as ambiguous as they were earlier.
4. Are you a loyal Croma customer?
Ans: Well, I have been buying electronic goods from Croma since the past few years. So,
I’m a partially loyal customer.
5. What would be your star rating for Croma on a scale from 1 to 5?
Ans: Definitely a 3.5.
Respondent No: 2
Name: Ritesh Jadhav Mobile no: 9702181802
Visited Store Location: Thane

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Ans: I like their ambience, the store merchandising, the display & also their huge array of
products.
Ans: They could but only to a certain extent.
Ans: Absolutely.
Ans: Yes.
Ans: 5.
Respondent no: 3
Name: Shruti Shetty Mobile no: 9819918070
Visited Store Location: Juhu
Ans. Products, assortments, all facilities under one roof, variety, availability, from lowest
brands to the highest brands etc....
Ans. The Apple store sales person from whom I purchased my Apple MacBook was
extremely helpful.
Ans. Yes, but not for price but for comparison regarding various products & to check the
prices because the price range offered by them is quite steep. And even if they offer a
lower price it will not be the lowest.

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Ans. Not for mobiles but for other household appliances like refrigerator, AC, washing
machines etc... I prefer Croma. So In a sense I’m a semi-loyal customer for Croma.
5. What would be your star rating for Croma on a scale from 1 to 5
Ans. 4.
Respondent no: 4
Name: Akshay Kodilkar Mobile no: 9175435398
Visited Store Location : Dadar
Ans: Spacious store place & its ambience.
Ans: Yes
Ans: Yes.
Ans: Sometimes but that depends on the special offer period.
Ans: 3.5
Respondent no: 5
Name: Hiren Shah Visited Store Location: Lower Parel Phoenix Mills
Mobile no: 9619709738
Ans: Ambience & store layout
Ans: Not fully. He has only answers to those questions only for which he is trained to.
Ans: Definitely
Ans: Not exactly.

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Ans: 3.5
Respondent no: 6
Name :Nikhil Chonkar Visited Store Location: Mulund PK road near Check Naka
Mobile no: 9167997475
Ans: Store layout & arrangement & competitive pricing
the particular appliance to you
Ans: To a large extent yes.
Ans: Yes
Ans: Not yet but I will think about it.
Ans: 3

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