1. Executive Summary:
This report deals with the situational analysis of a small food and grocery retail business in Bangalore, India. The name of the retailing company is Last Mile. This company deals with grocery and food product deliverables. This report deals gives any analysis of the internal environmental working of the company. This features the financial and the human resources working in the company. There is also an overview on the branding of the business and the products and services offered by this business. The next part of the report gives the external environmental analysis where the retail competitors are discussed. There is also a discussion made on the social-cultural trends and also the technological trend which are relevant in the retail industry. Target Segmentation is discussed in detail which helps to understand which market segment has to be targeted to expand the business. Competitors have to be identifies for any business to be successful.
The latter half of the report deals with identifying the competitors and also narrowing down their strengths and weaknesses which would largely contribute in helping Last Mile to counter attack the strengths and exploit the weaknesses of the competitors. Also, the latter half of the report analyzes the company’s Marketing Mix in terms of its four core elements, namely Product, Price, Promotion, and Place. It investigates the current and desired positioning of the company. The report identifies four objectives Last Mile shall achieve and elaborates specific strategies and tactics to complete this task.
Last Mile is a retail company which does specialize in selling grocery and food products. This company is situated in Bangalore. This company was started in the year 2002 by local bangalorean called Gaurav Kulkarni. In a very short span of time, it has become considerably well known to the local consumers. The biggest strength of this company is that it has a high level of quality. It also has a loyal customer base. This company runs its business efficiently by aligning the resources and the techniques to market an impressive range of product or brand. The desired success of the product is achieved when the customers perceive the value of the brand (Petras & Veltmeyer 2001). This results in the growth of the qualitative and financial value of the product thus increasing the equity of the business. There is a certain level of expectation from the customers towards the brand they purchase due to the level of service they expect or have been receiving from the previous dealings. Last Mile keeps in mind the relevant criterion when they target customers who have been making purchases of the same brands in the past. This has resulted in the improvement of the sales when compared to the competitor businesses.
Last Mile also maintains a competitive advantage over its competitors by carefully balancing and developing its marketing mix. In terms of product, Last Mile offers such categories of products as fresh vegetables, fresh fruits, canned foods, dairy products, meat products, seafood, baked goods, snacks, cheese, spices and herbs, sauces, oils and vinegars, and various groceries. Another important element of Last Mile’s success is effective promotion strategy aimed at generating positive publicity through public relations, direct mail, and advertising.
Last Mile’s pricing strategies are specifically tailored for every category of products. The emphasis is on value pricing that aids customers in saving, and psychological pricing. A part of Last Mile’s success is its convenient location in a busy part of Bangalore, although not the most central one.
Company’s plans include expanding customer base, introducing a line of household items, and engaging in more aggressive marketing activities with a view to expanding its market share.
3. Internal Environmental Analysis:
Last Mile is a retail business which deals with food items and groceries. It basically caters to the middle class and the upper middle class societies in the Indian communities.
3.1) Market Environment:
The retail business in India is booming. The food and grocery retail industry is the second biggest in the business at present. There is a steady growth in the economy with a demand for global trade and high employment opportunities (Burack & Elmer 1993). There is a high level of competition and a presence of a huge rise in the incomes. There are consumers who are in the younger age groups and are earning substantially and these consumers spend a bulk of their income in all channels of retailing namely grocery, non-grocery and non-stores too. There are new advents by the big corporate houses planning to invest huge amounts of money in retail businesses. There is a huge amount of shopping malls coming up which helps the business to expand. Supermarkets control a majority of the share in the food and grocery business. There was a huge rise in the retail businesses since there was a construction of super markets and convenience stores.
Organizations have become much more focused on delivering products and services to its customers based on the customization level desired by the customers. There is a huge growth in the level of importance given to the brand equity in businesses. There are two primary processes involved in the area of strategically managing brands. One is targeting the existing customer base and retaining the clientele for future expansion of the customer base. The other process is to target and acquire new customers. Brand management involves developing a relationship with customers and nurturing these clients in order to maintain a smooth flowing of the business. There is a constant check kept on quality of the services in order to ensure that the client base is not lost to competitors encroachments. There is extensive advertising done in order to maintain the viability of the products and services offered by the businesses. There are formal and informal market researches conducted to update the customization processes in order to maintain the competitive advantage.
3.3) Marketing Capabilities Analysis:
There should be a high level of service given to the customers. The customers should be given a superior brand quality. The main aim of this is to ensure that the customer does come back to the retail outlet and this indicates customer loyalty.
Identifying the Target:
The main market segment of the customers should be targeted and there should be better offers and deals offered to these customers. There can be a more convenient delivery service given to customers by delivering the products to their door step.
Identifying the purpose of the business:
The main purpose of the company is in retail business and the services and the products must be marketed in an effective. There can be posters used and having business cards given out to customers can also be useful to promote the business.
The best platform to promote and publicize the products and the services is the internet. Having a website to market the products and the goods would be the best possible way of growing the business. There can also be a provision of ordering groceries online and having them delivered would also be advantageous.
3.4) Product Life Cycle Analysis:
The product life cycle analysis begins with the product introduction where the products are introduced in the market. The next step involves the branding of the product where the products are given brand equity. The next step in the cycle involves the distribution of the products and the last step involves the product advertising where the product is publicized .The product gradually grows which results in the growth in financial gains for the business. The next step is the maturity stage of the product where the product gets competition and the prices decline and as a result the financial gains declines. The last stage is the product decline stage where the product saturates.
3.5) Financial and Human Resource Analysis:
The retail company Last Mile has investments of around twenty lacs Indian rupees .This company has a workforce of around twenty people .The level of service is excellent and the company is making plans of collaborating with another big brand and expanding its base. The prices are reasonable. The company is planning to get bank funding in order to increase the amount of deliverables kept in the stores. The workforce is also being planned to be increased to around seventy people.
3.6) Boston Matrix:
Ø Level of Quality
Ø Level of service
Ø Customized Products
Ø Joint Ventures
Ø Higher Prices product
Ø Retail goods
Ø Political trends
Ø Economic Instability
Ø Cheaper Rates by competitors
4. External Environmental Analysis:
4.1) Economic Trends:
The economic trend in India is on the upswing due to the flexible financial principles made by the government. The earning capacity of the customer has increased by exorbitant amounts. This is primarily due to the advent of Information Technology industry which keeps booming at a rapid pace. The increase in the earning is aiding the shopping habits of the customers. The business process outsourcing boom in the country has brought about a sea of change in the life styles of the youth. This means that the youth have more money to spend in the various aspects of life. There are also rural malls which have opened up and there is a dawn of awakening among the businesses to capture the market in the youth.
4.2) Political and Legal Trends:
The political scene in Indian for businesses is stable. There is a huge demand for India by the other retail corporate since the labor is skilled and cheap. There are foreign companies which are planning to come into Indian markets. But the foreign companies do need a joint venture partner. There will be a huge number of foreign retail companies venturing into India when the market opens up and the government approves the hundred percent FDI. This would be similar to what happened in China. Till 2005, there was a political system which was restricting the foreign retailers entering the market but after 2005, there was a franchise agreement which was passed which helped in collaborative advents by businesses. For single brand products. There was leniency given for up to fifty one percent.
4.3) Technological trends:
There is a high requirement of suitable and efficient supply chain management in the retailing industries. The main issue faced by the retail business is that here is an inefficient management of technological infrastructure (Alt et al. 2001).
There needs to be an efficient and adaptive customer service responsiveness to ensure that the loyalty of the consumers is maintained. The logistic issues have to be targeted and sorted out to ensure that there are no issues surfacing regarding the poor infrastructure. There are technologies such as Enterprise Resource Systems which can be implanted to ensure that there is a smooth interaction between the various aspects of the supply chain management. There are core business processes such as the procurement and the distribution of the retail products so as to ensure that there is a transparency in the working infrastructure of the retail businesses (Aaker 1995).
There is urgency for developing efficient retail management software which facilitates the smooth functioning of the processes. There is also a need for senior management to be efficient and also have a vision to lead the company to greater heights.
4.4) Social-cultural trends:
Retail sectors are being recognized as the biggest industry of the future generations .This is mainly due to the fact that there is a huge middle class bulk of people who are the major contributors to this theory. Food and grocery is assumed to be the second biggest segment in the field of retail businesses. An average Indian spends around forty percent of his earnings on food and grocery. There has been a major growth for big retailers .There is a change in the traditional cultural outlook among all genders in the society. There is a growth in the work force among the women which gives them a grater liberty to choose and make decisions on their own.
5. Customer Analysis:
The primary criterion for any business to thrive and flourish is to identify the range of customers that it targets. A particular group of people who have a particular set of requirements are categorized as the market segment. The process of customer analysis is important to businesses because it helps to give a broad overview of the products and services and helps to expertise in that particular field. Market Segmentation involves a process where the base market is split up into particular segments which are aimed at delivering monotypes of services. By targeting a particular set of people and segmenting them, it becomes easier for the businesses to market their plans and to provide analytical strategies to advertise the market segment.
5.1) Target Market Segmentation:
Normally, the segmentation of the markets is done depending on the generalized criterion. Smaller segments are normally referred to as specialized markets. But broadly speaking, all the segmentation is included in the consumer market.
The variables used in the market segmentation are:
Age: The primary age group that buys this food and retail groceries are between the age of thirty and above. This is normally due to the fact that the youth stays with their parents and the parents do choose the cost and the value of the product based on their experience.
Gender: The genders that predominantly purchase are female. They are the home makers and hence they are given the responsibility of choosing the food items.
Education: The major share of the customers is the educated kinds who have an idea of the particular brands and the advertisements on televisions.
Income and Occupation: The customer base is pretty much the middle class and above families who have a basic one lac Indian rupees and above salary category. They range from a variety of occupational backgrounds.
Religion: There are people who belong to all sorts of religion who come to the store. There are a few people who are very particular of gelatin and other items which are against their religious belief.
Language: India is a multicultural country. There is a big boom in the IT industry which has brought people from all across the other states into Bangalore. Therefore there are a lot of different languages speaking people who come to the store.
Lifestyle: The customers are the kinds of people who have a certain level of lifestyle. They would be brand conscious and may be particular about the certain set of requirements that they expect from the product.
Value: Customers have a detailed regard for high value. The clientele does not mind paying extra as long as they get the high level of quality that they are specifically looking for.
Attitude: The attitude is upbeat of the people in Bangalore. People are generous and kind. They have a tendency to spend lavishly and are very health conscious. They have specific brand consciousness also.
A certain section of the customers have a tendency to analyze the products and the benefits of the products purchased from a particular store (Rutz 1981). They normally would be doing the price comparison before purchasing the product and review the differences they will be entitled to get from any other store. The differences may be in terms of quality or even in terms of monetary savings. There are certain customers who are brand loyal. This means that they would have been using the brand from quite sometime and they are satisfied with the performance and hence they would want to continue using the same products and services. The improvement in segmentation helps the business to target a distinct section of people and put them into groups and provide them with the best level of quality service possible (Foucault 2003). This methodology helps to improve the market value and also helps to advertise the products and services in an efficient way.
6. Competitor Analysis:
6.1) Competitors Strengths and Weaknesses:
The biggest competition that retail companies like Last Mile face are from big retail organizations such as Big Bazaar and Food World. The brand name of such organizations is predominant in the market and these companies tend to draw away the majority shares in the business. The bigger companies that tend to enter the market are targeting to use a more customized process and target a major share of the clientele. The rates are more competitive from the competitors. These retailers also try to suit the liking of the Indian customers. There are a lot of promotional deals that the big companies are introducing which is easy based on the fact that there is tendency by the customer base in India to get attracted by the brand names and the offers and tend to purchase a more colorful product. The companies have their own supply chain management techniques which would help the competitors gain an upper hand due to the faster service and supply processes that they can achieve.
One of the biggest weaknesses for the competitors is that there is a lot of investment in India by a lot of foreign companies which are tending to diversify the market share. This would be working as an advantage for Last Mile because this would help to capture the target clientele by making sure that there is a high level of service given to the customers. This high level of service will ensure that there is a repetitive business attained by the business. The most important part of any business is the word of mouth publicity. This would be obtained if the business offers the best service and also helps to obtain an expertise in the retail field that it deals with.
6.2) Competitors Market Share:
The biggest share of retail business is held by the Food World .This business group involves in value retailing through its variety of retailing outlets. Food World has also invested in a huge food and garment retailing business market. It also has twenty lacs square feet of real estate properties which literally drown down all its competitors in the retailing field. The biggest advantage that Food World business has is that it invests across various forms of retailing sectors and invests very shrewdly in real estates which help it to close put all the competition. There has been a venturing by the Pantaloon owned retail companies such as Big Bazaar into smaller cities where the other retailers are just in the process of planning to venture into.
6.3) Competitors versus Last Mile:
Green Mile is planning on expansion its business. This is a very good move but the primary concern should be retention of the existing clientele. There is a lot of improvement to grow for the business since there is only three percent of the One hundred and eighty billion dollar market of business in big stores and shopping complexes. The other businesses are concentrated with the million of small businesses operating to cater the billions of Indian consumers needs. The competitors will also be seeking to make expansion plans. They would also be planning to diversify into other streams of retailing. But the biggest challenge they will face is the criterion being able to capture the heart of the market and making sure that there is no replication of the ideas.
6.4) Competitors Products and Services versus Last Mile:
The competitors have a huge market share when it comes to diversifies products and services. They have stepped into the market which involves retailing supermarket chains and also garment industry. The competitors are planning to spend as much as five million dollars to set up retailing outlets and have plans to fund collaborative alliances between organizations which would help them to venture into other fields. Last Mile has plans of expanding its business in the next two to three years time frame and also plans to improve its products and services. The biggest advantage Last Mile can have is in terms of quality and strategic alliances can be formed. It would pose a challenge to stride forward in the market where there is a thick competition arising. It would eventually narrow down to the quality and the expertise in handling the products and the services in the most efficient way.
Ø Food World has also invested in a huge food and garment retailing business market.
Ø The competitors have a huge market share when it comes to diversifies products and services.
Ø The competitors are planning to spend as much as five million dollars to set up retailing outlets
Ø The biggest advantage that Food World business has is that it invests across various forms of retailing sectors
Ø One of the biggest weaknesses for the competitors is that there is a lot of investment in India by a lot of foreign companies.
Ø The biggest advantage Last Mile can have is in terms of quality and strategic alliances can be formed
Ø The major weakness would be to match up the level of quality of Last Mile.
Ø The competitors would also find it hard to match the price offered by Last Mile.
The business has an Indian model with modern features and personalized consumer service.
The business anticipates the needs and tastes of Indian consumers.
Pre-packaged grains as well as “loose” grains for the customers to touch.
Last Mile offers the lowest price and promotions on special occasions and days.
Strong management team was responsible for the operational roles.
Wide range of products under one roof.
Last Mile was able to obtain better deals because manufacturers knew such retailers would be essential to sustain growth.
Consumers perceived thinking that goods in modern outlets were likely to be more expensive.
On peak days it would get so crowded that consumers frequently found themselves bumping into other consumer and products.
During promotions planning had not been done appropriately with merchandise and labor.
Lack of real estate.
Long process of manufacture of products to the point of it being displayed on the shelf.
Take the Indian consumer from local markets to Last Mile.
Explosive growth in the retail industry.
The Tag line “Isse Sasta aur acchha kahin nahin” (You cannot get it better and cheaper elsewhere) attracts a huge set of consumers.
Employment opportunities for many.
Government started reducing the tariff thereby improving the import of foreign goods.
Growth in the value retailing.
Last Mile had innovative promotions.
Supply chain of goods.
Government encouraging FDI and entering of other bigger companies in the retail sector.
Companies that would be having their own” in-house” supply chain for delivery of goods and products.
8.0. The present company tactics
Marketing Mix is one of the most effective tools to formulate a comprehensive marketing tactics. Marketing Mix is sometimes referred to as the ‘4 Ps’, which stands for product, place, price, and promotion (Marketing Teacher, 2006).
Since Last Mile specializes in selling grocery and food products, it has a wide range of offerings. The categories of products sold at Last Mile are fresh vegetables, fresh fruits, canned foods, dairy products, meat products, seafood, baked goods, snacks, cheese, spices and herbs, sauces, oils and vinegars, and various groceries.
Fresh vegetables include greens, tomatoes, cucumbers, asparagus, beets, carrots, mushrooms, potatoes, onions, corn, peppers, broccoli, cauliflower, celery, lettuce, zucchini, spinach, etc.
Fresh fruits include bananas, apples, cherries, peaches, oranges, grapes, melons, berries, lemons, plums, kiwis, pears, avocado, etc.
The availability of fresh fruits and vegetables depends on the season, however, Last Mile tries to strike beneficial deals with major companies that supply fresh fruits and vegetables imported from overseas.
Canned foods include canned fish, beans, corn, mixed fruit, mixed vegetables, beans, olives, pickles, soups, pasta sauce, etc.
Dairy products include milk, sour cream, butter, margarine, yoghurt, etc.
Meat products include beef, chicken, turkey, bacon, ham, pork, sausages, etc.
Seafood includes fish, shrimps, salmon, oysters, crab, etc.
Baked goods include bread, bagels, pastries, crackers, buns, rolls, cakes, donuts, cookies, croissants, etc.
Snacks include potato chips, dried fruits, candies, popcorns, etc.
Various groceries include coffee, tea, honey, cereal, ketchup, mayonnaise, peanut butter, etc.
Analyzing promotional strategies, a special promotional mix can be useful. Promotional mix comprises the following elements: Personal Selling, Sales Promotion, Public Relations, Direct Mail, Trade Fairs and Exhibitions, Advertising, and Sponsorship (Marketing Teacher, 2006).
In the case of Last Mile, there are three main pillars of effective promotion. Public Relations mean consistent and sustained action aimed at improving the relationship between the company and its public. It also includes maintaining good reputation and positive public image. Last Mile engages in both formal and informal Public Relations activities, i.e. conventional PR campaigns are supplemented with maintaining good reputation among its customers and encouraging them to spread a word about the shop.
Direct Mail is focused on reaching out to the customers who share a certain feature or quality. It’s a highly focused mail communication that is forwarded to the potentially interested customers. Last Mile occasionally sends leaflets with its new or discounted offerings to its loyal customers.
Advertising is a form of pre-paid communication with a view to increase awareness and formulate attitudes of the target audience. Last Mile cannot afford to have a huge advertising budget, yet some forms of advertising such as newspaper adds or billboards are an essential element of its marketing tactics.
Pricing policy is probably the most vital aspect of the business process. There are different pricing strategies, and the application of each strategy should rely on all other elements of the Marketing Mix. The basic pricing strategies include Premium Pricing, Penetration Pricing, Economy Pricing, Price Skimming, Psychological Pricing, Product Line Pricing, Optional Product Pricing, Captive Product Pricing, Product Bundle Pricing, Promotional Pricing, Geographical Pricing, and Value Pricing (Marketing Teacher, 2006).
Last Mile uses different pricing strategies for different products. However, its focus is on value pricing, i.e. helping customers save money without compromising quality. Sometimes Last Mile also employs psychological pricing that urges the customer to make decision on the basis of emotional rather than rational consideration. An example of effective Psychological Pricing is price list featuring 99 cents not one dollar (Marketing Teacher, 2006).
Last Mile is located in a busy district of Bangalore so it is easily accessible both by car and on foot. It is convenient for shoppers who prefer to buy products after work (since the majority of customers are over the age 30); it also provides an opportunity with social experiences like visiting a restaurant/café afterwards. Since Last Miles has been designed as a destination for everyday shopping, such a location gives it a competitive advantage over large chain retailers that are usually located at the outskirts.
Positioning can be defined as ‘how a product appears in relation to other products in the market’ (Tutor2u, 2007, para. 3). At present, Last Mile is positioned as a high-quality retailer with high prices. However, there is a need for a shift in Last Mile’s positioning strategy. Without compromising quality, Last Mile should aims to expand its customer base. Therefore, Last Mile should position itself as a store that offers high-quality products at reasonable prices. In addition, Last Mile should enhance its image as a provider of reliable and quality.
10.0. Last Mile’s Objectives
1. To increase the market share of Last Mile from 5 to 7 % by January 1, 2007.
2. To expand customer base by 15% by January 1, 2007.
3. To introduce sales of household items by January 1, 2007.
4. To generate positive publicity and enhance customer relations.
Objective 1 & 4
10.1. First Objective
To increase the market share of Last Mile from 5 to 7 % by January 1, 2007. In order to gain a tighter hold of the market, Last Mile should fight for the market share with its competitors. Increase in market share means not only greater sales but also better financial outlook and consumer trust.
1) To increase the range of products offered by the store;
2) To strike beneficial deals with local suppliers as well as major companies that import products from overseas.
Decrease prices by 3 % with a view to expanding customer base.
Make changes to the exterior and interior of the store in order to make it more appealing and improve the quality of customer’s shopping experience.
1) Increase advertising budget and market the brand more aggressively;
2) Develop a comprehensive direct mail scheme in the framework of customer loyalty program.
What is to be done
Study the range of products offered by competitors
Oct 15, 2007
Finding a market niche not taken up by competitors
Study the demand for products that is not yet satisfied by Last Mile
Oct 15, 2007
Balancing supply and demand of products
Increase the range of products offered
Oct 31, 2007
Significant increase in the range of offerings by the end of the year
Study what products are feasible to buy from local or overseas suppliers
Oct 15, 2007
Arrive at balanced decisions concerning potential suppliers
Start negotiations with local suppliers
Negotiations closed by Oct 31, 2007
Start negotiations with overseas importers
Negotiations closed by Oct 31, 2007
Reevaluate products & decrease prices
Decrease in the overall level of prices by mid-October
Employ effective pricing strategies like Value Pricing and Psychological Pricing
Increase sales and attract customers
Use Price Skimming strategy for the products that are offered exclusively by Last Mile
Compensate for the decrease in price
Conduct customer survey on the subject of their preferred store design
Oct 15, 2007
Greater awareness of customers’ preferences in design
Alter interior design
Oct 31, 2007
Better shopping experience for customers
Alter exterior design
Oct 31, 2007
More appealing exterior design
Allocate additional resources for advertising purposes
Opportunity for the PR department to elaborate and launch advertising campaign
Launch a brand-new advertising campaign
Nov 31, 2007
Increased brand awareness and expanded customer base
Send Direct Mail to loyal customers
Enhanced customer relations
It is of paramount importance to monitor the progress, since if there is a possibility of a failure to achieve strategic objectives, the company should carefully reconsider its goals and tactics. In order to monitor progress, it is necessary to compare planned performance with actual performance, and calculate variance, i.e. difference in the levels of planned and actual performance.
10.2. Second Objective
To expand customer base by 15% by January 1, 2007. 15% increase in the number of customers will generate considerable larger revenues. Therefore, Last Mile should carefully employ advertising strategies to attract new customers and introduce a customer loyalty program in order to retain existing ones.
Offer a wide range of products and ensure quality.
Elaborate a balanced pricing strategy to make products more affordable without compromising quality.
Attract shoppers’ attention with exterior design and offer creative and enjoyable interior design.
1) Reach out to new segments of population;
2) Develop a database of loyal customers;
3) Develop an effective feedback mechanisms;
4) Elaborate a comprehensive customer loyalty program.
What is to be done
Stage several Special Events like lotteries or contest
Nov 31, 2007
Attracting new customers and retaining existing ones
Introduce new products by presentations and tasting
On a case-by-case basis
Attracting new customers and increasing sales
Elaborate new advertising slogans
Nov 1, 2007
Attracting public attention
Develop a database of loyal customers
Nov 1, 2007
Providing a basis for customer loyalty programs
Elaborate customer loyalty program
Nov 15, 2007
Retaining existing customers
Launch a discount card for loyal customers
Nov 15, 2007
Ensuring customer loyalty
Provide special offers for loyal customers
On a case-by-case basis
Ensuring customer loyalty
Put a feedback box in the store and launch an online feedback mechanism
Nov 15, 2007
Improving customer care
Conduct customer survey
Nov 31, 2007
Improving customer care
Engage in customer after-care following expensive purchases
On a case-by-case basis
Reducing customers’ post-purchase cognitive dissonance
Introduce money-back guarantee
Sending a message of care and quality assurance
Engage in charity and community-oriented programs
On a case-by-case basis
Generating positive public image
Publicize the fact that the store buys from local suppliers
Enhance community relations and attract customers
Sell only environmentally-friendly and ‘clean’ products
Improve public image and attract environmentally conscious customers
Build a small kids playground
Nov 15, 2007
Provider better care for customers who shop with children
10.3. Third Objective
To introduce sales of household items by January 1, 2007.
Introduction of household items such as soaps, detergents, cleaning products etc.
Employing penetration pricing to motivate customer to switch from their usual destinations for household items shopping.
Organize a separate department in the store for household items.
1) Include information about new products into the general advertising strategy;
2) Introduce special offers and discounts for household items.
Retail companies like Last Mile should adopt effective supply chain management procedures. Supply chain management (SCM) is basically getting a product to shelf involves much behind-the-scenes work incorporating new manufacturing processes and technologies. With fierce competition among retailers like Food World and Big Bazaar, managing the supply chain is critical. In a recent survey conducted by Procter & Gamble, retailers on an average loose out on their sale by fort one percent of the time due to out-of-stocks. Customers will only tolerate an out of stock situation may be two or three times before they switch stores. Hence it’s important that Last Mile moves away from the traditional supply network into a supply chain management systems as it has numerous advantages. Last Mile should try to meet the consumer demands rather than maintaining an internally focused supply chain which they are currently following. It is very clear that the old axiom of warehousing does not work anymore because of increase in cost. One of the biggest advantages of opting for a SCM or consumer demand supply network is that inventory can be held in an incomplete state until there is actual customer demand.
Last Mile should also reposition itself as a company that offers high-quality products at affordable prices. Such positioning strategy will help the company to achieve its strategic objectives, namely increasing its market share, expanding customer base, introducing sales of household items, and generating positive publicity/enhancing customer relations.
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