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Introduction to the Company

This report is about our visit to the Aundh branch of DMart where we studied various aspects
of this Hypermart such as product portfolio, presentation, pricing strategy, promotional offers
and ambience. We also interacted with few employees so as to analyse their behavioural and
functional aspects.

DMart is a one-stop
supermarket chain that aims to
offer customers a wide range of
basic home and personal products under one roof. Each DMart store stocks home utility
products - including food, toiletries, beauty products, garments, kitchenware, bed and bath
linen, home appliances and more - available at competitive prices that Its customers appreciate.
Its core objective is to offer customers good products at great value.

DMart was started by Mr. Radhakishan Damani and his family to address the growing
needs of the Indian family. From the launch of its first store in Powai in 2002, DMart today
has a well-established presence in 158 locations across Maharashtra, Gujarat, Andhra Pradesh,
Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and
Rajasthan. With Its mission to be the lowest priced retailer in the regions It operate, its business
continues to grow with new locations planned in more cities.

The supermarket chain of DMart stores is owned and operated by Avenue Supermarts
Ltd. (ASL). The company has its headquarters in Mumbai. The brands D Mart, D Mart
Minimax, D Mart Premia, D Homes, Dutch Harbour, etc. are brands owned by ASL. DMart is
owned and operated by Avenue Supermarts Ltd. (ASL) – a company founded by Mr.
Radhakishan Damani. Mr. Radhakishan Damani is respected in the business world as an astute
investor in the Indian equity market, he has built a company that constantly strives towards
developing a deep understanding of customer needs and satisfying them with the right products.
A firm believer in core business fundamentals and strong ethical values, Mr. Damani has built
DMart into an efficient, large and profitable retail chain that is highly respected by customers,
partners and employees alike. After the IPO listing, it made a record opening on the market on
NSE. After the close of the stock on 22 March 2017 'Avenue Supermarts Limited' the market
value it became of Rs 39,988 crore, which is remarkable and recorded itself the 65th most
valuable Indian firm ahead of Britannia Industries, Marico and Bank of Baroda. As of 16
September 2017 the market capitalization of D Mart is close to ₹67,000 crore (i.e.) above
US$10 Billion. (Kamath, 2018)

Product Analysis

Presentation of the products in the store

As we enter the hyper-mart we saw big shelves containing all the items which were sorted
according to the category. Heavy items in a particular category were kept at the lowermost
shelf and approximately it can be said that the size of product reduced gradually as we moved
upward from the lower shelf. Apart from the product, the shelves contained price tags and
promotional offers. There were no mannequins or window displays as such. However, products
with high discounts were kept at the centre of aisle in cuboidal arrangement.

Product Categories

The Product categories that DMart deals with are as follows

Grocery & Staples Dairy & Frozen Footwear Home Appliances

Daily Essentials Fruits & Vegetables Crockery Kid’s Apparels

Home & Personal Care Bed & Bath Toys & Games Ladies Garments

DMart Brands Luggage Plastic Containers Apparel for Men

All the products inside the Hypermart were strategically placed. Categories such as Grocery
&Staples, Dairy & Frozen, Daily Essentials, Home & Personal Care, Fruits & Vegetables and
some of the DMart brands that belong to the above categories were placed at the ground floor

Categories such as Footwear, Apparels for Men, Women and Kids, etc. were kept on the first
floor. Categories such as Bed & Bath, Crockery, Plastic Containers, Toys & Games, Luggage,
Home Appliances etc. were kept on the second floor. Given below is an approximate depiction
of each floor and how it was strategically divided into categories to keep products.
Vegetables & Fruits
Ground Floor
1st Floor
While deciding the location of each category DMart has cleverly applied the following
strategies

1. Put the most consumable products at the back of the store

This will force customers to walk past all the prime merchandising areas on their way to pick
up milk, toilet paper, or bread. You’ll find that customers will always pick up an extra item or
two that they forgot about or didn’t realize they needed along the way.

2. Line the path to the back of the store with high margin items

Place high mark-up items and floor displays, like the one below, along the way to those high
volume items in the back of your store.

3. Put general merchandise and groceries on separate sides of the store

It allows customers to become familiar with where products are located in your store, and keeps
things looking consistent. You might consider organizing your store into departments and
categories so that customers can become familiar with where to find product in your store. We
can see this in the layout

4. Never place high theft items at the back of your store

The back of your store is typically the easiest location for theft to occur because it’s the most
concealed part of your store. Keep high theft items like cosmetics and hair accessories stocked
near cash registers and areas that are easily viewed from multiple points of your store. Also,
make sure you have a clear view to the back of the store or security cameras. In this case items
such as chocolates, cells etc.

5. Categorize your products by aisles or groups of aisles, meaning you should have departments
throughout your store for a consistent look and feel.

a) Place high margin items at the front of your store. These include things like: Sunglasses
displays, Back to school items, Sodas and candy bars, Batteries and small electronics

b) Place consumables and everyday goods at the back of your store. Everyone needs paper
towels, toilet paper, and Ziploc bags. Placing these high volume items at the back of your store
allows customers to eye other products as they walk to the back, giving you a better chance to
get extra sales.
c) Place seasonal items on the ends of interior aisles and also to the right side of your store. Try
to mix or “cross merchandise” multiple high margin and seasonal items together like in the
picture below, to maximize sales.

Location of Private Labels

In general, all the private labels were kept adjacent to the most selling brand in the category.
For example, DMart’s Chilli powder and similar spices were placed just adjacent to MDH
spices. Similar was the case with the Private Label items in other categories such as Bed &
Bath, Home & Personal Care, Apparels, etc.

Pricing Method

The firm is best known for its “everyday low cost, everyday low price” strategy, allowing it to
extend near-permanent discounts to customers on a daily basis. This helps it to churn inventory
quickly and aids profitability. Factory manufactures soaps in Batches. Then, Stockists bulk
break them into dozens, Wholesaler and retailer to packets and at last consumer buys 2 -3
packs. Stockists buy really huge quantities, hence they have bargaining power.

For ex: A Soap priced at Rs.40 will be sold at Rs 35 to Stockist, in turn stockist sells it to 37 to
wholesaler, by the time it reaches consumer it will be sold at MRP 40 or 39.50.

We also observed a few particular items that were being sold at a price remarkably
lower than the MRP e.g. A Nivea Men deodorant of MRP 299 was being sold at 139 Rs. This
all is possible because of elimination of middlemen by DMart

DMart has 110 Stores spread across Indian Cities, DMart buys products for its whole
110 stores, the sales channel is almost direct now, DMart does not need many warehouses,
Inventory is at its store and consumer picks it up, Inventory turnover is optimal which cuts
down the storage costs. With its direct bulk purchase DMart has eliminated middleman and the
commission is passed as discounts to consumers. Well, if you think all products are cheap in
DMart then you are wrong. FMCG products are used as anchor to sell its high margin products
like Toys, Fruits & Vegetables, Grocery & Staples, Crockery & Plastic Containers. Moreover,
DMart has its own branded products in Grocery, Home & Personal Care section which has
high margins.

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