BAN240-CASE ANALYSIS(GROUP3)

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Feb 20, 2024

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GROUP MEMBERS NAME: 1. PRERANA PANDIT 2. RIYA NANNETI 3. SUMAN GURUNG 4. SURABHI SANGAR 5. SHUBHAM JETHWA CASE NAME: “ COOLFRIDGE INDIA: RETAIL NETWORK EXPANSION IN RURAL MARKETS ” IDENTIFICATION OF PROBLEM: Sustaining the growth and distribution of retailers in rural markets of India. DECISION CRITERIA : 1. Whether there is market potential of their products in the rural region or not. It may be assessed by analyzing the size and need of public, public income, public behaviour, weather, and other factors of that region. 2. Whether there is potential return on investment (ROI) in rural markets of India or not. It may be examined by a complete financial analysis of the project. 3. Whether there is necessary infrastructures such as transportation, electricity in the rural region or not. 4. Whether there is any other competitor who has bigger market share in the rural region or not. It may assist CIL to make better decisions in expanding retailers in rural areas of India.

ANALYSIS : 1. The sales performance of Bihar State was satisfactory. However, it should not be the sole indicator that the retail expansion project in rural markets across India will be satisfactory as well. 2. Government policies and legislation affects businesses’ plans and actions. It is illustrated by ‘Make in India’ policy initiated by Government of India which encouraged CIL to take tax advantages by increasing its production capacity in India. 3. CoolFridge was an established brand in India while it followed the same basic distribution structure since 1977. Therefore, the structure is either well structured and smooth or, the company have not found any other better structure than this. 4. Customer behaviour and social relationships between retailers and customers in these rural areas is significant. The purchasing of the products and payments seems very flexible in the case

ALTERNATIVES:

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Based on alternatives, there are various factors that could be considered which can be clearly depicted from the case study which are explained below. To reach remote regions, CoolFridge can think about deploying mobile retail units. These mobile refrigeration machines might visit various settlements and provide isolated populations with access to perishable foods. In rural locations, CoolFridge may forge alliances with already-established neighborhood stores. The network and client base that CoolFridge already has allow it to swiftly grow and introduce its goods through these well-established channels. The possibility of establishing a web presence or collaborating with current e-commerce platforms might be investigated by CoolFridge. Customers in remote locations would be able to purchase things online and have them delivered right to their door thanks to this. CoolFridge could think about using a micro-franchise model, in which local business owners in rural regions are given the assistance, tools, and training they need to open and run CoolFridge retail stores. This strategy can support small enterprises while quickly growing the retail network. CoolFridge could look into collaborations with governmental agencies or programs that aim to increase rural residents' access to necessities. This can entail taking part in government initiatives or utilizing existing distribution and infrastructure networks to reach far-flung areas. Cost, viability, scalability, and alignment with CoolFridge's overarching company plan should all be taken into consideration while evaluating these possibilities. To identify the best options for CoolFridge India's retail network development in rural regions, it is crucial to undertake a thorough research of the case study . DECISIONS/RECOMMENDATIONS: The best practices in retail network expansion, there are some potential decisions and recommendations

IMPLEMENTATION Talking about the implementation cycle through out the case study for a retail network expansion in rural markets, we can consider the steps which are as depicted below: 1. Complete Market Research: To comprehend the demands, tastes, and purchasing power of the rural population, complete market research. Determine the target market categories, the competitors, and the demand trends in the rural marketplaces. 2. Network planning and infrastructure development: Assess the rural areas' current infrastructure, which includes power supplies, storage facilities, and transportation. Identify the infrastructure upgrades and investments needed to support the growth. This can entail opening brand-new stores or forming alliances with already-established neighbourhood merchants. 3. Development of an effective distribution and supply chain strategy is necessary to guarantee prompt product delivery to rural regions. Think about establishing distribution hubs in key access locations or collaborating with regional distributors. 4. Pricing and Product Selection: Tailor the product selection to the unique requirements and tastes of rural consumers. Offering necessities, perishable things, or goods with a local focus can fall under this category. Establish pricing policies that are reasonable and competitive for the rural market while preserving profitability. 5. Retail Outlet Setup and Management: Based on consumer demand and accessibility, choose the best locations for retail outlets in rural regions. Create retail locations with appropriate shop designs and layouts, making sure there are adequate refrigeration facilities and eye-catching displays. To efficiently maintain shop operations and deliver exceptional customer service, train and supervise retail workers. 6. Develop focused marketing and advertising initiatives to raise awareness and spur demand in rural areas. To effectively reach the rural population, use local media, community involvement, and word-of-mouth marketing. Connect with rural customers through utilising digital platforms, mobile marketing, and social media. 7. Monitoring and Evaluation: To keep track of the success of the retail network growth, establish a reliable monitoring and evaluation system. Key performance indicators (KPIs) including sales, client happiness, and profitability should be routinely monitored. To find the data's advantages, disadvantages, and areas for improvement, do an analysis. 8. Continuous Improvement: Based on input from the market and shifting circumstances, continuously evaluate and improve the implementation plan. Maintain adaptability and flexibility to adjust the retail network development strategy as necessary.

Q&A a) What factors influenced the start-up of CoolFridge? Should the entrepreneurs have considered other factors? There are various factors which influenced the startup of Coolfridge in India. Some of the factors are: 1. Make In India: They increased its production capacity as they got the tax advantages which was the policy by the Indian government to set up the manufacturing plant. Make in India is introduced by the government to increase the domestic manufacturing and promote foreign investment which will increase employment opportunities and will contribute to increase in development of the country. 2. Competitive Pricing: Coolfridge is very properly marketed and serves their customer with good quality of the products which is suitable for the hot Indian summer and had a 10% price premium over the nearest competition. In each product category, the company had regularly been among the top three selling brands. 3. Product quality and brand reputation: As Coolfridge India Limited is the subsidiary of Coolfridge Corporation which is an established and popular brand in rural India. Has a very good sales operations all over in India. It is in the top 3 among two different product categories. So, this influenced them to start up. 4. Distribution Network: The Parent company already had a good distribution network across the country and because of this it was very easy for the CIL to setup its operations without doing many efforts and time. 5. Increasing demand: Rural markets are facing economic growth because of that the demand for refrigerators is increasing. As a result, the primary sales-growth prospects for refrigerator marketers were establishing merchants in regions where there were no refrigerator outlets and investing in marketing campaigns to generate demand in such embryonic markets. These marketplaces were often located in small towns that served as feeder markets for surrounding villages and smaller towns. Yes, entrepreneurs should have considered other factors also like: 1. Market Research: Coolfridge could have done research in all the target market areas before starting CIL by that they could have got to know what the consumer’s need and expectations for refrigerators like pricing and consumer preferences. And accordingly, could have launched the startup and targeted the areas of high demand. 2. Financing and funding: As we can see they faced the issue in credit limit in 2 different stores Details of Rajendra Coolfridge and Details of Bombay Variety Store. So, they could have seen different options of funding before starting the startup like Bootstrapping, loans, venture money, and partnerships.

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b) What lessons can be learned from rural markets network expansion experiences? 1. Localization of Products: To meet the unique demands and tastes of rural consumers, CoolFridge should think about localizing its product lineup. To meet the needs and financial capabilities of rural households, refrigeration product size, features, and pricing may need to be adjusted. 2. Focus on Last-Mile Distribution: CoolFridge should provide special attention to building an effective last-mile distribution network, given the difficulties with infrastructure and logistics in rural areas. To do this, local partners must be found, transportation routes must be made as efficient as possible, and timely and dependable product availability in remote areas must be guaranteed. 3. Building Local Relationships and Trust: CoolFridge should make an effort to establish credibility and trust in rural areas. Building trusting relationships with key local players including civic leaders, opinion leaders, and government officials will help you do this. Building trust and improving brand reputation can be facilitated by taking part in community projects and showcasing a dedication to the welfare of the neighbourhood. 4. Promoting Product Benefits and Education: CoolFridge should concentrate on promoting the advantages of their refrigeration products and educating consumers about how these items can improve their everyday life since rural consumers may have little exposure to contemporary retail concepts and products. This can be accomplished by running awareness campaigns, showing off products, and creating educational materials specifically for rural audiences. 5. Affordable Pricing and Financing Options: For rural consumers, affordability is a key consideration. Consider offering competitive and reasonable prices for CoolFridge's products. Additionally, by looking into financing alternatives like installment plans or collaborations with microfinance institutions, businesses can increase the accessibility of their products to rural consumers with low incomes.

c) What challenges does CoolFridge continue to face in its startup phase? - CoolFridge planned to have at least one retailer in every market where the population is more than 100K people in India. - They initiated the sales headquarters in Patna, Bihar and got tremendous results in the financial Year 2021-2022. - However, their sales manager was worried that the current marketing strategy won’t remain successful in the long run. - Typically, he saw some uncertainty in their newly assigned retailers and the distributors. - He analyzed that some of their distributors were crossed from their trading limit, and some were not able to reach the predicted trading targets. - Therefore, this trend might not be beneficial for CoolFridge in the future times. - In addition, the company only sold its products to distributors, who then provided them to retailers following the company's rules. - This arrangement allowed the company's sales officers to focus on expanding the market, while the distributors took care of tasks like sales, collecting payments, delivering products, and monitoring retailers. - Due to limited opportunities, most refrigerator companies were unable to have retailers in all potential markets. - To overcome this challenge, these companies attempted to appoint retailers in nearby potential markets where no other retailer was present. This strategy aimed to make the appointed retailer financially viable. - But somehow, their recently appointed retailers didn’t meet the sales target which likely to windup their business with the company. - These sorts of the problems were faced by Coolfridge company in their startup period.

BAN240-CASE ANALYSIS(GROUP3)

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