NODWIN CONSULTANTS

A Study on the proposed venue for

the new Colour Factory

Relocation Venue selection and Strategies

By-

Ashwin Shrivastava & Samantha Karandagoda

2010

NODWIN CONSULTANTS PVT LTD. SUITE 1004 , IVORY COURT 1 , ESSEL TOWERS ,
MG ROAD , GURGAON , HARYANA.
Content

Introduction………………………………………………………………………………………3

Our Understanding of the issue………………………………………………………………..4

Our Approach to solving the issue……………………………………………………………..4

Location
Mapping…………………………………………………………………………………………..6

Our findings………………………………………………………………………………………7

Strategies………………………………………………………………………………………....20

Recommendation………………………………………………………………………………...21

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Introduction
This report aims at solving the dilemma to choose between 2 locations for the new colour
factory store. It makes a recommendation as to which location to choose out of the two and
why. It incorporates various survey findings and suggestions.

It also aims to give strategies to be adopted by the firm when it decides to shift to DLF
keeping in mind the nature of retail industry, consumer behavior and an industry analysis.

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Our understanding of the issue:
As per the conversation with Megha and after analysis of the documents it is clear that TCF
Chandigarh is facing a lot of issues.

The sales have been on a declining trend. There is a supply chain issue being faced by the
store. More so there are very few repeat customers.

Since the store is not breaking even, there is a possibility to relocate the store to DLF as per
the agreement with them.

Two locations have been identified as the possible and feasible locations for the new set up
to be.

If either of the location is chosen, the whats, the ifs, the whys and the how’s still need to be
answered.

Our Approach to solving the issues so faced –

The assumption here is that TCF Chandigarh will shift to DLF Promenade. Keeping this in
mind what we have done is to try and look at the issue from all angles and adopted a step
by step approach to come to a solution.

1. Factor Rating Method – We have used this method to assign factors which
contribute to a locations success and evaluated both the locations on these factors.

2. Footfall Mapping – Then we basically tried to map the footfalls in both the locations
and at a prominent place in the mall to confirm our findings from step 1

3. Face to face structured interview – Subsequently we tried to speak to the shop

keepers/ store keepers in and around the proposed locations to know the ground
reality i.e. whether is it really worthwhile to go there or not?

4. Area Mapping – After getting to know how other stores around the locations are
doing and feeling, we mapped the locations according to the stores around them and
then evaluate them on the basis of complementary stores, competitor stores, neutral
stores and cannibalizing stores.

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5. SWOT Analysis - To add more value to the above steps we decided to do a SWOT
analysis for both the locations and try to find the strengths that we can capitalize on ,
the opportunities that we can tap , the threats we need to be aware of and the
weaknesses we should try and overcome.

6. Porter’s 5 forces analysis – This activity was carried out to get to know from an
industry perspective and get to know about the competition we will face.

7. Ansoffs Matrix – Talks about various business options TCF will have once it decides
to venture into the new market of DLF.

8. Strategies “Way Forward “- This is our suggestion of the options TCF has boost up
its sale and capture a wider audience.

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Location Mapping -

The first assignment was to choose between 2 locations at DLF Promenade; Vasant
Kunj.The locations are highlighted below as Location 1 and Location 2. For convenience
sake we have written the names of the landmark around the area. Location 1 near Kool Kidz
and Location 2 near Mother care.

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Our Findings:
1. Factor rating Method-

• Developed a list of relevant factors called the critical success factors.

• Assigned a weight to each factor
• Developed a Scale for each factor
• Multiplied scale by weights for each factor for each Location
• Recommended the location with the highest point Score.

Location 1
Location (Weighted Location 2
Factors Weight Location 1 2 Score) (Weighted Score)
Footfalls 30 30 70 900 2100
Visibility 30 20 80 600 2400
Accessibility 20 60 60 1200 1200
Complementary
Products/stores 10 10 80 100 800
Open Area 20 20 80 400 1600
Competitors -10 60 70 -600 -700
2600 7400

In our case we found out location 2 to be much more superior to location 1 as far as Critical
Success Factors are concerned.

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2. Analysis of Footfall around each of the locations and also at
the food court –
Gender -Females
Area Time Age Group No’s
Location 2 2:30 - 3:30 Pm 1-10 9
10-20 5
20-30 44
30-40 20
40-50 18
50-60 12
60+ 1

Food Court 3:30 - 4:30 Pm 1-10 0

10-20 5
20-30 19
30-40 11
40-50 9
50-60 9
60+ 8

Location 1 4:30 - 5:30 Pm 1-10 2

10-20 2
20-30 13
30-40 4
40-50 3
50-60 1
60+ 1

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Gender -Males
Area Time Age Group No.s
Location 2 2:30 - 3:30 Pm 1-10 9
10-20 11
20-30 55
30-40 20
40-50 19
50-60 8
60+ 9

Food Court 3:30 - 4:30 Pm 1-10 1

10-20 8
20-30 42
30-40 13
40-50 8
50-60 2
60+ 8

Location 1 4:30 - 5:30 Pm 1-10 5

10-20 2
20-30 15
30-40 8
40-50 6
50-60 3
60+ 3

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This was done on 22nd February 2010. We also observed the pattern on Tuesday,
Wednesday, Saturday and Sunday. The observation on other days indicated the following –

• School Children visit the mall on weekdays between 11 to 1 Pm from school and
hang at the food court and a lot of them visit the Archie’s store as well.

• Birthday parties are organized at the food court for pre school kids and kids between
5-8 years of age.

• Presence of Event coordinators / event managers to organize the birthday parties.

• Some or the other promotion is always going on. On Sunday, Red bull organized a
promotional event. HT City is also doing a promotional event to build a database.
Honda is promoting its new car – Jazz. There was also a food show (street foods of
India by HT) and arts show organized on Sunday.

• The majority of people visiting the mall are in the age group 20-30.

• The majority of people purchasing from the stores are females.

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 3. Face to face structured interview with the Shop keepers –

We wanted to know how the other shops and the stores faring at the mall. To get to
know this, we conducted a face to face structured interview with the shopkeepers in
order to know get an answer to the questions helpful for the research.

For this purpose we chose a sample size of 20. The following stores were studied in
this experiment –

S.Oliver , Aldo , CK , FCUK , Kool Kidz , Booster Juice , Archie’s , Reebok , Mother
care , Orra , Lilliput , Gelato , Costa Coffee , Cinnabon , Adidas , Mango , Alcott ,
L’Occitane , DKNY Jeans , Promod.

The observations are recorded below.

Question 1 – What is the range of footfalls in your store on weekdays and on

weekends?

Answer -

Footfalls Footfalls
during during
weekdays No.s weekends No.s

0-200 20 0-200 17
200-400 0 200-400 3
400-600 0 400-600 0
600 - 800 0 600 - 800 0
800 -1000 0 800 -1000 0

200-400 during weekends in the following stores – Mother care, Archie’s, Cinnabon.

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 Footfall on weekdays Footfall on Weekends
25
20 20
15 15
10 10
5
5
0
0

Series1 Series1

Question 2 – What is the Average amount spent by the customer at your store?

Answer –

Average
Amount
Spent by a
customer No.s

0-200 3
200-400 2
400-600 0
600-800 0
1000-2000 2
2000+ 13
0-200 for Archie’s, Costa coffee, Kool kids.

200-400 for Booster Juice and gelato.

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 Average Spent
14
12
10
8
6
4
2
0

Series1

The average spent at the mall is quite high which can be observed seeing the above
graph. This owes to the fact that the mall is in an affluent neighborhood, the brands
are expensive. However these are just one store sales figure so this study neglects
people with multiple purchases and also the amount spent by the people at the food
court and multiplex.

Question 3 – Are you happy with your sales?

Answer - 75% of the store keepers were not happy with their current level of sales
whereas 25 % were happy with their level of sales. However the 75% said that they
are expecting the sales to increase post tax paying season( as year end tax
deductions are nearby) as the sales are increasing.

Question 4 – Have you achieved break-even? If yes- How long does it take?

Answer – This answer to this question was mostly no. This was because of the fact
that a lot of stores were new; the store managers didn’t have too much knowledge
on the investments made by the owner. Those who had an idea responded by
saying that it takes 6-7 months to recover the investment.

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The end point of the study was that all the shop keepers were happy with an
increase in footfalls; they were looking forward to a post tax period and were not
disappointed with the response the mall is getting.

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4. Area Mapping –
We also considered the fact that shops in and around the area also affected whether
people come to the store or not or governs to some extent the kind of people who come
to the store. That is why we chose to do an area mapping where we took into
consideration the shops around the proposed location

Location 1 has the following stores around it:-

• La Senza ( Will Not Cannibalize but can be a negative)

• French Connection ( Neutral)

• Kool Kidz ( Competitor)

• Aldo (Neutral)

• S Oliver (Neutral)

• Calvin Klein (Neutral)

• Bambiola ( Complementary)

Location 2 has the following stores around it:-

• Mother Care ( Complementary)

• Kids Camp ( Competitor)

• Orra ( Complementary)

• Alcott ( Neutral)

• Satya Paul (Neutral)

• W ( Neutral)

When compared on the basis of the location of stores around proposed spaces: location
2 scores above the location 1 as it has more empty space around it , a lot of promotions
also happen around location 2. The brands around this location command more footfalls.
More so its visibility and accessibility is more favorable than Location 1.
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5. SWOT Analysis

We did a SWOT analysis for both the locations and the results are given below.
Location 1 –

Strengths Weaknesses
• Location close to the • Wash rooms nearby
entrance • Poor visibility
• Quiet Area • Pub above (TGIF)
• Direct Access from Parking • Less Area for acivities
• La senza near by ( can be a
cultural issue)

Opportunities Threats
• Kool Kids not doing too • Shops above empty-
well Threat of new entrants.
• Can cannibalise Archies • Poor Accessibilty
sales • Kool kidz - if its sales pick
up.

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Location 2 -
Strengths
• Visibility very strong
• Quick Access
• Well Connected
• Shops around doing are
complementary and do good
business
• Lot of eateries near by
Opportunities
• Complementary store near
by - Mother care
• cannibalise Archies Mug Sale
• F&B - Strong Preesnce
Weaknesses
• Promotions can eat up sales
• far off as comapared to
location 1
• Escalators hide the view
Threats
• Kids kamp
• Promotions attracting kids
• New Indoor amusement park
opening in the neighbouring
mall
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6. Porters 5 forces Analysis

Competitive rivalry within the industry –

None in the do it yourself pottery business
Archie’s For Mugs
Play areas like Kool Kidz for children areas
Gift stores, Home Décor Stores among the few which can compete with the product.

Bargaining Power of Suppliers –
Supply Chain issues
Raw Material and kilning issues

Bargaining Power of Customers –
Switching capabilities of customers
Demand for new items as bisque and raw materials.
Looking for more exciting ambience and atmosphere.

Threat of new entrants
Lot of empty shop spaces
Personalized T shirts & mug stores like giggles.
New Mall coming up with indoor entertainment park

Threat of Substitutes
Cinemas as way of spending time
Mocha art house and other eateries
Kool Kidz
Summer Camps/ winter camps/Kids activity zones
Personalized / do it yourself different offerings.

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7. Ansoffs Matrix:

Based on this Matrix we can explore different solutions –

Market Penetration – By cannibalizing Archie’s sales. By giving more options i.e. adding
more items to the inventory and having a responsive supply chain.

Product Development – Paint you own T-shirts, Make your own Picture frames, gift cards.

Market Development – CSR, Kitty Parties, Mentor-Protégée Sessions

Diversification - Do it yourself gifts, not restricting to pottery.

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 Strategies Suggested for the Colour Factory to be opened at
DLF Promenade

Do a Pilot Run at the promotional space at the atrium. This is to first of all get a
database of the people residing nearby. Also it will help to gauge the consumer
response.

Use the pilot run to give the people a taste of what is in store for them and utilize it
to their strength later

A strategy of Get the girls and the guys will follow. Have lots to offer to satisfy the
demands of this segment

Use TCF as a personalized gift statement – People will count their closed ones by
the number of personalized gifts they have.

A must gift for the loved ones.

My Home, My Space, My décor’ the TCF way – tapping the housewife segment.

Tie up with event managers

To market itself n such a way that people see it as value for money with a play
area for kids along with a tangible return and a skill addition as well.

Make visibility very strong and to tap the school kids market making them want to
possess products from the colour factory.

Have a TCF Catalog with all possible inventory items and the finished product
pictures.

Mural, Hand prints of the walls.

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Recommendation –

Our recommendation would be to shift the store to DLF Promenade.

Location – The better location would be location 2 ( We have an assumption that

both the places will have the same rental , ceteris paribus)

Strategies have been mentioned above but we strongly recommend a pilot study,
which should also help in building a database.
We also suggest the move to a responsive supply chain strategy where
TCFresponds to customer needs leading to retention of customers and as a goodwill
measure.

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