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  1. 1. Royal Agencies Prepared by M.Karthik chinnaraja M.Sabarish kumar Gowtham Athithan Manoj kumar
  2. 2. HISTORY  The proprietor is K.Subramanium.  One of the un organized players in the market.  Perceived as South India’s largest retailer at the time of starting.  Started in 1965 in Nanjappa road  Started as multi storey building at that time  House and office needs, furniture items covering all the segments in the market.
  3. 3. LOCATION  Having two shops in Coimbatore ( one in Avinashi road and Nanjappa road).  Head Office is at Nanjappa road with 3 floors.  Branch office started in 1999 at Avinashi road  No of employees are 12 in both units in showroom
  4. 4. Location  Head office located in the mid of the city where the traffic of the customers is very high  Many Steel furniture Whole sale shops are located near by so that customers who are owning small shops looking for suppliers will prefer royal, which has more variety than other dealers  The branch office is located in Avinashi road covering the resident areas
  5. 5. Manufacturing facilities  There are three units for manufacturing  Each unit manufactures particular product category  Head office is owned building  Branch office is rental building
  6. 6. CUSTOMERS  Target all segments from below to above of the poverty line.  Targets both home, institutions and industrial users  Since the product range starts from Rs 500 and above It focus on all segments  Average daily footfall is 15 customers per day  Average buyers varies from 3-4. per day
  7. 7. Products  20 % items are from Nilkamal and supreme furniture in plastic items  70% items are private label manufactured by Royal agencies  10 % items are imported from china and Malaysia(wooden and luxury items)  Strictly followed policies includes no replacement and no exchange
  8. 8. Pricing  Follows multiple pricing strategy  Price vary for well known customers  Increase in government taxes are charged from customers along with the bill  Mark up’s vary from 10-15%(apart from discounts)
  9. 9. PRODUCT PROMOTIONS  Promotional activities are done in local exhibitions.  No other forms of advertisement are done  Standard price with nominal discounts throughout the year is their strategy
  10. 10. Store design and layout
  11. 11. Elements of store design parking location Royal agencies
  12. 12. Exterior design-products showing entrance. Straight front Larger Parking Area Entrance showing Products Window display. Where you can see the products from outside. Gardens which gives attractiveness
  13. 13. Exterior design Name boards for royal is provided by branded goods like Godrej and Supreme furniture
  14. 14. Safety measures Sand and water buckets present outside showroom Inside the shop water line with compressor is present near godown
  15. 15. Layout - free form layout
  16. 16. Space Planning In this store large number of space is allocated to wooden cots and beds 40% allocated to cots 25% allocated to sofas 5% for plastic furniture 5% for admin purpose 15% for dressing tables office tables 5% for bureau cupboards 5% for store room and other purpose
  17. 17. Interior design  Lighting is much important in furniture store.  White color light is used for display in order to provide accurate color of the goods  Floors are tiles. I.e. in light color. Which suits to the roof of the store.  Yellow color is painted in walls which is attractive  Large Mirrors are attached to the walls in the end of showroom in order to project there are more products in the showroom
  18. 18. Visual Merchandising FIXTURES Steel racks are provided by branded company Godrej for displaying their lockers. Only their branded items are allowed to display in that shelfs
  19. 19. Visual merchandising Products are arranged in a coordinated way Plano gram depends on the managing director and store manager Customers may see all the products irrespective of price
  20. 20. Problems Since all product categories are closely arranged the customer feels distracted Sometimes cluster of products becomes less attractive
  21. 21. Logistics and Supply chain
  22. 22. Supply Chain Flow Distributors Godown Displays Customer
  23. 23. Distributors  Distributors are located in Chennai who imports goods and distribute to various outlets  Each product category has different distributors  Nilkamal and supreme furniture agent comes to showroom and check for stock, based on store manager decision number of units are decided  Private label products are ordered immediately after each unit sale and sent for display
  24. 24. Stock keeping & Display  Each manufacturing units have plenty of place to stock goods     that are manufactured Based on availability of place stocks from other units are also stored Showroom in Avinashi road also have space for stocking goods All new models manufactured are immediately displayed Three manufacturing units goods are displayed in two showrooms only no catalogue provided
  25. 25. Delivery to Customers  Ordered goods are delivered to customers from godown stocks to avoid transportation costs  Plastic items and small items involving low cost are transported from showroom itself  If the product is not available Lead time depends on 15- 20 days for imported goods Lead time for private labels will be 1-10 days.
  26. 26. Logistics  Goods are transported through trucks . It is the responsibility of supplier in Chennai to bear the cost  Goods are delivered from showroom to customers through hired vehicles and the charge is collected from customers  Hired vehicles are booked on situational and on day basis  The company has three owned vehicle
  27. 27. Logistics contd..  No returns are accepted by dealers in Chennai  Damaged items are re worked and sold by royal itself  Damaged items from nilkamal and branded items ate taken by agents of the company itself during his next visit
  28. 28. Merchandising
  29. 29. Merchandise planning Demand analysis  Sales forecast- past year sales units + 10% -15% stock  Seasonal consideration- increase the stock during festivals  For office segment and commercial institutions mainly they increase the production volume units by the month of April, May and June.  Customers feedback and opinion  Competitors models
  30. 30. Budget consideration  They invest 15% extra amount in buying new models and design(imported and branded goods)  For Private labels budget is allocated during each month end thereby avoiding less stock  In private labels they invest much less in new models
  31. 31. Types of Merchandise Products Type of Merchandise Plastic Chairs , Steel tables office tables Steady demand Wooden sofas ,cots , cupboards lockers Seasonal -festivals
  32. 32. Merchandise hierarchy Royal agencies Office furnitures Cupboards Chairs Tables Home furnitures Lockers Sofas Tables Sofas Chairs Cots Wardrobe
  33. 33. Merchandise hierarchy contd… Royal wooden Imported Office chairs Royal plastics Supreme nilkamal
  34. 34. Key components of merchandise plan  Planned markdowns are not done in Royal  If the product quality is bad in imported goods they are not returned back  The defect goods are sent to manufacturing unit and it is corrected and sold  Employee discounts are given in Royal. The margin is very low for employees, some case they don’t collect margins from employees
  35. 35. Contd..  Imported goods are ordered once in 3 months mostly  Some times distributor calls Royal when the stock has arrived     from China and Malaysia The models are selected by Managing director and the quantity of the product is decided by him Regarding private labels inventories are checked at the end of the month During festival season inventory is checked weekly For branded items at end of every months company agents come and take order
  36. 36. Assortment planning  This is done by the store manager of two branches  Model stock plan is prepared and shown to managing director and shown for approval  Number of units to be purchased are decided by managing director
  37. 37. Merchandise procurement  Royal has a list of standard dealers and distributors in Chennai  They evaluate the suppliers by the years of experience in business  They avoid new suppliers who are unknown  Raw materials for private labels are procured as whole sale in various parts of Chennai, Coimbatore
  38. 38. Negotiations  Payment terms are negotiated during managing director visit  Advance is given initially  Remaining amount is paid within 15- 20 days after the delivery of goods  Amount is paid in two or three installments sometimes
  39. 39. Private label  Royal agencies has 70% of its product as private label  It sells its product in many outlets across Tamil nadu  The difference between price of branded and Royal product is 25%  They make their own product through their own units