Introduction about Tata Croma 

:-
Tata Croma is the India's first national, large format, retail chain for consumer electronics and
durables.Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons.
Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing facilities
from its global network.

Brand Philosophy

 If service wasn't important.

 If technology wasn't complex.
 If variety wasn't confusing.
 We would have no reason to be in business.
 We help you buy.

At Croma, shoppers are offered one of widest ranges of products and brands in consumer electronics and
durables and a shopping experience that's truly world-class. Shoppers can choose from a number of
products across eight categories which are

1.Own brand of Tata Croma       2.Computer     3. Home Entertainment    4.Communication

5.Large Appliances    6.Small Appliances    7.Gaming     8. Imaging

Apart from that Croma, plans to launch new products in niche categories such as jewellery cleaners,
renegotiate rentals with owners and increase its presence in metros to boost revenues.

The chain is planning to launch 10 to 15 new products in smaller home appliances and specialized
wellness products and expand the current private label portfolio under the ‘Croma’ brand. 

Reason for selecting Tata Croma :-

Currently, India’s consumer durable market is estimated at Rs 32,000 crore. There is growing interest for
new age products such as LCD-TVs and DVD players. Meanwhile, the penetration of the basic, largest
dollar items such as ovens, washing machines and refrigerators is also increasing. India too, has
witnessed a similar phenomenon, with the urban consumer durables market growing at almost 10
%p.a., andthe rural durables market growing at 25% p.a. 

Tata Croma is a dominating player in this space. These retail chain are seeing sales growth of 15%
month-on-month. The company’s turnover is around Rs 1,000 crores. To make their presence in all over
India Tata Croma has announced to open 100 croma stores within three years including 22 stores in the
current financial year. This expansion plan is exclusively for the Class II and III towns. As Ranchi
comes in the Class II towns & devoid of such type of Electronic retail chain, so we can plan to open the
store in Ranchi.
About consumer durable goods industry
Durable goods are those which don’t wear out quickly, yielding utility over time rather than at
once. Examples of consumer durable goods include electronic equipment, home furnishings and
fixtures, photographic equipment, leisure equipment and kitchen appliances. They can be further
classified as either white goods, such as refrigerators, washing machines and air conditioners or
brown goods such as blenders, cooking ranges and microwaves or consumer electronics such as
televisions and DVD players. Such big-ticket items typically continue to be serviceable for three
years at least and are characterized by long inter-purchase times.

Performance

In the past 10 years, the global market has witnessed a surge in demand as economies such as
Brazil, Mexico, India and China have opened up and begun rapid development, welcoming
globalization with élan. The consumer durables industry has always exhibited impressive growth
despite strong competition and constant price cutting, and the first contraction since the 2001
dot-com bust has been due to the global recession. Given the strong correlation between demand
for durables (both new and replacements) and income, the industry naturally suffered during the
2008-2009 period. However, projections for current year going forward are very optimistic, as
consumers resume spending, and producers launch new enticing variants to grab new customers.
Leading players include Sony Corporation, Toshiba Corporation, Whirlpool Corporation and
Panasonic Corporation.

Developing countries such as India and China have largely been shielded from the backlash of
the recession, as consumers continued to buy basic appliances. In fact, China has been ranked the
second-biggest market in the world for consumer electronics. Despite the recession, their strong
domestic economy and growing high-income population have buoyed demand leading to
aggressive market growth.

There is growing interest for new age products such as LCD-TVs and DVD players.
Meanwhile, the penetration of the basic, largest dollar items such as ovens, washing
machines and refrigerators is also increasing. India too, has witnessed a similar
phenomenon, with the urban consumer durables market growing at almost 10 %p.a., and
the rural durables market growing at 25% p.a. Some high-growth categories within this
segment include mobile phones, TVs and music systems.

The Indian consumer durables industry has witnessed a considerable change in the past couple of
years. Changing lifestyle, higher disposable income coupled with greater affordability and a
surge in advertising has been instrumental in bringing about a sea change in the consumer
behavior pattern. Apart from steady income gains, consumer financing and hire-purchase
schemes have become a major driver in the consumer durables industry.

In the case of more expensive consumer goods, such as refrigerators, washing machines, color
televisions and personal computers, retailers are joining forces with banks and finance
companies to market their goods more aggressively. In addition, change in policy, such as the
WTO FTA in 2005 resulted in zero customs duty on imports of all telecom equipment, thereby
improving the pricing and affordability of imported goods.

Challenges

The biggest threats to the local industry going forward are supply-related issues pertaining to
distribution and infrastructure, as well as demand issues due to competition from imported
goods. The lack of well developed distribution networks makes it especially challenging to
penetrate the fastest growing rural areas economically. In addition, regular power cuts and poor
road linkages make systematic production, assembly and delivery problematic.

On the demand side, customers have increasing choice from both domestically produced and
imported goods, with similar features. This homogeneity makes it difficult for players to remain
ahead of the competition.

MNCs hold an edge over their Indian counterparts in terms of superior technology combined
with a steady flow of capital, while domestic companies compete on the basis of their well-
acknowledged brands, an extensive distribution network and an insight in local market
conditions. The largest MNCs incorporated in India are Whirlpool India, LG India, Samsung
India and Sony India and homegrown brands are Videocon, Godrej Industries and IFB.

Future Prospects

Overall, the industry’s future remains robust, and interested applicants will benefit from a
holistic learning experience; Many of the research, sales, marketing and advertising related
roles will necessitate a good on-the-job learning of target audiences, who may well be a
totally new segment, based in never-before visited Class II and III towns. In addition, those
with technical backgrounds will be able to leverage their knowledge and experience to
constantly develop and innovate the product variants. With more MNCs growing their
Indian businesses, there is great potential to also learn best-in-class systems and
management skills.

During FY07, volume share of the single largest consumer durable was colour TVs at 30%,
followed by refrigerators and air conditioners at 18% and 13% respectively. Washing machines
and other assorted consumer durables captured a share in the total volume by 5% and 34%
respectively.

 FY07 witnessed the highest number of TV sets being sold when compared to the previous two
corresponding years. As per CMIE, growth in sale of TV sets was slower at 14.3% during FY07
when compared to a 21% growth in the previous year. On the demand side, domestic
consumption of refrigerators declined by almost 4% between FY05 and FY08, while imports
climbed. The imposition of anti-dumping duties on import of colour picture tubes will hit the
manufacturing costs of CTVs produced in India. Further, the reduction in the general rate of
excise duty (CENVAT) from 16% to 14% as proposed in the Union Budget for FY09 will not
have any effect on the selling price of colour TVs. This is because the combined effect of rising
input costs and a higher interest burden will negate the effect of such reduction.
 The key growth drivers for the Indian consumer durables industry:

 Rise in disposable income: The demand for consumer electronics has been rising with
the increase in disposable income coupled with more and more consumers falling under
the double income families. The growing Indian middle class is an attraction for
companies who are out there to woo them. 
 Availability of newer variants of a product: Consumers are spoilt for choice when it
comes to choosing products. Newer variants of a product will help a company in getting
the attention of consumers who look for innovation in products.
 Product pricing: The consumer durables industry is highly price sensitive, making price
the determining factor in increasing volumes, at least for lower range consumers. For
middle and upper range consumers, it is the brand name, technology and product features
that are important.
 Availability of financing schemes: Availability of credit and the structure of the loan
determine the affordability of the product. Sale of a particular product is determined by
the cost of credit as much as the flexibility of the scheme.
 Rise in the share of organised retail: Rise in organised retail will set the growth pace of
the Indian consumer durables industry. According to a working paper released by the
Indian Council for Research on International Economic Relations (ICRIER), organised
retail which constituted a mere four percent of the retail sector in FY07 is likely to grow
at 45-50% per annum and quadruple its share in the total retail pie 16% by 2011-2012.
The share will grow with bigger players entering the market.
 Innovative advertising and brand promotion: Sales promotion measures such as
discounts, free gifts and exchange offers help a company in distinguishing itself from
others.
 Festive season sales: Demand for colour TVs usually pick up during the festive seasons.
As a result most companies come out with offers during this period to cash in on the
festive mood. This period will continue to be the growth driver for consumer durable
companies.

Major hurdles and challenges plaguing the Indian consumer durables sector:

 Threat from new entrants, especially global companies: The domestic consumer
durables sector faces threat from newer companies, especially from global ones who have
technologically advanced products to offer.
 Rivalry and competition: Presence of a large number of players in the domestic
consumer durables industry leads to competition and rivalry among companies. Threat
from rivalry and competition poses a threat to domestic companies.
 Potential markets remaining yet untapped: A large segment of the domestic market,
mostly the rural market is yet to be tapped. Tapping this yet untapped and unorganised
market is a major challenge for the Indian consumer durables sector.
 Threat from substitute products/services: The domestic consumer durables industry is
plagued by threats from substitute products. Easy accessibility to theatres/multiplexes,
 especially in urban areas has turned off the viewership from TV to a large extent. With
the advent of a horde of FM radio stations, radio sets have now substituted TVs.
 Customer power with respect to availability of choice: The availability of a wide
product line on account of most products being homogeneous, poses a threat for
companies operating in the consumer durables sector. Customers have the choice of both
domestically produced and imported goods, with similar features.

According to CMIE statistics, domestic consumption of refrigerators witnessed a decline

between FY05 and FY08, while exports grew. From 3% of the total consumption in FY05,
exports grew to7% of the total consumption in FY08. On the supply side, domestic production of
refrigerators in the total supply remained at the same levels in the past three years ended FY08.
At 99% each in FY06-08, the share of production reported a mere 100 basis point increase over
FY05, as imports slided. The refrigerator industry posted a sluggish performance since the
beginning of FY09 on the back of volatile steel prices. The first quarter saw a production growth
of a mere 50 basis points to 2.18 mn units, as per CMIE.

Sales of Consumer Electronics Companies

The consumer electronic goods industry underwent a slowdown during the last quarter of FY08.
According to CMIE, the industry witnessed a slower 10.5% growth in the Mar 08 quarter
compared to a substantial 17.4% growth in the previous corresponding quarter. Domestic
consumer electronic companies together reported a subdued sales growth of almost 17% in
FY07, on the back of a robust 40.5% growth in FY06. While the larger companies reported
robust growth in sales, it was the smaller ones whose sales were negatively affected that
eventually brought down the industry sales growth.

 Industrial Growth

The industrial sector grew in moderation during FY08 at 8.5% on the back of a comparatively
higher growth of 11.5% during the previous fiscal. The country’s real GDP grew by 9% during
FY08; a tad lower than 9.6% in the previous fiscal. The consumer durables segment witnessed a
fall in production particularly for items where consumer preferences have shifted towards newer
products. Shifting in the consumption pattern coupled with rising input costs of steel, iron ore
etc, may further affect the production levels of these goods. On the supply side newer variants of
consumer durables on the back of technological advancements have flooded the market, whereas
on the demand side it is the prospering middle class and consumerism which have led to
changing demand patterns.