Business viability study of Branded Gift shops inside IIT KGP

Saravanan M (11BM60057) Under the guidance of Prof.Sangeetha Sahney

The Research objective

Determining the viability of a branded gift shop (comparable to Archies) inside IIT Kharagpur.

*(Comparable In terms of product mix, product quality and pricing)

Sub Questions
What is the existing market size and potential market size for gift items/greeting cards inside IIT KGP? What will be the feasible business model for the business to survive and sustain ?

The Framework
Model 1: Demonstrate technical feasibility Size the opportunity Confirm the customer requirements Analyze your ecosystem Prove competitive advantage Show financial viability

Alternative model
Model 2: Determine dimensions of Business viability Assign component weights to dimensions Determine respective key measures of dimensions Assign weighs to key measures Assess each measure and Weigh each dimensions individual viability Weigh collective viability of business

Market Size Estimation

The procedure followed 1.Exploratory Study to understand the target group 2.Exploratory Study to understand the current market 3.Survey to estimate the potential market size of the category

Estimating the Market Size

1. Study of IIT Kharagpur demographics 2. In depth Interviews with Tech Market Retailers to understand the market 3. Survey design- Stratified Random Sampling 4. Data collection In person From Veggies, Tikka, CCD, Tech Market. 5. Results and extrapolation 6. Limitations and future work

Demographics: UG Vs PG
Total population: 9000 UG : 5500 PG: 3500

UG vs PG
UG PG

39% 61%

Distribution of Students
Distribution of Students
UG 1st year UG 3rd year UG 5th year /Phd / Others PG 2nd year 20% 20% 12% 12% UG 2nd year UG 4th year PG 1st year

12% 12% 12%

Ideal Sample Size

Stratified Random Sampling

Total Sample size achieved: 181

Distribution of actual sample

Year/Course distribution of actual sample
10% 8%

8% 14%

38% 9% 13%

UG 1st year UG 2nd year UG 3rd year UG 4th year PG 1st year PG 2nd year others

Distribution of actual sample

Sample Gender Distribution
Female 18%

Male 82%

Survey Results & Analysis

Have you purchased or felt the need to purchase any of the following items in the last one year?

No 41% Yes 59%

Survey Results & Analysis

Amount of money you usually spend on such items ?
Less than Rs.200 per visit Rs.500 - Rs 1000 per visit 2% 11% 40% Rs.200 - Rs 500 per visit More than Rs 1000 per visit

47%

Survey Results & Analysis

Have you faced a situation where you could not buy some of above items, as it's unavailable in Kgp or the range of choice/quality was not good ?
No 35% Yes 65%

Survey Result & Extrapolation

Potential Market Size Projections

Consumer purchase behavior

Chi square test for finding significant association between purchase intention and gender/relationship status. Results: Gender and purchase intention heavily associated Relationship status and purchase intention not significantly associated.

Limitations & Future scope

Sample Size to be improved for better estimates. Target is 5% error and 99% confidence level. Demand to be equally distributed around the year. Families inside IIT Kgp not covered in survey

Key Assumptions
Gift items: All items stocked by Archies No competitor in branded gift/card segment The size, SKUs, price points for calculating costs. Assuming overall business viability to be a function of Financial, technical, market and business model viabilities.

Next semester
Technical Viability Supply chain implications Availability & Quality of resources IIT norms & regulations Economic & Financial Viability: Start up costs Working capital Return on Investment Profitability Breakeven point

Thank you!