Page 65 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes

APNAGHAR – Feed forward and Feedback
Case Study
he promoters of Koop Services, a two-store retail outfit in two respective suburbs
of Mumbai, were at a crossroad. They had, in 1999, taken the franchise of Apna
TBazaar, a well-known cooperative retail chain of general merchandise in Mumbai,
for two locations: Nerul, Navi Mumbai and Thane. After successfully establishing a modern
superstore format, they had a dream three year run and were able to grow with the two
suburbs. With a turnover of around ten million rupees in each of the two stores, the
franchisees were out performing every one of the other 60 outlets of Apna Bazaar.
Additionally, they became known for offering better service and more varieties and
categories of merchandise than the franchiser – which usually included groceries, FMCG,
homecare, utensils, etc.

Koop Services realised that they had outgrown in scale and scope of the Apna Bazaar
concept – one of those rare cases where the franchisee seem to have raced ahead of the
franchiser – and the normal schisms of partnerships were showing. They were facing the
classic disadvantages of the franchising system that inhibits the entrepreneurial and
innovativeness of the franchisee, chaining him to the rigid mother format. While Koop
wanted to travel up the value chain and go in for upmarket brands, merchandise and other
services, Apna Bazaar, the franchiser, insisted that they were straying from their tried-
and-tested segment of middle-class and lower-middle class and that they should stick to
their original format. Koop had information through marketing intelligence that Apna
Bazaar people were scouting around both the suburbs for space, locations and franchisees.
Koop also realised, with growing anxiety, that their three year franchising contract was
drawing to a close and if they did not renew their contract – which implied compliance –
then more Apna Bazaar stores would crop up at Nerul and Thane.

Koop Services had to quickly find answers to the following questions:
Should they continue to use the name of ‘Apna Bazaar’ - which was synonymous in

Mumbai with value shopping – for their superstores or drop it?
If they did drop the name, what would be the reaction(s)/response of the people in

the catchments area of the two respective stores?
And, if they did go for a name change, what would be the most appropriate

christening? The new name should convey more value benefits, the correct strategic
intent of the promoters, minimizing any negative feelings that might arise due to
the name change in the minds of the consumers of the stores.
But more important for Koop was to know whether the format that they had evolved

was what the consumers of Nerul and Thane would prefer and continue to patronize
- and not those of Apna Bazaar or any other wannabes. They realised that the Indian
shopper was a very canny species who constantly looked around for value benefits
and his loyalty could not be taken for granted. The last was especially true for a
retailer who had no tangibles for differentiation other than his shopping experience
and value benefits. Everything else – retail format, store design layout, merchandise
varieties and assortments – could be replicated.
One thing that the promoters of Koop Services agreed on was that they had a long-term
commitment to the retailing business and firmly believed in the modern superstore model.
They required answers to many other questions, which they felt would help them in fine-

Contd...

60 LOVELY PROFESSIONAL UNIVERSITY