Final Exam

RETAIL MANAGEMENT

Group 9
Rahema Ashraf 08458
Hussain Marvi 18476
Muhammad Azhar 16782
Haris Adnan 10852
Mashhood Ahmad Warraich 18467
Muhammad Saud Siddiqi 10922
 Scenario 1: 7-Eleven Store

7-Eleven Inc stores is an American- Japanese chain of convenience stores: with its
headquarters in Dallas, Texas. It aims to be convenience leader as stated by its founder Joe C
Thompson Jr, “Give the customers what they want, when and where they want it.” It was
called 7-Eleven to draw attention to the extended store hours of 7 a.m. to 11 a.m. With its
success fueled by customer needs and continuing its legacy of innovation, it has opened
70,200 stores globally till 2020 and heading to launch many more.

As part of the expansion strategy, we are planning to launch to launch 7-Eleven in Pakistan
and have come up with its appropriate target market, localized retail mix, roadmap for the
store launches; its competitive landscape and its major revenue and volume driving
categories.

Target Market

The target market for 7-Eleven Pakistan will be the same as globally with its core target
market consisting of adults and youth in the age bracket of 18-50 years old. It is targeted to
working professionals, college and university students and families with children out to grab
something quick without the hassle of going into the supermarket. This is further validated by
the customer survey of the average number of customers visiting 7-Eleven; having a high
proportion of 20-50 years old.

Therefore, the USP of 7-Eleven is primarily focused on convenience.

Localization of Retail Mix

Merchandise Category

The merchandise will be broadly categorized under four main categories; Food and
Beverages, Non-Food, Fresh products and service. Globally, its food and beverages accounts
for 52% of the total products which will be reflected the same in Pakistani stores; further
categorized into beverages, processed food and private brands. The beverages will include
both cold brands including its own exclusive “Slurpee” (frozen carbonated drink), and hot
beverages consisting of its premium high quality coffee.

The processed food category will contain both packaged food as well as freshly made
confectionary items having premium quality savory items like pies, croissants, pizza, apple
casserole, brownies, muffins, cakes and famous “Krispy Kreme” etc. the packaged food
category will have limited but premium chocolates, lollies, chips, bars, frozen yogurts etc.
The non-food category may contain shampoos, body wash, soaps, handwash, sanitizers,
lotions and creams. The fresh product category will have the limited variety of good quality
fruits and vegetables. The service category will have the ATM machine and the mobile top up
facilities and mobile cards category.

1
Pricing

Since 7-Eleven stands for convenience by giving you the luxury to shop 24/7 and offer you
premium quality products, therefore, it charges a premium for that. Therefore, premium
pricing strategy will be followed.

However, for its premium quality coffee variety, penetration pricing will be adopted. This is
in line with their global penetration pricing strategy for 7-Eleven coffee. They charge $1-$4
for their both cold and hot coffee which acts as an attention grabber and sells an average of
7000 cups per week per store with queues lined up in peak hours. (Australian store). The hot
coffee is made in a coffee machine from 7-Eleven own private brand milk and its own
premium quality coffee beans giving it’s a premium and high quality taste at low price.

As per interview from Australian store manager, coffee is a profit generating good which
drives the sales of other goods and on $1 saves them 65 cents too. Therefore, it will be priced
in the price range of Rs150-200 to attract the customers into the outlet.

Location

Globally, 7-Eleven has about 70,200 outlets spread across 18 countries in 2020. Its location
strategy is primarily based on area dominant strategy. While entering any new market, it
targets the urban areas specifically near commercial areas, popular residential areas and
offices. An interesting segment pursued globally is to target the big hotels and restaurants
populated by tourists and meet the daily needs of hotels as well like milk, water etc.

In Pakistan, it will be located in the KLI cities first and then if successful will be launched in
Murree which is a popular tourist hub. Also, it will be located as standalone outlets along
with 7Now Delivery service to target the nearby customers through its website and
application

Communication Mix

The communication mix involves an omni-channel strategy for its promotional strategy; from
its digital promotion to events to in-store promotions. Some of the popular promotional
strategies being implemented globally which could be implemented in Pakistan as well
including Free Slurpee on 7-eleven day at all stores, 200 free coffee vouchers along with gifts
cards on every occasion.

7-Eleven will also launch its loyalty program “Every Day Rewards” having multiple
discounts and bundles and option to redeem their points. Along with this, 7-Eleven will use
both ATL and BTL for its advertisements like TV and print advertising at booth and buses.
For BTL, it can promote on catalogs, trade shows and direct mail campaigns.

Customer Service

With its belief that success is fueled by the customer needs; 7-Eleven strives to provide the
best service by offering quality, speed, selection and value to its customers regarding what
they want, how and when they want it.

2
Therefore, customer service will be the USP of 7-Eleven with around 17 trained employees in
total will be hired for each outlet working in shifts with 2-3 employees at a time. Apart from
ensuring fresh stock is stocked and expiry checks are maintained. Their main task will be to
guide the customers around the shop, answering product queries and assisting them in
shopping.

They will be very courteous and friendly towards their customers and ensure a seamless
checkout process.

There will be also an active chat box on their Facebook and website along with an active
helpline through which customer can lodge their complaints and queries.

Store Design and Display

The store layout will be designed in a way to have maximum basket size possible. The brand
name of 7-Eleven will be placed visibly outside store with an orange and green logo
expressing its quality and freshness. The store will be brightly lit with the sight of Slurpee
vending machine clearly visible from its glass doors.

Inside the store, an atmosphere will be created with the smell of coffee and bakery items
where the fresh bakery items like muffins and croissants will be placed next to the coffee
vending machines to prompt impulse purchase.

There will be instore advertising and promotion with the merchandise looking presentable but
with limited merchandise variety to avoid confusion in customer’s needs.

Also, there will be discount and promotional play cards posted both outside stores as well on
the fridges and aisles to attract customers.

The ATM will be placed in the last corner so that the customer visually skim through the
whole merchandise prior to using the service.

And CCTV cameras will be placed in the entire outlet that will be monitored by the store
manager.

3
Road Map for Store Launch

With Karachi being the most populated city, the 1 st store will be launched in Karachi in
Defence phase 6 on khayaban-e- Shahbaz street in Jan-Feb 2022. The reason to open here is
to target the offices in Defence and Clifton along with targeting the schools and universities
in defence having students belonging to SEC A and B. moreover, majority of the defence
people must be aware of 7-Eleven due to their cultural exposure and would be attracted to the
store. Moreover, many bureaucrats and international foreign ministers stay in defence during
their stay in Karachi.

The second outlet will be opened in Mar-Apr 2022 at I.I. Chundrigarh which is the Hub of
firms and their head offices. This will target the working class who comes to grab a cup of
coffee on their way from work, grabbing some slush and bars in their lunchtime and then
want to enjoy iced coffee or Slurpee after a hectic day at office.

4
The 3rd outlet will be opened in May-June 2022 at Shahrah-e-Faisal which will target the
offices in PECHS and Shah-re- Faisal along with the residents of the surrounding areas like
PECHS, Bahadurabad, Shah-re- Faisal and Tariq Road etc.

In 2023, after 7-Eleven has maintained a strong footing in Karachi, it will launch its first store
in Islamabad to attract the diplomats and bureaucrats. The second store will be opened in
Apr-May 2023 to attract the tourists.

In Aug-Sept 2023, 7-Eleven will open its 1 st store in Lahore near Minar-e-Pakistan which is a
popular tourist spot for locals as well as foreigners. The 2nd store will be opened in Nov-Dec
2023 in Lahore to further grab a major share of the market and increase its reach.

In 2024, a thorough evaluation of Karachi existing stores will be done and if feasible, 4 th store
will be launched in North Nazimabad in Feb-March.

In 2025, considering that all outlets are functional efficiently and are profitable, a new outlet
will be opened in Murree; considering it a tourist hub and opens nearly all year round for the
tourists and general public.

Categories and their Classification

Globally, 7-Eleven have gasoline in their product portfolio, but in Pakistan, gasoline will not
be launched; since there are a lot of regulations involved with a very competitive market.

The volume driven category will be iced coffee and hot coffee who will be priced cheap to
attract the customers into the outlet.

The categories to attract customers can be the mobile cards and ATM machines which will
drive the sales of other categories.

On the other hand, the developed categories will be the chips, biscuits, confectionary and
water category.

The developing category will be the frozen yogurt category and the Slurpee category which
have low brand awareness in the Pakistani consumers.

Competitive Landscape

Since 7-Eleven does not have any direct competition of such retail size and scope, a
perceptual map based on the in-direct competitors was made where map placed different
brands in terms of product assortment(exclusive vs variety) and no of outlets(high vs low).
Imtiaz has more variety at low price and comparatively low quality as compared to others but
ranks highest in the number of outlets. While 7-Eleven has limited variety but aims to have
maximum outlets in future offering high quality at a premium price competing with Dunkin
Donuts with its Krispy Kreme, the mom and pop stores nearby in terms of convenience.

On the other hand, springs, Ebco and Agha’s have very limited number of outlets as well but
offer premium quality at a high price

5
 Scenario 2: Dragon Mart and Unity Foods

Business Background

‘China Bazaar’ is intended to be a one stop solution for Chinese products for customers
where both Business and individual customers alike will be able to the goods according to
their needs at one place.

Operating Model

Bazaars will be established in KLIFMP cities over the span of two years starting from
Islamabad. The bazaars will be divided into two sections. One for wholesalers and others for

6
 retailers. Chinese Manufacturers, distributors of Chinese goods will be invited to open their
showrooms in the premises. Private retailers will also be rented spaces for their businesses.
Company’s own stare will also be opened in the premises. Also, to cater to the online
customers company’s own website will be developed. There will be two main sources of
income for the business.

- Rental Income
- Income Generated through sale from company’s own stores Named Umart and through
commission on online sales.

Retail Mix

Place

The Bazaar will be established in KLIFMP cities over the span of 2-3 years starting from
Islamabad as a test location. The reason for starting from Islamabad is that it is a smaller
market than other cities like Karachi and Lahore but also have the population with household
incomes and demographics that resemble the other targeted cities. Once the targets are
achieved the additional bazaars will be opened in other KLIFMP cities. The places selected
are Gulshan-e-Iqbal in Karachi, Shah Alam in Lahore, Hussain Elahi (Multan), G-9
(Islamabad), Ghantaghar (Faisalabad). The reason for selecting city center in Karachi is that
apparently there is already a wholesale market for Chinese goods in Gulshan-e-Hadeed.
Therefore, opening one in the center makes more sense to facilitate both the individual and
business customers. Similarly, locations in other cities are also selected keeping in mind
proximity to the city business centers and wholesale markets.

Product

As per insights from our research for the proposal we found out that the e-commerce sellers
in Pakistan generally prefer to sell high value item goods than large quantities of low value
item goods. We aim to target manufacturers/distributors keeping in mind the above factor as
well as the popularity of the category. Therefore, the targeted categories will be ranging from
Mobile and Tablets, TV, Appliances, Motors to lifestyles and Groceries etc. Focus will be on
having more assortment in each category.

Promotion

The Company aims to offer vouchers to cut the final price to the customers, Also, higher
credit terms will be given to the customers. On the company’s own store and online site
discount promotions and flash sales will be run from time to time.

Price

Due to directly dealing with the manufacturers and dealers the margins for the middlemen
will be lower for the customers resulting in lower price. Other than that, promotions and
vouchers will result in lower prices.

7
People

The Bazaar will be dealing with B2B customers as well as B2C customers

Top 10 Categories

As per Daraz Index and Daraz Insights report top categories for e-retailers are:

Mobile and Tablets, TV, Home Appliances, Groceries, Motors, Lifestyle, Computing &
Gaming, Beauty & Fashion, Sports & Outdoor, Watches Bags and Jewelry.

References

https://www.slideshare.net/DarazCareers/ecommerce-index-powered-by-daraz

Daraz 11-11 Insights Report

8
9
10
 Scenario 3: Compare and Buy

CnB (Compare and Buy) is a proposed price comparator Q-commerce mobile application
with 100s of online and offline vendors listed. The idea is to create an application where
consumers can compare prices of everyday products, like grocery items, medicines,
electronic accessories, fruits and vegetables, and other low price everyday items, offered by
different retailers listed on the app. The additional feature we are offering, along with price
comparison is that the consumers can also place order through our app. App users can easily
browse through the categories they are interested in or search for a specific product they are
looking for. E.g., an app user wants to order Olpers 1ltr pack so he can type Olpers in the
search bar and then the retailers selling this product will appear. The prices and estimated
delivery times of retailers selling Olpers will appear on the user screen. He can select the
retailer he wants to buy from. As the user clicks on the option the order is added to the cart.
The user then adds his address, select payment option and then confirms the order. The
vendor, which was selected by the user, gets the notification. The vendor confirms the order
and adds the estimated delivery time. The deliveries are to be managed by the vendor but we
facilitate them. We have partnered with BYKEA, bike ride hailing service. An account for
CnB has been setup at BYKEA to manage COD transaction. The vendors can book a
BYKEA through our app. The vendor can also deliver through his own or any other third
party service. With BYKEA Rs 50 per order is fixed, anywhere in Karachi.

The business model for this service app is that different online and offline everyday low price
item retailers are approached. Different teams will be working in different areas of Karachi to
get the maximum retailers in those areas to get listed on our app. The idea is to get small
general stores, medical stores, and local fruit and vegetable sellers listed, along with online
sellers. The vendors will create their stores on our platform with a listing fee. We will also
charge 2% commission on every order placed through our website. The marketing team will
work on partnered promotions with different vendors to attract consumers. There will be CnB
exclusive deals by the vendors. App monetization can also be used a source of income, but
will be tested first to see it doesn’t disturb the buying experience.

To manage vendors, we will get a custom vendor management portal designed. As a vendor
registers to our platform, its account is created. Vendor orders, performance, revenue and
payment details will show up on that portal.

As we are working with multiple partners, vendors and logistic partner, plus we are also
offering cash on delivery so payment receipt and transfer would be a challenge. For this we
have created 3 models. The first is card payment model. In this the payment will be received
by us (in CnB bank account). We will then be liable to pay the vendor in the next 3 days,
deducting our commission. The payment pending will start to appear on the vendor
management portal. The second is vendor delivery model. Here the vendor does not uses
BYKEA and delivers on its own. Here the vendor is liable to pay us the order commission in
the next 3 days. As the order in completed the amount due will appear on the vendor’s portal.
He has to just click on the ‘Make Payment Button’ on the portal to transfer us the
commission amount. The third option is BYKEA delivery model. Here BYKEA rider collects
the payment from the customer. We have an agreement with BYKEA that COD payments

11
will be transferred the next day. So here BYKEA is liable to pay us and we are liable to pay
the vendor. For vendor payment the policy is the same, 3-day transfer period.

12
 Scenario 4: Khanaan and Toy Zone Shopper Behaviors

Interactive experience with toys outside of their packing is the main focus on these platforms
along with, making recollections of old memories and utilizing innovation in keen manners to
improve the experience. These are the patterns that are occurring across the whole toy online
retail business across the globe. Without being able to touch the product, in an online store,
the only thing that matters to an online shopper is the overall experience, convenience,
assortment offered, and the easy flow to their final checkout. Keeping these main pointers in
mind, we tried to analyze the user experience while shopping on the two-given platform/sites:
Khanaan.pk and Toyzone.pk. Following are the analyses of 5 different experiences of
different people on the given sites.

Respondent 1:

Khanaan.pk: The respondent was easily navigated the site`s search bar, where she put in the
product/ toy she wanted to buy (a bear in this case). She landed on to the assortment page
linked to the searched toy, but couldn’t find the “Add to Cart” button or option, but it was
actually at the bottom left corner of her screen. After scrolling up and down for a few seconds
she went back to the main page, searched for the desired product again and finally added it to
her cart. She checked out after a total of 6 clicks. It took her 1 minute and 45 seconds to
check-out.

Toyzone.pk: On this site she found it difficult to find the search icon at first place. After
searching for the product/toy, she landed on the assortment page, and after 6 clicks she was
able to checkout. The total time for this check-out was 1 minute 56 seconds.

Respondent 2:

Khanaan.pk: Respondent 2 searched for a classic game “Jenga”. The site only 3 product
listings for the searched game. It took her 5 clicks and 1 minute 16 seconds to complete her
order.

Toyzone.pk: On this site the respondent again searched the game with its original name,
“Jenga”. Unfortunately, Toyzone.pk did not have any assortment linked to this search word,
so she didn’t buy anything.

Respondent 3:

Khanaan.pk: This respondent was a little different, he used the Category bar to access “Toys
for Boys” instead of searching for a toy or character. Continuing changing the tabs he
eventually selected “Gun & Blasters” as the sub-category for the toys he was looking for.
After adding a product from this assortment, the buyer again scrolled through the Category
bar to land on “ATM Toys” sub-category under “Toys for Girls” category. After adding both
the toys to the cart it took him 11 clicks and 1 minute 8 seconds, cumulatively to complete
the order for shipment.

13
Toyzone.pk: At this site, this respondent again toggled through the Category bar for “Toys
for Boys” and bought “Crayola Modelling Clay”. At Toyzone.pk, he took 1 minute 33
seconds to complete his order, whereas the number of clicks in this case were 9 before he
checked-out.

Respondent 4:

Khanaan.pk: She examined the Homepage first before searching for any particular toy or
brand. In the search bar, she searched for “Walkers”. Here she was presented with a fair
assortment of the product (12 in total) she desired. She went to 2 pages before adding the
item in her cart. Exact 7 clicks and 1 minute 35 seconds to complete the order.

Toyzone.pk: Here she searched for the same product and examined the Homepage too. Once
she selected an item, she toggled through the supporting pictures of the item to virtually
evaluate the products aesthetics. At this site, it took her 2 minutes to complete the order and
she clicked 7 time before the order was placed.

Respondent 5:

Khanaan.pk: This respondent searched for product name (Hot Wheels) directly, as if he
knew what he wanted. He landed on the product listing page which was spread over 37 pages
(Huge Assortment). He chose the toy of choice from the second page of the product
offerings. He finished his check-out in 1 minute 13 seconds and in 7 clicks.

Toyzone.pk: Here again he searched the product using the same keyword (Hot Wheels) he
used on Khanaan.pk. but the site did not present him any related assortments. Then he
tweaked the keyword to see if there was any assortment available. After a few attempts he
was successful to find the desired items under the keyword “Hot”. He completed his order in
1 minute 25 seconds and he used a total of 6 clicks.

It is not only sales rates that evaluate success. How enthusiastically a customer visits a
website or uses a Mobile Application is also an important factor in determining success. If a
company really wants to succeed in today`s competitive online world, it needs to provide its
customers with a phenomenal “Customer Experience”. This experience should not only make
customer satisfied by the product and services offered by the company, but it should be such
an experience that is better than the company`s rivals. Based on the respondents` video
responses it is clearly seen that the number of clicks for both the sites in somewhat equal.
Only a single respondent went over 7 clicks before checking-out as he went through the
category bar instead of directly searching the toy or brand. Secondly, the assortment available
for the products, searched in these responses, was more at Khanaan.pk as compared to
Toyzone.pk, so the latter needs to work on offering more assortments for major categories.
This also came to our knowledge that the depth of the assortments at Khanaan.pk were more
compared to that of Toyzone.pk as search results for all the searched keywords went up to
several page listings. Thirdly, Toyzone.pk needs to work more on “Keyword Search
Optimization” and for that it needs to link mostly searched keywords with their respective
categories or product lines or SKUs. This would result in convenience for customers and
enhance its sites response time. Finally, both the sites may work on reducing the click per

14
order, which would again enhance convenience for customer and eventually the overall
customer experience.

Toysrus.com is an exceptional benchmark to be made in the online toy retail business. It

offers more in-depth assortments, ranging from printable to outdoor pools to dolls to Lego
blocks. Its site is more aesthetically pleasing, different color patterns associated to brand`s
logos`s color are used and product banners of the right measurements at optimal positions on
the website homepage. Screenshot is attached below.

15
 Scenario 5: Under Armour

Under Armour is one of the leading sports apparel brands in the United States, with its major
competitors being Nike and Adidas. The sports industry is cyclical in nature, and research
showed it would witness a growth of 4.5 per cent. Under Armour is the pioneer of the
performance apparel segment of the sports apparel market, performance apparel is made of a
fabric that is lighter than cotton, uses moisture-wicking technology and suitable for
sports. Under Armour enjoys strong research and development, and strong marketing budgets
as one of the key strengths of the brand. However, the sports apparel market (including
shoes) is dominated by Nike and Adidas.

As it wants to officially launch its product line in Pakistan, it has the following three
strategies available, pros and cons of which are discussed below: 

Open Flagship stores in top mall of KLIFM starting from KLI Initially 

- As it is a new brand coming into the Pakistani market, people won't buy it unless they get to

touch and feel the products and quality. This way UA can also increase its brand interaction
via shopping experience. 

- Since market leaders like Nike and Adidas have a presence in top malls, having a retail outlet
in the malls would enable UA to compete head-on with its competitors.

- Sales advisors can guide customers on the product range, and add a personal touch to the
shopping experience

- It is a costly strategy as the brand would need to pay the retail outlet rent/lease, pay salaries
of the sales advisors and train them, bear the inventory costs, however, the shipment costs
would be limited compared to other strategies. 

Go through a Distribution and Partner with stores like Speed Sports/ Flash etc. with
Limited Range 

- It is the most cost-effective as it will save the rent/lease costs, employment costs, and
inventory costs. 

- These stores have a consumer base already, hence UA would not have to worry much about
attracting more consumers. It would have to obviously, but they would already have a few
customers visiting these stores. 

- These stores already have trained staff and sales advisors, so UA would not have to bear the
training costs  

- People have trust issues whether these are authentic products or not, with the presence of
Nike and Adidas in malls of Karachi, group discussion showed that individuals would only
go to these retail outlets than going to Flash and Speed Sports 

16
- The chances of people purchasing UA against brands they have already tried are very few 

- UA would have no say on how the sales advisors are pitching UA to the potential customers
if at all. 

- The profits would be divided, and UA might get a very little amount of the total profit. 

Have a Daraz Mall account served through China 

- This would save the rent and inventory holding costs 

- E-commerce in Pakistan experienced a value growth of 96% in 2020, the total retail value
being PKR 152.5 billion, UA has a high potential of selling more through this channel. 

- Even in Covid-19 when the malls and retail outlets were closed, growth in e-commerce
doubled, hence this is a safer option 

- Daraz has a huge existing consumer base and active users, it holds 24.3% of the total share of
e-commerce making it the brand leader. Using Daraz to sell its products can be lucrative. 

- The shipment cost for orders would be too high, or UA should have monthly shipments to
save the cost 

- The lead time of processing and delivering one order would be around 40 days. 

- Shopping online for clothing is still not very common in Pakistan, people want to touch and
feel the fabric, and since this is a new brand, people might have trust issues 

- Managing order returns can be troublesome and time-consuming, as well as costly 

Chosen Strategy: Have a Blend of 2nd and 3rd options 

Choosing a blend of 2nd and 3rd options would having presence both physically and digitally,
this would enable customers to touch and feel the products and then order online in the future
if they like the product. This option would save inventory holding, employment, rental and
other costs. Both these channels have an existing consumer base, hence penetration into the
market would be relatively easy for UA.  

However, UA would have to market its products very aggressively against Nike and Adidas
which have been present in the Pakistani market for a couple of years now. UA must
also keep a close eye and maybe send mystery shoppers to stores like Flash to see whether
the sales advisors are pitching in UA products correctly if at all.

Retail Mix

• Merchandise: Limited to most running in stores like Flash, whereas complete

merchandise will be offered on Dara

17
• Price: Original USA price + additional costs incurred

• Location: Daraz and stores like Speed Sports

• Store design and layout: stores will decide

• Customer Service and Selling: have two customer service representatives to be

available 24/7 on helpline, Facebook page, Daraz chat or WhatsApp

• Advertising and Promotion: billboards, TV, social media, media used by SEC A, B1
andB2

18