Composition Of Consumer Co Operative Societies

Consumers are unorganized and therefore exploited by traders in price, quality and weight. Consumer co-operatives protects the interests of consumers against artificial scarcity, over charging of prices, supply of sub standard goods and the unfair trade practices distorted by private traders.

Definition:

Maharashtra Co-operative Societies Act, 1960, defines consumer co-operative society as a society, the object of which is:

The procurement, production or processing and the distribution of goods to or, the performance of other services for its members as also other consumers,

The distribution among its members and customers, of the profit occurring from such procurement, production, processing and distribution are in proportion as prescribed by rules or bye-laws of the society.

A consumer co-operative society is basically formed for the promotion of the interests of the consumers.

Composition of consumer co-operative societies:

National Co-operative Consumers’ Federation (1)

State Co-operative Consumers’ Federation (28)

Departmental Stores (Apna Bazaar)

Wholesale / Central Stores (681)

Primary Consumer Co-operative Stores (26469)

University & College Consumers’ Stores

Consumers’ Stores of Industrial Workers

Consumers’ Stores for Rural Population

Objectives of consumer co-operatives:

To educate the consumers to keep their needs within the income limit.

Stabilization of market rates.

To supply the goods and services regularly at reasonable costs.

To protect the consumers from black marketing, increase in market rates, scarcity, cheating and adulteration.

To supply proper unadulterated goods and to use proper measurement (weighing scales).

To inculcate the habit of savings and economy among the consumers.

To control the profit-making tendency

Need and importance of consumer co-operatives:

Supply of things and services as per needs-

The consumer co-operative societies are formed to satisfy the needs goods and services as demanded by the consumers. There are directly contracts with producers and manufacturers of things and required goods are purchased directly from them, thereby the consumers can be supplied with the goods as demanded.

Eradication of malpractices of traders-

It is found that there are many malpractices in trading like black marketing, artificial scarcity, cheating in measurements, hoarding, etc. proper measurements are not used whereby the consumer becomes ultimate victim of all these malpractices by the traders. There is no place for all these things in co-operative consumer societies and so the consumers are attracted towards them.

Necessity of time:

India has adopted financial planning and there is importance for public distribution of essentialities of life. The consumer co-operative societies help the government in distributing these essentialities to rural and urban areas of our country. These societies have become very important day by day. Since these societies have been entrusted the job distribution, the consumers are saved from financial exploitation and hardship.

Establishment of proper trading system:

The consumer co-operative societies supply good quality of things at reasonable cost by using right measurement and pure things. Hence from the viewpoint of customers these societies are very important.

Eradication of trader’s chain:

There is long chain in between the producers and consumers. The things are sold at higher cost to consumers because the middlemen add their own profit and expenses. The consumer co-operative societies directly purchase the goods from the producers and chain of middleman can be avoided.

Apna Bazaar

Apna Bazaar is probably the oldest and largest consumer co-operative multi-state society with a customer base of over 12 lakhs. The Rs 140-crore retail chain, that, for over 55 years remained largely “middle-class”, Apna Bazaar has 80 outlets in Mumbai, Thane and the neighbouring Konkan region. It has recently opened its first shop outside the state in Goa. It recorded a turnover of Rs 127 crore for the year 2003-04.

Apna Bazar, the synonym for the basic needs,

Brand name of

Mumbai Kamgar Madhyavarti Grahak Sahakari Mandal Ltd

Date of Incorporation

9th May 1948

Constitution

Multi State Co-operative Society

Sector

Private

Industry

Retailing

Registered Office

106-A, Govingi Keni Road, Naigaon, Dadar [East], Mumbai 400014

Role of Apna Bazaar:

Apna bazaar plays a vital role by market intervention during the shortages of essential commodities. The distribution of these items is taken up by the Apna Bazaar at a loss to fulfill its social commitments. At times of need, Apna Bazaar has diverted its manpower and resources, even at the cost of its own commercial interest, for the public good.

Objectives of Apna Bazaar:

To undertake wholesale and retail distribution of consumer goods and essential commodities; and to establish department stores;

To foster the growth products and new manufacturing units through market support and management advice

To lower distribution costs and to introduce fair and better trading practices such as fixed prices etc; and

Eradication of malpractices of traders black marketing, artificial scarcity, cheating in measurements, adulteration, etc.

Necessity of time – public distribution of essential commodities in rural and urban areas.

Elimination of middlemen.

Management and Organization:

Apna Bazaar is headed by a management team comprising a chairman, vice chairman and Hon secretaries. The team largely provides direction to the organization and is not involved in the day-to-day affairs. The day-to-day affairs are managed by an executive team, which consists of a general manager, additional general manager and office bearers of the organization.

Outlet

Apna Bazaar has a customer base of over 12 lakhs. Apna Bazaar has 80 outlets in Mumbai, Thane and the neighbouring Konkan region. It has recently opened its first shop outside the state in Goa.The break up of the stores is:

Items Sold By Apna Bazaar

Apna Bazaar has the following three main categories of items:

Agro products

Branded products

Rural products

Apna Bazaar sells an immense variety of items through its various departments/retail outlets. These are described below: –

Furniture:

All type of wooden furniture, steel furniture library furniture, hospital furniture, revolving chairs, computer furniture, mattresses, pillows, sofa cushion.

Household:

Steel utensils, aluminum utensils, non stock, gas stoves, locks, mixer-grinder, juice-cum-mixer grinder, hot-cases, room heater, room convector, geysers, all type of fans, electrical goods, washing machine, air-conditioners, water cooler, voltage stabilizer, generator set, crockery, flasks, plastic items, electrical bulb/tubes and tube fittings, table lamp, emergency light, cell, torch, electric wire, desert cooler, exhaust fans.

Footwear:

Shoes, sandals, ladies purse, belt, umbrella, school, bag, suit cases, brief cases, file box, file bag, luggage bag.

Textile:

Woolen suiting, tericot suiting and shirting, blanket, blazer, bed-sheets, pillow cover, dress material, all types of sarees, markein cloth, long cloth, voil, mulmul khadi etc.

Handloom:

Towels, dusters, curtain cloth, bed-covers, carpets, quilt, durries, jute matting, blankets, pillow covers, door-mats, PVC flooring.

Ready Made Garments:

Pants, shirts, undergarments, socks, sweaters, leather jackets, ladies suits, petticoats, children garments, rain coats, over-coats, mosquito mat, curtain tapes, machine oil, raxine.

Stationery:

All types of duplicating, typing, photocopies paper, printing paper, all types of rules registers in different sizes peon books, dak pads, pens, pencils, pen stands, eraser, markers, sign pens, gum-bottles scales, colours, art material, sealing wax, white fluid, sutle, stencil and carbon paper, all type of computer stationery, butter paper, crepe paper, glaze paper, graph paper, file covers, log books, all type of printed forms (Govt. offices), PVC sheet for binding purposes, transparency sheets, ledgers, cash books calculators, computer floppy, fax roll, typewriting ribbon, ammonia paper rolls.

Watches:

Watches of reputed companies like Titan.

Grocery & Toiletries:

Pulses, spices, atta, rice, oils, tea leaves, and various other edible items, insecticides, disinfectants, phenyle, detergents, soaps, cosmetics, tissue rolls and napkins etc.

Medical & Surgical Equipment:

All types of medicines, medical & surgical equipment etc.

Members Benefits:

Dividend on shares at 12% to individuals, society and government.

Purchase rebate on share amount 10% each year.

Attractive rate of interest up to 9% on fixed deposit by the members.

Facilities Offered By Apna Bazaar to Consumers:

Apna Bazaar provides the following facilities to consumers: –

Quality products at reasonable prices.

Variety of items under one roof.

24 hours drugs outlets.

Self-service counters

Items of high quality tested by its quality- testing laboratory.

Display boards and price lists at various counters to enable the customer to make his/her choice.

Home delivery, but this facility is only available for purchase from branches.

Discount sales periodically on various items

Location:

The location for the store is selected taking in consideration the residential population in the area, the standard of living of the people, the amount of business the other shops are doing and also future development that are likely to take place in that area in future.

Area covered:

Apna Bazaar has 80 outlets in Mumbai, Thane and the neighbouring Konkan region. It has recently opened its first shop outside the state in Goa. However the density of Apna Bazaar is high in Naigoan and Chembur

Space required:

The minimum requirement of area for setting up Apna Bazaar is1000 sq.feet. The biggest store is at Vashi, which is spread across 27000 sq.feet.

Target segments:

The store was started keeping in mind the lower middle class section of the society. But gradually it has moved up the consumer ladder with the inclusion of the middle class as its target consumer. Now slowly it is drawing the upper class towards it. It now caters to almost all the segments of the society depending on the location. In order to attract the upper class & to combat growing competition in the retail industry it is making changes in its product-mix.

Change in product Mix:

The above table indicates decline in the sales of Rice, Wheat, Pulses etc which shows the change in the food culture/consumption pattern of the consumer. It indicates that the consumer’s inclination towards ready-to-eat food is increasing. Taking this into consideration Apna Bazaar had made has made appropriate changes in its Product Mix. Slowly the Percentage of food grains, pulses has declined and that of FMCG products has increased. In a couple of years the percentage of poultry products in the product mix would increase whereas that of food grains pluses etc. would decline. This would further change the product -mix of Apna Bazaar.

Store Layout:

Layout of shop Apna Bazaar does not have any specific layout of shop. But in most of outlet the 1st division you would come out is Vegetable, Fruit, Medical product, food grains, and FMCG product. The only think that is kept under consideration that Heavy Product like 5kg. Sugar, 10kg. Wheat, 5 ltr. Oil is near cash counter for convenience of customer. In case of display they see to it that display at entrance is very colorful & attractive. Hence they display cosmetics & FMCG product. Besides product, which is new to the market, are also displayed to grab attention of consumer

Product Display:

The brands are displayed in a very attractive manner .The decision to place a Brand on a particular shall depends upon the Market share enjoyed by the company /Brand. Usually there are 5 Shelves. Out of which 2nd, 3rd & 4th shelves are most important ones on which the brand with high market share or high brand equity are placed. These products are always in demand by the customers.

Footfalls:

In big stores, like the departmental store at Andheri, there are 2000 to 3000 footfalls in a day (on weekdays) & on weekends there are around 3000 to 3500 footfalls. In small outlets there are around 100 footfalls on regular day’s .On weekends there are 200 to 250 footfalls. The footfalls are more especially on Sunday.

The footfalls are more in evening between 6.30pm. & 8.30pm .Whereas the footfalls are comparatively low during the afternoon slot of 1.30-3.30 pm. Keeping this in mind stores are closed down during this time. In this time the staff are rearrange the merchandise in the store.

Sources of Income:

Retailing is their core activity and a major part of their income come from the various retail outlets.

They supply commodities like Dal, Pulses, Food grains, Cereals to Govt. Institutions, Hospitals for their Canteens. A 30 Days credit is given to them.

They also earn income from the company racks that they display in their outlets. These racks contain the products of the particular company and the in turn pays Apna Bazaar for displaying these racks. E.g. Maggie, Colgate, Pepsodent, Vicks, Nescafe etc.

They provide space to companies e.g. MEPL (Electronic goods) in order to display and sell their goods by charging rent for space provided.

They have 37 Franchise outlets, which act as a source of income for Apna Bazaar as Apna Bazaar supplies 70% of goods.

Provide place to banks for opening ATM center by charging rent since almost all the outlets are owned by Apna bazaar.

MetLife India signed an agreement with Apna Bazaar Co-operative for selling life insurance policies. Based on the agreement, Apna Bazaar Co-operative shall become corporate agents for MetLife India and offer MetLife India products to its huge customer base. Henceforth Apna Bazaar will enable its customers to build financial freedom through MetLife India products based on need analysis. Apna Bazaar will receive a commission of 35% on Premium amount.

Exports:

‘Apna Bazaar ‘ is a 55 year old co-operative organization with US $ 37 million annual turnover through 07 departmental stores, 06 super markets & 65 retail outlets.

Apna bazaar used to export commodities like fish and grapes to Europe. In spite of good earnings on exports they have discontinued the exports from this year .Thus the reasons for the discontinuation were due to:

The goods were seasonal in nature.

In case of grapes the Jalgoan region in which grapes where cultivated was hit by drought, thereby by affecting the production of grapes.

Besides the grapes were sprayed with certain chemicals which were banned in the European countries, thereby further affecting the exports.

Besides exports is not Apna Bazaar’s core activity therefore the decision to discontinue exports was taken.

SWOT Analysis:

Strengths:

Goodwill-

Apna Bazaar has built its image over the years as a value for money store, which supplies good quality goods at economical price.

Number of Outlets-

Apna Bazaar has 80 outlets spread all over Mumbai, Navi Mumbai, Thane and the neighbouring Konkan region, Lanza (Bombay-Goa road), among other places in Maharashtra. All these areas are easily accessible as public transportation is available. Hence providing easy accessibility to the customers.

Team work-

Although there is no training imparted to the employees at the outlets, there is co-ordination and understanding between them due to which the work goes on smoothly creating a win-win situation for both, the management and the employees.

Modernization-

Apna Bazaar makes use of modern technology to maintain correct supplier bills and giving accurate bills to customers giving details of each purchase and most importantly showing him the savings he has made while purchasing from Apna Bazaar. They also possess total details of their sales and the percentage of sales in each category so they know where the sales are high and where they are lagging behind.

Genuine Products-

The products of Apna Bazaar are genuine as they purchase it directly from the companies. Lots of imitations of consumables such as honey, oil, etc. are available in many stores. People get cheated, as it is not easy to identify them.

CRM-

Apna Bazaar organizes a customer meet for their regular customers called MELAVDA at their anniversary to build stronger relations with their customers. On this day, the customers are offered purchase discounts which show that they have taken corrective steps towards customer satisfaction.

Weaknesses

Capital-

Raising capital for expansion and improvement is also a constraint. Apna Bazaar is bounded by the laws of consumer co-operatives due to which they cannot raise funds from open market. There is also limit prescribed by the consumer co-operatives for number of shares issued by Apna Bazaar. This is a major drawback for Apna Bazaar.

Ageing society-

Apna Bazar started after World War 2 when there was need of essential commodities at lower prices. But, after liberalization many super markets and hypermarkets have opened up due to which there is explosion of choices. Moreover, people today have the money to go for convenience shopping, and hence, the purpose for opening the co-operative is defeated.

Obstacles in recruitment: –

Apna Bazar does not have the budget to recruit skilled staff. The employees are not well educated and hence, they are not aware of the management practices. A qualified employee demands higher salary, which cannot be given by Apna Bazaar due to their constraints. Hence they cannot appoint a MBA a managerial job.

No online retailing: –

Apna Bazar does not have information about its products online. They should have their own website as it is very important in today’s world. They could even learn about customer grievances by the feedback.

Price fluctuation: –

Price Fluctuation is a major threat to Apna Bazar. If the product is bought at a higher price is has to be sold at that price only so as not to incur losses. For example, the price of oil fluctuates a lot. So if the price for oil is Rs. 820 for a can when it is purchased, it will be sold at Rs 820 per can even if the price falls to Rs. 800 per can. In this case the oil available from other shops will be cheaper.

Opportunities

Brand building: –

Apna Bazaar can take efforts to build its’ brand image. For this purpose, a marketing firm can he hired. This will attract more and more people to its outlets. Also, they have upgraded their outlets. This can be the base for attracting more customers as they will soon have all air conditioned stores.

Expansion: –

Apna Bazaar can expand its outlets to other states. At present, they have discovered interests from Madhya Pradesh and Delhi. The initiation is on the anvil.

Development in suburbs: –

People are now moving in the suburbs; infrastructure is developing due to which there is huge potential to attract more customers.

Retailing boom:

Retailing today is not only about selling at the shop, but also about surveying the market, offering choice and experience to consumers, competitive prices and retaining consumers as well. The establishment of supermarkets and convenience stores has been a great effort to communicate the advantages of organized retailing to customers.

Threats:

Malls-

There are a large number of malls that offer discounts the discounts offered by them are as good as those offered by Apna Bazaar because the malls purchase in bulk and can hence afford to give heavy discounts to the customers. The customer has an explosion of choices and will prefer shopping at these big malls because of the ambience. They get the complete shopping experience at malls. Hence, malls are a major threat for Apna Bazaar.

Competition from other stores in terms of-

Customer Centric Approach:

Most other stores take feedback from the customers in form of grievances, opinions and suggestions. They can find out customer needs and ways to satisfy them.

Image:

Image of a private retailer is more modern and advanced compared to that of Apna Bazaar. The display is also more attractive in other super markets and hypermarkets compared to Apna Bazaar.

Future Plans:

Apna Bazaar plans to open outlets in the new housing colonies coming up in the interior suburbs like Kandivli and Thane.

Increasing the distribution reach is a strategy to counter competition the co-operative plans to increase its outlets from 80 at present to about 100 by next year. This would comprise department stores, super markets, franchisee outlets and medical stores, both in Maharashtra as well as rest of the country.

Apart from that, it has money transfer facility under an arrangement with Western Union money transfer.

On the tie-up with HPCL for having Apna Bazaar outlets at the petrol pumps, so far three HPCL pumps have Apna Bazaar outlets and the results are still being analyzed.

Apna Bazaar Co-operative has embarked on a restructuring exercise and has appointed Darashaw and Company as strategic consultants. The restructuring involves exiting certain business while adding more services, to be provided under its umbrella. The restructuring plan involves exiting out of businesses like export of fish and grapes, milk processing, manufacturing bakery products like biscuits and also pickles papads and spices.

Online booking for provisions through the Net and a centralized system to control inventory are also on the anvil. To begin with the co-operative plans to have a dedicated call center for customers to phone in their requirements, which would then be delivered from the nearest Apna Bazaar outlet. An online presence, on the lines of Sangam Direct-the online initiative of HLL-is under consideration.

To ensure minimum inventory and maximum rotation, the co-operative is planning to centralize its supply chain management. It is talking to FMCG majors like Tata, Nestle, HLL and P&G to ensure rotation without building up much inventory. While the super markets would be serviced directly by the companies, the requirements of franchisee outlets would be met by Apna Bazaar to ensure better co-ordination.

Apna Bazaar operates the Akshay Labh Yojana scheme wherein the customers can deposit Rs. 10,000 at any point of time in the year and get items worth Rs. 100 per month free. They also have term deposit schemes.

Apna Bazaar has also entered into an eCRM tie-up with Venture Infotek, the e-infrastructure solutions provider, whereby Venture Infotek provides the integrated end-to-end solutions, with the shared infrastructure and payment-as-you-use payment mechanism, without investment in infrastructure.

The first thing on Apna Bazaar’s plans is to work on all 365 days like other big players.

Upgrading the skills of their manpower and create vehicle parking facility are also in their agenda. They plan to have a tie-up with Citibank on co-branding. Regarding credit card, they are on the verge of signing a MoU with SBI. As visual merchandising, a new way for presenting the products will be introduced.

The National Consumers Co-Operative Federation has approached Apna Bazaar and enquired about the possibility of running department stores under the brand name Apna Bazaar in Delhi and Madhya Pradesh.

Apna Bazaar is planning to open another outlet in Goa as they have got a good response from the supermarket.

Recommendations:

Government interference has had a major effect on the democratic setup of Apna Bazaar. Therefore, lesser dependence on government should be opted for.

Government should help stores like Apna Bazaar with credit at cheaper interest rates.

Apna Bazaar should improve their capital assets by enrolling more members and also introduce more product varieties.

In the coming years, the economy will be dominated by the retailing sector. Times are changing, organizations are changing. Changing according to times is inevitable. Apna Bazaar has to change its traditional viewpoints. It should adopt new techniques and accept change wholeheartedly. Bringing qualitative changes in their skill and especially mindset will help it to survive competition.

Apna Bazaar can open one outlet offering all the products it sells in the 80 outlets so that people get all products offered by Apna Bazaar under one roof.

Other activities:

Healthy child competition for member children.

Ayurvedic camp conducted by apna bazaar every year in November.

Consumer bulletins are printed and distributed to consumers, which gives them information about various products stored by them.