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Managing Brand Equity in the Digital Age: Croma’s Omni-Channel Retailing

CASE STUDY, BRAND MANAGEMENT
ET Cases, 12 Pages
AUTHOR(S) : A. J. Swapna and Dr. Nagendra V. Chowdary

Case Preview

Managing Brand Equity in the Digital Age: Croma’s Omni-Channel Retailing

 

“The beginning of the 21st century saw the advent and rapid growth of the mall culture. People abandoned traditional markets in droves to press their noses against  fancy windows of stores with unpronounceable names and scarcely recognizable merchandise in plush air-conditioned comfort. It took a while but both retailers and  shoppers grew to love this new way of shopping. Yet, just a decade later, the mall is yesterday’s phenomenon and e-com is the way the India of tomorrow is shopping. Our belief is that the premise of a click versus brick narrative itself is flawed.”

– Ritesh Ghosal (Ghosal), CMO, Croma

Croma, the multi-brand retail chain of Tata Group, has always been in the forefront of innovation and customer service. It is the country’s first retail chain to launch a webstore, www.croma.com in the Consumer Durables and Information Technology (CDIT) segment. Croma’s omni-channel features added benefits to consumers’  shopping experience, through which it started having a deeper understanding of customer behavior and preferences, which transformed the way it offered an omni-channel shopping experience to its customers. For instance, with the omni-channel approach, consumers had the option to choose among online and physical  stores, social media, customer care/call centers and emails to make their purchases. Consumers had more options to shop and interact with, more information about products or categories of products that interest them and greater range of product availability. For Croma, the consumer is at the center of its  strategy and allowed them to decide when, where and how to shop. The consulting firm, Boston Consulting Group in a paper stated that, in omni-channel retail – “the  consumer can order anytime, anywhere, and from any device. They can get their purchases in the store, at a separate delivery location, or through home delivery; to  determine their own shopping and delivery or pick-up windows to fit their busy schedules; and to be able to return items at any of the store’s retail locations without any hassles.” Can Croma’s omni-channel retail strategy successfully balance both type of channels used for selling and the varying customer needs based on  super personalization?

Omni-channel Retailers Dominate the World of E-Retailing: Change in the Indian ‘Digital’ Retail Landscape

With its vast population and expanding urban middle class, India has been an attractive market for e-retailers across the globe. Along with that, the India government’s recent initiative, ‘Make in India’ resulted in significant advances in the online retailing within the country. The ‘Survey of Shoppers’ in 19 countries reported by PwC in 2015, stated that, “the various ways of omni-channel shopping will redraw the retail landscape, where consumers want an array of options for shopping such as attractive prices, convenience, great customer service, and quick, if not immediate and gratification”. Using omni-channel retailing, consumers will be allowed to choose the channel that is most convenient for making purchases and getting customer support (Exhibit I)............

India’s Evolving Consumer: Discerningly Digital?

The Indian e-commerce market has grown steadily from $4.4 billion in 2010 to $13.6 billion in 2014 (Exhibit II). With the emergence of e-commerce market in India, the sector is expected to cross the $100 billion mark within 2020, contributing over 4% to India’s GDP............

Croma’s Journey from Brick to Click and its Omni-Channel Retail Initiatives

Launched in October 2006, and managed by Infiniti Retail, a 100% subsidiary of Tata Sons, Croma is India’s first chain of consumer electronics and durables. The large format stores sells nearly 6,000 electronic products and appliances of 180 brands and at prices to fit all budgets and offers products in eight categories namely large appliances, home entertainment, small appliances, computers and peripherals, communication, music and movies, imaging and gaming software............

Competition and Croma’s Business Challenges

Croma is a witness to the growing dominance of e-commerce in driving shoppers online while the rising clout of rivals such as Reliance Digital is gnawing away its share of the brick-and-mortar sales pie. “The challenge and the opportunity facing retailers today – of both the brick and click varieties – is to create an integrated platform for engaging the shopper and seeing through the full decision-making process. A platform that would allow the retailer to enter the conversation early in the shoppers’ decision-making process..............

Assignment Questions

I. Analyze the need and importance of multi-channel retailing in the context of changing Indian ‘Digital’ landscape in general and for Croma in particular.
II. How did Croma deploy its digital retailing strategy? Analyze the benefits arising out of adopting a multi-channel retailing approach in bolstering its market penetration in CDIT sales.
III. ..........

Exhibits

Exhibit I: Evolution of Omni-Channel Retail

Exhibit II: Global Omni-Channel Retail Index by Country and Online Retail in India – Market Size (in $ billion) – 2015

Exhibit III: Croma In-Store Photos

Exhibit IV: Various Store Formats of Croma – Megastore, Zip Store and Kiosk

Exhibit V: Croma's Omni-channel Retailing and its Customer Reviews

Exhibit VI: Croma's Competition with Reliance

Teaching Note Preview

Managing Brand Equity in the Digital Age: Croma’s Omni-Channel Retailing

 

Synopsis

This case study aims to understand how retailers and other channel intermediaries affect the brand equity of the products they sell. Croma, the retail arm of Tata group became the sought-after retail brand for Consumer Durables and Information Technology (CDIT) and its omni-channel features added value to consumers  shopping experience. Through its omni-channel retailing it started having a deeper understanding of customer behavior and preferences which transformed the  way Croma offered an omni-channel shopping experience to its customers. This case study will help participants understand how marketers of successful 21st century brands evolve and adapt every aspect of their marketing programs to enhance brand equity. Can Croma’s omni-channel retail strategy successfully  balance both the type of channels used for selling and the varying customer needs based on super personalization?

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

  • *This case study presupposes an understanding of the concepts of Multi-channel marketing/Integrated marketing communications and omni-channel retailing. Accordingly, the participants were asked to read the following chapters and interview to help them better connect the concepts:
  • *Kevin Lane Keller, et al., “Integrated Marketing Communications to build Brand Equity”, Strategic Brand Management, 3rd Edition, Pearson Education, Inc., 2011 – To understand how Croma garnered success using a slew of omni-channel retailing initiatives
  • *Philip Kotler, et al., “Managing Retailing, Wholesaling, and Logistics”, Marketing Management, 14th Edition, Pearson Education, 2013 – To understand the retailing strategies of Croma striving for market excellence
  • *“Interview conducted with Ritesh Ghosal by Dr. Nagendra V. Chowdary”, ET Cases, http://www.etcases.com/croma-omni-channel-retailing.html, April 25th 2016

 

Further, the students should have a basic understanding of the Indian Retail sector and its evolution in the changing digital landscape.

Case Positioning and Setting

This case study can be used for either of the following:

  • *MBA Program – Brand Management course – ‘Integrated Marketing Communications to build Brand Equity’, Chapter 6- To understand how Croma garnered success  using a slew of omni-channel retailing initiatives
  • *MBA Program – Marketing Management course – ‘Managing Retailing, Wholesaling, and Logistics’, Chapter 15 – To understand the retailing strategies of Croma  striving for market excellence

 

Case Study Analysis and Classroom Discussion

Preamble to this Case Study Analysis

This case study provides an opportunity to learn the basics of omni-channel retailing strategies in the light of Croma’s success. With the omni-channel  approach, consumers can choose among online and physical stores, social media, customer care call centers and emails to make their purchases. For Croma, the consumer is at the center of its strategy and allows them to decide when, where and how to shop. Accordingly, this case study was discussed in the  following way [Exhibit (TN)-I].............

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Abstract

This case study is an attempt to let the students/participants understand how retailers and other channel intermediaries affect the brand equity of the products they sell by establishing awareness and associations to their product assortments. Croma, the retail arm of Tata group became the sought-after retail brand for Consumer Durables and Information Technology (CDIT) segment. Marketers of successful 21st century brands continue to evolve and adapt every aspect of their marketing programs to enhance brand equity. These marketers will develop a deep understanding of what makes their brand successful, retaining enduring core elements while modifying peripheral elements that fail to add value or unnecessarily absorb costs. The businesses that win in the 21st century will be those that have marketers who successfully build, measure and manage brand equity.



Pedagogical Objectives

  • To understand the need and importance of multi-channel retailing in the context of changing Indian ‘Digital’ landscape in general and for Croma in particular
  • To understand how Croma deployed digital retailing strategy and analyze the benefits arising out of adopting a multi-channel retailing approach to bolster its market penetration in CDIT sales
  • To discuss and debate on the relationship between omni-channel retailing and multi-channel retailing and analyze Croma’s potential advantages and disadvantages thereof

Case Positioning and Setting

This case study can be used for either of the following:

  • MBA Program – Brand Management course – ‘Integrated Marketing Communications to build Brand Equity’, Chapter 6 – To understand how Croma garnered success using a slew of omni-channel retailing initiatives
  • MBA Program – Marketing Management course – ‘Managing Retailing, Wholesaling, and Logistics’, Chapter 15 – To understand the retailing strategies of Croma, striving for market excellence


This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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