SFM Inc. is a premier grocery chain, headquartered at Noida operating over 70 superstores across India, employee strength is 23,000 and annual sales is over Rs. 2.0 billion. SFM has a strong reputation for offering best quality products and excellent service. Through a combination of market research, trial and error, and listening to customers, SFM has grown into a successful organization. Many of the company’s superstores measure 1lakh sq. ft., 2-3 times the size of average supermarkets. Employee strength of a superstore is 500 – 600. Individual superstores differ in terms of actual size and some special features. Aside from the normal features of supermarkets, superstores have large bakery, fresh produce, pharmacy, floral and cards sections. The bulk foods department provides customers with the opportunity to select desired quantities from a vast array of food and nonfood items. Customers can wander among stations as they decide what to order.

Each department handles its own ordering. Factors such as pricing, special promotions, local circumstances are taken into account. Superstores typically receive one truckload of goods per day from the main warehouse. The short lead-time greatly reduces the time duration an item might be out of stock. SFM values its employees and invests an average of Rs.7000 to train each new employee. Employees learn about stores operations, importance of good customer service and how to provide it. Employees are helpful, cheerfully answer customer questions or handle complaints. Employees are motivated through a combination of compensation, profit sharing and benefits. Quality and customer satisfaction are foremost at SFM. If a customer is dissatisfied with an item and returns it in part or full, the customer is offered a choice of a replacement or a refund. If the item is a SFM brand item, quality control teams determine causes of the problem and suggest corrective action.

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Questions : ( 20 MARKS)

1. How do customers judge the service of a supermarket?

2. Indicate how and why each of the following factors are important to the successful operation of a supermarket

(a) Customer satisfaction

(b) Forecasting

(c) Capacity planning

(d) Location

(e) Service Design and delivery

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