INTRODUCTION:

A consumers' cooperative is a business owned by its customers for their mutual gain. It is a form of free enterprise that is oriented toward service rather than pecuniary profit. The customers or consumers of the goods and/or services the business provides are also the individuals who have provided the capital required to launch or purchase that enterprise. A consumers cooperative may be a supermarkets, convenience stores, and other businesses owned by independently-owned, and run Co-operative societies, which benefit from joint co-ordination and co-operation in managing their businesses. As mutually-owned businesses, each member of a society has a shareholding equal to the sum they paid in when they joined.The first consumer cooperative store was established in Rochdale, Eng., in 1844, and most co-ops are modeled after the same, original principles. They are based on open consumer membership, equal voting among members, limited customer services, and shared profits among members in the form of rebates generally related to the amounts of their purchases. Consumer cooperatives have gained widespread popularity throughout western and northern Europe, particularly in Denmark, Finland, Iceland, Norway, Sweden, and Great Britain. Co-ops typically emerge because community residents believe that local retailers' prices are too high or service is substandard.

DEFINITI0N:

According to the Maharashtra Co-operative Societies Act, 1960. Sec.2 (9) defines a consumer co-operative society as a society, the object of which is:

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

b. 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 byelaws of the society.

OBJECTIVES:

1. To encourage the habit of thrift, self-help and co-operation amongst the members of the society.2. To raise funds by the way of share capital, deposits, loans, donations and entrance fees.3. To procure and produce by self or in partnership, consumer goods of daily use and undertake retailing of such goods among the members and other consumers.4. To provide to the members such services as they may require as consumers.5. To undertake processing of consumers goods and its distribution amongst its members and other consumers.6. To try to improve the quality of goods produced by the society and to construct or purchase or obtain on hire godowns required for storing of goods.7. To take effective measures to ensure price stabilization and supply of goods to the consumers at reasonable prices.8. To undertake distribution or sale of essential commodities under the authority given by the state government or the local authority.

REASONS OF SUCCESS OF CONSUMER CO-OPERATIVE MOVEMENT:

1. Strict implementation of principles of co-operatives2. Co-ordinal actions with the manager and employees.3. Linkage of banks with co-operative society so as to gets financial assistance without any difficulty.4. Assistance of ladies in making the co-operative movement successful.5. Development of co-operative movements in England was spontaneous and self-managed.6. Co-operative stores used to Earmark part of the profits in reserve funds in case of financial crisis.7. An able and efficient management was also one of the reasons for its success.

STRUCTURE OF CONSUMER CO-OPERATIVES:

The consumer cooperatives have a four tier structure comprising primary consumer stores with branches functioning at the grass root level, the wholesale / central consumer stores with their branches at district / taluka level, the State Consumer Cooperative Federations at the State level, and the NCCF of India Ltd., at the national level. However, in the States located in the North East and in the smaller States/UTs., composite state level consumer-cum-marketing federations, dealing also with consumer articles, are functioning. In rural areas, distribution of consumer goods is handled by 44,418 village level societies, including Large Sized Agriculture Multi-Purpose Cooperative Societies (LAMPS) and or Primary Agricultural Credit Societies (PACS) at the retail level. As on 31.3.2004, the overall development feature of the consumer cooperatives in the country are as given below :-

Primary Consumer Whole sale / Central State CooperativeStore Consumer Stores Consumer Fedns.

No. of Stores 24078 794 30Branches 7484 5001 737(including Deptt.Stores) Membership (in lakhs) 105.74 22.29 0.21a) Coop. Store - 0.29 0.05b) Others - 22.00 0.16

Share Capital (Rs. in lakhs)Total 16552.41 6894.42 13273.41Govt. Participation 1808.76 4769.79 12235.07

Working Capital 127214.55 48293.38 32230.72 (Rs. in lakhs)Sales ( Rs. in crores)Total Sales 1602.43 2065.60 1437.12 a) Controlled commodities 745.39 1245.77 108.43 b) Non-controlled commodities 857.04 819.83 1328.69Stores in profit 8820 449 10 Total Number of employees 22068 15000 5518Trained employees 2455 3163 289

NATIONAL CO-OPERATIVE CONSUMER FEDERATION (NCCF):

National Cooperative Consumers’ Federation of India Limited (NCCF) is the apex Federation of the consumer cooperatives in the country. NCCF was set up on 16 October, 1965 and is governed under the Multi State Cooperative Societies Act 2002. The present membership of the NCCF is 136 comprising of Primary Co-op. Stores, Wholesale Societies, State level Consumer Cooperative Federations, National Cooperative Development Corporation and the Government of India.

CHIEF FUNCTION:

1. To help and guide state federations in their operations.2. To act as the chief spokesman of consumer co-operative in India.3. To procure and distribute consumer products such as:a. Pulses, spices, food grains, tea and other agricultural goods.b. Controlled cloth.c. Non-controlled textiles and readymade garments.d. Imported and domesticated goods.The federation maintains a consultancy and promotional cell, which is entrusted with the responsibility of farming operational and business procedures, administrative norms etc. It also publishes a monthly news bulletin, which contains information on the market rates of goods supplied by the consumer co-operatives.

PROBLEMS:

1. The consumer co-operative movement in India is government sponsored and initiated.

2. Consumers in India are indifferent to their own needs and still believe in the private trade system.

3. Consumer co-operatives are not well integrated and are scattered isolated.

4. The procurement and purchase operations are technically faulty.

5. They also face problems of low efficiency and low level of quality of products.

6. There is also intense competition from the private traders who create various problems for the consumer movement.

DISPUTE SETTLEMENT:

Disputes can be raised by any member regarding Election of a Managing Committee, or the Officers. Disputes can also be raised about the conduct of the conduct of the General Meeting and the management or business of the Society.

Such disputes can be settled in special courts which deal with only the Co- operative matters. These courts are called as Co-operative Courts. · In the case of disputes which arise due to recover of sums disbursed by the co-operative society. The Co-operative Court can attach the property of a member,if it is likely to be disposed off · A certificate then issued by the official assignee or by an authorised person or by the Co-operative Court itself shall be executed as a decree of a Civil Court and also executed as arrears of land revenue. Any private transfer of the property thereafter, shall be null and void against the claim Society.

APNA BAZAAR:

“For us customer is First”

INTRODUCTION:

Apna Bazar 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” has 80 outlets in Mumbai, Thane and the neighbouring Konkan region. It has recently opened its first shop outside the Maharashtra state, in Goa. Apna Bazaar has developed a strong brand image in the mind of the consumers. It enjoys strong consumer loyalty. There are just 4%-5% consumers who shift over to other retail stores.

Brand name Mumbai Kamgar Madhyavarti Grahak Sahakari Mandal LtdDate of Incorporation 9th May 1948Constitution Multi State Co-operative SocietySector PrivateIndustry RetailingRegistered Office 106-A, Govingi Keni Road, Naigaon, Dadar [East], Mumbai 400014

HISTORY:

In 1948 it started with The Naigaon Grahak Sahakari Mandal Limited, which became Mumbai Kamgar in 1958-59 after other consumer co. op. societies merged into it. In 1962-63 the organization became Madhyawarti Grahak Sahakari Mandal. In 1968, the organization started the nation’s first departmental store on the mill worker dominated areas like Naigaon, under the name of APNA BAZAR. In a short time the brand APNABAZAR grew popular all over Mumbai and has never looked back since. After successfully establishing a wide network of branches all over Mumbai, new branches were opened along the Konkan stretch following demand. Further franchisees were encouraged, giving livelihood opportunity to many entrepreneurs.

PURPOSE OF ESTABLISHMENT:

There was an industrial lock – out as a result of which many textile workers became unemployed. In order to help these workers and to provide them with employment, the Mumbai Kamgar Madhawarti Grahak Sahakari Sanstha Limited came into existence. They started a co-operative under the brand name “Apna Bazaar”

HOW TO START - AN APNA BAZAAR:

Being a people’s movement, Apna Bazaar goes by the principle – It is not people who crave for profits, but those who wish to serve the society and earning regular income as a source of their livelihood. This principle acts as bedrock for starting an APNA BAZAAR. Those who fall under this category are Housewives, Retired Citizens, the unemployed and any other persons who are capable of starting an Apna Bazaar in their neighbourhood. There are four categories of Apna Bazaars: Home Apna Bazaar Mini Apna Bazaar Medium Apna Bazaar Mega Apna Bazaar

Those who wish to start one such Bazaar should (as per their area and number of members) deposit an amount ranging from RS 1 lakh to RS 5 lakhs with the Consumer Awareness and Research Society Trust and enroll as a Co-ordinator.

Similarly, the coordinator should also make arrangements for space or accommodation, from 150 to 1,000 S.R., in accordance with the class of APNA BAZAAR, to be established. Atleast one person who has obtained a minimum education of up to 10th standard should be appointed for supervision and 1-3 helpers can be employed as per the need and size of the APNA BAZAAR. After the deposit is made, the accommodation arranged and the required personnel and assistants appointed and these three requirements taken care of by the depositor, the CARS Trust (Consumer Awareness And Research Society Trust) will take the entire responsibility and care of the remaining things to be done. They are as follows · The Government’s Licenses required for the establishment of APNA BAZAAR, Billing Machines, Weighing Machines, Racks, Furniture and other infrastructural facilities will be provided (as per the Deposit) by the CARS Trust. The CARS Trust will also supply all the items of daily consumption to be sold to the consumer, at rates fixed by the trust. The goods will be transported to the Centres in special transport vehicles. Also, the payment of taxes will be processed by the trust.· The products rate sold at our outlets at a rate which adds a minimal 7% to the manufacturing price, the Coordinator will receive 5% of his total turnover as Service Charge and the remaining 2% is used for transpiration, cleaning, packing and other incidental expenses. Depending on the size of the APNA BAZAAR, the number of members and the quantity of sales at the Centre, each coordinator will on average earn about RS 10,000/- to RS 50,000/- as service charge alone. If the Coordinator, while extending full service to the consumer and in complete keeping with the terms and conditions and rules and regulations of APNA BAZAAR, manages to increase the turnover he will then be eligible for an extra income.· The food items and products will be cleaned, packed and the rates fixed before they are sent to the coordinator. Hence the coordinator can conveniently and directly supply the goods to the consumer.· The food grains, products and other items obtained from the sources of production are tested for quality in the laboratories, before they are packed. The items are cleared, packaged and then sent to the APNA BAZAAR outlets.· The promotional and publicity requirements, the pamphlets, wall posters, banners, Audio, Video materials, applications and membership forms. Passbooks and Bill books will also be supplied to the Coordinator by the CARS Trust. Depending on the occasion and necessity, Radio and T.V. announcements and advertisements will also be released. The Coordinator will be given special training by the CARS Trust· Within the parameters of the CARS Trust rules, the Coordinator can transfer the Coordinatorship or terminate it.

OUTLETS:

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. The minimum requirement of area for setting up Apna Bazar is 1000 sq.feet. The biggest store is at Vashi, which is spread across 27000 sq.feet. In Mumbai it has 68 outlets, 11 outlets in Konkan and 1 in Goa. Of these there are:1. Departmental stores – 82. Supermarkets – 73. Medical stores – 44. Food stores – 2 5. Franchisee stores – 37

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.

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.

INVENTORY:

The F.M.C.G. products are directly from the company whereas food grains are purchased from a market at Thane, Vegetables & fruits are purchased from RadhaKrishna food land and Dry fruits are purchased from market in Vashi. The stock is valued on FIFO basis i.e. first in first out basis.

MODE OF PAYMENT

In Apna Bazar the mode of payment is Cash, Credit card, Debit card, Ticket restaurant, and Sodexhopass coupon. No individual credit is given. However

ApnaBazar also supplies commodities to govt. Institutes, Hospital etc. They supply food grains, Grocery etc. In this case they give a credit of month.

SOURCES OF INCOME

Ø Retailing is their core activity and a major part of their§ Income comes from the various retail outlets.Ø They supply commodities like Dal, Pulses, Food grains,§ Cereals to Govt. Institutions, Hospitals for their§ Canteens. A 30 Days credit is given to them.Ø 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 Bazar for displaying these racks. E.g. Maggie, Colgate, Pepsodent, Vicks, Nescafe etc.Ø They provide space to companies e.g. MEPL (Electronic goods) in order to display and sell their goods by charging rent for space provided.Ø They have 37 Franchise outlets, which act as a source of income for Apna Bazar as Apna Bazar supplies 70% of goods.Ø Provide place to banks for opening ATM center by charging rent since almost all the outlets are owned by Apna bazar.Ø MetLife India signed an agreement with Apna Bazar Co-operative for selling life insurance policies. Based on the agreement, Apna Bazar Co-operative shall become corporate agents for MetLife India and offer MetLife India products to its huge customer base. Henceforth Apna Bazar will enable its customers to build financial freedom through Metlife India products based on need analysis. Apna Bazar will receive a commission of 35% on Premium amount.

QUESTIONS ASKED

Mahesh Kambli, CEO of the co-operative retail chain, Apna Bazaar, which sells provisions, food products and medicines, marks fresh food and vegetables

segment as the focus area to sustain its growth. The plans are to consolidate on what already exists.

1)What is the current strength of Apna Bazaar? Any plans to increase the number of outlets?

Apna Bazaar has 86 outlets, of which 46 are company owned and the rest are franchisees. The network includes seven department stores, six supermarkets, 26 food stores and five speciality chemist stores. We're now planning improvement on whatever we presently run.

2)Looking ahead, what are the latest plans?

We are more in to consolidation than expansion, and to form strategic alliances. We will soon partner with the Japanese Consumer Co-operative Union (JCCU) in areas of training the staff force, visual merchandising and setting up a co-operative food brand. The company is also foraying into co-branding exercises to offer value to its consumers. We have already introduced a new section - Food and Vegetables, operational in stores at Vashi, Andheri, Charkop, Mulund and Fort. We have started with the Mulund store, and it is the first consumer cooperative store sector in India to have air-condition.

3) What is the idea behind establishing alliances with the likes of Japanese Consumer Co-operative Union ?

These alliances will be based on exchanging strengths in areas of training, visual merchandising and developing co-operative brands. Their expertise can be used for ours stores that are the value-additions. These brands will be cheaper than the existing ones, and the quality maintained.

4) How far has the upgrading skills of manpower reached?

We have roped in consultants to impart training, done through in-house facilities and affiliations with the Asoka Mehta Institute of Management and Research. Talks on an exchange programme of our personnel to JCCU are going on. All the stores have started staff training.

5) What will be the new focus? Also, which section of the society are you looking at?

We have marked the fresh food and vegetables segment as the focus area to sustain growth. They are currently available at four stores, and will extend it to

other outlets soon. We are looking at building an all-round image by targeting the upper middle class segment as well. We are bringing in initiatives like specialised counters and food courts at its department stores and super markets. People in their 40s are already coming to us. What we are targeting now is the still younger generation, the people who possess spending power.

6) What is your annual turnover?

We are projecting sales of Rs 165 crore this fiscal year, including the franchisee contribution of Rs 30-35 crore, down by Rs 10 crore from last year. We have closed down our export division to concentrate only on the core activities. The processing unit at Jalgaon is also closed down. The spices and dal factory at Taloja are being outsourced now. These moves have affected the sales.

Meanwhile, we have stopped the plans of going online, on the lines of Sangam Direct, the online initiative of HLL. The home delivery concept would not work unless there is delivery density. As such, the earlier plan to start a call centre parallel to this is also halted.

7) What do you want Apna Bazaar to be known for?

When it comes to food it has to be Apna Bazaar that must come into one's mind. I will say the punch line for Apna Bazaar will be - when you think about genuine products, think about Apna Bazaar.

FINANCIAL ANALYSIS:

TOTAL SALES:

In the financial year 2003-04 the organization’s total sales amounted to Rs. 127 crores and 36 lacs. There has been a fall of Rs. 5 crores in the total sales compared to the previous years. This was due to loss making outlets which were later closed down.

EXPENDITURE:

Out of the total expenditure incurred by Apna Bazar, Payment to staff constitutes to more than 40-45% in the financial year 2001-02, 2002-03, 2003-04. Also Interest on deposits and borrowings were around 20-25%. Apna Bazar borrowed money in order to set it off against the losses. These lead to increasing interest burden and almost resulting into debt trap.

MEASURES TAKEN TO ERADICATE LOSSES:

Since Apna Bazar has incurred losses of Rs. 150 lacs in the financial year 2003-04, they have taken the following steps to eradicate these losses:Ø They are trying to reduce the inventory turnover to two (2) days with the help of Radha Krishna Food land. These would reduce the blockage of capital and interest on it.Ø The concept of Shopping on wheel has been drastically cut down due to government regulation of disallowing vehicles on road, which are 15 years old. Another reason is that Apna Bazar outlets are now available in almost all areas of Mumbai. Ø Apna Bazar has discontinued the outlets, which are making losses for many years. Outlet in Bandra was closed. Ø They are trimming the staff and there has been no new intake of staff as of date. Ø Training and Development of staff in order to improve their efficiency and productivity.

SWOT ANALYSIS:

STRENGTHS:

1) Pure quality commodity and Surety of no duplication 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 the 2) Quantity is accurate and All prices below MRP including medical productsApna 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. 3) Guarantee on each product4) Strong network as compared to competitorsApna 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:

1) Ambience not satisfactory2) Congested (lack of space)3) Improper management of inventory.4) No Window display5) Lack of proper security measures and customer service6) Lack of parking space7) Has cloth bags instead of trolleys8)Some of the goods placed too high on racks so customers unable to reach them9) No computers on cash counters but cash machines present

OPPORTUNITIES:

1) Tie ups with Amul, Parle, HPCL, Metlife etc. 2) Start outlets at par with new super markets like D – Mart3) Opening stores exceeding 50000+sq fts, equipped with air conditioners, trolleys etc.4) Efforts to make shopping a pleasurable experience

THREATS:

D-Mart and Giant Hypermarket provides the experience of shopping which apna Bazar does not provide. 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.

FUTURE GROWTH STRATEGY:

· 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.· 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. · Expansion in the suburbs like thane and kandivali.· 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.

SOLUTIONS AND RECOMMENDATIONS:

Ø Getting more tech – savvy i.e. adopting new methods for billing like computers and having electronic displays of the currents offersØ Have shorter size of racks so customers are able to reach the products more easily

Ø Change existing iron racks with steels ones which are polishedØ 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.Ø Changing according to times is inevitable. Apna Bazaar has to change its traditional viewpoints. It should adopt new techniques and accept change wholeheartedlyØ Recruit more staff and train existing ones on providing better customer serviceØ Get trolleys of different sizes i.e. small, medium and large for the convenience of customersØ Provide valet parking or else have a spacious parking area for its customersØ Have electronic detectors at the entrance and exit points to prevent shop - liftingØ Change the ambience by :· Changing the flooring from tiles to marbles· Making the store centrally air – conditioned· Increase the size of the store vertically and horizontally to give a more spacious feel· Increase the number of cash counters so the rush will decrease· Improving the lighting to make the store look brighter

CONCLUSION:

Cooperatives are successful because they provide valuable services and save consumers money. Since the primary goal of cooperatives is to meet needs, not generate profits, they can serve their members at low cost.Cooperatives often provide services to their communities that are not readily available from for-profit businesses. In other cases, cooperatives enhance the level of competition in the marketplace by providing consumers with an alternative source of products and services. The central principle of consumer cooperatives is member control and participation. These member/owners meet periodically to establish policy and elect directors. Directors, in turn, hire managers to administer thecooperative on a day-to-day basis.