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Friday, July 13, 2007

The store openly displays, along with the purchase price of products, the profit margin

Neighbourhood store is revenue model for IIM soccer idea Ayesha Khan Indian Express Home > Front Page > Posted online: Sunday, July 08, 2007
Vadodara, July 7: From a small city club run by a fan in Vadodara to standing tall for India at an international soccer festival in Australia this week, it would seem that Providence FC simply has that name, and sheer grit, to thank for.
But actually, it’s a success story that has been built on a neighbourhood store, and an astute, “self-sufficient” business model designed by an IIM-Lucknow graduate — one that saw the club build up its ‘playing capital’ to grow from a domestic oddity to enter the Kanga Cup in Canberra on an Asian fellowship.
For one, it’s the only store to openly display, along with the purchase price of products, the profit margin that it hopes to gain from the sale of each item — rice, dal, tomato ketchup, detergent powder, and everything else in between.
And then, it has its “loyal” customers actually pooling in to make that margin better.
“We need money but to promote the game and not merely for profits” says C Sadanandan, the administrator, a retired IPCL employee, who started the club in a state not really famous for its football, initially with recruits from his home state Kerala.
Well, the IIM graduate who has fashioned this business model is Sadanandan’s son Satyajit. And, the customers who are part of this four-year-old “movement” are Vadodara residents like Girish Pandya, a retired pharma firm employee, who proposed a customer membership scheme, and G P Namdeo, former V-P (business operations), Nicholas Piramal, who simply offered his services.
Says Namdeo, “The low margins have ensured customer loyalty; a satisfied customer also spreads the word around. Along with the membership card, there’s home delivery as well as personal interaction where customer details such as their hobbies, and birthdays are noted down. This gives us an edge over the local kirana stores, as well as big supermarket chains here.”
Remember, the shoulders behind this initiative are those of footballers who play for Providence FC, most of them from poor backgrounds. Or, former footballers who have hung up their boots — six of them are now working on an incentive system in the store.
Says Satyajit, who decided not to take up a regular job after IIM to concentrate on his father’s dream: “The principles of retail business are the same, while we want to break even and earn enough, the guiding principle is the game. There is no sports business model in the country, we want to evolve that.” Satyajit has now been roped in by the All India Football Federation (AIFF) to work as Director (Projects) - it even agreed to his condition that he would be with Providence for five days a month.
Says Namdeo: “The idea is to increase community participation for the game. I volunteered my services and for the year 2007-08 we are hoping for a 48 per cent sales increase.”
But then, club officials admit that playing a tournament in Australia is a different ballgame altogether, and they are thankful for the backing they have got from Mumbai-based Ashok Piramal group and AIFF chief and Union Minister Priya Ranjan Dasmunshi. “We have managed to travel so far on our own principles, we just need professional management. People need to understand, football is just not a game but teaches you to live life,” says Satyajit.

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