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Project report on retail industry including
  strategies developed by major players




                   By: Kapil Dipal
                   PGDBE- Marketing




                      1
DECLARATION




I am a benefited Student of MBA, Declare that the Project Entitled “retail industry and the
strategies.” In Partial Fulfillment of MBA Degree Course is my Original Work.




                                            2
Acknowledgement
  I, sincerely thankful to all those people who have been giving me any kind of
assistance in the making of this project report. I express my gratitude to Mr.
who has through her vast experience and knowledge has been able to guide me, both
ably and successfully towards the completion of the project. I express my gratitude to
KIIT college of engineering, Gurgaon .



I would hereby, make most of the opportunity by expressing my sincerest thanks to all
my faculties whose teachings gave me conceptual understanding and clarity of
comprehension, which ultimately made my job more easy. Credit also goes to all my
friends whose encouragement kept me in good stead.               Their continuous support has
given me the strength and confidence to complete the project without any difficulty.

           Last of all but not the least I would like to acknowledge my gratitude to the
respondents without whom this survey would have been incomplete.

           .

    And in the end i would like to thanks my parents and friends for their all time help and constant
support.




                                                 3
CONTENTS

 Objective of the Study


 Executive Summary


 About the Organization


 Research Methodology


 Culture


 Data Analysis


 Conclusion


 Suggestions


 Limitations


 Questionnaire


 Bibliography




                              4
1.1 Introduction
        Retailing is the most active and attractive sector of last decade. While the retailing industry
itself has been present since ages in our country, it is only the recent past that it has witnessed so
much dynamism. Indian retailing today is at an interesting crossroads. The retail sales are at the
highest point in history and new technologies are improving retail productivity there are many
opportunities to start a new retail business. There are just over a 6 million retail outlets operating
across the Indian cities from north to south and from east to west. This large number of outlets,
many of which are trying to serve and satisfy the same market segments, results in fierce
competition and better values for shoppers.

        The retail mix is the combination of factors retail used to satisfied customer needs and
influences their purchase decision. It’s include the type of merchandise and services offered,
merchandise pricing,      advertising, promotional programs store design merchandise display,
assistance to customer provided by salespeople, and convenience of the store’s location.

        Biggest challenge for organized retailing is to create a “customer-pull” environment that
increases the amount of impulse shopping. Research shows that the chances of senses dictating sales
are up to 10-15%. Due to which there is emergence of discount stores which is expected to
spearhead the organized retailing revolution.

        The title of the project is “Effectiveness of Retailing Mix for Customer Satisfaction at
Big Bazaar” which the researcher has carried out, as retail mix greatly influences the customer
satisfaction level and the customer perception towards that store. It is one of the hot issue in todays
retail competition world which is very important for all the retail store to follow that.

        This study was done to know if customers are really satisfied with the present retaling mix
in the Big bazaar and also to find out how the store envirnoment influences the shopping behaviour
of the customer to know how the store environment can be improved.




                                                    5
1.2 Rationale of the study

        The project is all about to determine the satisfaction level of the customers from the store
environment and analyze the impact of retailing mix on the customer satisfaction level, and to
improve the store environment to increase the sales and to attract the customers, this study helps to
improve the environment of the store to reach the customer satisfaction level and improve the
merchandising in Big Bazaar.

2.1 Introduction

        The word "Retail" originates from a French-Italian word. Retailer is someone who cuts off
or sheds a small piece from something. Retailing is the set of activities that markets products or
services to final consumers for their own personal or household use. It does this by organizing their
availability on a relatively large scale and supplying them to customers on a relatively small scale.
Retailer is a Person or Agent or Agency or Company or Organization who is instrumental in
reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer.




2.2 Indian Retail Industry:




                                                 6
Indian retail industry is the largest industry in India, contributing to over 13% of the
country's GDP. Organized retail industry in India is expected to rise 35% yearly being driven by
strong income growth, changing lifestyles, and favorable demographic patterns. It is expected that
by 2011-12 modern retail industry in India will be worth US$ 590 billion. It has further been
predicted that the retailing industry in India will amount to US$ 833 billion by 2013 and US$ 1.3
trillion by 2018. Shopping in India has witnessed a revolution with the change in the consumer
buying behavior and the whole format of shopping also altering. Industry of retail in India which has
become modern can be seen from the fact that there are huge shopping centers, malls and sprawling
complexes which offer food, shopping, and entertainment all under the same roof. Indian retail
industry is expanding itself most aggressively; as a result a great demand for real estate is being
created. Indian retailers preferred means of expansion is to expand to other regions and to increase
the number of their outlets in a city.

         In the Indian retailing industry, food is the most dominating sector and is growing at a rate
of 9% annually. The branded food industry is trying to enter the India retail industry and convert
Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of
non- branded items. Indian retail industry is progressing well and for this to continue retailers as
well as the Indian government will have to make a combined effort. Indian retailing industry has
seen phenomenal growth in the last five years. Organized retailing has finally emerged from the
shadows of unorganized retailing and is contributing significantly to the growth of Indian retail
sector. The “India Retail Sector Analysis report helps clients to analyze the opportunities and factors
critical to the success of retail industry in India.

        Indian retail industry is going through a transition phase. Most of the retailing in our country
is still in the unorganized sector. The spread out of the retails in US and India shows a wide gap
between the two countries. Though retailing in India is undergoing an exponential growth, the road
ahead is full of challenges.

2.2.1 Key Challenges:


     Location:

        "Right Place, Right choice" Location is the most important ingredient for any business that
        relies on customers, and is typically the prime consideration in a customers store choice.
        Locations decisions are harder to change because retailers have to either make sustainable
        investments to buy and develop real estate or commit to long term lease with developers.
        When formulating decision about where to locate, the retailer must refer to the strategic
        plan:
                                                       7
o   Investigate alternative trading areas.
    o   Determine the type of desirable store location
    o   Evaluate alternative specific store sites


     Merchandise:
        The primary goal of the most retailers is to sell the right kind of merchandise.
        Merchandising consists of activities involved in acquiring particular goods and services and
        making them available at a place, time and quantity that enable the retailer to reach its goals.
        Merchandising is perhaps, the most important function for any retail organization, as it
        decides what finally goes on shelf of the store.


     Pricing:
        Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its
        interaction with other retailing elements. The importance of pricing decisions is growing
        because today's customers are looking for good value when they buy merchandise and
        services. Price is the easiest and quickest variable to change
     Target Audience:

        "Consumer the prime mover" "Consumer Pull", however, seems to be the most important
        driving factor behind the sustenance of the industry. The purchasing power of the customers
        has increased to a great extent, which is influencing the retail industry to a great extent, a
        variety of other factors also seem to fuel the retailing boom.


2.2.2 Scale of Operations:

        Scale of operations includes all the supply chain activities, which are carried out in the
business. It is one of the challenges that the Indian retailers are facing. The cost of business
operations is very high in India.


2.3.1 Indian retail types

     Malls
     Branded stores
     Specialty stores
     Departmental stores
     Super markets
     Discount stores

                                                    8
 Hyper markets
     Shopping markets
     Convenient stores


     Malls:
               The largest form of organized retailing today Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq. ft. and above. They lend an
ideal shopping experience with an amalgamation of product, service and entertainment, all under a
common roof. Examples include Shoppers Stop, mega Mart, Pantaloon, Wall mart etc.

 Specialty Stores:

               Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on
specific market segments and have established themselves strongly in their sectors.

 Discount Stores:

               As the name suggests, discount stores or factory outlets, offer discounts on the MRP
through selling in bulk reaching economies of scale or excess stock left over at the season. The
product category can range from a variety of perishable/ non perishable goods.

 Department Stores:

               Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs. Departmental stores further classified into localized departments such as clothing, toys,
home, groceries etc. Departmental Stores are expected to take over the apparel business from
exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which
started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and
even has its own in store brand for clothes called Stop!.

 Marts/Supermarkets:

               Large self service outlets, catering to varied shopper needs are termed as
Supermarkets. These are located in or near residential high streets. These stores today contribute to
30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini
supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft
to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

 Convenience Stores:

                                                   9
These are relatively small stores 400-2,000 sq. feet located near residential areas.
They stock a limited range of high-turnover convenience products and are usually open for extended
periods during the day, seven days a week. Prices are slightly higher due to the convenience premix




2.3.2 Traditional Retail Scene in India

        India is the country having the most unorganized retail market. Traditionally the retail
business is run by Mom & Pop having Shop in the front & house at the back. More than 99%
retailers function in less than 500Sq.Ft of area. All the merchandise was purchased as per the test &
vim and fancies of the proprietor also the pricing was done on ad hock basis or by seeing at the face
of customer. Generally the accounts of trading & home are not maintained separately. Profits were
accumulated in slow moving & non-moving stocks which were to become redundant or consumed
in-house. Thus profits were vanished without their knowledge. The Manufactures were to distribute
goods through C& F(Carry and Forward) agents to Distributors & Wholesalers. Retailers happen to
source the merchandise from Wholesalers & reach to end-users. The merchandise price used to get
inflated to a great extent till it reaches from Manufacturer to End-user. Selling prices were largely
not controlled by Manufacturers. Branding was not an issue for majority of customers. More than
99% customers are price sensitive & not quality or Brand Sensitive at the same time they are Brand
conscious also.


        Weekly Bazaar in many small towns was held & almost all the commodities were on the
scene including livestock. Bargaining was the unwritten law of market. Educational qualification
level of these retailers was always low. Hence market was controlled by handful of distributors &/or
Wholesalers. Virtually there was only one format of retailing & that was mass retail. Retailer to
consumer ratio was very low, for all the categories without exception. Varity in terms of quality,
Styles were on regional basis, community based & truly very low range was available at any given
single place. Almost all the purchases / (buying) by mass population was need oriented & next turn
may be on festivals, Marriages, Birthdays & some specific occasions. Impulsive buying or
consumption is restricted to food or vegetables etc. Having extra pair of trousers or Shirts or Casuals
& Formals & leisure wear & sports wear & different pair of shoes for occasions is till date is a
luxury for majority population except for those living in Metros.

        Purchasing power of India urban consumer is very low and that of Branded merchandise in
categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food, Jewellery, are slowly
seeping into the lifeline of Indian City folks. However electronic & electrical home appliances do
hold appropriate image into the minds of consumers. Brand name does matter in these white goods
                                                  10
categories. In the coming times also majority of organized retailers will find it difficult to keep
balance with rest of the unbranded retail market which is very huge. Retailing consists of those
business activities involved in the sale of goods and services to consumers for their personal, family,
or household use. Retailing comprises of four elements customer orientation, coordinated effort,
value-driven, and goal orientation.




        Figure 2.2 Evolution of Indian Retail                                (estimated)


2.3.3 Drivers of change in retailing

     Changing demographics and industry structure
     Expanding Computer technology
     Emphasis on lower cost and prices
     Emphasis on convenience and service
     Focus on productivity
     Added experimentation
2.3.4 Essentials of Retailing



                                                  11
Customer orientation- The retailer makes a careful study of the needs of the customer and attempts
to satisfy those needs.

Goal orientation – The retailer has clear cut goal and devises strategies to achieve those goals.

Value driven approach- the retailer offers good value to the consumer with merchandise having the
price and quality appropriate for the target market.

Coordinated efforts- Every activity of the firm is aligned to the goal and is designed to maximize
its efficiency and deliver value to the consumer




2.4 Organized Retail is evolving with changing customer aspirations

        Organized retailing in most economies has typically passed through four distinct phases in
its evolution cycle. In the first phase, new entrants create awareness of modern formats and rise
consumer expectations. In the second phase consumers demand modern formats as the markets
develop – thereby leading to strong growth. As with the life cycle in any industry, the high rate of
growth would lead to a stage where the market would reach maturity and all the players would
strengthen their positions. This will be followed by the final phase where the market would reach
saturation, the growth would be limited and for sustainable growth, retailers would explore new
markets as well as evaluate inorganic opportunities.

2.4.1 Growth Factors in Indian Organized Retail sector:

        The growth factors in India organized sector are various but it is mainly due to the fact that
India's economy is booming. Also, the rise in the working population which is young, pay- packets
which are hefty, more nuclear families in urban areas, rise in the number of women working, more
disposable income and customer aspiration, western influences and growth in expenditure for luxury
items. All these are the factors for the growth in Indian organized retail sector.

        According to the Icrier report, the retail business in India is estimated to grow at 13% from
$322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is expected to
grow at about 10% per annum with sales expected to rise from $ 309 billion in 2006-07 to $ 496
billion in 2011-12. With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by
2011, India will need additional retail space of 700,000,000 sq ft (65,000,000 m2) as compared to
today. Current projections on construction point to a supply of just 200,000,000 sq ft
(19,000,000 m2), leaving a gap of 500,000,000 sq ft (46,000,000 m2) that needs to be filled, at a cost
of US$15–18 billion.

                                                   12
Many Indian companies have entered the retail industry in India and this is also a factor
in the growth of Indian organized retail sector. Reliance Industries Limited is planning to invest US$
6 billion in the organized retail sector in I India by opening 1500 supermarkets and 1000
hypermarkets. Bharti Telecoms is planning a joint venture worth £ 750 million with Tesco a global
retail giant. Pantaloons are planning to invest US$ 1 billion in order to increase its retail space to 30
million square feet. Such huge investment is also a factor in the growth of the organized retail sector
in India.

             The world's largest retailer by sales, Walmart Stores Inc and Sunil Mittal's Bharti
Enterprises have entered into a joint venture agreement and they are planning to open 10 to 15 cash-
and-carry facilities over seven years, Carrefour the world’s second largest retailer by sales, is
planning to setup two business entities in the country one for its cash-and-carry business and the
other a master franchisee which will lend its banner, technical services and know how to an Indian
company for direct-to-consumer retail. The world’s fifth largest retailer by sales, Costco Wholesale
Corp (Costco) known for its warehouse club model is also interested in coming to India and waiting
for the right opportunity. Tesco Plc., plans to set up shop in India with a wholesale cash-and-carry
business and will help Indian conglomerate Tata group to grow its hypermarket business. The
factors for growth in Indian organized retail sector are many and that’s the reason behind its massive
growth, but for this to continue both the Indian retailers and the government will have to work
together.




                                                   13
2.4.2 Penetration of Organised Retail




Figure 2.3 Penetration of Organized Retail




2.4.3 Indian Organized Retail Sector's Impact on Lifestyles

         The Indian organized retail sector's impact changed the lifestyle of the Indian consumers
drastically. The evident increase in consumerist activity is colossal which has already chipped out a
money making recess for the Indian organized retail sector. With the onset of a globalized economy
in India, the Indian consumer's psyche has been changed. People have become aware of the value of
money.

         Now a days the Indian consumers are well versed with the concepts about quality of
products & services. These demands are the visible impacts of the Indian organized retail sector.
Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of
the latest national & international products with the help of print & electronic media. The social
changes with the rapid economic growth due to trained personnel’s, fast modernization; enhanced
availableness of retail space is the positive effects of Liberalization.


                                                    14
The growth factors of organized retail in India are:-

        Increase in per capita income which in turn increases the household consumption
        Demographical changes and improvements in the standard of living Change in patterns of
         consumption and availability of low-cost consumer credit
        Improvements in infrastructure and enhanced availability of retail space
        Entry to various sources of financing


        The non-food sector, segments comprising apparel, accessories, fashion, and lifestyle felt the
significant change with the emergence of new stores formats like convenience stores, mini Marts,
mini supermarkets, large supermarkets, and hyper marts. Even food retailing has became an
important retail business in the national arena, with large format retail stores, establishing stores all
over India. With the entry of packaged foods like MTR, ITC Ashirbad, fast foods chains like
McDonald's, KFC, beverage parlors’ like Nescafe, Tata Tea, Café Coffee and Barista, the Indian
food habits has been altered. These stores have earned the reputation of being 'super saver locations'.

    India will be a unique business arena in whole of the global economy, for the social and
economic parameters would overrule the big bang of the vivid competition. Previously mastered by
the unorganized retail sector, India opened up late as an economy in 1990 until then the idea of retail
formats were spread by the government.




2.4.4 Employment Generation by India Organized Retail Sector

         Lots of employment generation by Indian Organized Retail Sector in the near future. India is
going through a radical economic change. Though it is very infant stage, people can feel the climate
is changing. The unorganized retailers take the lion's share in the Indian retail sector, but the
organized retailers are growing at a good pace, and promise an increase of proportion of by 2016.
This is to be the largest sector after the agricultural sector. The increase in the number of consumers
twinned with the introduction of organized sector has brought numerous corporate investments in
retail sector. The entry of super markets, enormous departmental stores, and shopping malls has
encouraged the retailers to look at new business plans of expansion. An economic growth on a
monumental scale is offered by the Indian retail sector, equally in the national and international
market which in turn will generate a huge source of employment and a variety of options for the
consumers. The Ernst & Young's report 'The Great Indian Retail Story', anticipates that the Indian
retail sector would come up with 2 million employment opportunities within the year 2010.

Benefits to the economic growth:-
                                                   15
    Better quality products and services would lead to better competition

        More exports bring more foreign direct investments

        Organized Indian retail sector would encourage tourism

        Along with the employment boom there would be a vast development in the expertise of the
         human resource

        There would remain future scope for improvements in agriculture, small, and medium scaled
         with the help of the Indian retail sector

        The present employment in the retail business is nearly 4 crores and around 20 crores depend
on this sector. There is a scope of better exposure to the international standards with the entry of
transnational companies, which in turn is encouraging more & more retail management programs to
open up and help bridging the gap of supply & demand of talented professionals for management.




2.4.5 Scope of the Indian Retail Market:

         The scope of the Indian retail market is immense for this sector is poised for the highest
growth in the next 5 years. The Indian retail industry contributes 13% of the country’s GDP in the
Indian retail market the scope for growth can be seen from the fact that it is expected to rise to US$
590 billion in 2011-12 from US$ 309 billion in 2006-07.

         The organized retailing sector in India was only 7% in 2008 and is expected to rise to
25-30% by the year 2016. There are under construction at present around 325 departmental stores,
300 new malls, and 1500 supermarkets. This proves that there is a tremendous scope for growth in
the Indian retail market. The growth of scope in the Indian retail market is mainly due to the change
in the consumer’s behavior. For the new generation have preference towards luxury commodities
which have been due to the strong increase in income, changing lifestyle and demographic patterns
which are favorable. The scope of the Indian retail market has been seen by many retail giants and
that’s the reason that many new players are entering the India retail industry




2.5 Major players:

     Pantaloon Retail:


                                                     16
It is headquartered in Mumbai with 450 stores across the country employing more than 18,000
people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-India
retail space is of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largest
retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments -
Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar,
collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot),
Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing
(Futurbazaar.com), entertainment (Bowling co.) One of their recent innovations include e-
commerce’ hybrid format of ’small’ shops , the area for these stores will be 150 sq. ft. fitted with 40
digital screens. Customers will be encouraged to browse through the entire range of products on
digital screen. They will be able to place the order, the delivery of which will be arranged by the
shop to their homes within a few hours.


     K Raheja Group

    They forayed into retail with Shopper’s Stop, India’s first departmental store in 2001. It is the
only retailer from India to become a member of the prestigious Intercontinental Group of
Departmental Stores (IGDS). They have signed 50:50 joint venture with the Nuance Group for
Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75 billion.
The first Hypercity opened in Mumbai in 2006 with an area of 1, 20,000 sq. ft. clocking gross sales
of Rs. 1 bn in its first year. Crossword brand of book stores, Homes stop a store for home solutions,
Mothercare a concept stocking merchandise related to childcare are also owned by them. Recently,
Raheja’s have signed MoU with the Home Retail Group of UK to enter into a franchise arrangement
for the Argos formats of catalogue & internet retailing. The group has announced plans to establish a
network of 55 hypermarkets across India with sales expected to cross the US$100 million mark by
2010.


     Tata group:

    Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyle
retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest
prices. In 2005, it acquired Landmark, India's largest book and music retailer. Trent has more than 4
lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006. Tata’s
has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics
chain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007. Another subsidiary,
Titan Industries, owns brands like “Titan”, the watch of India has 200 exclusive outlets the country
and Tanishq, the jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs 6.55

                                                   17
billion.Trent plans to open 27 more stores across its retail formats adding 1.5 mn sq ft of space in the
next 12 DLF malls.


     Bharti-Walmart

    Their plans include US$ 7 bn investment in creating retail network in the country including 100
hypermarkets and several hundred small stores. They have signed a 50:50 percent joint venture
agreement with Walmart. Wal-Mart will do the cash & carry while Bharti will do the front-end.


     Reliance

    India’s most ambitious retail plans are by reliance, with investments to the tune of Rs. 30,000 cr
($ 6.67 bn) to set up multiple formats with expected sales of Rs 90,000 crores ($20 bn) by 2009-10.
There are already more than 300 Reliance Fresh stores and the first Reliance Mart Hypermart has
opened in Ahmedabad. The next ones are slated to open at Jamnagar, followed by marts in Delhi /
NCR, Hyderabad, Vijaywada, Pune and Ludhiana.


     AV Birla Group

    They have a strong presence in apparel retailing through Madura garments which is subsidiary
of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, Peter
England, Trouser town. In other segments of retail, AV Birla Group has announced investment plans
of Rs 8000 - 9000 crores in the first 3 years till 2010. The acquisition of Trinethra (food & grocery)
chain in the south has moved their tally to 400 stores in the country. Their “More” range of 15
supermarkets are slated to open at Nashik, Pune and other tier II cities in Western India in 2007.




2.6 Functions of retailing:

        Retailers play a significant role as a conduit between manufactures, wholesalers, suppliers,
and consumers. In this context, they perform various functions like storing, breaking bulk, holding
stock, as a channel of communication, storage, advertising, and certain additional services.

Storing:

      Manufacturers usually make one or a variety of products and would like to sell their inventory
to a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety of goods and
services to choose from and usually buy them in small quantities. Retailers are able to balance the

                                                  18
demands of both sides, by collecting an assortment of goods from different sources, buying them in
sufficiently large quantities, and selling them to consumers in small units.

          The above process is referred to as the storing process. Through this process, retailers
undertake activities and perform functions that add to the value of the products and services sold to
the consumer. Supermarkets in the US offer, on an average, 15,000 different items from 500
companies. Customers are able to choose from a wide range of designs, sizes, and brands from one
location. If each manufacturer had a separate store for its own products, customers would have to
visit several stores to complete their shopping. While all the retailers offer an assortment, they
specialize in types of assortment offered and the market to which the offering is made. Westside
provides clothing and accessories, while a chain like nil irises specializes in food and bakery items.
Shoppers stop targets the elite urban class, while pantaloons is targeted at the middle class.

Breaking bulk:

      Breaking bulk is another function performed by retailing. The word retailing is derived from
the French word retailer, meaning to cut a piece of. To reduce transportation costs, manufacturers
and wholesalers typically ship range cartons of the products, which are then tailored by the retailers
into smaller quantities to meet individual’s consumptions needs.

Holding stock:

       Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an
inventory that allows for instant availability of the products to the consumers. It helps to keep prices
stable and enables the manufacturer to regulate production. Consumers can keep a small stock of
products at home as they know that this can be replenished by their retailer and can save on
inventory carrying costs.

Additional Services:

         Retailers ease the change in ownership of merchandise by providing services that make it
convenient to buy and use products. Providing products guarantees, after-sales services and dealing
with consumer complaints are some of the services that add value to the actual product at the
retailers end. Retailers also offer credit and hire- purchase facilities to the customers to enable them
to buy a product now and pay for it later. Retailers fill orders, promptly process, deliver and install
products. Salespeople are also employed by retailers to answer queries and provide additional
information about the displayed products.




                                                   19
3.1 Introduction:

        Pantaloon Retail India Ltd (PRIL) has emerged as the leading retailer in India with its chain
of Pantaloon, Big Bazaar and Food Bazaar stores. With the right mix of management capabilities,
high growth product profile, well-developed strategy and extensive IT and logistics capabilities,
PRIL has ensured rapid growth. More importantly, while most organized retailers are struggling to
be in back, PRIL has demonstrated a consistent track record of profitable growth.

3.1.1 Company Research

        PRIL has chalked out an aggressive expansion plan to increase its retail space to over
17,40,000 sq.ft. over the next two years. Space for additional 4 Pantaloon’s, 11Big Bazaars and 2
Food Bazaar’s has already been finalized, and these would be Operational over the next two years.
PRIL aims to set up over 30 Food Bazaar’s and is scouting for appropriate locations for the same.
After popularizing the concept of hypermarket in India, PRIL is now also setting up a new format
shopping mall in the country under the name ‘Central’. The format would be on the lines of a
Selfridhes in London or a Central Mall in Bangkok. Two malls of 100,000 and 240,000 sq.ft. are
being set up in Bangalore and Hyderabad respectively.

     Diversity of product range will ensure profitable volume growth

        To achieve better return on retail space, PRIL uses certain product categories as margin
managers and certain product categories to generate traffic. The food and groceries business will act
as key volume growth driver while high share of apparel (which account for over 80% sales in
Pantaloon Stores and 40% in Big Bazaar) will enable PRIL to maintain high margins. The
management has demonstrated its ability to improve stock turnovers in both the formats
successfully, which has enabled significant margin improvement.

     Fully integrated value chain and own labels give competitive edge

        PRIL has a completely integrated value chain in apparels from fabric manufacturing to
apparel manufacturing, branding, distribution to retailing. The company controls the total value
chain from yarn to apparel retailing and gives a competitive edge in terms of speed of delivery;
lower inventory carrying costs and better realizations. Also, large part of PRIL’s apparel revenues
comes from own private labels. PRIL has developed significant competencies in apparel branding
over a period of time and has developed own labels (John Miller, Shrishti, Bare, Annabelle, AFL) in
all the apparel product categories. Worldwide, private labels give higher margin to retailers than the
national brands.Also growth of private labels is faster as retailer controls shelf space and visibility.
Other initiatives such as faster turnover of stocks by introducing 6 seasons in a year (against 2

                                                  20
earlier) has helped in bringing down inventory levels and at the same time providing wider choice to
customer and improving frequency of customer visits.

     High scalability of business model- multiplier effect will set in

    Size and scale drive economies on procurement and lower logistics costs, which enables a
retailer to deliver better value to customers. The hyper-market format has much higher scalability as
compared to the pure apparel-retailing format. Also, the potential to expand and scale is virtually
unlimited in the food & grocery segment, where efficiencies improve dramatically with scale as the
multiplier effect sets in. Food constitutes the largest expenditure item (estimated at over 50%) of an
average Indian’s monthly personal expenditure. However, the share of modern retail formats in the
Rs6700bn Food & Grocery market is a minuscule 0.3%, revealing the high growth potential in the
segment.

     New product categories and innovative tie-ups to aid growth

        PRIL offers large number of products to the customer to give them better choice for
selection. Different product categories have different depth and width in merchandise offering.
Besides, PRIL has tied up with Shop-in-Shop partners in its Big Bazaar stores. Some product
categories where the company does not have core competency or does not want to invest, but would
attract customers are catered through these partners. Eventually, in the long run, the Company may
manage some of these product categories on its own as volumes grow and it develops competencies
in these businesses. Shop-in-Shop partners typically pay a fixed rental for their space and share a
part of their profits. By expanding the range of product offerings and retail formats, PRIL today has
been able to target a much larger share of the consumer’s basket (about 70% as against less than 8%
in 1994). PRIL will be adding new product categories to its business in both Pantaloons as well as
Big Bazaar stores. Gold, Investment products, White goods and Appliances, Footwear will be the
new product categories that will be added. These product categories will help in improving Walk
In’s into its stores and generate additional business from the existing categories too.

     Competition from global players would pose a major threat

        Most global retailing majors have been keen on entering into the huge untapped Indian
market. However policy restricts Direct Foreign Investment in the sector. There is a high likelihood
of the Government lifting restriction on FDI into the retail sector in the near future. Entry of these
foreign giants - with significant experience and skills in retail management would increase
competition for PRIL. However, we believe that given the widely dispersed and heterogeneous
nature of Indian markets, a foreign entrant would find it extremely difficult to establish a national


                                                   21
presence. Pantaloon with its early mover advantage and understanding of local markets is well
entrenched to retain high customer share.

        Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as Menz
Wear Private Limited under the stewardship of Mr. Kishore Biyani. It was converted into a public
limited company in September, 1991. The company sold branded garments under Pantaloon, Bare
and John Miller brands. PRIL set up its first menswear Pantaloon Shoppe outlet in 1993. The
company’s name was changed to Pantaloon Retail (India) Limited in 1999, when it made a full-
fledged entry into the retail segment through the Pantaloons Family Store.




3.2 Pantaloon Retail (India) Ltd: A Company Snapshot




Business Description:



      Pantaloon Retail (India) Ltd. The Company's principal activity is to operate chain retails stores
in names of Big Bazaar, Food Bazaar, Central and Pantaloons. The Big Bazaar is the discount store
which offers a wide range of products under one roof. The products include apparels and non-
                                                  22
apparels such as utensils, sports goods and footwear. The Company also has its presence into gold
retailing by launching Gold Bazaar. The Company's Food Bazaar provides a range of food and
grocery products ranging from fresh fruits and vegetables, staples, FMCG products and ready-to-
cook products. The Central offers a chain of stores including books and music stores, global brands
in fashion, sports and lifestyle accessories, grocery store and restaurants. The Pantaloon retail stores
focus largely apparels and accessories.

About Pantaloon Retail (India) Ltd
          Pantaloon Retail (India) Limited is a leading retailer with a turnover of Rs. 1088 crores for
the financial year ending June 2008. The company is headquartered in Mumbai and has a presence
in Lifestyle Retailing through 18 Pantaloons Stores, 3 Central Malls in Bangalore, Hyderabad and
Pune. In Value Retailing it is present through 24 Big Bazaar hypermarkets, 38 Food Bazaars and 2
Fashion Stations. PRIL has a national presence with 2.6 million square feet of retail space across 24
cities.




3.2.1 Pantaloon: Fashion by Pantaloon

          Pantaloon is the company's departmental store and part of life style retail format. In fact,
PRIL took its very initial steps in the retail journey by setting up the first Pantaloon store in Kolkata
in 1997. In a short time Pantaloon has been able to carve a special place for it self in the hearts and
minds of the aspirational Indian customers. The company has depth of offering for both men and
women at affordable prices. A striking characteristic of Pantaloon has been the strength of its private
label programme. John Miller, Ajile. Scottsvile, Lombard, Annabelle are some of the successful
brands created by the company. With 13 stores across the country and an ever-increasing stable of
private brands, Pantaloon - in the coming years is poised to become a leading fashion trendsetter.

3.2.2 Big Bazaar: Is se sasta aur acha kahin nahin

          Big bazaar is the company’s foray into the world of hypermarket discount stores, the first of
its kind in India. Price and the wide array of products are the USP’s in Big Bazaar. Close to two lakh
products are available under one roof at prices lower by 2 to 60 per cent over the corresponding
market prices. The high quality of service, good ambience, implicit guarantees and continuous
discount programmes have helped in changing the face of the Indian retailing industry. A leading
foreign broking house compared the rush at Big Bazaar to that of a local suburban train.


                                                   23
Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and International
supermarket atmosphere with the objective of giving the customer all the advantages of Quality,
Range and Price associated with large format stores and also the comfort to See, Touch and Feel the
products. The company has recently launched an aggressive private label programme with its own
brands of tea, salt, spices, pulses, jams, ketchups etc. With unbeatable prices and vast variety (there
are 42 varieties of rice on sale), Food Bazaar has proved to be a hit with customers all over the
country.




           Outlet                                 104 outlets

                                                  Located in India


           Parent group                           Future group


           Owner                                  Kishore Biyani (CEO)


           Founded                                2001


           Head quarter                           Jogeswari , Mumbai


           Industry                               Retail


           Website                                www.bigbazar.com


           Tag line                               Is se sasta aur achha kahin nahi.

Figure 3.1: About Big Bazaar

Big Bazaar

        Big Bazaar is a chain of shopping malls in India, owned by the Pantaloon Group and which
work on Wal-Mart type economies of scale. They have had considerable success in many Indian
                                            24
cities and small towns. Big Bazaar provides quality items but at an affordable price. It is a very
innovative idea and this hypermarket has almost anything under one roof Apparel, Footwear, Toys,
Household Appliances and more. The ambience and customer care adds on to the shopping
experience.


Is Se Sasta Aur Accha Kahin Nahin !

What's in store for you at Big Bazaar?
1,70,000 products at 6- 60 % discount.
At Big Bazaar, you will get: A wide range of products at 6 – 60 % lower than the corresponding
market price, coupled with an international shopping experience.




3.3 Products available in Big bazaar


     Apparel and Accessories for Men, Women and Children.

     Baby Accessories.                      Toys
     Cosmetics                              Home Textiles              Luggage

     Crockery                               Home Needs                 Linens

     Dress Materials Suiting & Shirting     Household Appliances       Sarees

     Electrical Accessories                 Household Plastics         Stationery

     Electronics                            Hardware                   Utensils & Utilities

     Footwear                               Home Decor




                                                25
Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and International
supermarket atmosphere with the objective of giving the customer all the advantages of quality,
Range and Price associated with large format stores and also the comfort to See, Touch, and Feel the
products. 'FOOD BAZAAR' a division of Pantaloon Retail India Ltd is a chain of large
supermarkets with a difference. It was flagged off in April'02. With store sizes ranging from 8,000
sq ft to 15,000 sq. ft. in Mumbai (two stores), Kolkata, Bangalore & Hyderabad, it is opening more
stores at Gurgaon (Delhi), New Bombay & Nagpur. It currently caters to over 1.2 million customers
every day across 4 outlets in India and is soon set to expand and double this figure across 12 outlets
all over the country by June 2009. Food Bazaar offers the Indian consumer the best of Western and
Indian values.

        The western values of convenience, cleanliness and hygiene are offered through pre packed
commodities and the Indian values of "See- Touch- Feel" are offered through the “Mandi”
atmosphere created by displaying staples out in the open, all at very economical and affordable
prices without any compromise on quality. This satisfies the Indian consumer and comforts her
before making her final buying decision. At other super markets, the consumer is deprived of this
factor. Truly the Indian consumer now agrees with Food Bazaar: "Ab Ghar Chalaana kitna
Aasaan”. This positioning platform of Food Bazaar is evident from the higher discounts and the
wholesale price-points which are below MRP.

        Food Bazaar represents the company’s entry into food retail and is targeted across all classes
of population, tea, sugar, pulses, spices, rice wheat etc, besides fruits and vegetables. All products
are sold below MRP and discounts range between 2% to 20%. Fruits and vegetables are sold at
prices comparable to wholesale prices. Food Bazaar replicates a local ‘mandi’, to provide the much
important ‘touch & feel’ factor which Indian housewives are used to in the local bazaar. Food
Bazaar has over 50,000 stock keeping units which cover grocery, FMCG products, milk products,
juices, spices, ready to eat foods etc.




                                                 26
3.4 GROUP VISION AND MISSION:




Group Vision

Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the
most profitable manner

Group Mission


    We share the vision and belief that our customers and stakeholders shall be served only by
       creating and executing future scenarios in the consumption space leading to economic
       development.
    We will be the trendsetters in evolving delivery formats, creating retail realty, making
       consumption affordable for all customer segments – for classes and for masses.
    We shall infuse Indian brands with confidence and renewed ambition.
    We shall be efficient, cost- conscious and committed to quality in whatever we do.
    We shall ensure that our positive attitude, sincerity, humility and united determination shall
       be the driving force to make us successful.




Core Values

      Indianness: confidence in ourselves.
      Leadership: to be a leader, both in thought and business.
      Respect & Humility: to respect every individual and be humble in our conduct.
      Introspection: leading to purposeful thinking.
      Openness: to be open and receptive to new ideas, knowledge and information.
      Valuing and Nurturing Relationships: to build long term relationships.
      Simplicity & Positivity: Simplicity and positivity in our thought, business and action.
      Adaptability: to be flexible and adaptable, to meet challenges.
      Flow: to respect and understand the universal laws of nature.




                                                27
3.4.1 AWARDS AND RECOGNITION

2009 CNBC Awaaz Consumer Awards 2009, Images Fashion Forum 2009, Coca-Cola Golden
Spoon Awards 2009

2008 Indian Retail Forum Awards 2008, The INDIASTAR Award 2008 , Retail Asia Pacific 500
Top Awards 2008, Coca-Cola Golden Spoon Awards 2008, The Reid & Taylor Awards For Retail
Excellence 2008

2007 Images Retail Awards, National Retail Federation Awards, World Retail Congress Awards,
Hewitt Best Employers 2007, PC World Indian Website Awards Reader’s Digest Trusted Brands
Platinum Awards.

2006 Retail Asia Pacific Top 500 Awards, Asia money Awards, Ernst & Young Entrepreneur of the
Year Award, CNBC Indian Business Leaders Awards, Lakshmipat Singhania – IIM Lucknow
National Leadership Awards, Images Retail Awards , Readers’ Digest Awards , CNBC Awaaz
Consumer Awards, Reid & Taylor Awards for Retail Excellence

2005 Images Retail Awards 2005, DAKS London

2004 Images Retail Awards 2004, Reid & Taylor and DLF Awards

2003 Indian Express Award




                                             28
3.4.2 SWOT ANALYSIS:




Strengths:-

   •   EDLP [ Every Day Low Pricing]
   •   Experienced marketing team & executive staff.
   •   Strong culture, ethics and values are followed
   •   Emphasis on providing total customer satisfaction
   •   Point of purchase promotion to increase the purchase
   •   Variety of stuff under single roof
   •   Increase sales with the help of healthy competition between different department
   •   Maintains good employer-employee relation
   •   Cost control initiatives that is critical in a retail operations business
   •   Periodical reviews of the various operations have been done on regular basis to identify the
       any possible threat and address the same within time


Weakness:-

   •   Unable to meet store opening targets.
   •   Unavailability of popular brand items with regard to clothing.



Opportunities:-

   •   Population of the country is growing where the scope of market is kept on increasing for the
       retail sector.
   •   Organized Retail less penetrated in India so it acts as a great opportunity to the organization
       for its growth.
   •   Evolving consumer preferences.
   •   Economy is developing as the employment opportunities are increasing and the income of
       the people is also increasing which increases life standards of people.
   •   Company has more scope of expansion in two and three tier cities.




                                                   29
Threats:-
   •    Competitors Strategies
   •    Advancement of technology day by day.
   •    Government policies.
   •    Unorganized Retail sector
   •    Foreign direct investment cause more problems in future because of that many mergers and
        acquisition are happening in Indian retail sector




3.4.3 A layout chart of Big bazaar located at PIMPERI CHINCHWAD




 1. HELP DESK
 2. KIDS ACCESSORIES
 3. BABA SUITS
 4. JACKETS
 5. LADIES TOPS
 6. TRIAL ROOM
 7. PILLARS USED FOR DISPLAYING INFORMATION (SIZE CHART, SECTION
       DESCRIPTION)
 8. WOOLEN CLOTHS FOR KIDS
 9. KIDS CASUAL WEAR
 10. KIDS JEANS AND SHORTS
 11. LADIES ETHINIC
 12. LADIES ACCESSORIES – LINGERIES
 13. LADIES WESTERN
 14. MEN FORMAL SHIRTS
 15. MEN TROUSERS
 16. MEN SUITS AND BLAZERS
 17. MEN FABRICS
 18. MEN ETHINICS
 19. SOFT TOYS
 20. MEN ACCESSORIES – SUNGLASSES, WRIST WATCHES ETC
 21. HOME DECORATIVE ITEMS
 22. HOME FURNISHING (CURTAIN CLOTHS, CARPETS)
                                  30
23. MUSIC COUNTER
 24. LUGGAGE
 25. FOOTWEAR
 26. SPORTS
 27. SCHEME BASED PROMOTIONAL ITEMS
 28. FURNITURE BAZAR
 29. FOOD BAZAAR
 30. CASH COUNTER


TARGET AUDIENCE:

   Big Bazaar targets higher and upper middle class customers

   The large and growing young working population is a preferred customer segment

   Targets specifically working women and home makers who are the primary decision makers



CORE VALUES:

   Indian ness: Confidence in ourselves

   Leadership: To be a leader, both in thought and business

   Respect&Humility: To respect every Individual and be humble in conduct

   Introspection: Leading to purposeful thinking

   Openness: To be open and receptive to new ideas, knowledge and information

   Valuing and Nurturing relationship: To build and maintain long term relationships

   Simplicity&Positivety: Simplicity and positive approach in though, business and actions

   Adaptability: To be flexible and adaptable, to meet challenges



BIG BAZAAR-USP:

   1Billion population.

   Availability of Liquid Cash Disposable Income among Young Generation

   Affordable man power

   Craze, Passion among Mr. Customer (Consumer)

   More products ….Under ONE roof
                                             31
 Affordable price

    Sentiments -To infuse confidence in Indian brands

    Schemes-Buy 01 gets one free, 20% dis...etc



STRATEGIES:



    To minimize Retailing cost:

    Operating: Fewer staff on the floor-one person for every 500 sq ft

    Minimize the Furniture cost

    Sourcing: Cut Down 25-30 %

    Channel-Cut Down 15-20%

    Saving Shelf Space

    Way to deal unsold stock off

    Plans to have In-Store promotions as well slow-moving products off

    To ensure enough pull to snatch away customers from the neighborhood

    “Today’s Price”:Everyday a chosen product is being sold at lower than usual price

    Big Bazaar’s New Marketing Strategy: Big Bazaar has launched new marketing strategy
     which is based on Guerrilla Marketing. Guerrilla marketing warfare strategies are a type of
     marketing warfare strategy designed to wear-down the enemy by a long series of minor attacks,
     using principles of surprise and hit-and-run tactics. Attack, retreat, hide, then do it again, and
     again, until the competitor moves on to other markets. Herein guerrilla force is divided into
     small groups that selectively attack the target at its weak points. Corporate like Coke, Pepsi, etc
     have been using the same for quite some time now and the latest entrant is ‘Future Group’- Big
     Bazaar, Pantaloons, Future Bazaar, eZone are all part of this group and they are taking on the
     biggies like Shoppers Stop, Lifestyle, and Tata’s Westside.

In order to do the same, Future Group have come up with 3 catchy/cocky and cheeky ad campaigns
which surely do catch our eyes and surely one can’t resist appreciating the same.

Keep West-aSide. Make a smart choice!

Shoppers! Stop. Make a smart choice!

Change Your Lifestyle. Make a smart choice!




                                                32
 Big Bazaar Wholesale Club:

    Now Save, Even more:

      The Big Bazaar Wholesale Club brings to an opportunity to save in bulk as the
      customers buy in bulk. In line with the Big Bazaar tradition of providing best deals at


                                           33
best prices, the Big Bazaar Wholesale Club provides the customers bulk deals at
            wholesale prices.

         An extension of Big Bazaar, the Big Bazaar Wholesale Club offers multi-packs and bulk
          packs of a select range of merchandise at wholesale prices. The merchandise categories
          range from Food & FMCG to Home Linen and many more. Customers will not find any
          merchandise being sold loose/single unit (except fresh) at a Big Bazaar Wholesale Club.

         A typical Big Bazaar Wholesale Club is located adjacent to a Big Bazaar in the form
          of a separate section. The look and feel of a wholesale market is evident in the stores
          from the stacking styles and use of a lot of hand written signage by chalks on black
          slates.

     It has created ‘Fashion @ Big Bazaar’, a sub-brand, to position the format as much more
      than food or general merchandise.



ENVIRONMENTAL ANALYSIS:



EXTERNAL ENVIRONMENTAL FACTORS:



4Ps OF MARKETING



"Marketing" is the promotion of products, especially advertising and branding. Marketing practice tends
to be seen as a creative industry, which includes advertising, distribution and selling.

Marketing mix is a deciding factor in formulating marketing techniques for the success of a particular
brand, commodity or company. The components of marketing mix are:

    •   Product
    •   Price
    •   Promotion
    •   Place


PRODUCT:



Big Bazaar offers the maximum variety for each category of product. The product is the same in every
store in the city but the brand options are more in Big Bazaar. Also, the quantity for each product is not
limited to large packs only. The commodities sold by the retail chain also includes its “own products”
(Private Labels) which get a ready distribution network. The own products of Big Bazaar include My
World fashion magazine which is not available anywhere else. So costs are low for such products.

                                                  34
Diverse merchandise

Customized



PRICE:



Price is the critical point in a competitive industry. Big Bazaar works on a low cost model. It considers
its discounted price as its USP. There is an average discount of 7-8% on all items in respect to their
MRP. Prices of products are low because it is able to secure stock directly from the manufacturer. There
are huge synergies in terms of bulk purchasing, central warehousing and transportation. These all
factors help this retailer to keep low prices.

Low margin, High sales volumes

Low Interest Financing

Centralized sourcing

Discount pricing

Value pricing

Promotional pricing-Psychological discounting

                   -Special event pricing (Republic day)

Differentiated pricing-Time pricing

Bundling



PLACE:



Place means the location of the business. Big Bazaar has always worked on low-cost locations. It
targets semi-urban population with its placement. Its strategy is to find a cheap location and it never
goes for hot spots in the city. It relied on promotional activities to make up for unattractive locations.
Another strategy used by Big Bazaar to overcome location disadvantage is use of internet. It has
launched a merchandise retailing website www.futurebazaar.com which targets high-end customers
ready to use credit cards. The promotion of this website is done through advertisement on Google. The
website is put as sponsored link.

Initially identifies future/potential development areas

Acquires such areas at an early phase before the real estate value booms

Designed to look crowded

                                                  35
PROMOTION:



Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to make people
do bulk shopping. There are 2 types of promotional strategies of big bazaar. One is the holistic
advertisement which promotes the brand and creates awareness among people. It is not targeted at
promoting each store but only creates an image of Big Bazaar as low-cost shopping option. The store
has advertised through TV, road shows and also started reality show-typed promotional campaign “The
Big Bazaar Challenge.” Promotions like “Sabse Sasta Din” are a very successful strategy to get footfall.
In these products across categories such as apparels, furniture, electronics, utensils and food products at
the lowest possible prices, coupled with attractive promotional schemes. Some of the most attractive
offers being a 20-litre branded microwave oven with grill for Rs 2,499, jeans and trousers for Rs 199
and HCL laptops for Rs 22,990.

Other type of promotion is the particular store oriented promotion which includes speaking on the
loudspeaker in nearby blocks. Leaflets are given in local newspaper. There are promotional efforts even
inside the store. Buy 2 Get 1 Free types of promotions are very common. Original prices are cut down
and new prices are shown, of which customer takes quick notice. There are loyalty schemes which
reward regular clients. Promotion is also done through co-branded credit cards with ICICI bank.

Monthly Bachat Offers (Offer available at Big Bazaar stores in Hyderabad):

 Big Bazaar is offering monthly bachat offers and some of them are:

- Charminar Basmati Rice + Aadhar Sunflower Oil + 5 kgs of refined sugar, each worth Rs. 1080 - for
Rs. 659 only
- Tilda Khush Long Grain Rice (5 kgs) worth Rs. 440 - for Rs. 159 only
- Fortune Sunflower Oil (5 litres) worth Rs. 450 - for Rs. 262 only
- Cow Ghee worth Rs. 200 - For Rs. 189 only
- Britannia Marie Gold (370 grams) Rs. 25 - Buy 1 get Rs. 3 off or Buy 2 get Rs. 8 off
- Buy a Bournvita pouch pack (500 grams) worth Rs. 124 and get a free Britannia Good Day packet
worth Rs. 12
- Buy Super Cup Tea (1 kg) worth Rs. 240 and get 500 kg worth Rs. 105 free
- Buy Bambino Vermicelli (1 kg) worth Rs. 40 for Rs. 35; and get Bambino Macaroni (180 grams)
worth Rs. 12 free
- Buy onions (1 kg) worth Rs. 17 - for Rs. 14.90 only
- Buy potatoes (1 kg) worth Rs. 9.50 - for Rs. 7.90 only
- Buy Surf Excel (2 kg) worth Rs. 280 and get free Vim bar
- Buy Head & Shoulders Shampoo (400 ml) worth Rs. 215 and get a free Head & Shoulders 90 ml
men's shampoo worth Rs. 69



    Future card (3% Discount)

    Baby registry and marriage registry-targeted towards married couple, waiting for marriage

                                                  36
Shakti card

  Advertising (Print ads, TV ads, radio)

  Tying up with IPL targeting sports lovers

  Celebrity endorsements-Brand endorsement by M.S.Dhoni

  Exchange offers

  Weekend discounts

  Point of Purchase promotions

  ‘Junk’ swap offer-“Exchange anything old for something new”




  OPPURTUNITIES:

       Early Entry in Indian Retail
       Organized retail
       Evolving consumer preferences
       Targeting area more prone to developments
       Global Expansion
       In-Store Experience improvements



THREATS:

       Government policies like complex sales and excise policies.
       Unorganized retail.
       Large Foreign Competitors like Wal-Mart, Metro and Domestic player like Reliance.
       Burgeoning real estate prices which leads to high rentals.
       Economic Conditions
       Lowering Margins




PEST ANALYSIS:



      Political and Legal Factors:

   A stable government at the centre will facilitate speedy economic recovery and create an
    encouraging investment climate

   Problems of getting subsidy from Octrai and on different taxes like land, water taxes
                                              37
 Problems of taking over properties and real estate



      Economical:

   India, one of the fastest growing economies(6-6.5% GDP growth rate)

   Retail Industry to grow to 300 billion by 2010

   Increase in the percentage contribution of the service sector to GDP

   Increase in the investment on IT with focus on cost minimization



      Socio-Cultural Factors:

   Increase in Nuclear families

   People prefer to shop in local stores with the reasonable prices

   Increase in working women’s proposition

   Life style changes

   Shift in Product and service preferences

   Increase in Young population



      Technological:

   Technological development for fast billing and the service

   Better applications of information technology in the modern retail industry, like in supply
    chain management, store management, point of sale and customer relationship management




      Competitive Analysis:

   Big Bazaar faces competition from all the quarters of RPG Spencer Super stores, Reliance
    fresh stores, Trinethra stores, Food Bazaar. But the main threat and the strategies of Big
    Bazaar is around the local neighborhood Kirana Stores because this is where the big
    potential for growth lies.

INTERNAL ANALYSIS:

STRENGTHS:
                                               38
 LOW PRICE/Different discount scheme: The Big Bazaar Outlets sold a variety of products
      at prices which is lower than the market price. Almost everything has some kind of discount
      in Big Bazaar. Consumers accept the fact that they come from faraway places because it is
      cheap in Big Bazaar for bulk shopping. Big Bazaar is able to secure stock directly from the
      manufacturer which they are selling as Private label. Big Bazaar gets some extra benefits
      from manufacturer like display income, Manufacturer discount and Extra Distributor
      Discount. There are huge synergies in terms of bulk purchasing, central warehousing and
      transportation. Big Bazaar provides discounts ranging from 6-8%to the market and offers
      special discounts and offers up to 60% of 1,60,000 products 365 days a year. Price is the
      basic value propositions at Big Bazaar.
     HUGE DISPLAY AREA, avg 30,000sq/ft: Big Bazaar displays all their grocery and all
      other product that customer can touch and feel the quality. They offer self service.
     PRODUCT DIVERSITY: Big Bazaar offers the maximum variety for each category of
      product and this is cited by the customers as one of the main reasons why they like shopping
      at the Big Bazaar (Range of apparels, accessories, baby accessories, cosmetics, grocery,
      vegetables, crockery, dress material, suiting, shirting, footwear, toys, house hold appliances,
      home textiles, luggage, linens, saris, large product mix. Stocks about 30000 items in over 20
      product categories). The product is the same in every store in the city but the brand options
      are more in Big Bazaar. They have a huge carpet area in an average of 30,000 square feet.
     Huge promotional activities undertaken to ensure enough footfall
     Infrastructure
     Ambience of the Big Bazaar is not like the hypermarket in West, which follows liner layout.
      It is not only providing good parking ,AC ambience to create a “ no hassle “shopping
      experience but also designed in a way that it provides a traditional bazaar like environment,
      where the most Indian feel comfortable.

     The customers trust retail chains with quality of the product. They feel food products of Big
      Bazaar will have no adulteration. This quality is not assured in a kirana store.

     High Brand Equity



WEAKNESSES:

        Store unable to meet the growing consumer demand. General Perception of consumer.
        Depend on distribution channel of Brands for products like FMCG.
        Lack of strong supply chain like other big player
        Perception among consumers




CORE COMPETENCIES:

   A choice of more than 20,000 products

   Delivery across more than 1500 cities and towns in India covering around 16,000 pin codes

   Fast deliveries – tie ups with world leaders in logistics & transportation services

   A dedicated Customer Care helpline for any queries
                                               39
 Always offering Manufacturer’s guarantee as opposed to Seller’s guarantee, which most of
     the other online shopping sites offers

    Talks of Quality and Cost

    Special emphasis on apparels and life style products

       Providing interesting discounts




CHALLENGES:



    Waiting time in terms of Billing at Big Bazaar outlets is a concern and more so during the
     weekends. And during our personal observation while observing the operations(Though it
     was for 3-4 hours which is a short period of time),it was noted that few customers who had
     little to purchase, left their trolleys due to long queue at the counter.




Long Queues at the Billing counters


    The store has too many things at the same place. The floor plan has to be structurally laid
     out so that merchandising can be efficiently handled and displayed.

    Availability of most exclusive brands under all categories

    Product Uniqueness- Offer merchandise of highest quality

    After Sale Service

    Uniqueness Shopping Experience: The Store personnel should be more friendly and easy
     approachable, you should also offer drinking water, lime soda or tea to the customers once
     they enter in the store

                                                40
 Introduce best Promotional campaigns which make sense and also understandable to attract
      distant city crowd




Different In-store Promotions




     Introduce Best loyalty programs.



4.1 Retail Mix

        The retail mix is the combination of factors retail used to satisfied customer needs and
influences their purchase decision. It’s include the type of merchandise and services offered,
merchandise pricing,        advertising, promotional programs store design merchandise display,
assistance to customer provided by salespeople, and convenience of the store’s location.

        Retail mix is the term used to describe the various elements and methods required to
        formulate and execute retail marketing strategy.
     Retail managers must determine the optimum mix of retailing activities and coordinate the
        elements of the mix.
     The aim of such coordination is for each store to have a distinct retail image in consumers
        mind.
     The mix may vary greatly according to the type of the retailer is in, and the type of
        product/services.
While many elements may make up a firm’s retail mix, the essential elements may include:
     Store location,

                                                 41
 merchandise assortments
    Store ambience,
    customer service,
    price,
    Communication with customer
    Personal selling
    Store image
    Store design
    Sales incentives
    People
    Process
    Physical evidence
4.1.1 Composition of retail mix
            Place
            Product
            Price
            Promotion
            People
            Process
            Physical Environment
Key element
Table 4.1: Composition of Retail Mix



   1) Place (store location)                  2) Product (merchandise)
   •   Target market                          •   Product development
   •   Channel structure                      •   Product management
   •   Channel management                     •   Product features and benefits
   •   Retailer image Retail logistics        •   Branding
   •   Retail distribution                    •   Packaging




   3) Price                                   4) Promotion
   •   Costs
                                              •   Developing promotional mixes
   •   Profitability
                                         42
•   Value for money                                 •   Advertising management
    •   Competitiveness                                 •   Sales promotion
    •   Incentives                                      •   Sales management
    •   Quality                                         •   Public relations
    •   Status                                          •   Direct marketing
    •   After-sales services




    5) People element                                   6) Process element

    •   Staff capability                                •   Order processing
    •   Efficiency                                      •   Database management
    •   Availability                                    •   Service delivery
    •   Effectiveness                                   •   Queuing system
    •   Customer interaction                            •   Standardization
    •   Internal marketing



4.1.2 Retail mix planning
Retail mix plan consists of:
     Setting objectives
     Systematic way of identifying a range of options.
     Formulation of plans for achieving goals
     Logical sequence of retailing activities.
Importance of Retail mix planning
     Hostile and complex retail environment
     External and internal retail organisation factors interact for
            ·     Maximising revenue
            ·     Maximising profit
            ·     Maximising return on investment
            ·     Minimising costs
        Each element has conflicting needs
     All these variables interact
     All these variables result in optimum compromise.
Approaches to planning
                                                  43
Top down approach
Retail management sets goals and plans for all levels of management.
Bottom up approach
Various units prepare own goals and plans sent up for approval. It is the effective blending of all the
elements of retail mix activities within the retail organization that determines the success of retail
management. Discuss this statement and explain with retail examples how the elements of retail mix
could be blended to ensure the success of retail operation.



4.2 Retailing

       Retailing is the sale of goods and services to ultimate consumers for personal, non-business
use. Any institution may engage in retailing, but a firm engage primarily in retailing is called a
retailer. Retailers serve as purchasing agents for consumer and as sales specialists for producers and
wholesaling middleman. They perform many specific activities such as anticipating consumers'
wants, developing product assortments and financing. Retailers may be classified by form of
ownership and key marketing strategies. Also, types of retailers distinguished according to product
assortment, price and customer service levels. Mature institutions such as department stores,
discount houses and super markets face strong challenges from new competitors, particularly chain
stores or multiple shops in various product categories. Five major forms of non store retailing are
Direct selling, Telemarketing, Automatic vending, On line retailing and Direct marketing .Each type
has advantages as well as drawbacks.




4.2.1 Retail Marketing Mix

Whatever is from of ownership, a retailer must develop marketing mix strategies to succeed in its
chosen target markets. In retailing, the marketing mix emphasizes product assortment, price,
location, promotion and customer services designed to aid in the sale of a product. They include
credit, delivery, gift wrapping, product installation, merchandise returns, store hours, parking and-
very important personal service. Stores of different sizes face distinct challenges and opportunities.
Buying, Promotion, Staffing and expense control are influenced significantly by whether store's
sales volume is large or small. Size of a retail business creates certain merits and demerits.
Considering these factors, large stores ordinarily but not always have a competitive advantage over
small stores.




                                                  44
4.3 Competitive Advantage with Special Reference to Physical Facilities

         Another competitive advantage of retailers will be how they create physical facilities which
represent the distribution element of a retailer's marketing mix. Some firms engage in non-store
retailing by selling on hire or through catalogs or door to door, for example-but many more firms
rely on retail stores. Firms that operate retail stores must consider four aspects of physical facilities.

Location

         It is frequently stated that there are three keys to success in retailing: Location, Location,
Location! Although overstated, this axiom does suggest the importance that retailers attach to
location. Thus a stores site should be the first decision made about facilities. Considerations such as
surrounding population, traffic and cost determine where a store should be located.

Size

         This factor means the total square footage of the physical store, not the magnitude of the
firm operating the store. These are much different factors. A firm may be quite large with respect to
total sales, but each of its outlets may be only several thousand square feet in size.

Design

         This factor refers to a stores appearance, both interior and exterior over its competitor.

Layout

         The amount of space allocated to various product lines, specific locations of products and a
floor plan of display tables and racks comprise the store's layout. As would be expected, the
location, size, design and layout of retail stores are based on where consumers live and how they like
to go about their shopping. Consequently, the bulk of retail sales occur in urban, rather than rural,
areas. And suburban shopping areas have become more and more popular, where as many down
town areas have declined.




Assessing Competitors Current Strategies

         The first part in competitor analysis is to determine how competitors are attempting to
achieve their objectives. This question is addressed by examining their past and current marketing
strategies.

                                                    45
4.3.1 Marketing Strategy

        Many authors have attempted to explain the concept of strategy. At the retail level, a
marketing strategy can be thought of three major components: target selection of customers, core
strategy (i.e. positioning and differential advantage), and implementation (i.e. supporting marketing
mix). The first major component is the description of the market segment(s) to which competing
brands are being marketed. Market segments can be described in various ways. Since few brands are
truly mass marketed, the key is to determine which group each competitor has targeted. The second
strategy component is what is called the core strategy. This is the basis on which the rival is
competing, that is its key claimed differential advantage(s).Differential advantage is a critical
component of strategy because it usually forms the basic selling proposition around which the
brand's communications are formed. It is also called the brand's positioning. The final strategy
component of competitors must be assessed in the supporting marketing mix. The mix provides
insight into the basic strategy of the competitor and specific tactical decisions. These decisions are
what customers actually see in the market place. In fact, customers are exposed to price, advertising,
promotion and other marketing mix elements.

4.3.2 Marketing Environment

        To the company's marketers falls the major responsibility for identifying major changes in
the environment. The retail environment, in particular is constantly spinning out new opportunities,
in bad as well as in good years. The general marketing environment also spins out new threats-such
as an energy crisis, a sharp rise in interest rates, a deep recession-and firms find their markets
collapsing. Recent times have been marked by many sudden changes in the marketing environment,
leading Drucker to dub it an Age of Discontinuity and Toffler to describe it as a time of Future
Shock. Retail marketers need to continuously monitor the changing scene. They must use their
intelligence and marketing research to track the changing environment. By erecting early warning
systems, retailers will be able to revise marketing strategies in time to meet new challenges and
opportunities in the environment. It consists of the external actors and forces that affect the retailer’s
ability to develop and maintain successful transactions and relationships with its target customers.
We can distinguish between the retailers' micro environment and macro environment. The micro
environment consists of the actors in the retailer's immediate achievement that affects its ability to
serve its markets: Suppliers, intermediaries, customers, competitors and publics. The macro
environment consists of legal, social, economic and technological forces.




4.3.3 Store location and Layout

                                                   46
Retailers want to locate their stores in the best place possible. The best place possible will
vary from retailer to retailer depending on the industry type, type of product, competition, and other
market factors. Basically a retail store has to located where the market opportunities are at optimal
levels. There are basic guidelines that most retailers examine before choosing a new location. First,
the retailer must select a country or region and then define the boundaries of the trade area and
evaluate its population characteristics against the retailers target market. The buying power of the
area must be considered along with its market and sales potential. The size, location, and type of
competition must also be taken into account. The local legal and political environment must be
examined along with the leasing costs and occupancy rates. The actual physical features of the
location – such as available space, traffic and access to the site, and surrounding buildings – play a
role in the selection process. Retailers possess many tools to help in the site selection decision.
Reilly’s law and Huff’s model can aid in defining the trade area. Market segmentation and
demographic segmentation provides clues to population characteristics. The buying power index and
effective buying income suggest strength of the economic base while the index of retail saturation
offers a benchmark for market comparison. Changes in consumer lifestyle will require new
strategies for selecting retailing locations, such as the increasing use of convenience oriented sites,
the integration of food and non-food retailing, and the placement of retail merchandising in
amusement parks. There a numerous kind of retail stores to choose from as well. Most potential sites
fall in to one of these categories: business districts, shopping canters, and freestanding locations.
There are specific advantages and disadvantages for each type of location. The bottom line in retail
site selection should be to choose a location that will fit both today’s and tomorrow’s needs. The
layout and design of a retail store communicate a significant amount of information about the
retailer to the consumer. The architectural character of the store, building a new location, renovating
existing facilities, exterior design, interior design the modern self layout and the image of the store
are the key issues in designing a layout for a store.

4.3.4 Merchandise Management

        Merchandise management can be termed as the analysis, planning, acquisition, handling and
control of the merchandise investments of a retail operation. The process of merchandise
management includes the developing of strategies to ensure that the right product is bought at the
right price and available at the right place, at the right time, in the right amount, in order to satisfy
the needs of the target customer. No one in retail can completely avoid any contact with
merchandising activities. Merchandising is the day-to-day business of all retailers. As inventory is
sold, new stock needs to be purchased, displayed and sold. Hence, merchandising is often said to be
at the core of retail management. Merchandising traces its growth to the rise of organized retail in
the world. Initially, as the retailers operated only one or two stores, the function of buying the
                                                   47
merchandise, pricing it, etc., were much simpler. In many cases, the retailer did it himself. However,
as retailers started adding stores and categories, the workload on the buyers increased significantly.
Often, buyers had little information or time and they ended up using approximations based on sales
volumes, to allocate merchandise between stores. This sometimes, resulted in stores exchanging
merchandise among them!

        In order to overcome this limitation, the function of a planner came into being. The
planner’s job was to act as a link between the stores and the buyer. The de-linking of the function of
planning and buying allowed better interaction with the stores. Planners were able to devote more
time to collecting and studying store level data, the buyers on the other hand, were able to spend
more time with the vendors.




4.4 Competitive Sales

        Given widespread availability of the same brands, retailers have to cope with the
phenomenon of discounts. The retailers themselves dilute the strength of the retail market. With
promotions becoming the order of the day, they have entered into price wars against each other. ‘Up
to 50 percent off’ sales and ‘Two for one’ price offers have now become commonplace even at the
top retail outlets across our country. Every season every festival has more price cuts. The discounted
buying has become an annual market strategy rather than a mere sales promotion for a few weeks.
Deep price cuts may not be the answer to maintain their relevance against the small retailers nor
does it augur well for the brand building of the store.

5.1 Research title:
The title of the research project is:

      “Effectiveness of Retailing Mix for Customer Satisfaction at Big Bazaar.”

5.2 Research Problem:

        What is effectiveness of Retailing Mix at Big Bazaar leading to Customer Satisfaction?




                                                   48
5.3 Research Objective:




Primary objectives:

               To identify performance of store operations.

               To analyze how the merchandising mix influence the customer satisfaction level.

Secondary objectives:

     To understand the quality of service maintained in the store.

     To determine the performance of sales persons in the store.

     To find out reasons of dis-satisfaction.

     To find out which means of communication plays a vital role to persuade customer.

5.4 Scope of study

        The study makes an effort to ascertain the satisfaction level of customers from the store
environment and analyze the impact of retailing mix on the customer satisfaction level, and to
improve the store environment to increase the sales and to attract the customers.

        The company can come up to the expectation only by finding out the problem that
customers are facing during their purchase from the store. The subject has been taken for the
research as it plays key role in success of retail sector. As long as the company is able to satisfy its
customer, customer will remain in the bracket of loyal customer. This study helps to improve the
environment of the store to reach the customer satisfaction level and improve the merchandising in
Big Bazaar.

6.1 Objectives of Research:

        The purpose of research is to discover answers to questions through the application of
scientific procedures. The main aim of research is to find out the truth which is hidden and which
has not been discovered as yet. Though each research study has its own specific purpose, we may
think of research objectives as falling into a number of following broad groupings:


               To gain familiarity with a phenomenon or to achieve new insights into it (studies
                  with this object in view are termed as exploratory or formulative research studies);


                                                  49
 To portray accurately the characteristics of a particular individual, situation or a
                 group (studies with this object in view are known as descriptive research studies);
              To determine the frequency with which something occurs or with which it is
                 associated with something else (studies with this object in view are known as
                 diagnostic research studies);


6.2 Research Design:

        Research design is an arrangement of condition for collection and analysis of data in a
manner that aims to combine relevance to research purpose with an economy in procedure. Research
design is needed because it facilitates the smooth ailing of the various research operations, thereby
making research efficient possible yielding maximal information with minimal expenditure.
Research design used in this project is Single Cross-sectional design where one sample is drawn
from a population of interest. In this research design a cross sectional study is concerned with a
sample of elements from a given population. Data on a number of characteristics from the sample
elements are collected and analyzed.

6.3 Types of Research:

Exploratory research: The research is an exploratory when; one is seeking insight to general nature
of the problem, the possible alternatives and relevant variables that need to be considered. The
methods are flexible, unstructured and qualitative.

Descriptive research: It provides an accurate position of a particular aspect of the market
environment. The purpose of descriptive research is together a quantified measurement of a specific
reaction. It is structured. Most of the data that we needed are gathered in some form of direct or
indirect question which further will depend upon:

                  Nature of the question

                  Time frame of study

                  Funds available

                  Kinds of respondents




                                                  50
This project is totally based on survey of the market i.e. people and a lot of research on the web, so
for that a DESCRIPTIVE type of research design was used. Descriptive research provides an
accurate position of a particular aspect of the market condition. The purpose of this research is
together quantified measurement of a specific type of reaction. It is a structure most of the data that
we collected from the field are gathered in some form of direct or indirect question.



6.4. Data Collection Methodology:

The primary data are those, which are collected afresh and for first time and thus happen to be
original in character.

The secondary are those which have been collected by someone else and which have already been
passed through statistical process.

Data has been collected by the researcher by Primary sources such as questionnaire and personnel
interview. It included 20 questions and 100 customers were given the questionnaire and response
was taken from them. Charts and graphs will be used for presentation of data for easy understanding
and interpretation.

6.5 Data Collection Instruments:

                         1. Questionnaires
                         2.   Personal Interviews.
6.5.1 Designing the Questionnaire:

While designing the Questionnaires certain things were kept in mind such as simplicity, length and
clarity.

6.5.2 Personal Interviews

Personal interview is mostly commonly used method of data collection. Two purposive
communications between interviewer (researcher) and the respondent (subject) aimed at obtaining
and recording information pertinent to the subject matter of study. The interviewer resents oral,
verbal and written stimuli and receives oral resonances.

6.6 About the Survey:

6.6.1 Survey Title: “Effectiveness of Retailing Mix for Customer Satisfaction at Big Bazaar”.

6.6.2 Sample Universe: Big Bazaar Store

                                                     51
6.6.3 Sampling Method: Non-probability sampling was used .Non-probability sampling is that
sampling procedure which does not afford any basis for estimating probability that each item in
population has being included in the sample. Under non-probability sampling organizers of enquiry
purposely select particular unit of universe for constituting a sample on the basis of the small mass
that they so select out of huge one will be typical or representative of the whole. Adequate
consideration was taken to bring a heterogeneous group in terms of age, income, occupation etc. to
make the results credible.

6.6.4 Sample Size: 100 Respondents.

7.1 Analysis Techniques:

Time: The survey of 100 respondents was finished in two months.

Response Format:

The questions are a mix of open-ended, close-ended questions, binary, ranking and multiple choice
questions. They have been so inserted into the questionnaire, to get the appropriate response for a
particular situation.

7.2 Limitations of the study:




                   Time Constraint: Analysis pertaining to project title and the field survey has to
                        be done in a span of two months. This may limit the scope of the survey.

                   Biasness: The respondents may give a biased view.

                   Some respondents refuse to co-operate.

                   Some respondents replied half heartedly.

                   Some respondents gave incomplete information.




                                                   52
53
7.3 Survey Results, Presentation and Inference

Effectiveness of Retailing Mix for Customer satisfaction at Big Bazaar

Question 1a): Do you frequently shop at big bazaar?

Table No.7.1: No of customer

                      Yes                                     No                        Total

                       74                                     26                            100



Figure No.7.1: No of customers




Inference:

        From the above chart we can ascertain that majority of customers i.e., around 74% of sample
customers frequently visits to the store and 26% of the customer visits the store rarely.




Question 1b): How frequently do you shop at big bazaar?

TableNo.7.2: Customer Response


                                                  54
Sr.No.                                Response                                  No. of customers

       1.                               Every week                                        38

       2.                            Once in two week                                     24

       3.                           Once in three week                                    16

       4.                              Once in month                                      22



Figure No.7.2: Customer Response




Inference:

             From the above table we can analyze that the majority of the customers i.e. 38 out of 100
customer visits store every week , followed by 24 customer once in two week. Thus we can say that
majority of customer visit big bazaar every week, may be during weekends. We can conclude that
the customer visit Big Bazaar for their weekly purchase.




Question 2a): What comes to your mind when you think about big bazaar?

Table.No.7.3: Unique Selling Propositions of big bazaar

Sr.No.                              USP’s                                    No. of customers

  1.                               Discount                                         34

                                                   55
2.                          Product Variety                                         24

  3.                               Brand                                              4

  4.                              Quality                                             8

  5.                             Free offer                                           28

  6.                               Others                                             2



Figure No.7.3: Unique Selling Propositions of big bazaar




Inference:

                From the data collected we can determine that among 5 USP’s of big bazaar most
recognised are discounts and free offers, along with that it also recognised for product varieties. But
they have to rethink about the brand available in the store and they have to expand their brand
availability.

Question 2b): Do you feel that you find different variety of product in Big Bazaar?

Table No.7.4: No of customer

                      Yes                                    No                            Total

                       66                                    34                            100



Figure No.7.4: Product Variety

                                                  56
Inference:

             From the above chart we can asertain that upto 66% percent i.e. majority of customers
satisfied with the variety of product in the store.




Question 2c): Do you find the specific brand that; you look in the big bazaar?

Table No.7.5: No. of Customers

                       Yes                                  No                      Total

                        37                                  63                      100

Figure No.7.5: No. of Customers




                                                      57
Project at-big-bazaar kapil
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Project at-big-bazaar kapil
Project at-big-bazaar kapil
Project at-big-bazaar kapil

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Project at-big-bazaar kapil

  • 1. Project report on retail industry including strategies developed by major players By: Kapil Dipal PGDBE- Marketing 1
  • 2. DECLARATION I am a benefited Student of MBA, Declare that the Project Entitled “retail industry and the strategies.” In Partial Fulfillment of MBA Degree Course is my Original Work. 2
  • 3. Acknowledgement I, sincerely thankful to all those people who have been giving me any kind of assistance in the making of this project report. I express my gratitude to Mr. who has through her vast experience and knowledge has been able to guide me, both ably and successfully towards the completion of the project. I express my gratitude to KIIT college of engineering, Gurgaon . I would hereby, make most of the opportunity by expressing my sincerest thanks to all my faculties whose teachings gave me conceptual understanding and clarity of comprehension, which ultimately made my job more easy. Credit also goes to all my friends whose encouragement kept me in good stead. Their continuous support has given me the strength and confidence to complete the project without any difficulty. Last of all but not the least I would like to acknowledge my gratitude to the respondents without whom this survey would have been incomplete. . And in the end i would like to thanks my parents and friends for their all time help and constant support. 3
  • 4. CONTENTS  Objective of the Study  Executive Summary  About the Organization  Research Methodology  Culture  Data Analysis  Conclusion  Suggestions  Limitations  Questionnaire  Bibliography 4
  • 5. 1.1 Introduction Retailing is the most active and attractive sector of last decade. While the retailing industry itself has been present since ages in our country, it is only the recent past that it has witnessed so much dynamism. Indian retailing today is at an interesting crossroads. The retail sales are at the highest point in history and new technologies are improving retail productivity there are many opportunities to start a new retail business. There are just over a 6 million retail outlets operating across the Indian cities from north to south and from east to west. This large number of outlets, many of which are trying to serve and satisfy the same market segments, results in fierce competition and better values for shoppers. The retail mix is the combination of factors retail used to satisfied customer needs and influences their purchase decision. It’s include the type of merchandise and services offered, merchandise pricing, advertising, promotional programs store design merchandise display, assistance to customer provided by salespeople, and convenience of the store’s location. Biggest challenge for organized retailing is to create a “customer-pull” environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are up to 10-15%. Due to which there is emergence of discount stores which is expected to spearhead the organized retailing revolution. The title of the project is “Effectiveness of Retailing Mix for Customer Satisfaction at Big Bazaar” which the researcher has carried out, as retail mix greatly influences the customer satisfaction level and the customer perception towards that store. It is one of the hot issue in todays retail competition world which is very important for all the retail store to follow that. This study was done to know if customers are really satisfied with the present retaling mix in the Big bazaar and also to find out how the store envirnoment influences the shopping behaviour of the customer to know how the store environment can be improved. 5
  • 6. 1.2 Rationale of the study The project is all about to determine the satisfaction level of the customers from the store environment and analyze the impact of retailing mix on the customer satisfaction level, and to improve the store environment to increase the sales and to attract the customers, this study helps to improve the environment of the store to reach the customer satisfaction level and improve the merchandising in Big Bazaar. 2.1 Introduction The word "Retail" originates from a French-Italian word. Retailer is someone who cuts off or sheds a small piece from something. Retailing is the set of activities that markets products or services to final consumers for their own personal or household use. It does this by organizing their availability on a relatively large scale and supplying them to customers on a relatively small scale. Retailer is a Person or Agent or Agency or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer. 2.2 Indian Retail Industry: 6
  • 7. Indian retail industry is the largest industry in India, contributing to over 13% of the country's GDP. Organized retail industry in India is expected to rise 35% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. It is expected that by 2011-12 modern retail industry in India will be worth US$ 590 billion. It has further been predicted that the retailing industry in India will amount to US$ 833 billion by 2013 and US$ 1.3 trillion by 2018. Shopping in India has witnessed a revolution with the change in the consumer buying behavior and the whole format of shopping also altering. Industry of retail in India which has become modern can be seen from the fact that there are huge shopping centers, malls and sprawling complexes which offer food, shopping, and entertainment all under the same roof. Indian retail industry is expanding itself most aggressively; as a result a great demand for real estate is being created. Indian retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of non- branded items. Indian retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort. Indian retailing industry has seen phenomenal growth in the last five years. Organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly to the growth of Indian retail sector. The “India Retail Sector Analysis report helps clients to analyze the opportunities and factors critical to the success of retail industry in India. Indian retail industry is going through a transition phase. Most of the retailing in our country is still in the unorganized sector. The spread out of the retails in US and India shows a wide gap between the two countries. Though retailing in India is undergoing an exponential growth, the road ahead is full of challenges. 2.2.1 Key Challenges:  Location: "Right Place, Right choice" Location is the most important ingredient for any business that relies on customers, and is typically the prime consideration in a customers store choice. Locations decisions are harder to change because retailers have to either make sustainable investments to buy and develop real estate or commit to long term lease with developers. When formulating decision about where to locate, the retailer must refer to the strategic plan: 7
  • 8. o Investigate alternative trading areas. o Determine the type of desirable store location o Evaluate alternative specific store sites  Merchandise: The primary goal of the most retailers is to sell the right kind of merchandise. Merchandising consists of activities involved in acquiring particular goods and services and making them available at a place, time and quantity that enable the retailer to reach its goals. Merchandising is perhaps, the most important function for any retail organization, as it decides what finally goes on shelf of the store.  Pricing: Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its interaction with other retailing elements. The importance of pricing decisions is growing because today's customers are looking for good value when they buy merchandise and services. Price is the easiest and quickest variable to change  Target Audience: "Consumer the prime mover" "Consumer Pull", however, seems to be the most important driving factor behind the sustenance of the industry. The purchasing power of the customers has increased to a great extent, which is influencing the retail industry to a great extent, a variety of other factors also seem to fuel the retailing boom. 2.2.2 Scale of Operations: Scale of operations includes all the supply chain activities, which are carried out in the business. It is one of the challenges that the Indian retailers are facing. The cost of business operations is very high in India. 2.3.1 Indian retail types  Malls  Branded stores  Specialty stores  Departmental stores  Super markets  Discount stores 8
  • 9.  Hyper markets  Shopping markets  Convenient stores  Malls: The largest form of organized retailing today Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq. ft. and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, mega Mart, Pantaloon, Wall mart etc.  Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.  Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.  Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Departmental stores further classified into localized departments such as clothing, toys, home, groceries etc. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!.  Marts/Supermarkets: Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.  Convenience Stores: 9
  • 10. These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premix 2.3.2 Traditional Retail Scene in India India is the country having the most unorganized retail market. Traditionally the retail business is run by Mom & Pop having Shop in the front & house at the back. More than 99% retailers function in less than 500Sq.Ft of area. All the merchandise was purchased as per the test & vim and fancies of the proprietor also the pricing was done on ad hock basis or by seeing at the face of customer. Generally the accounts of trading & home are not maintained separately. Profits were accumulated in slow moving & non-moving stocks which were to become redundant or consumed in-house. Thus profits were vanished without their knowledge. The Manufactures were to distribute goods through C& F(Carry and Forward) agents to Distributors & Wholesalers. Retailers happen to source the merchandise from Wholesalers & reach to end-users. The merchandise price used to get inflated to a great extent till it reaches from Manufacturer to End-user. Selling prices were largely not controlled by Manufacturers. Branding was not an issue for majority of customers. More than 99% customers are price sensitive & not quality or Brand Sensitive at the same time they are Brand conscious also. Weekly Bazaar in many small towns was held & almost all the commodities were on the scene including livestock. Bargaining was the unwritten law of market. Educational qualification level of these retailers was always low. Hence market was controlled by handful of distributors &/or Wholesalers. Virtually there was only one format of retailing & that was mass retail. Retailer to consumer ratio was very low, for all the categories without exception. Varity in terms of quality, Styles were on regional basis, community based & truly very low range was available at any given single place. Almost all the purchases / (buying) by mass population was need oriented & next turn may be on festivals, Marriages, Birthdays & some specific occasions. Impulsive buying or consumption is restricted to food or vegetables etc. Having extra pair of trousers or Shirts or Casuals & Formals & leisure wear & sports wear & different pair of shoes for occasions is till date is a luxury for majority population except for those living in Metros. Purchasing power of India urban consumer is very low and that of Branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food, Jewellery, are slowly seeping into the lifeline of Indian City folks. However electronic & electrical home appliances do hold appropriate image into the minds of consumers. Brand name does matter in these white goods 10
  • 11. categories. In the coming times also majority of organized retailers will find it difficult to keep balance with rest of the unbranded retail market which is very huge. Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing comprises of four elements customer orientation, coordinated effort, value-driven, and goal orientation. Figure 2.2 Evolution of Indian Retail (estimated) 2.3.3 Drivers of change in retailing  Changing demographics and industry structure  Expanding Computer technology  Emphasis on lower cost and prices  Emphasis on convenience and service  Focus on productivity  Added experimentation 2.3.4 Essentials of Retailing 11
  • 12. Customer orientation- The retailer makes a careful study of the needs of the customer and attempts to satisfy those needs. Goal orientation – The retailer has clear cut goal and devises strategies to achieve those goals. Value driven approach- the retailer offers good value to the consumer with merchandise having the price and quality appropriate for the target market. Coordinated efforts- Every activity of the firm is aligned to the goal and is designed to maximize its efficiency and deliver value to the consumer 2.4 Organized Retail is evolving with changing customer aspirations Organized retailing in most economies has typically passed through four distinct phases in its evolution cycle. In the first phase, new entrants create awareness of modern formats and rise consumer expectations. In the second phase consumers demand modern formats as the markets develop – thereby leading to strong growth. As with the life cycle in any industry, the high rate of growth would lead to a stage where the market would reach maturity and all the players would strengthen their positions. This will be followed by the final phase where the market would reach saturation, the growth would be limited and for sustainable growth, retailers would explore new markets as well as evaluate inorganic opportunities. 2.4.1 Growth Factors in Indian Organized Retail sector: The growth factors in India organized sector are various but it is mainly due to the fact that India's economy is booming. Also, the rise in the working population which is young, pay- packets which are hefty, more nuclear families in urban areas, rise in the number of women working, more disposable income and customer aspiration, western influences and growth in expenditure for luxury items. All these are the factors for the growth in Indian organized retail sector. According to the Icrier report, the retail business in India is estimated to grow at 13% from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is expected to grow at about 10% per annum with sales expected to rise from $ 309 billion in 2006-07 to $ 496 billion in 2011-12. With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by 2011, India will need additional retail space of 700,000,000 sq ft (65,000,000 m2) as compared to today. Current projections on construction point to a supply of just 200,000,000 sq ft (19,000,000 m2), leaving a gap of 500,000,000 sq ft (46,000,000 m2) that needs to be filled, at a cost of US$15–18 billion. 12
  • 13. Many Indian companies have entered the retail industry in India and this is also a factor in the growth of Indian organized retail sector. Reliance Industries Limited is planning to invest US$ 6 billion in the organized retail sector in I India by opening 1500 supermarkets and 1000 hypermarkets. Bharti Telecoms is planning a joint venture worth £ 750 million with Tesco a global retail giant. Pantaloons are planning to invest US$ 1 billion in order to increase its retail space to 30 million square feet. Such huge investment is also a factor in the growth of the organized retail sector in India. The world's largest retailer by sales, Walmart Stores Inc and Sunil Mittal's Bharti Enterprises have entered into a joint venture agreement and they are planning to open 10 to 15 cash- and-carry facilities over seven years, Carrefour the world’s second largest retailer by sales, is planning to setup two business entities in the country one for its cash-and-carry business and the other a master franchisee which will lend its banner, technical services and know how to an Indian company for direct-to-consumer retail. The world’s fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its warehouse club model is also interested in coming to India and waiting for the right opportunity. Tesco Plc., plans to set up shop in India with a wholesale cash-and-carry business and will help Indian conglomerate Tata group to grow its hypermarket business. The factors for growth in Indian organized retail sector are many and that’s the reason behind its massive growth, but for this to continue both the Indian retailers and the government will have to work together. 13
  • 14. 2.4.2 Penetration of Organised Retail Figure 2.3 Penetration of Organized Retail 2.4.3 Indian Organized Retail Sector's Impact on Lifestyles The Indian organized retail sector's impact changed the lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making recess for the Indian organized retail sector. With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have become aware of the value of money. Now a days the Indian consumers are well versed with the concepts about quality of products & services. These demands are the visible impacts of the Indian organized retail sector. Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national & international products with the help of print & electronic media. The social changes with the rapid economic growth due to trained personnel’s, fast modernization; enhanced availableness of retail space is the positive effects of Liberalization. 14
  • 15. The growth factors of organized retail in India are:-  Increase in per capita income which in turn increases the household consumption  Demographical changes and improvements in the standard of living Change in patterns of consumption and availability of low-cost consumer credit  Improvements in infrastructure and enhanced availability of retail space  Entry to various sources of financing The non-food sector, segments comprising apparel, accessories, fashion, and lifestyle felt the significant change with the emergence of new stores formats like convenience stores, mini Marts, mini supermarkets, large supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena, with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC Ashirbad, fast foods chains like McDonald's, KFC, beverage parlors’ like Nescafe, Tata Tea, Café Coffee and Barista, the Indian food habits has been altered. These stores have earned the reputation of being 'super saver locations'. India will be a unique business arena in whole of the global economy, for the social and economic parameters would overrule the big bang of the vivid competition. Previously mastered by the unorganized retail sector, India opened up late as an economy in 1990 until then the idea of retail formats were spread by the government. 2.4.4 Employment Generation by India Organized Retail Sector Lots of employment generation by Indian Organized Retail Sector in the near future. India is going through a radical economic change. Though it is very infant stage, people can feel the climate is changing. The unorganized retailers take the lion's share in the Indian retail sector, but the organized retailers are growing at a good pace, and promise an increase of proportion of by 2016. This is to be the largest sector after the agricultural sector. The increase in the number of consumers twinned with the introduction of organized sector has brought numerous corporate investments in retail sector. The entry of super markets, enormous departmental stores, and shopping malls has encouraged the retailers to look at new business plans of expansion. An economic growth on a monumental scale is offered by the Indian retail sector, equally in the national and international market which in turn will generate a huge source of employment and a variety of options for the consumers. The Ernst & Young's report 'The Great Indian Retail Story', anticipates that the Indian retail sector would come up with 2 million employment opportunities within the year 2010. Benefits to the economic growth:- 15
  • 16. Better quality products and services would lead to better competition  More exports bring more foreign direct investments  Organized Indian retail sector would encourage tourism  Along with the employment boom there would be a vast development in the expertise of the human resource  There would remain future scope for improvements in agriculture, small, and medium scaled with the help of the Indian retail sector The present employment in the retail business is nearly 4 crores and around 20 crores depend on this sector. There is a scope of better exposure to the international standards with the entry of transnational companies, which in turn is encouraging more & more retail management programs to open up and help bridging the gap of supply & demand of talented professionals for management. 2.4.5 Scope of the Indian Retail Market: The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The Indian retail industry contributes 13% of the country’s GDP in the Indian retail market the scope for growth can be seen from the fact that it is expected to rise to US$ 590 billion in 2011-12 from US$ 309 billion in 2006-07. The organized retailing sector in India was only 7% in 2008 and is expected to rise to 25-30% by the year 2016. There are under construction at present around 325 departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a tremendous scope for growth in the Indian retail market. The growth of scope in the Indian retail market is mainly due to the change in the consumer’s behavior. For the new generation have preference towards luxury commodities which have been due to the strong increase in income, changing lifestyle and demographic patterns which are favorable. The scope of the Indian retail market has been seen by many retail giants and that’s the reason that many new players are entering the India retail industry 2.5 Major players:  Pantaloon Retail: 16
  • 17. It is headquartered in Mumbai with 450 stores across the country employing more than 18,000 people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-India retail space is of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largest retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar, collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment (Bowling co.) One of their recent innovations include e- commerce’ hybrid format of ’small’ shops , the area for these stores will be 150 sq. ft. fitted with 40 digital screens. Customers will be encouraged to browse through the entire range of products on digital screen. They will be able to place the order, the delivery of which will be arranged by the shop to their homes within a few hours.  K Raheja Group They forayed into retail with Shopper’s Stop, India’s first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). They have signed 50:50 joint venture with the Nuance Group for Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75 billion. The first Hypercity opened in Mumbai in 2006 with an area of 1, 20,000 sq. ft. clocking gross sales of Rs. 1 bn in its first year. Crossword brand of book stores, Homes stop a store for home solutions, Mothercare a concept stocking merchandise related to childcare are also owned by them. Recently, Raheja’s have signed MoU with the Home Retail Group of UK to enter into a franchise arrangement for the Argos formats of catalogue & internet retailing. The group has announced plans to establish a network of 55 hypermarkets across India with sales expected to cross the US$100 million mark by 2010.  Tata group: Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired Landmark, India's largest book and music retailer. Trent has more than 4 lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006. Tata’s has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics chain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007. Another subsidiary, Titan Industries, owns brands like “Titan”, the watch of India has 200 exclusive outlets the country and Tanishq, the jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs 6.55 17
  • 18. billion.Trent plans to open 27 more stores across its retail formats adding 1.5 mn sq ft of space in the next 12 DLF malls.  Bharti-Walmart Their plans include US$ 7 bn investment in creating retail network in the country including 100 hypermarkets and several hundred small stores. They have signed a 50:50 percent joint venture agreement with Walmart. Wal-Mart will do the cash & carry while Bharti will do the front-end.  Reliance India’s most ambitious retail plans are by reliance, with investments to the tune of Rs. 30,000 cr ($ 6.67 bn) to set up multiple formats with expected sales of Rs 90,000 crores ($20 bn) by 2009-10. There are already more than 300 Reliance Fresh stores and the first Reliance Mart Hypermart has opened in Ahmedabad. The next ones are slated to open at Jamnagar, followed by marts in Delhi / NCR, Hyderabad, Vijaywada, Pune and Ludhiana.  AV Birla Group They have a strong presence in apparel retailing through Madura garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town. In other segments of retail, AV Birla Group has announced investment plans of Rs 8000 - 9000 crores in the first 3 years till 2010. The acquisition of Trinethra (food & grocery) chain in the south has moved their tally to 400 stores in the country. Their “More” range of 15 supermarkets are slated to open at Nashik, Pune and other tier II cities in Western India in 2007. 2.6 Functions of retailing: Retailers play a significant role as a conduit between manufactures, wholesalers, suppliers, and consumers. In this context, they perform various functions like storing, breaking bulk, holding stock, as a channel of communication, storage, advertising, and certain additional services. Storing: Manufacturers usually make one or a variety of products and would like to sell their inventory to a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the 18
  • 19. demands of both sides, by collecting an assortment of goods from different sources, buying them in sufficiently large quantities, and selling them to consumers in small units. The above process is referred to as the storing process. Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets in the US offer, on an average, 15,000 different items from 500 companies. Customers are able to choose from a wide range of designs, sizes, and brands from one location. If each manufacturer had a separate store for its own products, customers would have to visit several stores to complete their shopping. While all the retailers offer an assortment, they specialize in types of assortment offered and the market to which the offering is made. Westside provides clothing and accessories, while a chain like nil irises specializes in food and bakery items. Shoppers stop targets the elite urban class, while pantaloons is targeted at the middle class. Breaking bulk: Breaking bulk is another function performed by retailing. The word retailing is derived from the French word retailer, meaning to cut a piece of. To reduce transportation costs, manufacturers and wholesalers typically ship range cartons of the products, which are then tailored by the retailers into smaller quantities to meet individual’s consumptions needs. Holding stock: Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventory that allows for instant availability of the products to the consumers. It helps to keep prices stable and enables the manufacturer to regulate production. Consumers can keep a small stock of products at home as they know that this can be replenished by their retailer and can save on inventory carrying costs. Additional Services: Retailers ease the change in ownership of merchandise by providing services that make it convenient to buy and use products. Providing products guarantees, after-sales services and dealing with consumer complaints are some of the services that add value to the actual product at the retailers end. Retailers also offer credit and hire- purchase facilities to the customers to enable them to buy a product now and pay for it later. Retailers fill orders, promptly process, deliver and install products. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. 19
  • 20. 3.1 Introduction: Pantaloon Retail India Ltd (PRIL) has emerged as the leading retailer in India with its chain of Pantaloon, Big Bazaar and Food Bazaar stores. With the right mix of management capabilities, high growth product profile, well-developed strategy and extensive IT and logistics capabilities, PRIL has ensured rapid growth. More importantly, while most organized retailers are struggling to be in back, PRIL has demonstrated a consistent track record of profitable growth. 3.1.1 Company Research PRIL has chalked out an aggressive expansion plan to increase its retail space to over 17,40,000 sq.ft. over the next two years. Space for additional 4 Pantaloon’s, 11Big Bazaars and 2 Food Bazaar’s has already been finalized, and these would be Operational over the next two years. PRIL aims to set up over 30 Food Bazaar’s and is scouting for appropriate locations for the same. After popularizing the concept of hypermarket in India, PRIL is now also setting up a new format shopping mall in the country under the name ‘Central’. The format would be on the lines of a Selfridhes in London or a Central Mall in Bangkok. Two malls of 100,000 and 240,000 sq.ft. are being set up in Bangalore and Hyderabad respectively.  Diversity of product range will ensure profitable volume growth To achieve better return on retail space, PRIL uses certain product categories as margin managers and certain product categories to generate traffic. The food and groceries business will act as key volume growth driver while high share of apparel (which account for over 80% sales in Pantaloon Stores and 40% in Big Bazaar) will enable PRIL to maintain high margins. The management has demonstrated its ability to improve stock turnovers in both the formats successfully, which has enabled significant margin improvement.  Fully integrated value chain and own labels give competitive edge PRIL has a completely integrated value chain in apparels from fabric manufacturing to apparel manufacturing, branding, distribution to retailing. The company controls the total value chain from yarn to apparel retailing and gives a competitive edge in terms of speed of delivery; lower inventory carrying costs and better realizations. Also, large part of PRIL’s apparel revenues comes from own private labels. PRIL has developed significant competencies in apparel branding over a period of time and has developed own labels (John Miller, Shrishti, Bare, Annabelle, AFL) in all the apparel product categories. Worldwide, private labels give higher margin to retailers than the national brands.Also growth of private labels is faster as retailer controls shelf space and visibility. Other initiatives such as faster turnover of stocks by introducing 6 seasons in a year (against 2 20
  • 21. earlier) has helped in bringing down inventory levels and at the same time providing wider choice to customer and improving frequency of customer visits.  High scalability of business model- multiplier effect will set in Size and scale drive economies on procurement and lower logistics costs, which enables a retailer to deliver better value to customers. The hyper-market format has much higher scalability as compared to the pure apparel-retailing format. Also, the potential to expand and scale is virtually unlimited in the food & grocery segment, where efficiencies improve dramatically with scale as the multiplier effect sets in. Food constitutes the largest expenditure item (estimated at over 50%) of an average Indian’s monthly personal expenditure. However, the share of modern retail formats in the Rs6700bn Food & Grocery market is a minuscule 0.3%, revealing the high growth potential in the segment.  New product categories and innovative tie-ups to aid growth PRIL offers large number of products to the customer to give them better choice for selection. Different product categories have different depth and width in merchandise offering. Besides, PRIL has tied up with Shop-in-Shop partners in its Big Bazaar stores. Some product categories where the company does not have core competency or does not want to invest, but would attract customers are catered through these partners. Eventually, in the long run, the Company may manage some of these product categories on its own as volumes grow and it develops competencies in these businesses. Shop-in-Shop partners typically pay a fixed rental for their space and share a part of their profits. By expanding the range of product offerings and retail formats, PRIL today has been able to target a much larger share of the consumer’s basket (about 70% as against less than 8% in 1994). PRIL will be adding new product categories to its business in both Pantaloons as well as Big Bazaar stores. Gold, Investment products, White goods and Appliances, Footwear will be the new product categories that will be added. These product categories will help in improving Walk In’s into its stores and generate additional business from the existing categories too.  Competition from global players would pose a major threat Most global retailing majors have been keen on entering into the huge untapped Indian market. However policy restricts Direct Foreign Investment in the sector. There is a high likelihood of the Government lifting restriction on FDI into the retail sector in the near future. Entry of these foreign giants - with significant experience and skills in retail management would increase competition for PRIL. However, we believe that given the widely dispersed and heterogeneous nature of Indian markets, a foreign entrant would find it extremely difficult to establish a national 21
  • 22. presence. Pantaloon with its early mover advantage and understanding of local markets is well entrenched to retain high customer share. Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as Menz Wear Private Limited under the stewardship of Mr. Kishore Biyani. It was converted into a public limited company in September, 1991. The company sold branded garments under Pantaloon, Bare and John Miller brands. PRIL set up its first menswear Pantaloon Shoppe outlet in 1993. The company’s name was changed to Pantaloon Retail (India) Limited in 1999, when it made a full- fledged entry into the retail segment through the Pantaloons Family Store. 3.2 Pantaloon Retail (India) Ltd: A Company Snapshot Business Description: Pantaloon Retail (India) Ltd. The Company's principal activity is to operate chain retails stores in names of Big Bazaar, Food Bazaar, Central and Pantaloons. The Big Bazaar is the discount store which offers a wide range of products under one roof. The products include apparels and non- 22
  • 23. apparels such as utensils, sports goods and footwear. The Company also has its presence into gold retailing by launching Gold Bazaar. The Company's Food Bazaar provides a range of food and grocery products ranging from fresh fruits and vegetables, staples, FMCG products and ready-to- cook products. The Central offers a chain of stores including books and music stores, global brands in fashion, sports and lifestyle accessories, grocery store and restaurants. The Pantaloon retail stores focus largely apparels and accessories. About Pantaloon Retail (India) Ltd Pantaloon Retail (India) Limited is a leading retailer with a turnover of Rs. 1088 crores for the financial year ending June 2008. The company is headquartered in Mumbai and has a presence in Lifestyle Retailing through 18 Pantaloons Stores, 3 Central Malls in Bangalore, Hyderabad and Pune. In Value Retailing it is present through 24 Big Bazaar hypermarkets, 38 Food Bazaars and 2 Fashion Stations. PRIL has a national presence with 2.6 million square feet of retail space across 24 cities. 3.2.1 Pantaloon: Fashion by Pantaloon Pantaloon is the company's departmental store and part of life style retail format. In fact, PRIL took its very initial steps in the retail journey by setting up the first Pantaloon store in Kolkata in 1997. In a short time Pantaloon has been able to carve a special place for it self in the hearts and minds of the aspirational Indian customers. The company has depth of offering for both men and women at affordable prices. A striking characteristic of Pantaloon has been the strength of its private label programme. John Miller, Ajile. Scottsvile, Lombard, Annabelle are some of the successful brands created by the company. With 13 stores across the country and an ever-increasing stable of private brands, Pantaloon - in the coming years is poised to become a leading fashion trendsetter. 3.2.2 Big Bazaar: Is se sasta aur acha kahin nahin Big bazaar is the company’s foray into the world of hypermarket discount stores, the first of its kind in India. Price and the wide array of products are the USP’s in Big Bazaar. Close to two lakh products are available under one roof at prices lower by 2 to 60 per cent over the corresponding market prices. The high quality of service, good ambience, implicit guarantees and continuous discount programmes have helped in changing the face of the Indian retailing industry. A leading foreign broking house compared the rush at Big Bazaar to that of a local suburban train. 23
  • 24. Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and International supermarket atmosphere with the objective of giving the customer all the advantages of Quality, Range and Price associated with large format stores and also the comfort to See, Touch and Feel the products. The company has recently launched an aggressive private label programme with its own brands of tea, salt, spices, pulses, jams, ketchups etc. With unbeatable prices and vast variety (there are 42 varieties of rice on sale), Food Bazaar has proved to be a hit with customers all over the country. Outlet 104 outlets Located in India Parent group Future group Owner Kishore Biyani (CEO) Founded 2001 Head quarter Jogeswari , Mumbai Industry Retail Website www.bigbazar.com Tag line Is se sasta aur achha kahin nahi. Figure 3.1: About Big Bazaar Big Bazaar Big Bazaar is a chain of shopping malls in India, owned by the Pantaloon Group and which work on Wal-Mart type economies of scale. They have had considerable success in many Indian 24
  • 25. cities and small towns. Big Bazaar provides quality items but at an affordable price. It is a very innovative idea and this hypermarket has almost anything under one roof Apparel, Footwear, Toys, Household Appliances and more. The ambience and customer care adds on to the shopping experience. Is Se Sasta Aur Accha Kahin Nahin ! What's in store for you at Big Bazaar? 1,70,000 products at 6- 60 % discount. At Big Bazaar, you will get: A wide range of products at 6 – 60 % lower than the corresponding market price, coupled with an international shopping experience. 3.3 Products available in Big bazaar Apparel and Accessories for Men, Women and Children. Baby Accessories. Toys Cosmetics Home Textiles Luggage Crockery Home Needs Linens Dress Materials Suiting & Shirting Household Appliances Sarees Electrical Accessories Household Plastics Stationery Electronics Hardware Utensils & Utilities Footwear Home Decor 25
  • 26. Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and International supermarket atmosphere with the objective of giving the customer all the advantages of quality, Range and Price associated with large format stores and also the comfort to See, Touch, and Feel the products. 'FOOD BAZAAR' a division of Pantaloon Retail India Ltd is a chain of large supermarkets with a difference. It was flagged off in April'02. With store sizes ranging from 8,000 sq ft to 15,000 sq. ft. in Mumbai (two stores), Kolkata, Bangalore & Hyderabad, it is opening more stores at Gurgaon (Delhi), New Bombay & Nagpur. It currently caters to over 1.2 million customers every day across 4 outlets in India and is soon set to expand and double this figure across 12 outlets all over the country by June 2009. Food Bazaar offers the Indian consumer the best of Western and Indian values. The western values of convenience, cleanliness and hygiene are offered through pre packed commodities and the Indian values of "See- Touch- Feel" are offered through the “Mandi” atmosphere created by displaying staples out in the open, all at very economical and affordable prices without any compromise on quality. This satisfies the Indian consumer and comforts her before making her final buying decision. At other super markets, the consumer is deprived of this factor. Truly the Indian consumer now agrees with Food Bazaar: "Ab Ghar Chalaana kitna Aasaan”. This positioning platform of Food Bazaar is evident from the higher discounts and the wholesale price-points which are below MRP. Food Bazaar represents the company’s entry into food retail and is targeted across all classes of population, tea, sugar, pulses, spices, rice wheat etc, besides fruits and vegetables. All products are sold below MRP and discounts range between 2% to 20%. Fruits and vegetables are sold at prices comparable to wholesale prices. Food Bazaar replicates a local ‘mandi’, to provide the much important ‘touch & feel’ factor which Indian housewives are used to in the local bazaar. Food Bazaar has over 50,000 stock keeping units which cover grocery, FMCG products, milk products, juices, spices, ready to eat foods etc. 26
  • 27. 3.4 GROUP VISION AND MISSION: Group Vision Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner Group Mission  We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development.  We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses.  We shall infuse Indian brands with confidence and renewed ambition.  We shall be efficient, cost- conscious and committed to quality in whatever we do.  We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful. Core Values  Indianness: confidence in ourselves.  Leadership: to be a leader, both in thought and business.  Respect & Humility: to respect every individual and be humble in our conduct.  Introspection: leading to purposeful thinking.  Openness: to be open and receptive to new ideas, knowledge and information.  Valuing and Nurturing Relationships: to build long term relationships.  Simplicity & Positivity: Simplicity and positivity in our thought, business and action.  Adaptability: to be flexible and adaptable, to meet challenges.  Flow: to respect and understand the universal laws of nature. 27
  • 28. 3.4.1 AWARDS AND RECOGNITION 2009 CNBC Awaaz Consumer Awards 2009, Images Fashion Forum 2009, Coca-Cola Golden Spoon Awards 2009 2008 Indian Retail Forum Awards 2008, The INDIASTAR Award 2008 , Retail Asia Pacific 500 Top Awards 2008, Coca-Cola Golden Spoon Awards 2008, The Reid & Taylor Awards For Retail Excellence 2008 2007 Images Retail Awards, National Retail Federation Awards, World Retail Congress Awards, Hewitt Best Employers 2007, PC World Indian Website Awards Reader’s Digest Trusted Brands Platinum Awards. 2006 Retail Asia Pacific Top 500 Awards, Asia money Awards, Ernst & Young Entrepreneur of the Year Award, CNBC Indian Business Leaders Awards, Lakshmipat Singhania – IIM Lucknow National Leadership Awards, Images Retail Awards , Readers’ Digest Awards , CNBC Awaaz Consumer Awards, Reid & Taylor Awards for Retail Excellence 2005 Images Retail Awards 2005, DAKS London 2004 Images Retail Awards 2004, Reid & Taylor and DLF Awards 2003 Indian Express Award 28
  • 29. 3.4.2 SWOT ANALYSIS: Strengths:- • EDLP [ Every Day Low Pricing] • Experienced marketing team & executive staff. • Strong culture, ethics and values are followed • Emphasis on providing total customer satisfaction • Point of purchase promotion to increase the purchase • Variety of stuff under single roof • Increase sales with the help of healthy competition between different department • Maintains good employer-employee relation • Cost control initiatives that is critical in a retail operations business • Periodical reviews of the various operations have been done on regular basis to identify the any possible threat and address the same within time Weakness:- • Unable to meet store opening targets. • Unavailability of popular brand items with regard to clothing. Opportunities:- • Population of the country is growing where the scope of market is kept on increasing for the retail sector. • Organized Retail less penetrated in India so it acts as a great opportunity to the organization for its growth. • Evolving consumer preferences. • Economy is developing as the employment opportunities are increasing and the income of the people is also increasing which increases life standards of people. • Company has more scope of expansion in two and three tier cities. 29
  • 30. Threats:- • Competitors Strategies • Advancement of technology day by day. • Government policies. • Unorganized Retail sector • Foreign direct investment cause more problems in future because of that many mergers and acquisition are happening in Indian retail sector 3.4.3 A layout chart of Big bazaar located at PIMPERI CHINCHWAD 1. HELP DESK 2. KIDS ACCESSORIES 3. BABA SUITS 4. JACKETS 5. LADIES TOPS 6. TRIAL ROOM 7. PILLARS USED FOR DISPLAYING INFORMATION (SIZE CHART, SECTION DESCRIPTION) 8. WOOLEN CLOTHS FOR KIDS 9. KIDS CASUAL WEAR 10. KIDS JEANS AND SHORTS 11. LADIES ETHINIC 12. LADIES ACCESSORIES – LINGERIES 13. LADIES WESTERN 14. MEN FORMAL SHIRTS 15. MEN TROUSERS 16. MEN SUITS AND BLAZERS 17. MEN FABRICS 18. MEN ETHINICS 19. SOFT TOYS 20. MEN ACCESSORIES – SUNGLASSES, WRIST WATCHES ETC 21. HOME DECORATIVE ITEMS 22. HOME FURNISHING (CURTAIN CLOTHS, CARPETS) 30
  • 31. 23. MUSIC COUNTER 24. LUGGAGE 25. FOOTWEAR 26. SPORTS 27. SCHEME BASED PROMOTIONAL ITEMS 28. FURNITURE BAZAR 29. FOOD BAZAAR 30. CASH COUNTER TARGET AUDIENCE:  Big Bazaar targets higher and upper middle class customers  The large and growing young working population is a preferred customer segment  Targets specifically working women and home makers who are the primary decision makers CORE VALUES:  Indian ness: Confidence in ourselves  Leadership: To be a leader, both in thought and business  Respect&Humility: To respect every Individual and be humble in conduct  Introspection: Leading to purposeful thinking  Openness: To be open and receptive to new ideas, knowledge and information  Valuing and Nurturing relationship: To build and maintain long term relationships  Simplicity&Positivety: Simplicity and positive approach in though, business and actions  Adaptability: To be flexible and adaptable, to meet challenges BIG BAZAAR-USP:  1Billion population.  Availability of Liquid Cash Disposable Income among Young Generation  Affordable man power  Craze, Passion among Mr. Customer (Consumer)  More products ….Under ONE roof 31
  • 32.  Affordable price  Sentiments -To infuse confidence in Indian brands  Schemes-Buy 01 gets one free, 20% dis...etc STRATEGIES:  To minimize Retailing cost:  Operating: Fewer staff on the floor-one person for every 500 sq ft  Minimize the Furniture cost  Sourcing: Cut Down 25-30 %  Channel-Cut Down 15-20%  Saving Shelf Space  Way to deal unsold stock off  Plans to have In-Store promotions as well slow-moving products off  To ensure enough pull to snatch away customers from the neighborhood  “Today’s Price”:Everyday a chosen product is being sold at lower than usual price  Big Bazaar’s New Marketing Strategy: Big Bazaar has launched new marketing strategy which is based on Guerrilla Marketing. Guerrilla marketing warfare strategies are a type of marketing warfare strategy designed to wear-down the enemy by a long series of minor attacks, using principles of surprise and hit-and-run tactics. Attack, retreat, hide, then do it again, and again, until the competitor moves on to other markets. Herein guerrilla force is divided into small groups that selectively attack the target at its weak points. Corporate like Coke, Pepsi, etc have been using the same for quite some time now and the latest entrant is ‘Future Group’- Big Bazaar, Pantaloons, Future Bazaar, eZone are all part of this group and they are taking on the biggies like Shoppers Stop, Lifestyle, and Tata’s Westside. In order to do the same, Future Group have come up with 3 catchy/cocky and cheeky ad campaigns which surely do catch our eyes and surely one can’t resist appreciating the same. Keep West-aSide. Make a smart choice! Shoppers! Stop. Make a smart choice! Change Your Lifestyle. Make a smart choice! 32
  • 33.  Big Bazaar Wholesale Club:  Now Save, Even more: The Big Bazaar Wholesale Club brings to an opportunity to save in bulk as the customers buy in bulk. In line with the Big Bazaar tradition of providing best deals at 33
  • 34. best prices, the Big Bazaar Wholesale Club provides the customers bulk deals at wholesale prices.  An extension of Big Bazaar, the Big Bazaar Wholesale Club offers multi-packs and bulk packs of a select range of merchandise at wholesale prices. The merchandise categories range from Food & FMCG to Home Linen and many more. Customers will not find any merchandise being sold loose/single unit (except fresh) at a Big Bazaar Wholesale Club.  A typical Big Bazaar Wholesale Club is located adjacent to a Big Bazaar in the form of a separate section. The look and feel of a wholesale market is evident in the stores from the stacking styles and use of a lot of hand written signage by chalks on black slates.  It has created ‘Fashion @ Big Bazaar’, a sub-brand, to position the format as much more than food or general merchandise. ENVIRONMENTAL ANALYSIS: EXTERNAL ENVIRONMENTAL FACTORS: 4Ps OF MARKETING "Marketing" is the promotion of products, especially advertising and branding. Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. Marketing mix is a deciding factor in formulating marketing techniques for the success of a particular brand, commodity or company. The components of marketing mix are: • Product • Price • Promotion • Place PRODUCT: Big Bazaar offers the maximum variety for each category of product. The product is the same in every store in the city but the brand options are more in Big Bazaar. Also, the quantity for each product is not limited to large packs only. The commodities sold by the retail chain also includes its “own products” (Private Labels) which get a ready distribution network. The own products of Big Bazaar include My World fashion magazine which is not available anywhere else. So costs are low for such products. 34
  • 35. Diverse merchandise Customized PRICE: Price is the critical point in a competitive industry. Big Bazaar works on a low cost model. It considers its discounted price as its USP. There is an average discount of 7-8% on all items in respect to their MRP. Prices of products are low because it is able to secure stock directly from the manufacturer. There are huge synergies in terms of bulk purchasing, central warehousing and transportation. These all factors help this retailer to keep low prices. Low margin, High sales volumes Low Interest Financing Centralized sourcing Discount pricing Value pricing Promotional pricing-Psychological discounting -Special event pricing (Republic day) Differentiated pricing-Time pricing Bundling PLACE: Place means the location of the business. Big Bazaar has always worked on low-cost locations. It targets semi-urban population with its placement. Its strategy is to find a cheap location and it never goes for hot spots in the city. It relied on promotional activities to make up for unattractive locations. Another strategy used by Big Bazaar to overcome location disadvantage is use of internet. It has launched a merchandise retailing website www.futurebazaar.com which targets high-end customers ready to use credit cards. The promotion of this website is done through advertisement on Google. The website is put as sponsored link. Initially identifies future/potential development areas Acquires such areas at an early phase before the real estate value booms Designed to look crowded 35
  • 36. PROMOTION: Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to make people do bulk shopping. There are 2 types of promotional strategies of big bazaar. One is the holistic advertisement which promotes the brand and creates awareness among people. It is not targeted at promoting each store but only creates an image of Big Bazaar as low-cost shopping option. The store has advertised through TV, road shows and also started reality show-typed promotional campaign “The Big Bazaar Challenge.” Promotions like “Sabse Sasta Din” are a very successful strategy to get footfall. In these products across categories such as apparels, furniture, electronics, utensils and food products at the lowest possible prices, coupled with attractive promotional schemes. Some of the most attractive offers being a 20-litre branded microwave oven with grill for Rs 2,499, jeans and trousers for Rs 199 and HCL laptops for Rs 22,990. Other type of promotion is the particular store oriented promotion which includes speaking on the loudspeaker in nearby blocks. Leaflets are given in local newspaper. There are promotional efforts even inside the store. Buy 2 Get 1 Free types of promotions are very common. Original prices are cut down and new prices are shown, of which customer takes quick notice. There are loyalty schemes which reward regular clients. Promotion is also done through co-branded credit cards with ICICI bank. Monthly Bachat Offers (Offer available at Big Bazaar stores in Hyderabad): Big Bazaar is offering monthly bachat offers and some of them are: - Charminar Basmati Rice + Aadhar Sunflower Oil + 5 kgs of refined sugar, each worth Rs. 1080 - for Rs. 659 only - Tilda Khush Long Grain Rice (5 kgs) worth Rs. 440 - for Rs. 159 only - Fortune Sunflower Oil (5 litres) worth Rs. 450 - for Rs. 262 only - Cow Ghee worth Rs. 200 - For Rs. 189 only - Britannia Marie Gold (370 grams) Rs. 25 - Buy 1 get Rs. 3 off or Buy 2 get Rs. 8 off - Buy a Bournvita pouch pack (500 grams) worth Rs. 124 and get a free Britannia Good Day packet worth Rs. 12 - Buy Super Cup Tea (1 kg) worth Rs. 240 and get 500 kg worth Rs. 105 free - Buy Bambino Vermicelli (1 kg) worth Rs. 40 for Rs. 35; and get Bambino Macaroni (180 grams) worth Rs. 12 free - Buy onions (1 kg) worth Rs. 17 - for Rs. 14.90 only - Buy potatoes (1 kg) worth Rs. 9.50 - for Rs. 7.90 only - Buy Surf Excel (2 kg) worth Rs. 280 and get free Vim bar - Buy Head & Shoulders Shampoo (400 ml) worth Rs. 215 and get a free Head & Shoulders 90 ml men's shampoo worth Rs. 69 Future card (3% Discount) Baby registry and marriage registry-targeted towards married couple, waiting for marriage 36
  • 37. Shakti card Advertising (Print ads, TV ads, radio) Tying up with IPL targeting sports lovers Celebrity endorsements-Brand endorsement by M.S.Dhoni Exchange offers Weekend discounts Point of Purchase promotions ‘Junk’ swap offer-“Exchange anything old for something new” OPPURTUNITIES:  Early Entry in Indian Retail  Organized retail  Evolving consumer preferences  Targeting area more prone to developments  Global Expansion  In-Store Experience improvements THREATS:  Government policies like complex sales and excise policies.  Unorganized retail.  Large Foreign Competitors like Wal-Mart, Metro and Domestic player like Reliance.  Burgeoning real estate prices which leads to high rentals.  Economic Conditions  Lowering Margins PEST ANALYSIS: Political and Legal Factors:  A stable government at the centre will facilitate speedy economic recovery and create an encouraging investment climate  Problems of getting subsidy from Octrai and on different taxes like land, water taxes 37
  • 38.  Problems of taking over properties and real estate Economical:  India, one of the fastest growing economies(6-6.5% GDP growth rate)  Retail Industry to grow to 300 billion by 2010  Increase in the percentage contribution of the service sector to GDP  Increase in the investment on IT with focus on cost minimization Socio-Cultural Factors:  Increase in Nuclear families  People prefer to shop in local stores with the reasonable prices  Increase in working women’s proposition  Life style changes  Shift in Product and service preferences  Increase in Young population Technological:  Technological development for fast billing and the service  Better applications of information technology in the modern retail industry, like in supply chain management, store management, point of sale and customer relationship management Competitive Analysis:  Big Bazaar faces competition from all the quarters of RPG Spencer Super stores, Reliance fresh stores, Trinethra stores, Food Bazaar. But the main threat and the strategies of Big Bazaar is around the local neighborhood Kirana Stores because this is where the big potential for growth lies. INTERNAL ANALYSIS: STRENGTHS: 38
  • 39.  LOW PRICE/Different discount scheme: The Big Bazaar Outlets sold a variety of products at prices which is lower than the market price. Almost everything has some kind of discount in Big Bazaar. Consumers accept the fact that they come from faraway places because it is cheap in Big Bazaar for bulk shopping. Big Bazaar is able to secure stock directly from the manufacturer which they are selling as Private label. Big Bazaar gets some extra benefits from manufacturer like display income, Manufacturer discount and Extra Distributor Discount. There are huge synergies in terms of bulk purchasing, central warehousing and transportation. Big Bazaar provides discounts ranging from 6-8%to the market and offers special discounts and offers up to 60% of 1,60,000 products 365 days a year. Price is the basic value propositions at Big Bazaar.  HUGE DISPLAY AREA, avg 30,000sq/ft: Big Bazaar displays all their grocery and all other product that customer can touch and feel the quality. They offer self service.  PRODUCT DIVERSITY: Big Bazaar offers the maximum variety for each category of product and this is cited by the customers as one of the main reasons why they like shopping at the Big Bazaar (Range of apparels, accessories, baby accessories, cosmetics, grocery, vegetables, crockery, dress material, suiting, shirting, footwear, toys, house hold appliances, home textiles, luggage, linens, saris, large product mix. Stocks about 30000 items in over 20 product categories). The product is the same in every store in the city but the brand options are more in Big Bazaar. They have a huge carpet area in an average of 30,000 square feet.  Huge promotional activities undertaken to ensure enough footfall  Infrastructure  Ambience of the Big Bazaar is not like the hypermarket in West, which follows liner layout. It is not only providing good parking ,AC ambience to create a “ no hassle “shopping experience but also designed in a way that it provides a traditional bazaar like environment, where the most Indian feel comfortable.  The customers trust retail chains with quality of the product. They feel food products of Big Bazaar will have no adulteration. This quality is not assured in a kirana store.  High Brand Equity WEAKNESSES:  Store unable to meet the growing consumer demand. General Perception of consumer.  Depend on distribution channel of Brands for products like FMCG.  Lack of strong supply chain like other big player  Perception among consumers CORE COMPETENCIES:  A choice of more than 20,000 products  Delivery across more than 1500 cities and towns in India covering around 16,000 pin codes  Fast deliveries – tie ups with world leaders in logistics & transportation services  A dedicated Customer Care helpline for any queries 39
  • 40.  Always offering Manufacturer’s guarantee as opposed to Seller’s guarantee, which most of the other online shopping sites offers  Talks of Quality and Cost  Special emphasis on apparels and life style products Providing interesting discounts CHALLENGES:  Waiting time in terms of Billing at Big Bazaar outlets is a concern and more so during the weekends. And during our personal observation while observing the operations(Though it was for 3-4 hours which is a short period of time),it was noted that few customers who had little to purchase, left their trolleys due to long queue at the counter. Long Queues at the Billing counters  The store has too many things at the same place. The floor plan has to be structurally laid out so that merchandising can be efficiently handled and displayed.  Availability of most exclusive brands under all categories  Product Uniqueness- Offer merchandise of highest quality  After Sale Service  Uniqueness Shopping Experience: The Store personnel should be more friendly and easy approachable, you should also offer drinking water, lime soda or tea to the customers once they enter in the store 40
  • 41.  Introduce best Promotional campaigns which make sense and also understandable to attract distant city crowd Different In-store Promotions  Introduce Best loyalty programs. 4.1 Retail Mix The retail mix is the combination of factors retail used to satisfied customer needs and influences their purchase decision. It’s include the type of merchandise and services offered, merchandise pricing, advertising, promotional programs store design merchandise display, assistance to customer provided by salespeople, and convenience of the store’s location.  Retail mix is the term used to describe the various elements and methods required to formulate and execute retail marketing strategy.  Retail managers must determine the optimum mix of retailing activities and coordinate the elements of the mix.  The aim of such coordination is for each store to have a distinct retail image in consumers mind.  The mix may vary greatly according to the type of the retailer is in, and the type of product/services. While many elements may make up a firm’s retail mix, the essential elements may include:  Store location, 41
  • 42.  merchandise assortments  Store ambience,  customer service,  price,  Communication with customer  Personal selling  Store image  Store design  Sales incentives  People  Process  Physical evidence 4.1.1 Composition of retail mix  Place  Product  Price  Promotion  People  Process  Physical Environment Key element Table 4.1: Composition of Retail Mix 1) Place (store location) 2) Product (merchandise) • Target market • Product development • Channel structure • Product management • Channel management • Product features and benefits • Retailer image Retail logistics • Branding • Retail distribution • Packaging 3) Price 4) Promotion • Costs • Developing promotional mixes • Profitability 42
  • 43. Value for money • Advertising management • Competitiveness • Sales promotion • Incentives • Sales management • Quality • Public relations • Status • Direct marketing • After-sales services 5) People element 6) Process element • Staff capability • Order processing • Efficiency • Database management • Availability • Service delivery • Effectiveness • Queuing system • Customer interaction • Standardization • Internal marketing 4.1.2 Retail mix planning Retail mix plan consists of:  Setting objectives  Systematic way of identifying a range of options.  Formulation of plans for achieving goals  Logical sequence of retailing activities. Importance of Retail mix planning  Hostile and complex retail environment  External and internal retail organisation factors interact for · Maximising revenue · Maximising profit · Maximising return on investment · Minimising costs  Each element has conflicting needs  All these variables interact  All these variables result in optimum compromise. Approaches to planning 43
  • 44. Top down approach Retail management sets goals and plans for all levels of management. Bottom up approach Various units prepare own goals and plans sent up for approval. It is the effective blending of all the elements of retail mix activities within the retail organization that determines the success of retail management. Discuss this statement and explain with retail examples how the elements of retail mix could be blended to ensure the success of retail operation. 4.2 Retailing Retailing is the sale of goods and services to ultimate consumers for personal, non-business use. Any institution may engage in retailing, but a firm engage primarily in retailing is called a retailer. Retailers serve as purchasing agents for consumer and as sales specialists for producers and wholesaling middleman. They perform many specific activities such as anticipating consumers' wants, developing product assortments and financing. Retailers may be classified by form of ownership and key marketing strategies. Also, types of retailers distinguished according to product assortment, price and customer service levels. Mature institutions such as department stores, discount houses and super markets face strong challenges from new competitors, particularly chain stores or multiple shops in various product categories. Five major forms of non store retailing are Direct selling, Telemarketing, Automatic vending, On line retailing and Direct marketing .Each type has advantages as well as drawbacks. 4.2.1 Retail Marketing Mix Whatever is from of ownership, a retailer must develop marketing mix strategies to succeed in its chosen target markets. In retailing, the marketing mix emphasizes product assortment, price, location, promotion and customer services designed to aid in the sale of a product. They include credit, delivery, gift wrapping, product installation, merchandise returns, store hours, parking and- very important personal service. Stores of different sizes face distinct challenges and opportunities. Buying, Promotion, Staffing and expense control are influenced significantly by whether store's sales volume is large or small. Size of a retail business creates certain merits and demerits. Considering these factors, large stores ordinarily but not always have a competitive advantage over small stores. 44
  • 45. 4.3 Competitive Advantage with Special Reference to Physical Facilities Another competitive advantage of retailers will be how they create physical facilities which represent the distribution element of a retailer's marketing mix. Some firms engage in non-store retailing by selling on hire or through catalogs or door to door, for example-but many more firms rely on retail stores. Firms that operate retail stores must consider four aspects of physical facilities. Location It is frequently stated that there are three keys to success in retailing: Location, Location, Location! Although overstated, this axiom does suggest the importance that retailers attach to location. Thus a stores site should be the first decision made about facilities. Considerations such as surrounding population, traffic and cost determine where a store should be located. Size This factor means the total square footage of the physical store, not the magnitude of the firm operating the store. These are much different factors. A firm may be quite large with respect to total sales, but each of its outlets may be only several thousand square feet in size. Design This factor refers to a stores appearance, both interior and exterior over its competitor. Layout The amount of space allocated to various product lines, specific locations of products and a floor plan of display tables and racks comprise the store's layout. As would be expected, the location, size, design and layout of retail stores are based on where consumers live and how they like to go about their shopping. Consequently, the bulk of retail sales occur in urban, rather than rural, areas. And suburban shopping areas have become more and more popular, where as many down town areas have declined. Assessing Competitors Current Strategies The first part in competitor analysis is to determine how competitors are attempting to achieve their objectives. This question is addressed by examining their past and current marketing strategies. 45
  • 46. 4.3.1 Marketing Strategy Many authors have attempted to explain the concept of strategy. At the retail level, a marketing strategy can be thought of three major components: target selection of customers, core strategy (i.e. positioning and differential advantage), and implementation (i.e. supporting marketing mix). The first major component is the description of the market segment(s) to which competing brands are being marketed. Market segments can be described in various ways. Since few brands are truly mass marketed, the key is to determine which group each competitor has targeted. The second strategy component is what is called the core strategy. This is the basis on which the rival is competing, that is its key claimed differential advantage(s).Differential advantage is a critical component of strategy because it usually forms the basic selling proposition around which the brand's communications are formed. It is also called the brand's positioning. The final strategy component of competitors must be assessed in the supporting marketing mix. The mix provides insight into the basic strategy of the competitor and specific tactical decisions. These decisions are what customers actually see in the market place. In fact, customers are exposed to price, advertising, promotion and other marketing mix elements. 4.3.2 Marketing Environment To the company's marketers falls the major responsibility for identifying major changes in the environment. The retail environment, in particular is constantly spinning out new opportunities, in bad as well as in good years. The general marketing environment also spins out new threats-such as an energy crisis, a sharp rise in interest rates, a deep recession-and firms find their markets collapsing. Recent times have been marked by many sudden changes in the marketing environment, leading Drucker to dub it an Age of Discontinuity and Toffler to describe it as a time of Future Shock. Retail marketers need to continuously monitor the changing scene. They must use their intelligence and marketing research to track the changing environment. By erecting early warning systems, retailers will be able to revise marketing strategies in time to meet new challenges and opportunities in the environment. It consists of the external actors and forces that affect the retailer’s ability to develop and maintain successful transactions and relationships with its target customers. We can distinguish between the retailers' micro environment and macro environment. The micro environment consists of the actors in the retailer's immediate achievement that affects its ability to serve its markets: Suppliers, intermediaries, customers, competitors and publics. The macro environment consists of legal, social, economic and technological forces. 4.3.3 Store location and Layout 46
  • 47. Retailers want to locate their stores in the best place possible. The best place possible will vary from retailer to retailer depending on the industry type, type of product, competition, and other market factors. Basically a retail store has to located where the market opportunities are at optimal levels. There are basic guidelines that most retailers examine before choosing a new location. First, the retailer must select a country or region and then define the boundaries of the trade area and evaluate its population characteristics against the retailers target market. The buying power of the area must be considered along with its market and sales potential. The size, location, and type of competition must also be taken into account. The local legal and political environment must be examined along with the leasing costs and occupancy rates. The actual physical features of the location – such as available space, traffic and access to the site, and surrounding buildings – play a role in the selection process. Retailers possess many tools to help in the site selection decision. Reilly’s law and Huff’s model can aid in defining the trade area. Market segmentation and demographic segmentation provides clues to population characteristics. The buying power index and effective buying income suggest strength of the economic base while the index of retail saturation offers a benchmark for market comparison. Changes in consumer lifestyle will require new strategies for selecting retailing locations, such as the increasing use of convenience oriented sites, the integration of food and non-food retailing, and the placement of retail merchandising in amusement parks. There a numerous kind of retail stores to choose from as well. Most potential sites fall in to one of these categories: business districts, shopping canters, and freestanding locations. There are specific advantages and disadvantages for each type of location. The bottom line in retail site selection should be to choose a location that will fit both today’s and tomorrow’s needs. The layout and design of a retail store communicate a significant amount of information about the retailer to the consumer. The architectural character of the store, building a new location, renovating existing facilities, exterior design, interior design the modern self layout and the image of the store are the key issues in designing a layout for a store. 4.3.4 Merchandise Management Merchandise management can be termed as the analysis, planning, acquisition, handling and control of the merchandise investments of a retail operation. The process of merchandise management includes the developing of strategies to ensure that the right product is bought at the right price and available at the right place, at the right time, in the right amount, in order to satisfy the needs of the target customer. No one in retail can completely avoid any contact with merchandising activities. Merchandising is the day-to-day business of all retailers. As inventory is sold, new stock needs to be purchased, displayed and sold. Hence, merchandising is often said to be at the core of retail management. Merchandising traces its growth to the rise of organized retail in the world. Initially, as the retailers operated only one or two stores, the function of buying the 47
  • 48. merchandise, pricing it, etc., were much simpler. In many cases, the retailer did it himself. However, as retailers started adding stores and categories, the workload on the buyers increased significantly. Often, buyers had little information or time and they ended up using approximations based on sales volumes, to allocate merchandise between stores. This sometimes, resulted in stores exchanging merchandise among them! In order to overcome this limitation, the function of a planner came into being. The planner’s job was to act as a link between the stores and the buyer. The de-linking of the function of planning and buying allowed better interaction with the stores. Planners were able to devote more time to collecting and studying store level data, the buyers on the other hand, were able to spend more time with the vendors. 4.4 Competitive Sales Given widespread availability of the same brands, retailers have to cope with the phenomenon of discounts. The retailers themselves dilute the strength of the retail market. With promotions becoming the order of the day, they have entered into price wars against each other. ‘Up to 50 percent off’ sales and ‘Two for one’ price offers have now become commonplace even at the top retail outlets across our country. Every season every festival has more price cuts. The discounted buying has become an annual market strategy rather than a mere sales promotion for a few weeks. Deep price cuts may not be the answer to maintain their relevance against the small retailers nor does it augur well for the brand building of the store. 5.1 Research title: The title of the research project is: “Effectiveness of Retailing Mix for Customer Satisfaction at Big Bazaar.” 5.2 Research Problem: What is effectiveness of Retailing Mix at Big Bazaar leading to Customer Satisfaction? 48
  • 49. 5.3 Research Objective: Primary objectives:  To identify performance of store operations.  To analyze how the merchandising mix influence the customer satisfaction level. Secondary objectives:  To understand the quality of service maintained in the store.  To determine the performance of sales persons in the store.  To find out reasons of dis-satisfaction.  To find out which means of communication plays a vital role to persuade customer. 5.4 Scope of study The study makes an effort to ascertain the satisfaction level of customers from the store environment and analyze the impact of retailing mix on the customer satisfaction level, and to improve the store environment to increase the sales and to attract the customers. The company can come up to the expectation only by finding out the problem that customers are facing during their purchase from the store. The subject has been taken for the research as it plays key role in success of retail sector. As long as the company is able to satisfy its customer, customer will remain in the bracket of loyal customer. This study helps to improve the environment of the store to reach the customer satisfaction level and improve the merchandising in Big Bazaar. 6.1 Objectives of Research: The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into a number of following broad groupings:  To gain familiarity with a phenomenon or to achieve new insights into it (studies with this object in view are termed as exploratory or formulative research studies); 49
  • 50.  To portray accurately the characteristics of a particular individual, situation or a group (studies with this object in view are known as descriptive research studies);  To determine the frequency with which something occurs or with which it is associated with something else (studies with this object in view are known as diagnostic research studies); 6.2 Research Design: Research design is an arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to research purpose with an economy in procedure. Research design is needed because it facilitates the smooth ailing of the various research operations, thereby making research efficient possible yielding maximal information with minimal expenditure. Research design used in this project is Single Cross-sectional design where one sample is drawn from a population of interest. In this research design a cross sectional study is concerned with a sample of elements from a given population. Data on a number of characteristics from the sample elements are collected and analyzed. 6.3 Types of Research: Exploratory research: The research is an exploratory when; one is seeking insight to general nature of the problem, the possible alternatives and relevant variables that need to be considered. The methods are flexible, unstructured and qualitative. Descriptive research: It provides an accurate position of a particular aspect of the market environment. The purpose of descriptive research is together a quantified measurement of a specific reaction. It is structured. Most of the data that we needed are gathered in some form of direct or indirect question which further will depend upon:  Nature of the question  Time frame of study  Funds available  Kinds of respondents 50
  • 51. This project is totally based on survey of the market i.e. people and a lot of research on the web, so for that a DESCRIPTIVE type of research design was used. Descriptive research provides an accurate position of a particular aspect of the market condition. The purpose of this research is together quantified measurement of a specific type of reaction. It is a structure most of the data that we collected from the field are gathered in some form of direct or indirect question. 6.4. Data Collection Methodology: The primary data are those, which are collected afresh and for first time and thus happen to be original in character. The secondary are those which have been collected by someone else and which have already been passed through statistical process. Data has been collected by the researcher by Primary sources such as questionnaire and personnel interview. It included 20 questions and 100 customers were given the questionnaire and response was taken from them. Charts and graphs will be used for presentation of data for easy understanding and interpretation. 6.5 Data Collection Instruments: 1. Questionnaires 2. Personal Interviews. 6.5.1 Designing the Questionnaire: While designing the Questionnaires certain things were kept in mind such as simplicity, length and clarity. 6.5.2 Personal Interviews Personal interview is mostly commonly used method of data collection. Two purposive communications between interviewer (researcher) and the respondent (subject) aimed at obtaining and recording information pertinent to the subject matter of study. The interviewer resents oral, verbal and written stimuli and receives oral resonances. 6.6 About the Survey: 6.6.1 Survey Title: “Effectiveness of Retailing Mix for Customer Satisfaction at Big Bazaar”. 6.6.2 Sample Universe: Big Bazaar Store 51
  • 52. 6.6.3 Sampling Method: Non-probability sampling was used .Non-probability sampling is that sampling procedure which does not afford any basis for estimating probability that each item in population has being included in the sample. Under non-probability sampling organizers of enquiry purposely select particular unit of universe for constituting a sample on the basis of the small mass that they so select out of huge one will be typical or representative of the whole. Adequate consideration was taken to bring a heterogeneous group in terms of age, income, occupation etc. to make the results credible. 6.6.4 Sample Size: 100 Respondents. 7.1 Analysis Techniques: Time: The survey of 100 respondents was finished in two months. Response Format: The questions are a mix of open-ended, close-ended questions, binary, ranking and multiple choice questions. They have been so inserted into the questionnaire, to get the appropriate response for a particular situation. 7.2 Limitations of the study:  Time Constraint: Analysis pertaining to project title and the field survey has to be done in a span of two months. This may limit the scope of the survey.  Biasness: The respondents may give a biased view.  Some respondents refuse to co-operate.  Some respondents replied half heartedly.  Some respondents gave incomplete information. 52
  • 53. 53
  • 54. 7.3 Survey Results, Presentation and Inference Effectiveness of Retailing Mix for Customer satisfaction at Big Bazaar Question 1a): Do you frequently shop at big bazaar? Table No.7.1: No of customer Yes No Total 74 26 100 Figure No.7.1: No of customers Inference: From the above chart we can ascertain that majority of customers i.e., around 74% of sample customers frequently visits to the store and 26% of the customer visits the store rarely. Question 1b): How frequently do you shop at big bazaar? TableNo.7.2: Customer Response 54
  • 55. Sr.No. Response No. of customers 1. Every week 38 2. Once in two week 24 3. Once in three week 16 4. Once in month 22 Figure No.7.2: Customer Response Inference: From the above table we can analyze that the majority of the customers i.e. 38 out of 100 customer visits store every week , followed by 24 customer once in two week. Thus we can say that majority of customer visit big bazaar every week, may be during weekends. We can conclude that the customer visit Big Bazaar for their weekly purchase. Question 2a): What comes to your mind when you think about big bazaar? Table.No.7.3: Unique Selling Propositions of big bazaar Sr.No. USP’s No. of customers 1. Discount 34 55
  • 56. 2. Product Variety 24 3. Brand 4 4. Quality 8 5. Free offer 28 6. Others 2 Figure No.7.3: Unique Selling Propositions of big bazaar Inference: From the data collected we can determine that among 5 USP’s of big bazaar most recognised are discounts and free offers, along with that it also recognised for product varieties. But they have to rethink about the brand available in the store and they have to expand their brand availability. Question 2b): Do you feel that you find different variety of product in Big Bazaar? Table No.7.4: No of customer Yes No Total 66 34 100 Figure No.7.4: Product Variety 56
  • 57. Inference: From the above chart we can asertain that upto 66% percent i.e. majority of customers satisfied with the variety of product in the store. Question 2c): Do you find the specific brand that; you look in the big bazaar? Table No.7.5: No. of Customers Yes No Total 37 63 100 Figure No.7.5: No. of Customers 57