18687956 retail-sector-in-india-a-case-of-big-bazaar

An

FINAL REPORT OF MANAGEMENT THESIS- II
On

“To study the growth of
Retail sector in India: A Case of Big Bazaar”

-: SUBMITTED BY:-
Mr. Avinash Chandrakant Silimkar
INC VASHI
7NBMN002
IN THE PARTIAL FULFILLMENT OF THE

“MASTER OF BUSINESS ADMINISTRATION’’

-: UNDER GUIDANCE OF:-
Dr. MEENA VAZIRANI

-: SUBMITTED TO:-
ICFAI NATIONAL COLLEGE, VASHI
2007-09

INRERIM REPORT Page 1

DECLARATION

I hereby declare that the Initial Report entitled “An Analytical Study of the
Development of Retail Marketing in India : A Case of Big Bazaar” submitted for
Management Thesis-II , under the supervision & guidance of Dr. Meena Vazirani, in
partial fulfillment of MBA, ICFAI National College, Vashi.

Place: Vashi Name: Mr. Jayesh Parte

Date: 18/12/2008


CERTIFICATE

This is to certify that the Management Thesis titled ___________________________________
______________________________________________________________________submitted
by_____________________________________ Enroll No: _____________________________
during Semester _________ of the MBA Program (The Class of 2009) embodies original work done by him.

Signature of the Faculty Supervisor

Name (in Capitals) : ____________________________________________
Designation : ____________________________________________
Campus : ____________________________________________


TABLE OF CONTENTS

PAgE
SR.NO PARTICULARS
NO
1 ACKNOWLDgEMENT 5

2 LIST OF TABLES & ILLUSTRATIONS 6

3 ABBREVIATIONS 7

4 INTRODUCTION 8

5 OBJECTIVE 12

6 RESEARCH METHODOLOgY 14

9 FINDINg & SUggESTIONS 19
10 COMPANY PROFILE 33
11 SUMMARY 42
12 CONCLUSION 43
13 REFERANCES 44


ACKNOWLEDgEMENT

I took this opportunity to express my gratitude to all those who have helped me

to make this project a success. I would like to thankful my Dr. Meena Vazirani who

helped and guided me throughout the development of the project, He provided me all

kind of information, and inspired me to complete the project successfully. I am also

thankful to Principal for his valuable support & guidance.

I would like to thank everyone who contributed for the success of this

project. I must thank them whose valuable guidance makes it so simple and support me

during the project development directly or indirectly.


LIST OF TABLES & ILLUSTRATIONS

Sr. no
PARTICULARS PAGE NO

Pie chart 08
1

2 Tables 23 & 24

3 Picture 19 & 21


ABBREVIATIONS

 SWOT: strength weakness opportunities threats

 Porters 5 force model

 1 threat of new entrant

 2 the bargaining power of buyers

 3 the bargaining power of suppliers

 4 the rivalry among existing players

 5 the threat of substitute products

 GDP: gross domestic product

 FMCG: Fast moving consumer goods

 PRIL: Pantaloon Retail India Limited


INTRODUCTION

The Indian Retail Industry is the largest among all the industries, accounting for

over 10 per cent of the country’s GDP and around 8 per cent of the employment. The

Retail Industry in India has come forth as one of the most dynamic and fast paced

industries with several players entering the market.

Retailing in India is gradually inching its way toward becoming the next boom

industry. The whole concept of shopping has altered in terms of format and consumer

buying behavior, ushering in a revolution in shopping in India. Modern retail has

entered India as seen in sprawling shopping centers, multi-

storied malls and huge complexes offer shopping, entertainment

and food all under one roof. The Indian retailing sector is at an

inflexion point where the growth of organized retailing and

growth in the consumption by the Indian population is going to

take a higher growth trajectory. The Indian population is witnessing a significant change

in its demographics.

Retail and real estate are the two booming sectors of India in the present times.

And if industry experts are to be believed, the prospects of both the sectors are mutually

dependent on each other. Retail, one of India’s largest industries, has presently emerged


as one of the most dynamic and fast paced industries of our times with several players

entering the market. Accounting for over 10 per cent of the country’s GDP and around

eight per cent of the employment retailing in India is gradually inching its way toward

becoming the next boom industry.

As the contemporary retail sector in India is reflected in sprawling shopping

centers, multiplex- malls and huge complexes offer shopping, entertainment and food all

under one roof, the concept of shopping has altered in terms of format and consumer

buying behavior, ushering in a revolution in shopping in India. This has also contributed

to large-scale investments in the real estate sector with major national and global players

investing in developing the infrastructure and construction of the retailing business. The

trends that are driving the growth of the retail sector in India are

• Low share of organized retailing

• Falling real estate prices

• Increase in disposable income and customer aspiration

• Increase in expenditure for luxury items (CHART)


Another credible factor in the prospects of the retail sector in India is the increase in

the young working population. In India, hefty pay packets, nuclear families in urban

areas, along with increasing working-women population and emerging

opportunities in the services sector. These key factors have been the growth drivers

of the organized retail sector in India which now boast of retailing almost all the

preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and

Toiletries, Home & Office Products, Travel and Leisure and many more. With this

the retail sector in India is witnessing rejuvenation as traditional markets make way

for new formats such as departmental stores, hypermarkets, supermarkets and

specialty stores.


INDUSTRY EVOLUTION

• Traditionally retailing in India can be traced to

• The emergence of the neighborhood ‘Kirana’ stores catering to the convenience

of the consumers

• Era of government support for rural retail: Indigenous franchise model of store

chains run by Khadi & Village Industries Commission

• 1980s experienced slow change as India began to open up economy.

• Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and

Grasim first saw the emergence of retail chains

• Later Titan successfully created an organized retailing concept and established a

series of showrooms for its premium watches

• The latter half of the 1990s saw a fresh wave of entrants with a shift from

Manufactures to Pure Retailers.

• For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and

Music World in music; Crossword and Fountainhead in books.

• Post 1995 onwards saw an emergence of shopping centers

• Mainly in urban areas, with facilities like car parking

• Targeted to provide a complete destination experience for all segments of society

• Emergence of hyper and super markets trying to provide customer with 3 V’s -

Value, Variety and Volume


• Expanding target consumer segment: The Sachet revolution - example of

reaching to the bottom of the pyramid.

• At year end of 2000 the size of the Indian organized retail industry is estimated

at Rs. 13,000 crore.

OBJECTIVE
To perform a Management Thesis there must be certain objectives in front of the

student, which will show a specific way to work on Management Thesis. In reality

objectives is nothing but a part of future planning and effective planning is half work

done, when we see objectives for working on Management Thesis we can effectively

utilize our strength, time and tem management.

For the betterment of Management Thesis I also set some objectives in front of me,

this proved very helpful in Management Thesis. I have performed work according

these objectives. The objectives, which we have selected, are as bellow.

1. To identify and understand the significance of retailing in the current business

environment

2. To develop guidelines to build a retailing business

3. To identify the competition in the market and develop strategies for retailing

business accordingly

4. To identify significant characteristics of the end consumer, understand its

significance for the retailing business and develop strategies accordingly


5. To identify the paradigm shifts in retailing business with increasing scope of

technology / e-business and develop strategies accordingly

6. To know the growth of retail industry with respect to big bazaar.

7. To know the factors affecting for retail industry.

8. To find the factors which are behind the change of Indian Retailing Industry?

9. To understand the benefits to customers, manufactures, wholesalers, and the

economy from Retail sector.

10. To know about Big Bazaar.

11. To know about its competitors.

12. To know about its customers

13. To know about its Promoters & Organizational structure.

14. To know about its strengths, weaknesses, opportunities & threats.

15. To earn practical knowledge.

16. To analyze problems which I am facing while working on field.

17. To know about marketing strategies.

18. Last but not the least to know about retail business


RESEARCH METHODOLOgY

Research Plan obtain pioneer place while working on any project. So we

go through the research plan.

The research plan is as follows:-

While working on our Management Thesis, the participation of manager,

sales manager, marketing manager, auditor, employees, etc. & our professors enlighten

the use of theoretical concepts in actual business world. Their views & suggestions

proved very useful in the successful completion of our Management Thesis.

We developed the research plan into various components:-

A] Data sources

B] Research instruments

C] Sampling methods


A] Data Sources

1) Primary data:-

Primary data is collected from the locality of the coverage area. We have

taken in to consideration the views of manager, sales manager, marketing manager,

auditor, employees, etc. & our professors about the relevant subject & also pay attention

towards their suggestions. Their suggestions are incorporated in the report. This data

prepared the basis for the Management Thesis report.

Beside of all this, some data is also collected by we ourselves.

2) Secondary data:-

Same as above some data is collected from the media also.

i) Newspapers

ii) Magazines

iii) Books on Management

iv) Text books


B] Research Instruments

To collect the primary data for the Management Thesis, we have selected

some questions in concern with the organization i.e. Big Bazaar. We used these

questions as a research instruments for knowing the facts.

These questions are as follows:-

1) Questions related to their marketing management.

2) Questions related to their capital.

3) Questions related to their investment.

4) Questions related to their turn over.

5) Questions related to their advertise expenditure.

6) Questions related to their interpersonal relations with Customers

7) Questions related to their competitors.

8) Questions related to their organizational structure.

9) Questions related to training & development of employers

10) Questions related to motivation.


11) Questions related to role of personal manager in the organization.

C] Sampling Plan

A sampling plan is most important to do Management Thesis successfully.

The points considered in the sampling plan are as following:-

I) Sampling Unit:-

The staff of the organization including the managers of different

departments and the employees was targeted for the Management Thesis.

II) Sampling Quantity:-

The sampling quantity was 24 & all are related with Big Bazaar. Apart

from this we also considered some customers of Big Bazaar.

iii) Coverage:-

The coverage of the survey was whole organization i.e. Big Bazaar.


LIMITATION

Collection of data related to marketing strategy of Big Bazzar is a difficult task

because this information is very rarely available with secondary resources therefore it

requires more time and lot of efforts.


FINDINgS AND SUggESTIONS

Big Bazaar is planning to position itself as a value retailer after being hived off as

an independent company within the Future Group. While a new company has been

floated under the name of Future Hypermarket, the retailer is now considering a new

name to represent its discount format. Speaking to Business Line, Mr. Rajan Malhotra,

Chief Executive Officer, Big Bazaar, said, “Although we have registered a new

company under the name of Future Hypermarket, we intend changing its name. Big

Bazaar is not a hypermarket and is more of a value-for-money format and that is what

the new company would stand for.”

Currently, Big Bazaar contributes 64 per cent of the Future Group’s total

turnover of Rs 7,000 crore. With its standalone status as a company, Big Bazaar is

expecting to drive greater efficiencies in its back-end operations. As Mr. Malhotra says,

“There would be clarity for the concept as we become a separate company. There

would be back-end efficiency in our operations.” With amalgamation of formats under

various heads ranging from Food Bazaar to Furniture Bazaar, Big Bazaar is looking at

distinguishing itself as a ‘value’ retailer in its segment rather than being clubbed with

the rest of the existing hypermarkets in the country.

Besides, it is looking forward to re-launching its private label, DJ & C, as a

national brand by giving the brand rights to Future Brands (the group vertical handling

brands in the group). Targeting the youth segment, DJ&C is today worth Rs 200 crore in

Bazaar’s kitty. “We intend re-launching it as a national brand through other retail

outlets by the end of this month. We believe Big Bazaar has moved into a mature phase

and that is a compelling reason to launch our youth brand at a national level. The DJ&C

brand has crossed a turnover of Rs 200 crore and now has enough pull to take it to its

next level,” states Mr. Malhotra.


Having forged long-term relationships with a host of FMCG players through

MoUs, Big Bazaar is open to new categories being tested through its formats. “We are

open to the highest selling brands such as Pears and Dove opening the new age

categories at our stores,” says Mr. Malhotra. Meanwhile, Big Bazaar has roped in

cricketer and India ODI captain Mahendra Singh Dhoni as the brand ambassador for

its extensive collection of fashion apparel.

Pantaloon Retail (India) Limited, is India's leading retailer that operates multiple retail

formats in both the value and lifestyle segment of the Indian consumer marker. Headquartered

in Mumbai (Bombay), the company operates over 7 million square feet of retail space, has over

1000 stores across 51 cities in India and employs over 24,000 people.

The company's leading formats include Pantaloons, a chain of fashion outlets, Big

Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the

look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience

and quality and Central, a chain of seamless destination malls. Some of its other formats

include, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Station, all, Top 10, bazaar and

Star and Sitara. The company also operates an online portal, futurebazaar.com.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a

large-format home solutions store, Collection i, selling home furniture products and E-Zone

focused on catering to the consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year 2007 by

the US-based National Retail Federation (NRF) and the Emerging Market Retailer of the Year

2007 at the World Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business group catering to

the entire Indian consumption space. Future Group is one of the country's leading business

groups present in retail, asset management, consumer finance, insurance, retail media, retail

spaces and logistics. The group's flagship company, Pantaloon Retail (India) Limited operates

over 7 million square feet of retail space, has over 1000 stores across 51 cities in India and


employs over 24,000 people. Some of its leading retail formats include, Pantaloons, Big Bazaar,

Central, Food Bazaar...


Indian Retail Market and Growth of SMEs
Source: Technopak Advisors

The retail market in India is estimated at about US$ 410 billion and constitutes

about 60% of private consumption and about 35% of India's GDP. With Indian GDP

expected to grow at 7-8 % in the next coming years, the retail market is expected to

touch US $860 billion by 2018. In recent years, this sector has witnessed a lot of interest

from both domestic and global players, who have committed investments worth US $30

billion, which will lead to increase in the share of modern retail from the current 4.5%

to almost 25% of the total retail market by 2018.


The Indian retail market is the fifth largest retail destination globally. The

current size of the Indian retail industry stands at $511 billion in 2008. Simultaneously,

modern retail is likely to increase its share in the total retail market to 22 per cent by

2010. Organized retail in India raked in US$ 25.44 billion turnover in 2007-08 as against

US$ 16.99 billion in 2006-07, a whopping growth rate of 49.73 per cent (according to the

Credit Rating and Information Services of India). Organized retail has increased its

share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. It is currently

around 12 per cent. India has one of the largest numbers of retail outlets in the world.

Of the 12 million retail outlets present in the country, nearly 5 million sell food and

related products.

Though the market has been dominated by unorganized players, the entry of domestic

and international organized players is set to change the scenario. Per capita retailing

space is about 2 sq. ft (compared to 16 sq. ft in the U S). India's per capita retailing space

is thus the lowest in the world. Around 7% of the population in India is engaged in

retailing, as compared to 20% in the USA.

Statistically, the global retail industry is witnessing a CAGR of 5.5% is slated to grow at

the same rate till 2009. The following graph shows an overall trend of the global retail

revenues.


ANALYSIS OF THE SITUATION
India is standing in the threshold of a retail revolution. The Indian consumer

class consists of a 300 million strong bourgeoning middle-class, expected to grow to 600

million by 2010. Overall economic growth and increasing disposable incomes have

boosted double-digit growth in consumer spending, enabling retail sales o grow by

50-100% in 2006.

According to the India Retail Report 2007, total private consumption reached INR

20,000 billion at current prices in 2006. The share of organized retail stood at 4.6 per

cent of the total Indian Retail Value of INR 12,000 billion ($270 billion). However, the

organized sector is expected to grow at 35-40% in the next few years as compared to

overall retail growth of 7-8%. The potential for introducing international brands, ability

to make huge capital investment and ease of setting shop in India is luring foreign

players to the industry. Thus, the retail sector will experience an influx of international

retail models and quality outlets in the coming few years.

Description of the concept
Manufacturers can look at the following alternatives to increase sales volume:

1) Sales promotion and advertising in malls
Most supermarkets and hypermarkets promote in-house offers to attract customers.

They also spend a lot on visual display of promotions. These costs can be shared by the

company, thus increasing their stake in the sales of the mall.

a) Retail outlets will be supportive of sales promotion and advertising by companies

inside malls for two reasons:

- it increases sales of the entire category as such

- it reduces burden on malls to attract/educate consumers towards particular products.


For the FMCG companies, return on advertising in terms of increased sales (or market

share) will be more pronounced due to point-of-purchase promotion.

b) Manufacturers can share costs of advertising and make sections of the store more

attractive in return for slightly lower margins to the retailers. They can set up small

kiosks or shelves to display their own products. This involvement of the company in

the operation of the mall will also help build a strategic relationship between the two.

2) Use malls to target niche segments
Malls and supermarkets typically attract the middle and upper-middle class

consumers who have considerable spending power as well as brand awareness. Thus

manufacturers can use this channel effectively to launch specific variants of existing

products or niche products for which they are able to Concept Paper Indian Institute of

Management Ahmadabad attract a premium from such consumers. These products

should be launched exclusively in the malls and not through Kirana stores. The

presence of a larger product range will increase the attractiveness of shopping at a mall

for the consumer, making it a win-win situation for both.

INDIA’S RETAIL MARKET IS AT ITS PINNACLE AND IS DRAWINg HUgE ATTENTION
FROM BOTH gLOBAL AND LOCAL RETAILERS.
Reasons for India’s high growth rate in the retail sector are:

• High growth rates- India’s GDP is projected to grow by more than 8 percent in fiscal

year 2008; projections for 2009 are a more modest at about 7 percent

• Untapped growth potential- Organized retail, which still accounts for less than 5

percent of the market is expected to grow at a compound annual growth rate (CAGR)


of 40 percent to $107 billion by 2013. India’s overall retail sector is expected to rise to

$833 billion by 2013 and to $1.3 trillion by 2018, at a CAGR of 10 percent.

• Growing Purchasing Power- Consumer spending is on a sharp rise. In the last four

years the consumer spending has grew by astounding 75 percent. This can be attributed

to the significant rise in the disposable incomes of India’s young population. It has to be

noted that more than 33 percent of Indian population is below the age of 15.

BENEFITS OF RETAILINg
Retailers play a major role in the transfer of goods and services from the

manufactures to the end users. In this process retailer delivers many benefits to

customers, manufactures, wholesalers, and the economy.

Benefits to customers

Retailers act as a buying agent for consumers. They perform various business

activities that increase the value of the goods and the service they sell to the end users.

As buying agents a retailer performs various activities to satisfy the end consumers.

These activities include

19. Breaking bulk

20. Providing assortment

21. Holding inventory

22. Providing after sales services

23. Providing information


Benefits to Manufactures and wholesalers

Manufactures and wholesalers consider retailing as a channel for delivering their

product /services to the end consumer. By selling services retailers provide the

manufactures great revenue, which could be reinvested in production. Thus retailers

play major role in smoothing out the variation between the production and sales of the

manufactures product.

Benefits to the economy

The retailing business is the largest privet industry in the world with turnover of

US $6.6 trillion. Retailing plays a crucial role in the management of world economy and

retailers constitute a tenth of the fortune 500 companies. In INDIA retailing accounts for

over 10% GDP and around 8% of the employment only next to the agriculture industry.


AN ANALYTICAL STUDY OF THE DEVELOPMENT OF
RETAIL MARKETINg IN INDIA: A CASE OF BIg BAzAAR

THE PROCESS OF STRATEGIC MANAGEMENT

A process in management is defined as a perceptible flow of information through
interrelated stages of analysis directed towards the achievement of an aim. There are four
basic elements in the process of strategic management;

• Environmental scanning

• Strategy formulation

• Strategy implementation

• Evaluation & control

Environmental scanning:

It involves monitoring the environment, & evaluating & disseminating

information obtained from the internal & external environments. The aim of this is to

identify the strategic factors that may determine the future of the firm. An organization

derive several benefits from environmental scanning including the development of a

common perception, identification of strengths & weaknesses, an understanding of

trends & conditions, & optimum utilization of internal & external information.

SWOT analysis is the most commonly used technique for environmental

scanning. SWOT is an acronym for the strengths, weaknesses, opportunities & threats

faced by a firm. Strengths & weaknesses are within the control of the top management

in the long run. Opportunities & threats are external factors that are outside the control

of the organization. The key strengths of the firm become the core competencies that the

organization can use to gain competitive advantage.


ENVIRONMENTAL SCANNINg FOR BIg BAzAAR

INTERNAL SCANNING

The SWOT analysis of Big Bazaar is as follows:

Strengths:

 The strengths of Big Bazaar are it is leading and growing at the faster pace.

 It has many outlets all over India. It has a good customer base.

 They launched Big-Bazaar a hypermarket with over 1, 70,000 products as the

first offering in value retailing segment. Products are cheaper than the market

price by as much as 5 to 60%.

 Apparels are cheaper by 25 to 60% while the price difference on the other

products varies between 5 to 20%.

 The Big-Bazaar has been positioned to the customer as a place where the

customer can shop for each & everything for which if goes to a market.

Weakness:

 Big Bazaar has not yet trapped the whole market.

 Facing problems due to political environment

Opportunities

 Huge untapped market

Threats

 Competition from organized retail players which are in market and emerging

like Reliance, shopper’s stop, Wal-Mart

 Competition from local retailers.


EXTERNAL ENVIRONMENTAL SCANNING

Before Big Bazaar coming to India their strategy was to scan the environment &

find the location where the Mall should be situated. It will also use various tools such as

surveys for getting the preferences of big bazaar. We got the opinion that Big Bazaar

sustain in the market or not, where it is situated. For gaining the opinions from the local

people they will prepare the questionnaire and get it filled from the people. Then they

will form a focus group for getting more and more of information. They can also adopt

open forum strategy for environmental scanning. For that purpose we have prepared a

questionnaire and collected the data.

Analysis of political and legal factors:

In India there is a political triangle this consist of the municipal corporation

which belongs to Indira congress, the other is MLA which belongs to Shivsena and BJP

and MP which belongs to the national congress. The congress political people are

having contacts with common people and not much concerned with merchants but

contradictory to this that the BJP and Shivsena they are having more concern about

merchants of the city. As Municipal Corporation is in the hands of congress party and

they are ready to have big bazaar in India that is the reason they are ready to provide

some kind of perks to big bazaar they are as follows:

• Subsidy from octroi, different taxes like land tax and water tax

• Help in taking over properties and real estate

• Some concessions from labor laws

Socio-cultural factors:

Now a days in India also proportion of working women’s is increasing and the

literacy rate has also increased this will lead into increase in standard of living of


people. As people are aware about western culture through various Medias they are

very much eager to follow the western culture. People from talukas are coming to India

as it is a district place for shopping, taking education, for working etc. this also creates

demand. There is a majority of middleclass people in India and it is a most populated

district consisting 13 talukas. The major communities in India city are Hindus, Muslims,

Christians, Jain, Sindhi and Punjabi.

Economic environment:

As this district is having 13 talukas and most of them are having good

agricultural base which ultimately leads to higher seasonal income. Another one is that

most of the people who are residing in India they are engaged in various jobs and

businesses they is the part of regular income group. So this will lead to higher

purchasing power and a huge potential market. One more advantage to big bazaar

coming to India is availability of cheap labor.

From the external analysis we came to know that the people residing the India

city are in the favor of Big Bazaar coming to India. The location preferred by them is

Savedi as it is highly developed and accessible area to all the people.

Strategy formulation:

It refers to the development of long term plans for managing opportunities &

threats in the external environment, & for utilizing the strengths & overcoming the

weaknesses within the firm. A strategist takes into consideration components of

strategic management like company mission, company profile, external environment

strategic analysis & choice, long term objectives, grand strategy while formulating the

strategy.

Strategy formulation helps an organization to;


• Capitalize on available opportunities.

• Address the challenges faced by the organization.

• Provide leadership that understands & masters change.

• Incorporate an in-depth planning model that involves the community.

STRATEGIC FORMULATION FOR BIG BAZAAR:

Big Bazaar will form some strategies for the long-term goals. First of all it will

find out what are the opportunities present in the market so that they can grab it so as

to expand their business, trap a particular segment of people, and establish a good

client base and to generate good revenues. They will also keep in mind the threats that

they have from their competitors and also form the small grocery shops. They will find

out some strategies to overcome the threat and to sustain in the market for a longer

period of time. They will also try to utilize their strengths and overcome the

weaknesses.


COMPANY PROFILE

Big Bazaar comes under the Pantaloon Retail India Limited (PRIL). PRIL was

early to realize the potential of the huge middle-class population in India. We started

the operations with a trouser

brand, Pantaloon. In the initial stages

we had small format outlets

branded Pantaloon Shopee, which

were franchise operations

realizing the problems

associated with franchise

model, we decided to have our own

retail outlets. They launched the

own retail store,

“Pantaloon’s”. In 1997, they

launched Big-Bazaar a hypermarket with over 1, 70,000 products as the first offering in

value retailing segment. They have introduced the concept of seamless malls in India

through the new format Central. We have wide network of Pantaloons stores spread

across the country.

Hence, apart from retailing lifestyle products, it ventured into value retailing by

launching the hypermarket chain. Big Bazaar is a chain that stocks all home need

products under one roof; spread over 30,000 square feet of land, across different cities

in India. It has been positioned as ‘Is se sasta aur acha kahin nahi,’ (Nothing cheaper

and better anywhere) indicating the value of stores. Big Bazaar stocks over 200,000

products that include apparel, food products, home appliances and cosmetics. Products


are cheaper than the market price by as much as 5 to 60%. Apparels are cheaper by 25

to 60%while the price difference on the other products varies between 5 to 20%.

On Oct. 12, 2001, we launched ‘Big-Bazaar’ as offering in the value retailing

segment. By removing inefficiencies from the distribution chain we are able to unleash

attractive savings, which are passed on to the consumer. Big-Bazaar is India’s first

hypermarket in the discount store format. Big-Bazaar provides more than 2,00,000

items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationary,

electronics & white goods which are sold at a discount to the maximum retail price.

Price is the principal value proposition at these stores.

A big driver of the Big Bazaar is the product variety. This is achieved by selling

wide range of products & through the “Shop-in-Shop” format. As a result, a typical Big-

Bazaar comprises shops that stocks medicines, optical accessories, camera rolls, bakery

products, dry fruits, crockery, glassware, health & beauty products, ladies accessories,

electronics infant necessities, watches, clocks, computer accessories, food & beverages,

stationary, readymade garments, household appliances, home furnishings, baggage We

believe this is a win-win situation as the customer is assured of product availability, the

shop owner can benefit of the in structure & we enjoy assured income without needing

to stock inventory. Also the shop-in-shop offering is able to increase the customer traffic

in to the stores. The Big-Bazaar has been positioned to the customer as a place where

the customer can shop for each & everything for which if goes to a market. The number

of Big-Bazaar stores has increased from 4 in 2002 to 21 Oct 24, 2005.

They have also launched private label initiative in Big-Bazaar. Understanding of

the apparel industrial, decades of experience& a vertically, integrated structure

provides with more compelling reasons to expand the number of private labels. We

have launched a full range of accessories to supplement the apparel business including

imitation jewellery, sunglasses, watches, mobile phones etc…


Analysts attribute the success of PRIL to cheaper sourcing of products and lower

distribution cost. Pantaloons sourced its products through ‘Consolidators.’ There was a

consolidator for each product category. These consolidators were responsible for

procuring quality goods at the cheapest possible price, and were paid commissions on

their sale at the store. The consolidator directly dealt with manufacturers, and as a

result the distribution cost could be slashed as no intermediates were involved. In

addition to discounts on products through the year, Big Bazaar also held events such as

‘Kitchen Mela’, ‘Trouser Mela’, etc. to attract customers.


MANAgEMENT OF BIg BAzAAR

Mr. Kishore Biyani, Managing Director

Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the
Group Chief Executive Officer of Future Group. To know more, click here.
Mr. Gopikishan Biyani, Wholetime Director

Gopikishan Biyani, is a commerce graduate and has more than twenty years of
experience in the textile business.
Mr. Rakesh Biyani, Wholetime Director

Rakesh Biyani, is a commerce graduate and has been actively involved in category
management; retail stores operations, IT and exports. He has been instrumental in the
implementation of the various new retail formats.
Mr. Ved Prakash Arya, Director

Ved Prakash Arya, is an engineer by training and is a graduate of the Indian Institute
of Management, Ahmedabad. Prior to joining Pantaloon Retail, he was the CEO of
Globus.
Mr. Shailesh Haribhakti, Independent Director

Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a Certified
Internal Auditor. He is the Deputy Managing Partner of Haribhakti & Co., Chartered
Accountants and past president of Indian merchant Chambers. He is on the Board of
several Public Limited Companies, including Indian Petrochemicals Corporation Ltd.,
Ambuja Cement Eastern Ltd. etc. He is on the Board of Company since June 1, 1999.
BIg BAzAAR


FOR THE gREAT INDIAN MIDDLE CLASS
It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class. It

was started as a hypermarket format in Mumbai with approx. 50,000 sqft of space. Its

values and missions are to be the best in Value Retailing by providing the cheapest prices

and hence go the tag-line

“IS SE SASTA AUR ACHCHA KAHIN NAHIN”

It sells variety of merchandise at affordable rates, the prices of which it claims are lowest

in the city but the level of services offered is also very low.

The following graph shows the retail life cycle and we can say that Big Bazaar is

currently at the Growth Stage.

Cash flow
Flows

Maturity

Growth
Decline

Introduction

Time

OBSERVATION:

There were various observations made from the time I entered the store. They can be

summed up as follows:

 Verticals inside the store relates to each category of product

o Food Bazaar Depot- books

o M-bazaar Electronic Bazaar

o Furniture Bazaar Footwear Bazaar

 Trolleys are not easily available, especially on other than ground floor.

 Little attention to cleanliness. Dust on shelves as well as some product items.

 In-house packaging not efficiently done.

 Crowded store interiors. Items are arranged in a cluttered way. Tried to stock

maximum number in limited area.

 Sign boards are not prominent. Lack of direction creates confusion.

 Family crowd is evident. Youth comprises of only around 10% of the crowd.

 Food Bazaar very efficiently managed. It is a bit over-staffed but layout is very

good. Shelf space is used very well to stock products with clear distinction.

POSITIONINg STRATEgY


COMPANY VISION, MISSION AND CORE VALUES

“Future” – the word that signifies optimism, growth, achievement, strength,

beauty, rewards and perfection. Future encourages us to explore areas yet unexplored,

write rules yet unwritten; create new opportunities and new successes. To strive for a

glorious future brings to us our strength, our ability to learn, unlearn and re-learn our

ability to evolve.

They, in Future Group, will not wait for the Future to unfold itself but create

future scenarios in the consumer space and facilitate consumption because

consumption is development. Thereby, we will effect socio-economic development for

our customers, employees, shareholders, associates and partners.

Their customers will not just get what they need, but also get them where, how

and when they need. They will not just post satisfactory results, They will write success

stories. They will not just operate efficiently in the Indian economy, we will evolve it.

They will not just spot trends; They will set trends by marrying our

understanding of the Indian consumer to their needs of tomorrow.


It is this understanding that has helped us succeed. And it is this that will help us

succeed in the Future. They shall keep relearning. And in this process, do just one thing.

Rewrite Rules. Retain Values.

Group Vision

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

Group Mission

 They 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.

 They will be the trendsetters in evolving delivery formats, creating retail realty,

making consumption affordable for all customer segments – for classes and for

masses.

 They shall infuse Indian brands with confidence and renewed ambition.

 They shall be efficient, cost- conscious and committed to quality in whatever we

do.

 They shall ensure that our positive attitude, sincerity, humility and united

determination shall be the driving force to make us successful.

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 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

Action.

 Adaptability: to be flexible and adaptable, to meet challenges.

 Flow: to respect and understand the universal laws of nature.

Various Strategies

After big bazaar coming to India it will be at its introduction stage so it is quite

obvious that it will adopt some strategy for attracting the customers. The strategy

which they would adopt is that they will have low price, high advertisements, it would

offer different kind of schemes, offers, discounts, scratch cards, coupons. They would

also give stress on providing the prompt services like home delivery, after sales

services, guarantees and warrantees, so as to sustain in the market and to create a good

reputation.

Following are some additional strategies they require to adopt:

• Thorough market research

• Site selection and evaluation

• Employee search and training

• Less premium and low price branded goods in merchandise assortment.

• Gaming zone and restaurant

• Promotional activities like advertisement, seasonal discounts, festival offers, etc.


While formulating strategies we should keep in mind that strategies should be flexible.

This is helpful to change or revival of strategy.

SUMMERY
This paper provides detailed information about the growth of retailing industry

in India. It examines the growing awareness and brand consciousness among people

across different socio-economic classes in India and how the urban and semi-urban

retail markets are witnessing significant growth. It explores the role of the Government

of India in the industry’s growth and the need for further reforms. In India the vast

middle class and its almost untapped retail industry are the key attractive forces for

global retail giants wanting to enter into newer markets, which in turn will help the

India Retail Industry to grow faster. The paper includes growth of retail sector in India,

strategies, strength and opportunities of retail stores, retail format in India, recent

trends, and opportunities and challenges. This paper concludes with the likely impact

of the entry of global players into the Indian retailing industry. It also highlights the

challenges faced by the industry in near future.

In India the vast middle class and its almost untapped retail industry are the key

attractive forces for global retail giants wanting to enter into newer markets, which in turn


will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per

cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food

Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in

India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future

of the India Retail Industry looks promising with the growing of the market, with the

government policies becoming more favorable and the emerging technologies facilitating

operations.


CONCLUSION

The retail sector has played a phenomenal role throughout the world in

increasing productivity of consumer goods and services. It is also the second largest

industry in US in terms of numbers of employees and establishments. There is no

denying the fact that most of the developed economies are very much relying on

their retail sector as a locomotive of growth. The India Retail Industry is the largest

among all the industries, accounting for over 10 per cent of the country’s GDP and

around 8 per cent of the employment. The Retail Industry in India has come forth as

one of the most dynamic and fast paced industries with several players entering the

market. But all of them have not yet tasted success because of the heavy initial

investments that are required to break even with other companies and compete with

them. The India Retail Industry is gradually inching its way towards becoming the

next boom industry.

For launching Big bazaar in India city is company’s mission to expand the

business. For this purpose company is carrying out many marketing strategy. To study

this marketing strategy I will be visiting the mall and also the manager to collect the

data from them. Also I’ll be collecting data from the customer as what strategies they

liked.


REFERENCE

 Magazines, Newspaper, pamphlets

 www.google.com

 www.pantaloon.com

 Marketing textbook

 Retail Management textbook

 Challenges of India's retail boom, Jan 2007. Retrieved Nov 2007 from

 http://www.rediff.com/money/2007/jan/30spec.htm

 Opportunity India Retail, Mar 2007. Retrieved Nov 2007 from


18687956 retail-sector-in-india-a-case-of-big-bazaar

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