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Project at-big-bazaar kapil

  1. 1. Project report on retail industry including strategies developed by major players By: Kapil Dipal PGDBE- Marketing 1
  2. 2. DECLARATIONI am a benefited Student of MBA, Declare that the Project Entitled “retail industry and thestrategies.” In Partial Fulfillment of MBA Degree Course is my Original Work. 2
  3. 3. Acknowledgement I, sincerely thankful to all those people who have been giving me any kind ofassistance 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, bothably and successfully towards the completion of the project. I express my gratitude toKIIT college of engineering, Gurgaon .I would hereby, make most of the opportunity by expressing my sincerest thanks to allmy faculties whose teachings gave me conceptual understanding and clarity ofcomprehension, which ultimately made my job more easy. Credit also goes to all myfriends whose encouragement kept me in good stead. Their continuous support hasgiven 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 therespondents 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 constantsupport. 3
  4. 4. CONTENTS Objective of the Study Executive Summary About the Organization Research Methodology Culture Data Analysis Conclusion Suggestions Limitations Questionnaire Bibliography 4
  5. 5. 1.1 Introduction Retailing is the most active and attractive sector of last decade. While the retailing industryitself has been present since ages in our country, it is only the recent past that it has witnessed somuch dynamism. Indian retailing today is at an interesting crossroads. The retail sales are at thehighest point in history and new technologies are improving retail productivity there are manyopportunities to start a new retail business. There are just over a 6 million retail outlets operatingacross 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 fiercecompetition and better values for shoppers. The retail mix is the combination of factors retail used to satisfied customer needs andinfluences 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 thatincreases the amount of impulse shopping. Research shows that the chances of senses dictating salesare up to 10-15%. Due to which there is emergence of discount stores which is expected tospearhead the organized retailing revolution. The title of the project is “Effectiveness of Retailing Mix for Customer Satisfaction atBig Bazaar” which the researcher has carried out, as retail mix greatly influences the customersatisfaction level and the customer perception towards that store. It is one of the hot issue in todaysretail 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 mixin the Big bazaar and also to find out how the store envirnoment influences the shopping behaviourof the customer to know how the store environment can be improved. 5
  6. 6. 1.2 Rationale of the study The project is all about to determine the satisfaction level of the customers from the storeenvironment and analyze the impact of retailing mix on the customer satisfaction level, and toimprove the store environment to increase the sales and to attract the customers, this study helps toimprove the environment of the store to reach the customer satisfaction level and improve themerchandising in Big Bazaar.2.1 Introduction The word "Retail" originates from a French-Italian word. Retailer is someone who cuts offor sheds a small piece from something. Retailing is the set of activities that markets products orservices to final consumers for their own personal or household use. It does this by organizing theiravailability 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 inreaching the Goods or Merchandise or Services to the End User or Ultimate Consumer.2.2 Indian Retail Industry: 6
  7. 7. Indian retail industry is the largest industry in India, contributing to over 13% of thecountrys GDP. Organized retail industry in India is expected to rise 35% yearly being driven bystrong income growth, changing lifestyles, and favorable demographic patterns. It is expected thatby 2011-12 modern retail industry in India will be worth US$ 590 billion. It has further beenpredicted that the retailing industry in India will amount to US$ 833 billion by 2013 and US$ 1.3trillion by 2018. Shopping in India has witnessed a revolution with the change in the consumerbuying behavior and the whole format of shopping also altering. Industry of retail in India which hasbecome modern can be seen from the fact that there are huge shopping centers, malls and sprawlingcomplexes which offer food, shopping, and entertainment all under the same roof. Indian retailindustry is expanding itself most aggressively; as a result a great demand for real estate is beingcreated. Indian retailers preferred means of expansion is to expand to other regions and to increasethe number of their outlets in a city. In the Indian retailing industry, food is the most dominating sector and is growing at a rateof 9% annually. The branded food industry is trying to enter the India retail industry and convertIndian consumers to branded food. Since at present 60% of the Indian grocery basket consists ofnon- branded items. Indian retail industry is progressing well and for this to continue retailers aswell as the Indian government will have to make a combined effort. Indian retailing industry hasseen phenomenal growth in the last five years. Organized retailing has finally emerged from theshadows of unorganized retailing and is contributing significantly to the growth of Indian retailsector. The “India Retail Sector Analysis report helps clients to analyze the opportunities and factorscritical to the success of retail industry in India. Indian retail industry is going through a transition phase. Most of the retailing in our countryis still in the unorganized sector. The spread out of the retails in US and India shows a wide gapbetween the two countries. Though retailing in India is undergoing an exponential growth, the roadahead 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. 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 firms goal and its interaction with other retailing elements. The importance of pricing decisions is growing because todays 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 thebusiness. It is one of the challenges that the Indian retailers are facing. The cost of businessoperations is very high in India.2.3.1 Indian retail types  Malls  Branded stores  Specialty stores  Departmental stores  Super markets  Discount stores 8
  9. 9.  Hyper markets  Shopping markets  Convenient stores  Malls: The largest form of organized retailing today Located mainly in metro cities, inproximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq. ft. and above. They lend anideal shopping experience with an amalgamation of product, service and entertainment, all under acommon roof. Examples include Shoppers Stop, mega Mart, Pantaloon, Wall mart etc. Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailerCrossword, RPGs Music World and the Times Groups music chain Planet M, are focusing onspecific 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 MRPthrough selling in bulk reaching economies of scale or excess stock left over at the season. Theproduct 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 consumerneeds. Departmental stores further classified into localized departments such as clothing, toys,home, groceries etc. Departmental Stores are expected to take over the apparel business fromexclusive brand showrooms. Among these, the biggest success is K Rahejas Shoppers Stop, whichstarted in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India andeven has its own in store brand for clothes called Stop!. Marts/Supermarkets: Large self service outlets, catering to varied shopper needs are termed asSupermarkets. These are located in or near residential high streets. These stores today contribute to30% of all food & grocery organized retail sales. Super Markets can further be classified in to minisupermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ftto 5,000 sq ft. having a strong focus on food & grocery and personal sales. Convenience Stores: 9
  10. 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 extendedperiods during the day, seven days a week. Prices are slightly higher due to the convenience premix2.3.2 Traditional Retail Scene in India India is the country having the most unorganized retail market. Traditionally the retailbusiness 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 faceof customer. Generally the accounts of trading & home are not maintained separately. Profits wereaccumulated in slow moving & non-moving stocks which were to become redundant or consumedin-house. Thus profits were vanished without their knowledge. The Manufactures were to distributegoods through C& F(Carry and Forward) agents to Distributors & Wholesalers. Retailers happen tosource the merchandise from Wholesalers & reach to end-users. The merchandise price used to getinflated to a great extent till it reaches from Manufacturer to End-user. Selling prices were largelynot controlled by Manufacturers. Branding was not an issue for majority of customers. More than99% customers are price sensitive & not quality or Brand Sensitive at the same time they are Brandconscious also. Weekly Bazaar in many small towns was held & almost all the commodities were on thescene including livestock. Bargaining was the unwritten law of market. Educational qualificationlevel of these retailers was always low. Hence market was controlled by handful of distributors &/orWholesalers. Virtually there was only one format of retailing & that was mass retail. Retailer toconsumer 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 givensingle place. Almost all the purchases / (buying) by mass population was need oriented & next turnmay be on festivals, Marriages, Birthdays & some specific occasions. Impulsive buying orconsumption 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 aluxury for majority population except for those living in Metros. Purchasing power of India urban consumer is very low and that of Branded merchandise incategories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food, Jewellery, are slowlyseeping into the lifeline of Indian City folks. However electronic & electrical home appliances dohold appropriate image into the minds of consumers. Brand name does matter in these white goods 10
  11. 11. categories. In the coming times also majority of organized retailers will find it difficult to keepbalance with rest of the unbranded retail market which is very huge. Retailing consists of thosebusiness 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 experimentation2.3.4 Essentials of Retailing 11
  12. 12. Customer orientation- The retailer makes a careful study of the needs of the customer and attemptsto 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 theprice and quality appropriate for the target market.Coordinated efforts- Every activity of the firm is aligned to the goal and is designed to maximizeits efficiency and deliver value to the consumer2.4 Organized Retail is evolving with changing customer aspirations Organized retailing in most economies has typically passed through four distinct phases inits evolution cycle. In the first phase, new entrants create awareness of modern formats and riseconsumer expectations. In the second phase consumers demand modern formats as the marketsdevelop – thereby leading to strong growth. As with the life cycle in any industry, the high rate ofgrowth would lead to a stage where the market would reach maturity and all the players wouldstrengthen their positions. This will be followed by the final phase where the market would reachsaturation, the growth would be limited and for sustainable growth, retailers would explore newmarkets 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 thatIndias economy is booming. Also, the rise in the working population which is young, pay- packetswhich are hefty, more nuclear families in urban areas, rise in the number of women working, moredisposable income and customer aspiration, western influences and growth in expenditure for luxuryitems. 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 togrow at about 10% per annum with sales expected to rise from $ 309 billion in 2006-07 to $ 496billion in 2011-12. With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by2011, India will need additional retail space of 700,000,000 sq ft (65,000,000 m2) as compared totoday. 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 costof US$15–18 billion. 12
  13. 13. Many Indian companies have entered the retail industry in India and this is also a factorin the growth of Indian organized retail sector. Reliance Industries Limited is planning to invest US$6 billion in the organized retail sector in I India by opening 1500 supermarkets and 1000hypermarkets. Bharti Telecoms is planning a joint venture worth £ 750 million with Tesco a globalretail giant. Pantaloons are planning to invest US$ 1 billion in order to increase its retail space to 30million square feet. Such huge investment is also a factor in the growth of the organized retail sectorin India. The worlds largest retailer by sales, Walmart Stores Inc and Sunil Mittals BhartiEnterprises 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, isplanning to setup two business entities in the country one for its cash-and-carry business and theother a master franchisee which will lend its banner, technical services and know how to an Indiancompany for direct-to-consumer retail. The world’s fifth largest retailer by sales, Costco WholesaleCorp (Costco) known for its warehouse club model is also interested in coming to India and waitingfor the right opportunity. Tesco Plc., plans to set up shop in India with a wholesale cash-and-carrybusiness and will help Indian conglomerate Tata group to grow its hypermarket business. Thefactors for growth in Indian organized retail sector are many and that’s the reason behind its massivegrowth, but for this to continue both the Indian retailers and the government will have to worktogether. 13
  14. 14. 2.4.2 Penetration of Organised RetailFigure 2.3 Penetration of Organized Retail2.4.3 Indian Organized Retail Sectors Impact on Lifestyles The Indian organized retail sectors impact changed the lifestyle of the Indian consumersdrastically. The evident increase in consumerist activity is colossal which has already chipped out amoney making recess for the Indian organized retail sector. With the onset of a globalized economyin India, the Indian consumers psyche has been changed. People have become aware of the value ofmoney. Now a days the Indian consumers are well versed with the concepts about quality ofproducts & 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 ofthe latest national & international products with the help of print & electronic media. The socialchanges with the rapid economic growth due to trained personnel’s, fast modernization; enhancedavailableness of retail space is the positive effects of Liberalization. 14
  15. 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 thesignificant 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 animportant retail business in the national arena, with large format retail stores, establishing stores allover India. With the entry of packaged foods like MTR, ITC Ashirbad, fast foods chains likeMcDonalds, KFC, beverage parlors’ like Nescafe, Tata Tea, Café Coffee and Barista, the Indianfood 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 andeconomic parameters would overrule the big bang of the vivid competition. Previously mastered bythe unorganized retail sector, India opened up late as an economy in 1990 until then the idea of retailformats 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 isgoing through a radical economic change. Though it is very infant stage, people can feel the climateis changing. The unorganized retailers take the lions share in the Indian retail sector, but theorganized 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 consumerstwinned with the introduction of organized sector has brought numerous corporate investments inretail sector. The entry of super markets, enormous departmental stores, and shopping malls hasencouraged the retailers to look at new business plans of expansion. An economic growth on amonumental scale is offered by the Indian retail sector, equally in the national and internationalmarket which in turn will generate a huge source of employment and a variety of options for theconsumers. The Ernst & Youngs report The Great Indian Retail Story, anticipates that the Indianretail sector would come up with 2 million employment opportunities within the year 2010.Benefits to the economic growth:- 15
  16. 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 dependon this sector. There is a scope of better exposure to the international standards with the entry oftransnational companies, which in turn is encouraging more & more retail management programs toopen 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 highestgrowth in the next 5 years. The Indian retail industry contributes 13% of the country’s GDP in theIndian 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 to25-30% 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 inthe Indian retail market. The growth of scope in the Indian retail market is mainly due to the changein the consumer’s behavior. For the new generation have preference towards luxury commoditieswhich have been due to the strong increase in income, changing lifestyle and demographic patternswhich are favorable. The scope of the Indian retail market has been seen by many retail giants andthat’s the reason that many new players are entering the India retail industry2.5 Major players:  Pantaloon Retail: 16
  17. 17. It is headquartered in Mumbai with 450 stores across the country employing more than 18,000people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-Indiaretail space is of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largestretailer 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(, 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 40digital screens. Customers will be encouraged to browse through the entire range of products ondigital screen. They will be able to place the order, the delivery of which will be arranged by theshop 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 theonly retailer from India to become a member of the prestigious Intercontinental Group ofDepartmental Stores (IGDS). They have signed 50:50 joint venture with the Nuance Group forAirport 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 salesof 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 arrangementfor the Argos formats of catalogue & internet retailing. The group has announced plans to establish anetwork of 55 hypermarkets across India with sales expected to cross the US$100 million mark by2010.  Tata group: Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyleretail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowestprices. In 2005, it acquired Landmark, Indias largest book and music retailer. Trent has more than 4lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006. Tata’shas also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronicschain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007. Another subsidiary,Titan Industries, owns brands like “Titan”, the watch of India has 200 exclusive outlets the countryand Tanishq, the jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs 6.55 17
  18. 18. billion.Trent plans to open 27 more stores across its retail formats adding 1.5 mn sq ft of space in thenext 12 DLF malls.  Bharti-Walmart Their plans include US$ 7 bn investment in creating retail network in the country including 100hypermarkets and several hundred small stores. They have signed a 50:50 percent joint ventureagreement 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 hasopened 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 subsidiaryof Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, PeterEngland, Trouser town. In other segments of retail, AV Birla Group has announced investment plansof 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 15supermarkets 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, holdingstock, 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 inventoryto a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety of goods andservices to choose from and usually buy them in small quantities. Retailers are able to balance the 18
  19. 19. demands of both sides, by collecting an assortment of goods from different sources, buying them insufficiently large quantities, and selling them to consumers in small units. The above process is referred to as the storing process. Through this process, retailersundertake activities and perform functions that add to the value of the products and services sold tothe consumer. Supermarkets in the US offer, on an average, 15,000 different items from 500companies. Customers are able to choose from a wide range of designs, sizes, and brands from onelocation. If each manufacturer had a separate store for its own products, customers would have tovisit several stores to complete their shopping. While all the retailers offer an assortment, theyspecialize in types of assortment offered and the market to which the offering is made. Westsideprovides 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 fromthe French word retailer, meaning to cut a piece of. To reduce transportation costs, manufacturersand wholesalers typically ship range cartons of the products, which are then tailored by the retailersinto smaller quantities to meet individual’s consumptions needs.Holding stock: Retailers also offer the service of holding stock for the manufacturers. Retailers maintain aninventory that allows for instant availability of the products to the consumers. It helps to keep pricesstable and enables the manufacturer to regulate production. Consumers can keep a small stock ofproducts at home as they know that this can be replenished by their retailer and can save oninventory carrying costs.Additional Services: Retailers ease the change in ownership of merchandise by providing services that make itconvenient to buy and use products. Providing products guarantees, after-sales services and dealingwith consumer complaints are some of the services that add value to the actual product at theretailers end. Retailers also offer credit and hire- purchase facilities to the customers to enable themto buy a product now and pay for it later. Retailers fill orders, promptly process, deliver and installproducts. Salespeople are also employed by retailers to answer queries and provide additionalinformation about the displayed products. 19
  20. 20. 3.1 Introduction: Pantaloon Retail India Ltd (PRIL) has emerged as the leading retailer in India with its chainof 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 tobe 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 over17,40,000 sq.ft. over the next two years. Space for additional 4 Pantaloon’s, 11Big Bazaars and 2Food 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 formatshopping mall in the country under the name ‘Central’. The format would be on the lines of aSelfridhes in London or a Central Mall in Bangkok. Two malls of 100,000 and 240,000 sq.ft. arebeing 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 marginmanagers and certain product categories to generate traffic. The food and groceries business will actas key volume growth driver while high share of apparel (which account for over 80% sales inPantaloon Stores and 40% in Big Bazaar) will enable PRIL to maintain high margins. Themanagement has demonstrated its ability to improve stock turnovers in both the formatssuccessfully, 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 toapparel manufacturing, branding, distribution to retailing. The company controls the total valuechain 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 revenuescomes from own private labels. PRIL has developed significant competencies in apparel brandingover a period of time and has developed own labels (John Miller, Shrishti, Bare, Annabelle, AFL) inall the apparel product categories. Worldwide, private labels give higher margin to retailers than thenational 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. 21. earlier) has helped in bringing down inventory levels and at the same time providing wider choice tocustomer 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 aretailer to deliver better value to customers. The hyper-market format has much higher scalability ascompared to the pure apparel-retailing format. Also, the potential to expand and scale is virtuallyunlimited in the food & grocery segment, where efficiencies improve dramatically with scale as themultiplier effect sets in. Food constitutes the largest expenditure item (estimated at over 50%) of anaverage Indian’s monthly personal expenditure. However, the share of modern retail formats in theRs6700bn Food & Grocery market is a minuscule 0.3%, revealing the high growth potential in thesegment.  New product categories and innovative tie-ups to aid growth PRIL offers large number of products to the customer to give them better choice forselection. 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 productcategories where the company does not have core competency or does not want to invest, but wouldattract customers are catered through these partners. Eventually, in the long run, the Company maymanage some of these product categories on its own as volumes grow and it develops competenciesin these businesses. Shop-in-Shop partners typically pay a fixed rental for their space and share apart of their profits. By expanding the range of product offerings and retail formats, PRIL today hasbeen 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 asBig Bazaar stores. Gold, Investment products, White goods and Appliances, Footwear will be thenew product categories that will be added. These product categories will help in improving WalkIn’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 Indianmarket. However policy restricts Direct Foreign Investment in the sector. There is a high likelihoodof the Government lifting restriction on FDI into the retail sector in the near future. Entry of theseforeign giants - with significant experience and skills in retail management would increasecompetition for PRIL. However, we believe that given the widely dispersed and heterogeneousnature of Indian markets, a foreign entrant would find it extremely difficult to establish a national 21
  22. 22. presence. Pantaloon with its early mover advantage and understanding of local markets is wellentrenched to retain high customer share. Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as MenzWear Private Limited under the stewardship of Mr. Kishore Biyani. It was converted into a publiclimited company in September, 1991. The company sold branded garments under Pantaloon, Bareand John Miller brands. PRIL set up its first menswear Pantaloon Shoppe outlet in 1993. Thecompany’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 SnapshotBusiness Description: Pantaloon Retail (India) Ltd. The Companys principal activity is to operate chain retails storesin names of Big Bazaar, Food Bazaar, Central and Pantaloons. The Big Bazaar is the discount storewhich offers a wide range of products under one roof. The products include apparels and non- 22
  23. 23. apparels such as utensils, sports goods and footwear. The Company also has its presence into goldretailing by launching Gold Bazaar. The Companys Food Bazaar provides a range of food andgrocery 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 brandsin fashion, sports and lifestyle accessories, grocery store and restaurants. The Pantaloon retail storesfocus largely apparels and accessories.About Pantaloon Retail (India) Ltd Pantaloon Retail (India) Limited is a leading retailer with a turnover of Rs. 1088 crores forthe financial year ending June 2008. The company is headquartered in Mumbai and has a presencein Lifestyle Retailing through 18 Pantaloons Stores, 3 Central Malls in Bangalore, Hyderabad andPune. In Value Retailing it is present through 24 Big Bazaar hypermarkets, 38 Food Bazaars and 2Fashion Stations. PRIL has a national presence with 2.6 million square feet of retail space across 24cities.3.2.1 Pantaloon: Fashion by Pantaloon Pantaloon is the companys 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 Kolkatain 1997. In a short time Pantaloon has been able to carve a special place for it self in the hearts andminds of the aspirational Indian customers. The company has depth of offering for both men andwomen at affordable prices. A striking characteristic of Pantaloon has been the strength of its privatelabel programme. John Miller, Ajile. Scottsvile, Lombard, Annabelle are some of the successfulbrands created by the company. With 13 stores across the country and an ever-increasing stable ofprivate 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 ofits kind in India. Price and the wide array of products are the USP’s in Big Bazaar. Close to two lakhproducts are available under one roof at prices lower by 2 to 60 per cent over the correspondingmarket prices. The high quality of service, good ambience, implicit guarantees and continuousdiscount programmes have helped in changing the face of the Indian retailing industry. A leadingforeign broking house compared the rush at Big Bazaar to that of a local suburban train. 23
  24. 24. Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and Internationalsupermarket 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 theproducts. The company has recently launched an aggressive private label programme with its ownbrands of tea, salt, spices, pulses, jams, ketchups etc. With unbeatable prices and vast variety (thereare 42 varieties of rice on sale), Food Bazaar has proved to be a hit with customers all over thecountry. Outlet 104 outlets Located in India Parent group Future group Owner Kishore Biyani (CEO) Founded 2001 Head quarter Jogeswari , Mumbai Industry Retail Website Tag line Is se sasta aur achha kahin nahi.Figure 3.1: About Big BazaarBig Bazaar Big Bazaar is a chain of shopping malls in India, owned by the Pantaloon Group and whichwork on Wal-Mart type economies of scale. They have had considerable success in many Indian 24
  25. 25. cities and small towns. Big Bazaar provides quality items but at an affordable price. It is a veryinnovative 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 shoppingexperience.Is Se Sasta Aur Accha Kahin Nahin !Whats 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 correspondingmarket 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. 26. Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and Internationalsupermarket 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 theproducts. FOOD BAZAAR a division of Pantaloon Retail India Ltd is a chain of largesupermarkets with a difference. It was flagged off in April02. With store sizes ranging from 8,000sq ft to 15,000 sq. ft. in Mumbai (two stores), Kolkata, Bangalore & Hyderabad, it is opening morestores at Gurgaon (Delhi), New Bombay & Nagpur. It currently caters to over 1.2 million customersevery day across 4 outlets in India and is soon set to expand and double this figure across 12 outletsall over the country by June 2009. Food Bazaar offers the Indian consumer the best of Western andIndian values. The western values of convenience, cleanliness and hygiene are offered through pre packedcommodities 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 affordableprices without any compromise on quality. This satisfies the Indian consumer and comforts herbefore making her final buying decision. At other super markets, the consumer is deprived of thisfactor. Truly the Indian consumer now agrees with Food Bazaar: "Ab Ghar Chalaana kitnaAasaan”. This positioning platform of Food Bazaar is evident from the higher discounts and thewholesale price-points which are below MRP. Food Bazaar represents the company’s entry into food retail and is targeted across all classesof population, tea, sugar, pulses, spices, rice wheat etc, besides fruits and vegetables. All productsare sold below MRP and discounts range between 2% to 20%. Fruits and vegetables are sold atprices comparable to wholesale prices. Food Bazaar replicates a local ‘mandi’, to provide the muchimportant ‘touch & feel’ factor which Indian housewives are used to in the local bazaar. FoodBazaar has over 50,000 stock keeping units which cover grocery, FMCG products, milk products,juices, spices, ready to eat foods etc. 26
  27. 27. 3.4 GROUP VISION AND MISSION:Group VisionFuture Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in themost profitable mannerGroup 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. 28. 3.4.1 AWARDS AND RECOGNITION2009 CNBC Awaaz Consumer Awards 2009, Images Fashion Forum 2009, Coca-Cola GoldenSpoon Awards 20092008 Indian Retail Forum Awards 2008, The INDIASTAR Award 2008 , Retail Asia Pacific 500Top Awards 2008, Coca-Cola Golden Spoon Awards 2008, The Reid & Taylor Awards For RetailExcellence 20082007 Images Retail Awards, National Retail Federation Awards, World Retail Congress Awards,Hewitt Best Employers 2007, PC World Indian Website Awards Reader’s Digest Trusted BrandsPlatinum Awards.2006 Retail Asia Pacific Top 500 Awards, Asia money Awards, Ernst & Young Entrepreneur of theYear Award, CNBC Indian Business Leaders Awards, Lakshmipat Singhania – IIM LucknowNational Leadership Awards, Images Retail Awards , Readers’ Digest Awards , CNBC AwaazConsumer Awards, Reid & Taylor Awards for Retail Excellence2005 Images Retail Awards 2005, DAKS London2004 Images Retail Awards 2004, Reid & Taylor and DLF Awards2003 Indian Express Award 28
  29. 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 timeWeakness:- • 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. 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 sector3.4.3 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. 31. 23. MUSIC COUNTER 24. LUGGAGE 25. FOOTWEAR 26. SPORTS 27. SCHEME BASED PROMOTIONAL ITEMS 28. FURNITURE BAZAR 29. FOOD BAZAAR 30. CASH COUNTERTARGET 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 makersCORE 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 challengesBIG 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. 32.  Affordable price  Sentiments -To infuse confidence in Indian brands  Schemes-Buy 01 gets one free, 20% dis...etcSTRATEGIES:  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 campaignswhich 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. 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. 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 tendsto 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 particularbrand, commodity or company. The components of marketing mix are: • Product • Price • Promotion • PlacePRODUCT:Big Bazaar offers the maximum variety for each category of product. The product is the same in everystore in the city but the brand options are more in Big Bazaar. Also, the quantity for each product is notlimited 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 MyWorld fashion magazine which is not available anywhere else. So costs are low for such products. 34
  35. 35. Diverse merchandiseCustomizedPRICE:Price is the critical point in a competitive industry. Big Bazaar works on a low cost model. It considersits discounted price as its USP. There is an average discount of 7-8% on all items in respect to theirMRP. Prices of products are low because it is able to secure stock directly from the manufacturer. Thereare huge synergies in terms of bulk purchasing, central warehousing and transportation. These allfactors help this retailer to keep low prices.Low margin, High sales volumesLow Interest FinancingCentralized sourcingDiscount pricingValue pricingPromotional pricing-Psychological discounting -Special event pricing (Republic day)Differentiated pricing-Time pricingBundlingPLACE:Place means the location of the business. Big Bazaar has always worked on low-cost locations. Ittargets semi-urban population with its placement. Its strategy is to find a cheap location and it nevergoes 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 haslaunched a merchandise retailing website which targets high-end customersready to use credit cards. The promotion of this website is done through advertisement on Google. Thewebsite is put as sponsored link.Initially identifies future/potential development areasAcquires such areas at an early phase before the real estate value boomsDesigned to look crowded 35
  36. 36. PROMOTION:Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to make peopledo bulk shopping. There are 2 types of promotional strategies of big bazaar. One is the holisticadvertisement which promotes the brand and creates awareness among people. It is not targeted atpromoting each store but only creates an image of Big Bazaar as low-cost shopping option. The storehas advertised through TV, road shows and also started reality show-typed promotional campaign “TheBig 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 atthe lowest possible prices, coupled with attractive promotional schemes. Some of the most attractiveoffers being a 20-litre branded microwave oven with grill for Rs 2,499, jeans and trousers for Rs 199and HCL laptops for Rs 22,990.Other type of promotion is the particular store oriented promotion which includes speaking on theloudspeaker in nearby blocks. Leaflets are given in local newspaper. There are promotional efforts eveninside the store. Buy 2 Get 1 Free types of promotions are very common. Original prices are cut downand new prices are shown, of which customer takes quick notice. There are loyalty schemes whichreward 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 - forRs. 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 packetworth 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 mlmens shampoo worth Rs. 69 Future card (3% Discount) Baby registry and marriage registry-targeted towards married couple, waiting for marriage 36
  37. 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 improvementsTHREATS:  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 MarginsPEST 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. 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. 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 EquityWEAKNESSES:  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 consumersCORE 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. 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 discountsCHALLENGES:  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. 41.  Introduce best Promotional campaigns which make sense and also understandable to attract distant city crowdDifferent 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 andinfluences 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. 42.  merchandise assortments  Store ambience,  customer service,  price,  Communication with customer  Personal selling  Store image  Store design  Sales incentives  People  Process  Physical evidence4.1.1 Composition of retail mix  Place  Product  Price  Promotion  People  Process  Physical EnvironmentKey elementTable 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. 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 marketing4.1.2 Retail mix planningRetail 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. 44. Top down approachRetail management sets goals and plans for all levels of management.Bottom up approachVarious units prepare own goals and plans sent up for approval. It is the effective blending of all theelements of retail mix activities within the retail organization that determines the success of retailmanagement. Discuss this statement and explain with retail examples how the elements of retail mixcould 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-businessuse. Any institution may engage in retailing, but a firm engage primarily in retailing is called aretailer. Retailers serve as purchasing agents for consumer and as sales specialists for producers andwholesaling middleman. They perform many specific activities such as anticipating consumerswants, developing product assortments and financing. Retailers may be classified by form ofownership and key marketing strategies. Also, types of retailers distinguished according to productassortment, price and customer service levels. Mature institutions such as department stores,discount houses and super markets face strong challenges from new competitors, particularly chainstores or multiple shops in various product categories. Five major forms of non store retailing areDirect selling, Telemarketing, Automatic vending, On line retailing and Direct marketing .Each typehas advantages as well as drawbacks.4.2.1 Retail Marketing MixWhatever is from of ownership, a retailer must develop marketing mix strategies to succeed in itschosen 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 includecredit, 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 storessales 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 oversmall stores. 44
  45. 45. 4.3 Competitive Advantage with Special Reference to Physical Facilities Another competitive advantage of retailers will be how they create physical facilities whichrepresent the distribution element of a retailers marketing mix. Some firms engage in non-storeretailing by selling on hire or through catalogs or door to door, for example-but many more firmsrely 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 tolocation. Thus a stores site should be the first decision made about facilities. Considerations such assurrounding 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 thefirm operating the store. These are much different factors. A firm may be quite large with respect tototal 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 afloor plan of display tables and racks comprise the stores layout. As would be expected, thelocation, size, design and layout of retail stores are based on where consumers live and how they liketo 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 downtown areas have declined.Assessing Competitors Current Strategies The first part in competitor analysis is to determine how competitors are attempting toachieve their objectives. This question is addressed by examining their past and current marketingstrategies. 45
  46. 46. 4.3.1 Marketing Strategy Many authors have attempted to explain the concept of strategy. At the retail level, amarketing strategy can be thought of three major components: target selection of customers, corestrategy (i.e. positioning and differential advantage), and implementation (i.e. supporting marketingmix). The first major component is the description of the market segment(s) to which competingbrands are being marketed. Market segments can be described in various ways. Since few brands aretruly mass marketed, the key is to determine which group each competitor has targeted. The secondstrategy component is what is called the core strategy. This is the basis on which the rival iscompeting, that is its key claimed differential advantage(s).Differential advantage is a criticalcomponent of strategy because it usually forms the basic selling proposition around which thebrands communications are formed. It is also called the brands positioning. The final strategycomponent of competitors must be assessed in the supporting marketing mix. The mix providesinsight into the basic strategy of the competitor and specific tactical decisions. These decisions arewhat 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 companys marketers falls the major responsibility for identifying major changes inthe 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-suchas an energy crisis, a sharp rise in interest rates, a deep recession-and firms find their marketscollapsing. 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 FutureShock. Retail marketers need to continuously monitor the changing scene. They must use theirintelligence and marketing research to track the changing environment. By erecting early warningsystems, retailers will be able to revise marketing strategies in time to meet new challenges andopportunities in the environment. It consists of the external actors and forces that affect the retailer’sability to develop and maintain successful transactions and relationships with its target customers.We can distinguish between the retailers micro environment and macro environment. The microenvironment consists of the actors in the retailers immediate achievement that affects its ability toserve its markets: Suppliers, intermediaries, customers, competitors and publics. The macroenvironment consists of legal, social, economic and technological forces.4.3.3 Store location and Layout 46
  47. 47. Retailers want to locate their stores in the best place possible. The best place possible willvary from retailer to retailer depending on the industry type, type of product, competition, and othermarket factors. Basically a retail store has to located where the market opportunities are at optimallevels. 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 andevaluate its population characteristics against the retailers target market. The buying power of thearea must be considered along with its market and sales potential. The size, location, and type ofcompetition must also be taken into account. The local legal and political environment must beexamined along with the leasing costs and occupancy rates. The actual physical features of thelocation – such as available space, traffic and access to the site, and surrounding buildings – play arole 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 anddemographic segmentation provides clues to population characteristics. The buying power index andeffective buying income suggest strength of the economic base while the index of retail saturationoffers a benchmark for market comparison. Changes in consumer lifestyle will require newstrategies 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 inamusement parks. There a numerous kind of retail stores to choose from as well. Most potential sitesfall 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 retailsite selection should be to choose a location that will fit both today’s and tomorrow’s needs. Thelayout and design of a retail store communicate a significant amount of information about theretailer to the consumer. The architectural character of the store, building a new location, renovatingexisting facilities, exterior design, interior design the modern self layout and the image of the storeare 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 andcontrol of the merchandise investments of a retail operation. The process of merchandisemanagement includes the developing of strategies to ensure that the right product is bought at theright price and available at the right place, at the right time, in the right amount, in order to satisfythe needs of the target customer. No one in retail can completely avoid any contact withmerchandising activities. Merchandising is the day-to-day business of all retailers. As inventory issold, new stock needs to be purchased, displayed and sold. Hence, merchandising is often said to beat the core of retail management. Merchandising traces its growth to the rise of organized retail inthe world. Initially, as the retailers operated only one or two stores, the function of buying the 47
  48. 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 salesvolumes, to allocate merchandise between stores. This sometimes, resulted in stores exchangingmerchandise among them! In order to overcome this limitation, the function of a planner came into being. Theplanner’s job was to act as a link between the stores and the buyer. The de-linking of the function ofplanning and buying allowed better interaction with the stores. Planners were able to devote moretime to collecting and studying store level data, the buyers on the other hand, were able to spendmore time with the vendors.4.4 Competitive Sales Given widespread availability of the same brands, retailers have to cope with thephenomenon of discounts. The retailers themselves dilute the strength of the retail market. Withpromotions becoming the order of the day, they have entered into price wars against each other. ‘Upto 50 percent off’ sales and ‘Two for one’ price offers have now become commonplace even at thetop retail outlets across our country. Every season every festival has more price cuts. The discountedbuying 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 nordoes 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. 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 storeenvironment and analyze the impact of retailing mix on the customer satisfaction level, and toimprove 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 thatcustomers are facing during their purchase from the store. The subject has been taken for theresearch as it plays key role in success of retail sector. As long as the company is able to satisfy itscustomer, customer will remain in the bracket of loyal customer. This study helps to improve theenvironment of the store to reach the customer satisfaction level and improve the merchandising inBig Bazaar.6.1 Objectives of Research: The purpose of research is to discover answers to questions through the application ofscientific procedures. The main aim of research is to find out the truth which is hidden and whichhas not been discovered as yet. Though each research study has its own specific purpose, we maythink 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. 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 amanner that aims to combine relevance to research purpose with an economy in procedure. Researchdesign is needed because it facilitates the smooth ailing of the various research operations, therebymaking research efficient possible yielding maximal information with minimal expenditure.Research design used in this project is Single Cross-sectional design where one sample is drawnfrom a population of interest. In this research design a cross sectional study is concerned with asample of elements from a given population. Data on a number of characteristics from the sampleelements are collected and analyzed.6.3 Types of Research:Exploratory research: The research is an exploratory when; one is seeking insight to general natureof the problem, the possible alternatives and relevant variables that need to be considered. Themethods are flexible, unstructured and qualitative.Descriptive research: It provides an accurate position of a particular aspect of the marketenvironment. The purpose of descriptive research is together a quantified measurement of a specificreaction. It is structured. Most of the data that we needed are gathered in some form of direct orindirect question which further will depend upon:  Nature of the question  Time frame of study  Funds available  Kinds of respondents 50
  51. 51. This project is totally based on survey of the market i.e. people and a lot of research on the web, sofor that a DESCRIPTIVE type of research design was used. Descriptive research provides anaccurate position of a particular aspect of the market condition. The purpose of this research istogether quantified measurement of a specific type of reaction. It is a structure most of the data thatwe 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 beoriginal in character.The secondary are those which have been collected by someone else and which have already beenpassed through statistical process.Data has been collected by the researcher by Primary sources such as questionnaire and personnelinterview. It included 20 questions and 100 customers were given the questionnaire and responsewas taken from them. Charts and graphs will be used for presentation of data for easy understandingand 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 andclarity.6.5.2 Personal InterviewsPersonal interview is mostly commonly used method of data collection. Two purposivecommunications between interviewer (researcher) and the respondent (subject) aimed at obtainingand 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. 52. 6.6.3 Sampling Method: Non-probability sampling was used .Non-probability sampling is thatsampling procedure which does not afford any basis for estimating probability that each item inpopulation has being included in the sample. Under non-probability sampling organizers of enquirypurposely select particular unit of universe for constituting a sample on the basis of the small massthat they so select out of huge one will be typical or representative of the whole. Adequateconsideration was taken to bring a heterogeneous group in terms of age, income, occupation etc. tomake 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 choicequestions. They have been so inserted into the questionnaire, to get the appropriate response for aparticular 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. 53
  54. 54. 7.3 Survey Results, Presentation and InferenceEffectiveness of Retailing Mix for Customer satisfaction at Big BazaarQuestion 1a): Do you frequently shop at big bazaar?Table No.7.1: No of customer Yes No Total 74 26 100Figure No.7.1: No of customersInference: From the above chart we can ascertain that majority of customers i.e., around 74% of samplecustomers 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. 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 22Figure No.7.2: Customer ResponseInference: From the above table we can analyze that the majority of the customers i.e. 38 out of 100customer visits store every week , followed by 24 customer once in two week. Thus we can say thatmajority of customer visit big bazaar every week, may be during weekends. We can conclude thatthe 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 bazaarSr.No. USP’s No. of customers 1. Discount 34 55