The document provides an analysis of the retail industry in India and focuses on Big Bazaar as a case study. It discusses the size and key players of the Indian retail industry. Some of the key drivers of change include favorable demographics, rising incomes, and urbanization. Big Bazaar is analyzed in terms of its company details, stakeholders, value system, resources, competition and strategies. It finds that Big Bazaar targets the middle and upper middle class in India and sees opportunities in the growing organized retail sector and evolving consumer preferences.
1. Product
Retailers must have the right assortment of products and sell them in a manner compatible with their marketing view retailers must decide on the number of assortments in the store and the number of products in each range. In addition, they must select the quality of the articles within each category, decide on pricing policy. Finally, retailers must determine if the assortments should generally be stable over time
2. Price
A price strategy should reflect the company's own objectives and be related to the sales and profit. The goals to be achieved can be established as income and/ or volume units.
a) Market penetration pricing strategy is used when the retailer wishes to acquire revenue by setting a low price and selling a large number of product units.
b) High price strategy is used by the company to attract customers who are not concerned about the price, but the service and prestige. Usually the strategy does not maximize sales, but brings great profit per unit.
c) Cost-oriented pricing strategy The retailer sets the price, adding the operating expenses and desired profit to the cost per unit. The difference between the merchandise cost and the selling price is the trade margin. With a variable margin policy, retailers adjust the margins on merchandise categories.
d) The strategy of prices adjustment to market conditions The retailer may adjust prices according to the demand or market segment. The best example of adapting the retailer prices from Romania to the market demand are represented by some food prices (oil, sugar, flour) and durable goods prices (electronics, appliances, cars) in 2008.
e) Competition-oriented price strategy A retailer can use competition prices as guide. A company may not modify prices if there have been changes in demand or costs, if they are not modified by competition. Similarly, a firm may change its prices if the competition changes them, even if there have not been changes in demand or costs.
3. Place
Some specialists substituted in the literature the term "distribution channel" with "marketing channel” This change aims to emphasize the role of intermediaries in the distribution process, to create value for users or consumers, adding the utility of form, possession, time and place. In addition, the role of marketing channels is not only to participate in demand satisfaction by offering goods and services, but it also requires active participation to stimulate demand through information, creating proximity and promotion developed by members of the economic units network that form the channel. The product must be available at the right place (Product category), at the right time (time you sell your product), and in the right quantity (enough stock).
4. Promotion
Some specialists considers that the role of the promotion policy in the retail business is to attract potential consumers (creating traffic in store) to convert visitors into consumers and to retain buye
CUSTOMER BUYING BEHAVIOUR AT PANTALOONSSrihari Reddy
Customer Buying Behavior is the study of individuals and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Customer behavior is increasingly a part of strategic planning for the future investment and growth of any industry. Retail industry or precisely to say apparel industry is no exception.
1. Product
Retailers must have the right assortment of products and sell them in a manner compatible with their marketing view retailers must decide on the number of assortments in the store and the number of products in each range. In addition, they must select the quality of the articles within each category, decide on pricing policy. Finally, retailers must determine if the assortments should generally be stable over time
2. Price
A price strategy should reflect the company's own objectives and be related to the sales and profit. The goals to be achieved can be established as income and/ or volume units.
a) Market penetration pricing strategy is used when the retailer wishes to acquire revenue by setting a low price and selling a large number of product units.
b) High price strategy is used by the company to attract customers who are not concerned about the price, but the service and prestige. Usually the strategy does not maximize sales, but brings great profit per unit.
c) Cost-oriented pricing strategy The retailer sets the price, adding the operating expenses and desired profit to the cost per unit. The difference between the merchandise cost and the selling price is the trade margin. With a variable margin policy, retailers adjust the margins on merchandise categories.
d) The strategy of prices adjustment to market conditions The retailer may adjust prices according to the demand or market segment. The best example of adapting the retailer prices from Romania to the market demand are represented by some food prices (oil, sugar, flour) and durable goods prices (electronics, appliances, cars) in 2008.
e) Competition-oriented price strategy A retailer can use competition prices as guide. A company may not modify prices if there have been changes in demand or costs, if they are not modified by competition. Similarly, a firm may change its prices if the competition changes them, even if there have not been changes in demand or costs.
3. Place
Some specialists substituted in the literature the term "distribution channel" with "marketing channel” This change aims to emphasize the role of intermediaries in the distribution process, to create value for users or consumers, adding the utility of form, possession, time and place. In addition, the role of marketing channels is not only to participate in demand satisfaction by offering goods and services, but it also requires active participation to stimulate demand through information, creating proximity and promotion developed by members of the economic units network that form the channel. The product must be available at the right place (Product category), at the right time (time you sell your product), and in the right quantity (enough stock).
4. Promotion
Some specialists considers that the role of the promotion policy in the retail business is to attract potential consumers (creating traffic in store) to convert visitors into consumers and to retain buye
CUSTOMER BUYING BEHAVIOUR AT PANTALOONSSrihari Reddy
Customer Buying Behavior is the study of individuals and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Customer behavior is increasingly a part of strategic planning for the future investment and growth of any industry. Retail industry or precisely to say apparel industry is no exception.
India is the country having the most unorganized retail market.
The contribution of retail industry to India’s GDP is more than 13%.
More than 99% retailer’s function in less than 500 square feet of shopping space.
India's retail sector is on its way of modernization. Traditional markets are making way for new formats such as departmental stores, supermarkets and specialty stores.
With the growth in income levels, Indians have started spending more on health and beauty products.
India's retail sector is estimated to touch US$ 833 billion by 2013 and US$ 1.3 trillion by 2018.
Marketing: A presentation on the trends observed in the Indian organized retail sector over the years and how it has helped in the economic growth in India.
2. Plan of Presentation
• Industry Analysis
Industry size
Key Players
Key Drivers of change(PESTEL, Diamond Analysis)
Opportunity and Threat
• Organization Analysis
Company details
Stake Holder Analysis
Value System
Resource Analysis
Competitive Strategy
• Conclusion
3. Industry Size
• India’s top retailers are largely
lifestyle, clothing and apparel
stores
• This is followed by grocery
stores
• Following the past trends and
business models in the west
retail giants such as Pantaloon,
Shoppers’ Stop and Lifestyle
are likely to target metros and
small cities almost doubling
their current number of stores
• These Walmart wannabes have
the economy of scale to be low
–medium cost retailers
pocketing narrow margin
4. Key Players
• Pantaloon Retail (India) Limited with over 12 million sq ft of retail space
spread over 1,000 stores across 71 cities in India.
• Tata Trent limited Retail sector activity: Apparel, books and music Current
store formats: Hypermarket, supermarkets Future plans: New venture
called
• RPG Enterprises Stores: 250 stores, including 36 large format stores across
66 cities in India Retail sector activity: Music, food and grocery, beauty
products
• Landmark Group Apparel, home décor and furnishing, Current outlets: 15
Lifestyle stores and eight Home Centers
• Madura garments 82 store in India across 50 cities and five international
stores Retail sector activity: Apparel
• Vishal Mega mart 180 showrooms in 100 cities, Retail area coverage of
2,990,146 sq ft
• Bata 1,250 outlets in India
• Provogue Ltd. Apparel and footwear, 124 own stores and 228 outlets in 64
cities
• Archies Ltd. Archies has 100 company-owned stores in India and 450
franchise-run outlets
5. • POLOTICAL • ECONOMICAL
• Government is stable
• Government policy
towards investment
is liberal(49%)
• Labor law
• Restriction for MNC’s
• Economy is
growing(7.2%)
• Recovery from
recession
• Monetary policy
PEST ANALYSIS
6. • Socio-cultural • TECHNOLOGY
• According to
mckinsey report
Indian consumer
goods market is
expected to reach
$400 bl. By 2010
• Rapid expansion of
IT sector
• New trends are
coming
CONTD….
7. Key drivers of change
• Multiple drivers leading to a consumption boom:
• Favorable demographics
• Growth in income
• Increasing population of women
• Raising aspirations : Value added goods sales
• Food and apparel retailing key drivers of growth
• Organized retailing in India has been largely an urban phenomenon with
affluent classes and growing number of double-income households.
• More successful in cities in the south and west of India. Reasons range
from differences in consumer buying behavior to cost of real estate and
taxation laws.
• Rural markets emerging as a huge opportunity for retailers reflected in the
share of the rural market across most categories of consumption
• IT is a tool that has been used by retailers ranging from Amazon.com to
eBay to radically change buying behavior across the globe.
8. Opportunities and threats
OPPORTUNITIES
• Retail industry in INDIA accounting
10% of the country’s GDP.
• Successive Indian government have
steadily Liberalize policies related to
investment, banking, trading etc.
• URBANISATION caused more
concentration of middle income and
high income people.
• Hypermarket is emerging as the most
favorable format for the time being in
India
• Increasing workforce of women
• Falling real estate prices
• Increase in disposable income and
customer aspiration
• Increase in expenditure for luxury
items
• Low share of organized retailing
THREATS
• Automatic approval is not allowed for
foreign investment in retail.
• Regulations restricting real estate
purchases, and cumbersome local
laws.
• Taxation, which favours small retail
businesses.
• Absence of developed supply chain
and integrated IT management.
• Lack of trained work force.
• Low skill level for retailing
management.
• Lack of Retailing Courses and study
options
• Intrinsic complexity of retailing –
rapid price changes, constant threat
of product obsolescence and low
margins.
9. About Big Bazaar Hyper mart
Chain of development store in India
Out let 120 out lets
Located in India
Parent group Future group
Owner Kishore Biyani (CEO)
Founded 2001
Head quarter Jogeswari , Mumbai
Industry Retail
website www.bigbazar.com
Tag line Is se sasta aur achha kahin nahi.
Vision Everything ,Everywhere, Every time for
every Indian consumer in the most
profitable manner
10. Stakeholders & Big Bazaar
Main Market/ Non Market stakeholders
Market Stakeholders
• The stockholders
• The Big Bazaar Executive
• The Employees
• The Communities where Big Bazaars located
• Consumers
• Suppliers
• Non profit Organization
•Competitors
Non Market Stakeholders
• The Labor Unions
• The International Retail Stores
• The Politicians
Big Bazaar
Contributions
Contributions
Inducements
Inducements
13. IN HOUSE BRANDS @ BIG BAZAAR
DJ & C CLEAN MATE SENSEI
KORYO STAR SITARA CARE MATE
FRESH & PURE RENUKA MAJITHIA
SARAPOLO and 40 more brands
FEW BRANDS @ BIG BAZAAR
15. Analysis
5 Forces Analysis
Rivalry among the competitor •Reliance Retail, Aditya Birla Group , Vishal Retail’s,
Bharti and Walmart, etc
Threat of entrants •FDI policy not favorable for international players.
• Economies of scale (minimum size requirements for profitable
operations)
•High initial investments and fixed costs
•Cost advantages of existing players due to experience curve
effects of operation with fully depreciated assets
•Scarcity of important resources, e.g. qualified expert staff
Bargaining power of supplier •The bargaining power of suppliers varies depending
upon the target segment.
•The unorganised sector has a dominant position.
• There are few players who have a slight edge over
others on account of being established players and
enjoying brand distinction.
Bargaining power of buyers • Consumers are price sensitive..
•Availability of more choice.
Threat of substitutes
•Unorganized retail
16. Resource Analysis
• Human Resource
Well Trained Staff
Appearance
Empowered Individual
Encouraged To Think Out Of The Box
Employ close to 10,000 people and recruit nearly 500
additional people every month
Use Scenario Planning as a tool for Quick Decision
Making
Security Gaurds At All Gates
18. CORE COMPETENCY OF BIG BAZAR
• A choice of more than 20000 products
• Delivery across more than 1500 cities covering around
16000 pin codes
• A dedicated customer care helpline for any queries
• Fast delivery-tie up with world leader logistic &
transportation services
• Talks of Quality and Cost
• Special emphasis on apparels and life style products
• Providing interesting discounts
Core-Competency of Big Bazaar
19. Strength
- High Brand Equity
- State-of-art infrastructure
- EDLP
- PoP promotions
- Variety of stuff under
single roof
-MIS
Weakness
- Unable to meet store
opening targets
- Falling revenue/sq. ft.
- General perception
Opportunity
• Organized retail (4.15%)
• Evolving consumer preferences
• In Store Experience Improvements
• New formats and consumption space
• Looking at expansion
Threat
- Competitors
- Government policies
- Unorganized retail
-Economic condition
20. Customer Segmentation
Big Bazaar targets higher and upper middle
class customers.
The large and growing young working
population is a preferred customer segment.
Big Bazaar specifically targets working
women and home makers who are the primary
decision makers.
21. M
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Big Bazaar At BCG Matrix
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22. Organization value and customer value
*High
organization value
*Low customer
value
Big Bazaar
*High
organization value
*High customer
value
*Low organization
value
*Low customer
value
*Low organization
value
*Low customer
value
23. Strategy
Focus on Rural customer?
• 73% of population live in 6,00000 villages out of Total
population 114 billion.
• Minimum support price.
• NREGS -100 days employment.
• Income from farm products is Tax free.
Customer oriented
Employee oriented- high attrition rate