marketing strategies of big bazaar-2
TRANSCRIPT
“MARKETING STRATEGIES OF BIG BAZAAR”
SUBMITTED TO
Ms.Swarna Bakshi(MENTOR)
SUBMITTED BY
Anchit GautamBATCH:2007-2010
ROLL NUMBER:C-06
1
METHODOLOGY OF RESEARCH:
1) Type of Research: Exploratory Research
2) Time Frame: 2months
3) Tools used:
Primary – personal interview, tele-interview.
Secondary- MNES Journals, Internet, Magzines, Press Releases etc.
2
SCOPE OF STUDY:
So far, it has been seen that retailing is a vital and involuntary
action performed by the living structure of the market economy
(as opposed to the case in a barter economy). In a barter
economy, bane; transactions take place between consumers
themselves. Consumers interact directly whereas in a centralized
market economy, transactions taking place at a larger scale
(both in terms of volume and variety) necessitate an interface
between the manufacturers and final consumers. Hence we
reinforce the fact that retailing is not a new deal. This industry is
extant as an interface between production and consumption,
from times immemorial, benefiting us - consumers or producers
in the various ways discussed above.
Our study concentrates on organized retailing, which consists of
shopping malls, super markets, chain stores, and like. In the last
few years a shift has occurred in India from individual retail
outlets owned separately and managed distinctively to
professionally managed retailing. This is an industry, which has
now started attracting better investments and talent. Things
3
changed primarily because of the rising expectations of Indian
consumers and the corporate responding quickly.
Today the industry (in India) seems to be functioning somewhere
between the accelerated development and maturity stages, with
high growth rates, intense competition and moderate profitability.
4
Table of Contents
CONTENTS PAGE NO.
Certificate of Originality ii
Signatory Page iii
Thesis Approval Letter iv
Synopsis v
Acknowledgement vii
Introduction to Retailing 1-2
Retail Marketing Mix 3
Importance of Studying Retailing 4-6
Changing Customer Mindset 7
The Industry Structure 8-11
Company Profile 12-35
Drivers of the Industry 36-39
Field Study 40-50
Research 0bjective 51
Research Methodology 52
Findings of The Survey 53-62
Comparison Across Types of Retailers 59
Establishing A Retail Store 61
Analyzing Customers on Life-Style Concepts 62
Conclusions 64-65
Bibliography 66
Annexure 67-68
5
INTRODUCTION TO RETAILING
Retailing consists of those business activities involved in the sale
of goods and services to consumers for their personal, family or
household use. It is the final stage in a channel of distribution,
which comprises all of the businesses and people involved in the
physical movement and transfer of ownership of goods and
services from producer to consumer.
Retailing involves
Interpreting needs of the consumers
Developing good assortments of merchandise
Presenting them in an effective manner so that consumers
find it easy and attractive to buy.
Retailing differs from marketing in the sense that it refers to only
those activities, which are related to marketing goods and/or
services to final consumers for personal, family or household
use. Whereas marketing, according to American Marketing
6
Association, refers to ‘the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods
and services to create exchanges that satisfy individual and
organizational objectives.”
Organizational buyers purchase in order to perform a task or sell a product effectively, efficiently and at a profit. They could be industrial buyers or intermediary buyers. Industrial buyers are those who purchase goods and services to be used in or to aid manufacturing process. Intermediary buyers
are those (i.e. wholesalers and retailers) who buy merchandise
for resale. Retailers include street vendors, local supermarkets,
department stores, restaurants, hotels, barbershops, airlines and
even bike and car showrooms. Still retailing may or may not
involve the use of a physical location. Mail and telephone orders,
direct selling to consumers in their homes and offices and
vending machines - all fall within the purview of retailing. In
addition to it, retailing mayor may not involve a “retailer.’
Manufacturers, importers, non-profit firms and wholesalers are
acting as retailers when they sell goods and/or services to final
consumers.
7
Whatever the form of retailing, a retail marketing strategy defines
the execution of the marketing process and facilitation of
customer satisfaction.
This retail marketing strategy involves selecting a retail target
market (i.e. the carefully/exactly identified group of final
consumers that a retailer seeks to satisfy) and then
implementing the corresponding retail marketing mix (i.e. a
combination of product. price, promotion and distribution
strategies that will satisfy the retail target market). The elements
of the marketing mix encompass the facets shown in the table
below. The table depicts consumer service as the crux of the
whole activity.
8
RETAIL MARKETING MIX
Product Branding Price
Packaging Cost of goods
Product Design Business Expenses
Assortment Gross Margin
Services Profit
Promotion Distribution
Advertising Logistics
Personal Selling Store Location
Sales Promotion Site Evaluation
Public Relations Transportation
Visual Merchandising Storage of goods
Source: -Ron Hasty, James Reardon - Retail Management The implementation of
such a retail strategy mix benefits consumers and producers and yields economic
utility.
IMPORTANCE OF STUDYING RETAILING
9
by the living structure of the market economy (as opposed to the
case in a barter economy). In a barter economy, bane;
transactions take place between consumers themselves.
Consumers interact directly whereas in a centralized So far, it
has been seen that retailing is a vital and involuntary action
performed market economy, transactions taking place at a
larger scale (both in terms of volume and variety) necessitate an
interface between the manufacturers and final consumers.
Hence we reinforce the fact that retailing is not a new deal. This
industry is extant as an interface between production and
consumption, from times immemorial, benefiting us - consumers
or producers in the various ways discussed above.
Our study concentrates on organized retailing, which consists of
shopping malls, super markets, chain stores, and like. In the last
few years a shift has occurred in India from individual retail
outlets owned separately and managed distinctively to
professionally managed retailing. This is an industry, which has
now started attracting better investments and talent. Things
10
changed primarily because of the rising expectations of Indian
consumers and the corporate responding quickly.
Today the industry (in India) seems to be functioning somewhere
between the accelerated development and maturity stages, with
high growth rates, intense competition and moderate profitability.
In order to get an idea of the magnitude of the issue we are
dealing with, we look at the international scenario. During 1992,
the largest 100 retailers in the world generated over $1.1 trillion
in revenues.
Retailing is the second largest industry in the world, one of the
largest employers of the world and an index of economic growth.
In India there are about 5 million retail outlets varying in sizes
and nomenclatures. India has the highest number of retail outlets
per capita in the world but has the lowest retail space per capita
in the world (2 ft / person). Out of these 5 million outlets 96% are
smaller than 500 sq. ft. in area 3. There are about 3 million
outlets in India’s 3700 designated towns and more than 6,
11
00,000 villages. About 350 million people live, within one-minute
walk of these retail shops. According to retail census conducted
by market researcher ORG-MARK, Rs.4,79,568 crore worth of
products were sold through theses million retail outlets
Manufacturers owned and retail chain store are springing up in
urban areas to market consumer goods to the middle class in a
much similar style as malls around the globe. At present about
8% of the Indian population is employed in the retailing industry
as against 20% in USA. As India moves towards the service
oriented economy, a rise in this percentage is expected. The
number of the retail outlets is growing at about 8.5% annually in
the urban areas and in towns with population between 1, 00,000
to I million; the growth rate is about 4.5%.
According to Kurt Salmon Association, a global management
consulting firm, organized retailing seems all set to power ahead
from Rs. 5000 crore currently to about Rs.30,000 crore in next
live years. A. T. Kearney reports that organized retailing will
12
account for about 20% of the total $8 trillion retail market in India
in the next 5-7 years as against 1-2% today.
Consumer Spend by 2005 (in Rs. crore)
Unorganized Retailing 7, 08,836
Organized Retailing
Food and grocery 5,956
Non food 23,886
Source: Shah, Jindal “Shop at Leisure” Economic Times (4th
Feb 2000)
THE INDUSTRY STRUCTURE
13
Hence, commencing the study of retailing industry, we must first
look at its structure - what the retailing industry is made up of,
what it looks like. The structure of the retailing industry can be
studied from two perspectives - according to the form of
ownership of various retail units or according to the strategy mix
that various retailers adopt.
Based on the form of ownership, various types of retailers
comprising the retailing industry are described below:
1. An unaffiliated or independent retailer is one who owns
and operates only one retail outlet. A family mostly owns it
with high dependence on the owner, thus affecting long run
success and employee morale. He is supposed to have a
friendly personalized image and his offering reflects the
tastes and preferences of its owners and customers. Kirana
shops are very good examples of such retailers.
2. A chain retailer or corporate retail chain owns and
operates multiple retail outlets (store units) under common
ownership. Most chains have well defined management
14
philosophies, which tend to be solid overall strategies.
These contribute towards limiting the independence of the
local owners of the individual units who, in addition, lack
commitment also. bachoomal is a good e.g. of it.
There also exist associations of independent retailers,
which are formed in order to compete more effectively with
corporate chain stores. They enjoy benefits of a corporate
chain while still maintaining status of individual owners.
These associations could be formed with other retailers
(known as cc, operative chains), with sponsorship by a
wholesaler (known as voluntary chains) rather than by the
retailers themselves or by franchise agreements sponsored
by manufacturers or distributors (known as dealers) or by
service firms (known as franchisees).
3. A franchise system results from a contractual agreement
between a franchiser and a retail franchisee, thus allowing
the franchisee to conduct a given form of business under
an established name as per a particular business format in
15
return for an initial fee and a percentage of monthly gross
sales as royalty. It helps franchise to create national or
international presence quickly and with similar investments
(than required by the franchise alone for creating such a
presence independently).
4. A Leased Department (LD) is a department in a retail store that is rented to an outside party. If the existing store is well known, with a large number of steady customers, it becomes easier for the LD to generate immediate sales. It operates in categories on the fringe of the store’s major product lines and it must be taken care that it’s not a parasite and does not live off the traffic generated by other parts of the store. Thus goods or services lines that it can offer may be restricted. Apart from this, various requirements are imposed to ensure overall consistency and co-ordination.
5. Vertical Marketing System (VMS) is comprised of all the
levels of business along a channel of distribution (Refer to
Fig.1). In an independent VMS, there are three levels of
independently owned businesses - manufacturers,
wholesalers and retailers. Such a system is most beneficial
if manufacturers and/or retailers are small, intensive
distribution is sought and customers are widely distributed.
16
In a partially integrated VMS, two independently owned
businesses (most likely a manufacturer and retailer) along
a channel perform all production and distribution functions
without the aid of the third i.e. wholesaler. This type of
system is most appropriate if manufacturers and retailers
are large. selective or exclusive distribution is sought and
existing wholesalers are too expensive or unavailable.
Through a fully integrated VMS, a single firm performs all
production and distribution functions without the aid of any
other firms. A fully integrated VMS enables a firm to have
total control over its strategy, to have direct contact with
final consumers, to have higher retail markups without
raising prices (by eliminating channel members), to be self
sufficient and not rely on others and to have exclusivity
over the goods and services offered.
Consumer Co-operatives are retail firms owned by their
respective customer members. In such co-operative
arrangements, groups of consumers invest in the co-
17
operative, receive stock certificates, elect officers, manage
operations and share the profits or savings that accrue.
6. Consumer Co-operatives come into existence with the purpose (of some consumers) of operating stores as well or better than traditional retailers, of getting control over prices, of saving money by substituting their own labors or of getting access to healthful, environmentally safe plots, not available from traditional stores
Based on the strategy mix that various retailers adopt, the industry will comprise of fifteen types of retailers.
18
COMPANY PROFILE
GURGAON MALLS
Gone are the days when one had to rush from one shop to
another to pick up the things of their choice. A whole new world,
a paradise for shopper-holics and a place to be….malls in
Gurgaon have left no stone unturned to woo people of not only
the vicinity but also around. Sprawling at an alarming rate,
shopping malls in Gurgaon offer high-end entertainment and a
complete enthralling shopping experience. Revolutionizing the
standards of life of people of Gurgaon, shopping malls in
Gurgaon are giving a major boost to the retail industry, thus
transforming the entire map of the city right since their inception.
Giving a tough competition to the local market stores, Gurgaon
malls have given an eminent competitive edge to the city that
has been longing for some action so far. With apparent similarity
in design and modern-day amenities, Gurgaon shopping malls
are in no way inferior to shopping malls of the western world.
Fully loaded with nearly two dozen operational shopping malls
19
and some 140 in pipeline, the city is gearing ahead to soothe
shopping spree of the populace.
Foreseeing great future ahead, now more Gurgaon mall developers are putting their best foot forward to gratify even the minutest need of the shoppers. Whether it is a necessity of high-end brands or the immediate need of theme specific products, Gurgaon malls are becoming a perfect shopping destination to visit. Being the ideal one stop shopping destinations,
Gurgaon shopping malls save upon lot of money and time. If this
progress steadily remains on the track for the next few years, the
entire retail bustle will definitely undergo a remarkable change.
Marketing reports on Retail industry
For enthusiast shoppers, there is a long streak of shopping malls
in Gurgaon to follow.
Right from Sahara Mall, DLF City Centre, MGF Metropolitan,
DLF Mega Mall to Vishal Mega Mart, there is a multitude of
alternatives to replete shopping spree. But in terms of regard and
recognition, Sahara Mall, Gurgaon Metropolitan Mall and Mega
Mall Gurgaon supersede all.
20
Spread over an area of 3.89 acre, Sahara Mall is fascinating the
visitors since March 2001. Fully decked with state-of-the-art
amenities, it enthralls shoppers with its huge range of latest
offerings.
Meanwhile Gurgaon’s Metropolitan Mall is a full air-conditioned shopping location with the readability of seven screen multiplex, exotic food joints and lots of other enticing amenities. Positioned over the large area of 400,00 sq.ft, Gurgoan’s Metropolitan mall has leading brands such as McDonald’s, PVR, Nike, Shoppers Stop and Benetton. As far as the Mega Mall of Gurgaon is related, it is one another perfect destination for a shopping enthusiast to explore. Extended over 30,000 sq,ft. area, the Mega Mall of Gurgaon enchants visitors with a three screen multiplex and tenders customers with latest offerings from top brand stores of Nakshatra, Reebok and a host of many others.
Retailing in India, with a few exceptions, mostly consists of small
family-owned shops that stock particular kinds of goods..
Needless to say retailing is scattered and disorganised.
Organised retailing first came to the South and is now spreading
all over India by the entry of a number of companies ? notably,
the Tatas with Trent, the Piramals with Crossroads the Rajan
21
Raheja group with Globus, the Goenkas with Foodworld and so
on.
Prior to the formal launch of the Piramals-owned Crossroads,
Mumbai?s first shopping multiplex, Piramal Holdings chairman
Ajay Piramal at a press meet said at Crossroads "there would be
something for everyone."
The implication clearly was that most people could do some
shopping at the mall. As things later turned out, maybe he meant
window-shopping! For, that is all most would-be shoppers could
do when Crossroads opened to the public.
At that time, the mall was abounding with exclusive names like
Shyam Ahuja, Ritu Beri, Rohit Bal and Swarovski ? of course, at
an astronomical price. Two years down the line, exclusivity at
Crossroads is being replaced by affordability. Now pedestrian
consumer durables shops selling Whirlpool refrigerators and
Videocon televisions rub shoulders with Swarovski?s outlets.
And the evolution is still on. The Trents and the Crossroads soon
proved with their high prices that, they were not for everyone and
22
only the well-heeled could afford to shop there. Subsequently,
when the climbdown started it became clear that this is not the
way it should be.
Retail industry experts say that in 2001, retailing entered a new
phase in India. Established retailers are now experimenting with
new formats in infrastructure, pricing and customer-care. The
biggest change in 2001, therefore, was on the price front.
Subhiksa in Chennai, Margin Free in Kerala, Bombay Bazaar in
Mumbai, RPG?s Giant in Hyderabad, Big Bazaar in Kolkata,
Hyderabad and Bangalore have one thing in common ? they all
price their products below MRP. Discount stores are slowly
arriving in India and industry insiders feel they will spearhead a
revolution in organised retailing.
Says Big Bazaar MD Kishore Biyani: "On the list of top retailers
in the world quite a few are discounters. Around 60 per cent of
the business abroad comes from this format. Incidentally, the
largest retailer in the world, Wal-Mart, is a discount store."
Perhaps no other format typifies the change so much as the
23
hypermarkets. A hypermarket is somewhat of a big discount
store that, ideally, stocks 60 per cent food and 40 per cent non-
food items.
Hypermarkets are designed to generate higher revenues and delivery gains in terms of branding, merchandising, display, variety and choice for partners,
consumers, retailers and the government alike. Owing to the
huge volume of sales generated at hypermarkets, overheads
stay low and they are able to function like discount stores.
Some call them the Godzillas of retailing, as they are several
times bigger in scope and scale than department stores. They
are usually located at the edge-of-the-town, and have an
extremely complex supply chain.
So far, most national-level retailers have stayed away from the
hypermarket format largely because of the complexity of
managing the supply chain and even a discount store like the 70-
store chain Subhiksha has stuck to food and provisions and
restricted itself to Tamil Nadu. Globally, hypermarkets account
for 60 per cent of the retail sales. However, a few established
24
retailers are setting up hypermarkets in India. For instance, the
Rs 6,000-crore RPG group of Food World, Health and Glow and
Music World fame opened its hypermarket by the name of Giant
early this year in Hyderabad.
Say company officials: "The response has been fantastic, and
we are growing month-on-month." The 50,000-sq ft hypermarket
is co-owned by Dairy Farm, a leading pan-Asian food and
drugstore retailer based in Hong Kong. RPG and Dairy Farm
plan to launch eight to 10 such stores in three years in cities like
Pune, Bangalore and Chennai.
Dairy Farms core strategy is to focus on supermarket,
hypermarket, convenience and drugstore operations, offering
consumers value for money through low-cost, efficient
distribution of high-quality fresh foods and fast-moving consumer
goods.
Another such hypermarket is Big Bazaar, set up in Hyderabad,
Kolkata and Bangalore by the Pantaloon group. It stocks close to
1.5 lakh items across 18 product categories and relies on
25
aggressive pricing to pull in customers as well as bludgeon
competition.
Says Biyani: "We are doing better than expected ? we get
around 22,000 clients each day with daily sales of Rs 25-30 lakh
from all the three stores." Big Bazaar invested a total of Rs 30
crore to have a discount store each in the three centres.
Biyani says Big Bazaar will open a store in Gurgaon by early
2002 and three stores in Mumbai, beginning March 2002. The
total investment will be Rs 25-30 crore and the turnover
expected from each store is around Rs 50 crore. RPG plans to
have 15 Giant stores in the next five years, entailing a total
investment of Rs 225 crore.
While southern and western India have seen a range of
hypermarkets such as the RPG groups Giant in Hyderabad,
Pantaloon Retails Big Bazaar among others, the north ?
particularly Delhi ? has been devoid of such stores.
Consumers here rely on a network of local mom-and-pop stores
for daily shopping. These increasingly offer the convenience of
26
tele-shopping as well. In a recent development, two New Delhi-
based retail chains and Ansal Housing and Construction decided
to jointly set up six hypermarkets in New Delhi.
The retail chains include Home Store (India), a retailer of home
products and accessories, and Lifespring, owner of a chain of
health and beauty product stores in Delhi. The three will invest
more than Rs 50 crore to set up six hypermarkets across Delhi
by year 2003. To be called Metro Sabka Bazar (Everybodys
Market), each store will be spread over 50,000 sq ft.
According to Arif Sheikh, managing director The Home Store,
(THS), The Home Store plans to follow a business plan where it
will buy out the real estate for all the proposed hypermarkets and
will later rent out a major portion and also take a cut in margins.
THS has the retailing expertise and will need to sell at
competitive prices to keep out expenses and overheads low.
The company estimates that each hypermarket will involve an
investment of Rs 50 crore. The reason for THSs diversification
clearly is to expand its customer base, which is currently limited
27
to a niche audience. The Home Store already operates 17
outlets in 10 Indian cities, although none of the stores are
hypermarkets.
New retail brand that entered India in year 2001 was the ?8-
billion Marks and Spencer (M&S) that opened outlets in Mumbai
and Delhi. M&S, known for its discounted pricing in countries like
the UK, has ventured into India through the franchisee route in a
tie-up with Planet Sport. Unlike in other countries M&S is going
in for fancy pricing and may find the going tough, say retail
industry experts.
Hypermarkets, thus, are clearly a volumes game and in India,
with its value-for-money conscious public, if managed well they
could change the retail scene for good.
28
Retailers Rush in to Grab the Market
The Indian retail sector has suddenly become active. While
attention had been focused on the mall boom close to 220 malls
will be operational by the end of 2008 Reliance Industries led by
Mukesh Ambani has launched its retail operations, branded
Reliance Retail in the country by opening outlets in Hyderabad,
that sell fruits vegetables and grocery, while other retailers
(Indian and global) are poised to spring into action.
Industry watchers are taken aback by the speed and ease with
which Reliance has inaugurated its retail operations. Says Arvind
Singhal, head of retail consultancy, KSA Technopak: "Nowhere
in the world has a project started on such a scale it has taken
just 15 months from planning to execution." (See: RIL launches
first Reliance Fresh retail store in Hyderabad)
Technopak anticipates that Reliance's entry into retail will spur
others into action and the top 10 players in the modern retail
trade are likely to pump in $18-20 billion in five years to generate
as much as $50-60 billion in revenue by 2011. This investment
29
will be made in the top 150 cities, though impact would be visible
in at least the top 500 if not more.
Reliance will however, soon encounter competition from large
domestic players like ITC, the Adity Birla Group, telecom
maverick Sunil Mittal's Bharti group, RP Goenka's RPG
Enterprises and the Ruia's Essar Group, all of
whom are finalising their retail plans while global players like
Carrefour, Wal-Mart and Tesco will inevitably move in either with
franchised, cash and carry or plain retail models. German retailer
Metro already operates a cash and carry store in Bangalore and
is scheduled to open outlets in Hyderabad soon.
Unconfirmed reports say the Aditya Birla Group may spend
Rs15,000 crore ($3.3 billion) to set up 6,000 outlets in three
years.
Sunil Mittal, chairman of Bharti Enterprises is planning a tie up
for his FieldFresh Foods Pvt Ltd with the UK-based Tesco to set
up chain stores in India. The Aditya Birla Group is expected to
open its first store by the middle of next year.
30
Wal-Mart's recent moves indicate that it is no longer willing to
wait for the Indian government to drag its feet on the issue of FDI
in retail, and has initiated talks with Indian companies for
franchised or cash and carry operations. As a first step towards
setting up a presence in India, Wal-Mart has appointed Raj Jain
(former CEO of Whirlpool of India) as the CEO of its proposed
Indian operations.
The US-based retail chain currently has a set-up in Bangalore to
source products for its international retail operations. Jain,
currently undergoing training in Shanghai, has been hired
specifically to spearhead the retail company's entry into India.
Earlier Wal-Mart had set up a project office in Delhi from where it
was said to be working on various entry strategies. Wal-Mart is
also believed to be building a team in India, which includes the
head of finance, marketing and legal affairs.
Wal-Mart is said to be extremely concerned about the impact
that Reliance Retail will make on the groceries and fresh foods
market, recognized globally as the life blood of organised retail
31
the world over. Until now, Indian retailers have tended to
minimize their presence in this segment mainly due to high
investments required.
Though Spencer's, FoodBazaar, Nilgiri Dairy Farms, Dairy
Farms are present in the fresh food segment, theirs is a token
presence and not a competitive threat.
Against this Mukesh Ambani has announced a Rs25, 000-crore
investment for its Reliance Fresh initiative and Reliance Select.
(See: RIL to invest Rs25,000 crore in retail) investment in its
backroom and supply chain and cold chain is also said to be
huge. For fresh produce it plans to source fruits and vegetables
directly from farmers eliminating middlemen and for groceries it
has tied up with FMCG manufacturers to source stocks directly
from company factories.
Sources say the large FMCG players like HLL, ITC, Dabur and
Marico are putting in place systems to service Reliance as the off
take of consumer goods from HLL is expected to be large.
32
The world's second largest retail chain, the €74.5-billion
Carrefour is also set to enter India along with Dubai-based
Landmark group which operates the Lifestyle chain of stores in
India.
According to reports, Carrefour's plans include opening 200
hypermarkets throughout India in the next 10 years. Incidentally,
Carrefour was the first international retailer to set up shop in Asia
in 1989 in Taiwan, Indonesia, Malaysia, Thailand and China.
Carrefour had maintained a procurement office in Gurgaon near
Delhi from 2000 to 2004 from where it sourced food products
from India through international distribution agents. In 2004 it
recalled its executives after postponing plans to set up shop in
India due to the lack of clarity on foreign direct investment (FDI)
in the retail sector. Carrefour operates 7,000 stores in 29
countries worldwide and has 47.8 per cent of the group's sales
originating from France. The remaining sales come from its
hypermarket store format which the group pioneered.
33
Carrefour India is understood to be exploring formats like the
cash-and-carry and franchisee model to facilitate its entry.
German retailer Metro is also following the cash-and-carry model
in India and has set up two distribution centres in Bangalore and
is in the process of setting up more in Hyderabad and Kolkata.
A recent study by real estate services provider Frank Knight
India revealed that the Indian retail sector is worth $210 billion
and is expected to grow at between five and seven per cent per
year. Organised retail represents just three per cent of the
overall industry, but is growing at 30 per cent per year.
34
PANTALOON (BIG BAZAR)
Pantaloon Retail is looking at launching 60 Big Bazaar new
outlets in the next eight months and is targeting to open 100 Big
Bazaars this year. The company currently has 40 outlets with 10
Big Bazaars in the south. It is planning to invest an average of
Rs15 crore on each outlet. The size of the outlets ranges from
40,000 square feet to 1.7 lakh square feet. The company has
invested about Rs16 crore for setting up the new retail outlet in
Hyderabad, which spreads over 52,000 square feet. With the
new expansion plans in place, the company is expecting over 80
pc increase in revenues in the next financial year
35
Big Bazaar
Type Subsidiary of Pantaloon Group
Founded 2001
Headquarters Mumbai, India
Industry Retail
Parent Pantaloon Group
Owner Kishore Biyani
Slogan Is se sasta aur accha kahi nahin
Website http://www.pantaloon.com/bigbazaar.htm
Big Bazaar is a chain of shopping malls in India currently with 29 outlets, owned by the Pantaloon Group. It works on same the economy model as Wal-Mart and has had considerable success in many Indian cities and small towns. The idea was pioneered by entrepreneur Kishore Biyani, the head of Pantaloon Retail India Ltd.
Pantaloon Retail (India) Limited, is India's leading retail
company with presence across multiple lines of businesses.
The company owns and manages multiple retail formats
that cater to a wide cross-section of the Indian society and
is able to capture almost the entire consumption basket of
the Indian consumer. Headquartered in Mumbai (Bombay),
36
the company operates through 4 million square feet of retail
space, has over 140 stores across 32 cities in India and
employs over 14,000 people. The company registered a
turnover of Rs 2019 crore for FY 2005-06.
Pantaloon Retail forayed into modern retail in 1997 with the
launching of fashion retail chain, Pantaloons in Kolkata. In
2001, it launched Big Bazaar, a hypermarket chain that
combines the look and feel of Indian bazaars, with aspects
of modern retail, like choice, convenience and hygiene. This
was followed by Food Bazaar, food and grocery chain and
launch Central, a first of its kind seamless mall located in
the heart of major Indian cities. Some of it's other formats
include, Collection i (home improvement products), E-Zone
(consumer electronics), Depot (books, music, gifts and
stationary), aLL (fashion apparel for plus-size individuals),
Shoe Factory (footwear) and Blue Sky (fashion
37
accessories). It has recently launched its retailing venture,
futurebazaar.com.
The group's subsidiary companies include, Home Solutions
Retail India Ltd, Pantaloon Industries Ltd, Galaxy
Entertainment and Indus League Clothing. The group also
has joint venture companies with a number of partners
including French retailer Etam group, Lee Cooper, Manipal
Healthcare, Talwalkar's, Gini & Jony and Liberty Shoes.
Planet Retail, a group company owns the franchisee of
international brands like Marks & Spencer, Debenhams,
Next and Guess in India.
Future Group
Pantaloon Retail is the flagship enterprise of the Future
Group, which is positioned to cater to the entire Indian
consumption space. The Future Group operates through six
verticals: Future Retail (encompassing all retail businesses),
Future Capital (financial products and services), Future
38
Brands (management of all brands owned or managed by
group companies), Future Space (management of retail real
estate), Future Logistics (management of supply chain and
distribution) and Future Media (development and
management of retail media).
Future Capital Holdings, the group's financial arm, focuses
on asset management and consumer finance. It manages
two real estate investment funds (Horizon and Kshitij) and
consumer-related private equity fund, Indivision. It also
plans to get into insurance, consumer credit and other
consumer-related financial products and services in the
near future.
Future Group's vision is to, "Deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner." One of the core values at Future Group is, 'Indianess' and its corporate credo is – Rewrite rules, Retain values.
CORPORATE STATEMENTS
39
Future Group Manifesto
“Future” – the word which signifies optimism, growth,
achievement, strength, beauty, rewards and perfection.
Future encourages to explore areas yet unexplored, write
rules yet unwritten; create new opportunities and new
successes. To strive for a glorious future brings to Company
strength, ability to learn, unlearn and re-learn, ability to
evolve.
Future Group, will not wait for the Future to unfold itself
but create future scenarios in the consumer space and
facilitate consumption because consumption is
development. Thereby, it effect socio-economic
development for the customers, employees, shareholders,
associates and partners.
Their customers will not just get what they need, but also
get them where, how and when they need.
40
They will not just post satisfactory results, it will write
success stories.
They will not just operate efficiently in the Indian economy,
will evolve it.
They will not just spot trends, but will set trends by
marrying its understanding of the Indian consumer to their
needs of tomorrow.
It is this understanding that has helped us succeed. And it is this that will help us succeed in the Future. The Company shall keep relearning and in this process, do just one thing.
Group Vision
Future Group shall deliver Everything, Everywhere, Every
time for Every Indian Consumer in the most profitable
manner.
Group Mission
The Company share the vision and belief that our
customers and stakeholders shall be served only by
41
creating and executing future scenarios in the
consumption space leading to economic development.
They will be the trendsetters in evolving delivery formats,
creating retail realty, making consumption affordable for
all customer segments – for classes and for masses.
They shall infuse Indian brands with confidence and
renewed ambition.
They shall be efficient, cost- conscious and committed to
quality in whatever we do.
They shall ensure that their positive attitude, sincerity,
humility and united determination shall be the driving force
to make Company successful.
Core Values
Indianness: confidence in ourselves.
Leadership: to be a leader, both in thought and business.
42
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.
43
Major Milestones
1987 Company incorporated as Manz Wear Private Limited. Launch of
Pantaloons trouser, India’s first formal trouser brand.
1991 Launch of BARE, the Indian jeans brand.
1992 Initial public offer (IPO) was made in the month of May.
1994 The Pantaloon Shoppe – exclusive menswear store in franchisee
format launched across the nation. The company starts the
distribution of branded garments through multi-brand retail outlets
across the nation.
1995 John Miller – Formal shirt brand launched.
1997 Pantaloons – India’s family store launched in Kolkata.
2001 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first
hypermarket chain launched.
2002 Food Bazaar, the supermarket chain is launched.
2004 Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ -
India’s first seamless mall is launched in Bangalore.
2005 Fashion Station - the popular fashion chain is launched aLL – ‘a
little larger’ - exclusive stores for plus-size individuals is launched
44
2006 Future Capital Holdings, the company’s financial arm launches
real estate funds Kshitij and Horizon and private equity fund
Indivision. Plans forays into insurance and consumer credit.
Multiple retail formats including Collection I, Furniture Bazaar,
Shoe Factory, EZone, Depot and futurebazaar.com are launched
across the nation.
Group enters into joint venture agreements with ETAM Group
and General.
Major Achievements of Pantaloon Retail Chosen as International Retailer for the Year 2007 Chosen as Emerging Market Retailer of the Year 2007 Best Employers in India (Rank 14th) in the Hewitt Best
Employers 2007 survey. Best Managed Company in India (Mid-cap) for the year
2006. Won Images Retail Awards 2006 for Best Value Retail
Store, Best Retail Destination, and Best Food & Grocery Store
45
JOINT VENTURES COMPANIES
Planet Retail Holdings Ltd.
The group is a joint venture partner in Planet Retail
Holdings Ltd., which operates sports, lifestyle and leisure
retail chain. It also owns the franchisee and distribution
rights of brands like Marks & Spencer, Guess, Debenhams
and Puma in India.
Footmart Retail
Footmart Retail is a joint venture with Liberty Shoes and is
engaged in the retailing of footwear products in India.
GJ Future Fashions
GJ Future Fashions is a joint venture with kids apparel
manufacturer - Gini & Jony.
CapitaLand Retail India
The group is a joint venture partner in CapitaLand Retail
India, along with Singapore-based CapitaLand Limited. The
46
company provides retail management services to retail
properties owned or managed by various group companies
and investment funds.
ETAM Future Fashions India Pvt. Ltd.
ETAM Future Fashions India Pvt. Ltd., is a joint venture with
French-retailer, ETAM and the group. The company is
involved in manufacturing and distribution of women’s
fashion and lingerie products.
47
AWARDS & RECOGNITION
Kishore Biyani conferred 'international retailer of the year' award 18 January 2007
Apex US retail body, National Retail Federation (NRF), has
conferred 'international retailer of the year award' on Kishore
Biyani, managing director, Pantaloon Retail India Ltd.
The award was presented to Biyani at NRF's 96th annual
convention and expo on 16 January in New York.
NRF is the world's largest retail trade association with a
membership that comprises all retail formats and channels of
distribution and its award is traditionally given to companies
that achieve an international reputation for creative genius,
inspirational leadership and distinguished service to the retail
industry.
Previous recipients of this award are Metro AG (Germany),
Carrefour (France), Ito Tokada Group (Japan), Zara (Spain)
and Boticario (Brazil).
48
Accepting the award Biyani said, "It would have been more
appropriate if we had got the award after global retailers
have stepped into India. We are in a no-competition scenario
currently but we excel in what we do to delight our Indian
consumers."
Biyani also said, "We can take a person out of India but not
India out of a person. We have a deep understanding of
Indian consumers and we offer everything they need every
time, everywhere through every format of retailing".
According to Farooq Kathwari, chairman, NRF, "Pantaloon
Retail India Ltd is the unanimous choice of the jury for the
International Retailer of the Year Award this year. We
applaud the impressive growth of the organisation whose
turnover is poised to become $6 billion by 2010".
The other awardees were Reed Hastings, founder chairman
and CEO of Netflix, who received NRF's innovator of the
year award and Millard Drexler, chairman and CEO, J Crew
49
Group, Inc, who received NRF's gold medal for retailing
excellence.
2006
National Retail Federation
International Retailer of the Year - Pantaloon Retail (India) Ltd. The National Retail Federation is the largest retail trade association with over 1.4 million member organisations in the US and across the world. Some of the past recipients of this award include Metro AG, Carrefour, Ito-Yokado, Zara and Boticario.
Retail Asia, Retail Asia Pacific Top 500 Awards
International Retailer of the Year - Pantaloon Retail (India)
Ltd. The National Retail Federation is the largest retail trade
association with over 1.4 million member organisations in the
US and across the world. Some of the past recipients of this
award include Metro AG, Carrefour, Ito-Yokado, Zara and
Boticario.
50
Images Retail Awards 2006
← Mr. Kishore Biyani – Retail Face of the year
← Big Bazaar – Best Value Retail Store
← Big Bazaar – Best Retail Destination
← Food Bazaar – Best Food and Grocery Store
Readers Digest Platinum Trusted Brand Award
← Big Bazaar - Earning a trusted Place in the everyday
lives of consumers
CNBC Awaaz Consumer Awards
← Big Bazaar: Most preferred store
Retail Asia Publishing
PRIL – Numero Uno Retail Organisation of India
2005
Readers Digest and Awaaz consumer Award
Big Bazaar - Most preferred, large, Food and Grocery store
←
51
← Readers Digest Platinum Trusted Brand Award
← Big Bazaar - Earning a trusted Place in the everyday lives
of consumers
Images Retail Awards 2005
← PRIL – Most admired retailer of the year
← Food Bazaar - Retailer of the year (food and grocery)
← Big Bazaar – Retailer of the year (value retailing)
← Central – Retail launch of the year
Business Today selected PRIL among:
← Top 20 companies in India to watch in 2005
← India’s most investor-friendly companies in the top 75
← India’s biggest wealth creators in the top 100
2004
52
Images Retail Awards 2004
← PRIL – Most admired retailer of the year
← Food Bazaar - Retailer of the year (food and grocery)
← Big Bazaar – Retailer of the year (value retailing)
← Central – Retail launch of the year
Reid & Taylor and DLF Awards
PRIL – Retailer of the year
2003Indian Express Award
PRIL- Marketing excellence and excellence in brand
building
53
RESEARCH 0BJECTIVE
The objective of the study is:-
1. To identify change in the behavior that is preference of
the small retail store over the supermarket or vice-
versa.
2. To identify the retailers point of view regarding change
in sales volume.
3. Finally to relate the above findings so as to get a
comprehensive picture of where the small retail store is
today and where it is headed.
54
RESEARCH METHODOLOGY
The methodology adopted for collection of data is well as the various application policies of the retailers.
Source of data:-
1. Primary data sources comprised of :-
a. Books
b. Newspapers
c. Magazines
d. Periodicals & through internet
55
CONCLUSIONS
The growing and changing trends in retail industry has changed the whole customer perception and their buying habits. The fast trends of retailing from unorganized to organize and the profit emerging from the business has promoted many of the bigger players to enter in the market and many of them ready to enter.
Consumer of India the half of the population still lives below
the poverty line so there are the many factors which effect
the growth of these kinds of super-stores, like, purchasing
power, buying habits and life styles of the people.
The market is flooded with products - branded and
unbranded. The organized retail chains, display all the
products and the most attractive product catches the
customer attention. Gone are the days of - customer loyalty
with increasing number of products of similar quality hitting
the market? Differentiation plays the lead role. There is a
close relation between the growth of brands and the growth
of the organized retailing. Companies selling branded
56
products prefer to have big and organized retail outlets such
as supermarkets where there can be differentiated from
unbranded products.
The customers of the 21st century would expect to pick
his/her own products form an array of choices rather than
asking the local kirana wall’s to deliver a list of monthly
groceries. Thus, the way of distribution of products has
gained importance in the past decade.
Still the customer perception is positive about the changing trend most of the people prefer to shape at superstores and agree that the trends should be changed from unorganized retailing to organized retailing.
57
BIBLOGRAPHY
For the successful completion of the project work, the project work the following were the, journals, websites that were consulted & taken help of:-
JOURNALS:-
← Business today
← Business world
← India today
WEBSITES:-
← www.google.com
← www.vishalmegamart.com
NEWSPAPER:-
← Time of India
← Economic Times
← Daynik Jagran.
58
59