Retail Marketing In India

According to Philip Kotler “ Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non – business use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing”.

The next phase of economic development in India will be consumption led. With the sustained and strong rates of economic growth, retail sales is expected to cross USD 400 billion by 2010, turning India into the biggest retail market in the world! In India, the retail industry is broadly divided into the organized and unorganized sectors. Of this total market, the organized sector accounted for Rs. 350 billion (about 3.5 % of the total) of the total revenues. India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% - 11% of the country's GDP. McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025.Organized retail market in India is expected to reach US$ 50 billion by 2011.

The major competitors in retail in India are-

Departmental Hypermarket

Life Style Big Bazaar

Pantaloon Reliance

Shoppers Stop Wal-Mart(to enter)

There are many categories in the organized sector and the unorganized sector cannot be classified into categories but in terms of markets like vegetable market, gold market ,Clothes Market etc

Evolution of Retail in India Informal retailing sector Typically small retailers Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of labor laws

Formal Retailing Sectoro Typically large retailerso Greater enforcement of taxation mechanisms

Pantaloons Retail Company Limited

Pantaloons was launched in 1987 as “Manswear Pvt Ltd” by Mr.Kishore Biyani. In 1991 it launched its first brand BARE in the market. The company got listed in the Stock Exchange and then rolled out its products through a franchisee model called Pantaloons Shoppe. In the year 1997 Pantaloons opened its first store in Kolkata and from that day the company has never looked back.

Pantaloons objective is to celebrate “FRESH Fashion” they want to be the trend setters and give their customers a fresh feeling of the product. The company has gone under several changes and now is concentrating on Youth of the country as their target market. Pantaloons Fresh Fashion brings a hip and a attractive look that’s the reason the youth is attached to its brands like UMM ,BARE . Today Pantaloons is present in mostly all major cities of India .

The company has won many awards and some of them are:-

Most Admired Retail Company(2008)-Indian Retail Forum

Most Admired Retail Company(2008)-Coco cola Golden Spoon

2008-09 (cr) 2007-08 (cr) 2006-07(cr)

Sales Rs. 5048.91 Rs. 4776.56 Rs. 3031.44

Net Profit Rs. 125.97 Rs125.81 Rs 119.51

Growth in last 3 yrs is Rs 2017.47

Market Share is 30% according to Mr Kishore Biyani (Retail Space)

Major Competitors- LifeStyle, Shoppers Stop, Spencers and Trent

Rank in Industry-Market Leader

Pantaloon Retail Company Limited’s Headquarter is in Mumbai (Bombay), the company operates through four 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 2,019 crore for FY 2005-06. And in 2008-09Rs4048 crores

Some of the Companies Board Of Directors are

Mr. Kishore BiyaniManaging Director

Mr. Gopikishan BiyaniWholetime Director

Mr. Rakesh BiyaniWholetime Director

Mr. Shailesh HaribhaktiDirector

Mr. S. DoreswamyDirector

Marketing Policy

Focus :-

According to Pantaloons, fashion is all about here and now. The company has primarily focused on the youth of the country since the major part of the population lies in the age of 15to45 which is the income group. Pantaloons are very serious behind the idea of “fresh fashion “and have projected youth at the fore-front. The ideology of the company is Fresh Fashion, Fresh Attitude, Fresh Feeling.

Pantaloons 2009 Collection

Ajile Akkriti Akkriti Kidswear

   

Scope of Marketing: -

Positioning- Leading player in organized retail in India:-PRIL is the market leader in the organized retail segment and has a pan India presencewith its stores operational across 15 states. The company has presence in food andgrocery, clothing, home furnishing and improvement, durables, footwear, leisure andentertainment, health and beauty, etc. PRIL operates through multiple formats likeHypermarket (Big Bazaar), Departmental Store (Pantaloon), Supermarket (Food Bazaar)

and Specialty Stores. Thus, PRIL is best placed to extend its presence across categories,formats and regions.

The positioning is a creative exercise down with an existing product. the well known products generally hold a distinctive position in consumer's minds. The positioning requires that every tangible aspect of product, price, place and promotion must supportthe chosen positioning strategy. Company should develop a unique selling proposition (USP) for each brand and stick to it, PPL consistently promotes its DAP fertilizer by Higher yield at lower cost.As companies increase the number of claims for their brand, they risk disbelief and a loss of clear positioning. In general a company mustavoid four major positioning errors. Those are under positioning over positioning, confused positioning and doubtful positioning.

In the Life-style segement (Pantaloons) the positioning of the store is very different. The store is very open and has a soothing music when the customer enters. The store is very open and spacious; the door of the store is always open which is inviting customers. Since the store is very spacious Pantaloons has segmented its products in a Demographic way and this is the same in all the outlets .The entrance would have the cosmetics,jewellary etc then is the ladies section which first has the Indian wear then the western after that it’s the men’s wear and then the sportswear. Pantaloons brands like UMM, DJ&C are always positioned at the eyelevel. There is a lot of detailing on the presentation of the products which are then displayed on the mannequin. The company would place its beat products on the mannequin. Pantaloon always positions its product at a place where the consumer would see the product once and is easy to locate. Location plays a major role in positioning the product in their store to enhance sale. The company would also position itself according to the needs of the youth because it is the target market and likes things fresh.

Promotional Strategy :-Under the market strategy promotional idea is very important. Organization provides some schemes or rebates to retailers or consumers. They make advertisement according to convenient of the people and the feature of the product. So on the basis of marketing strategy a organization runs in the market. It is several types of which makes helpful to increase sales and turnover of the organization. Pantaloons is the first company to promote their products through movies like Na Tum Jano Na Hum and many others, since the company’s focus is youth they tend to promote their products through youth icons like Mahendra Singh Dhoni, Bipasha Basu, they also tend to sponsor events which are watched by the youth like the Pantaloons Femina Miss India which they relate to or is liked by the youth. The company also promotes its products through discounts. For Example-In Pantaloons (life style segement) on a purchase of one t-shirt(UMM) you would have to pay Rs349 and on a purchase of two one would buy it for Rs549.The company keeps yearly or quarterly discounts. Pantaloon majorly promotes its brands through promotions in events which involve youth like Malhaar, Umang and popular college festivals etc

Sectoral Strategies :- India has been a country which followed the concept of un-organized retail till very recently when the real retail boom happened. The major change was brought in by Pantaloon and Shoppers Stop. Both these companies belonged to a family and the concept of malls started in India and within 5 to 9 years has become a huge sector. Retail contributes 10% to

India’s GDP. The retail sector in the country is around $350billion and is expected to grow at a very smooth pace. The organized retail sector is segmented into different types like the hyper market, departmental store, speciality stores ,discount stores and there are other types .

Over the past few years the Organized Retail Sector has been characterized by the following strategies:– -Large Formats-Rapid Expansions-More Players with variety of formats-Urban India is the initial target market-Location-Efficient Supply Chain Management-Profitability Model

PLC and Responses-Marketing Activities- Pantaloons Retail Company Ltd is involved in many marketing activities but they are different for different stores

Pantaloons Stores

Positioned as 'India's family store,' a Pantaloons departmental store (Pantaloons) targeted the middle and upper middle class urban population of the country and offered a wide range of garments, accessories and life style products to meet the specific requirements and preferences of all age groups especially the young Indians. The company has majorly marketed its products like BARE,UMM,DJ&C and many more through movies like “Kya Kool Hai Hum”, “Na Tum Jano Na Hum” and many more .Pantaloons also sponsors events like “Femina Miss India”. It has also increased its advertisement expenditure budget from 20crores to Rs 40 crores during IPL season. It has also sponsored many International Cricket Tournaments. Since the target market is different the marketing mix is different too.

Big Bazaars

In 2001, PRIL opened its first 'Big Bazaar,' a 30,000 square feet store in Kolkata (See Exhibit II for a Picture of a Big Bazaar Store). The major USP of the 'Big Bazaar,' store was low pricing. These stores offered the best price proposition to customers. The Marketing Activities for Big Bazaar are very different .Since it is a Hyper-Market and the Target Market are the masses the company markets a lot through the print media.The coverage of this is even better. In Big Bazaar marketing is purely done on offers and there are “Maha Sales” once a year and the sales rise 3 times in those 3 days.

As part of this, the stores focused less on branded items and more on unbranded products with the same quality as branded ones, at a much cheaper rate. Commenting on this, Biyani said, "We are not in the business of selling ambience, but in the business of giving the best possible deals to

our consumers."...

Food Bazaar

The first Food Bazaar was set up in Lower Parel in suburban Mumbai in 2001. Food Bazaars represent PRIL's foray into yet another value retailing business, focusing on food and grocery products. These stores were designed based on PRIL's understanding of the emotional and rational needs of Indian housewives... They follow the “Guerilla Marketing Strategy’ to sell their products by offering high discounts etc

Product Category:-

Pantaloons Retail India Limited is a company which has many branches like Pantaloon, Big Bazaar, Food Bazaar etc .There are various products available in various stores .The three stores by themselves categorize various products according to their target markets . Pantaloons has its flagship product since its inception ‘Bare’ and it is only available in Pantaloons and not in any other Pantaloons Retail Company Limited Store but if there are some unsold stock which needs to be sold then they sell it in Big Bazaar.Very recently the company had opened a new mall called Sobo-Central in Mumbai Tardeo were there are various products like apparels, accessories ,electronic gadgets etc available at different storeys of the mall and all the products are well segmented according to the needs of customers. Ladies Apparel and related products on the entire first floor, mens wear on the second floor and this how it goes on.

Product Life Cycle:–

Bare is the oldest product offered by Pantaloons ever since it was incorporated. It is the company’s flagship product and is in the market since a long time. Bare was first introduced as a men’s formal wear when Pantaloons had started its operations. Then, the company also introduced “Bare Cotton Pants”. The product was doing really well and was sold very extensively over the years. The company then introduced Bare Jeans which was mainly positioned for the youth. The company would aggressively sell the product through various discount offers and they have successfully able to change the design , introduced a lot of variations in Bare to keep the product going. Now they have re-introduced Bare with new-formal Bare shirts .These shirts are formal shirts and they are suited for working executives were they are offering some discounts with “Bare Formal pants”. This is how they have sustained and increased the declining sales of Bare as a product which they have successfully re-invented.

New Product Development-Pantaloons Retail Company Limited has many branches and within those branches there are many products .The company has a trend of introducing new products in their branches very frequently. Pantaloon and Central both had introduced a new collections of UMM in their stores very recently. The new collection was given exclusive space and that section was very beautifully decorated and gave the customers a very new look and feel of the space and the product which then essentially helped for higher sales . There was no offer on the

jeans as they had positioned it as an exclusive product. This is how they redefine their old brands and introduce new products.

Branding and Promotion

Number of major brands- Pantaloon Retail have a number of

brands which are created by them :-

Bare DJ&C UMM RIG Shrishti Lombard KNIGHTHOOD

Contribution from major brands-

Product Name Year Month Sales Quantity UOMSales Value

(Crores)Product Mix

Apparel 2008 12 13.41 Pieces 3,159.38 59.65

Others 2008 12 0   1,610.18 30.40

Other Operating Income 2008 12 0   272.58 5.14

Other Sales 2008 12 0   253.74 4.79

Advertising Budget For Promoting Major Brands-The company has appointed Bobby Deol Lara Dutta, M .S .Dhoni, Bipasha Basu and Zayed Khan as Brand Ambassadors. The company has recently increased its advertising budgets to Rs 40 crores looking at the cricket season which is coming up for the year.

Promotional Offers Run by Pantaloons Retail Company Limited

Big bazaar believes in advertising its brand and offers. We often encounter big bazaar’s advertisement in the newspapers. Big Bazaar Wazirpur is no different the various promotional schemes are decided by the main office and all the outlets run these schemes, they understand the importance of communication. The Future Group has created a category for the growing media industry called Future Media, which is to be a medium through which advertisers can communicate with shoppers in the store. On the effectiveness of this method of reaching the customer, Partho Dasgupta, Chief Executive Officer, Future Media, says “You are communicating to the consumer when and where it matters — at the time of making a purchase decision.” The company is considering all types of ways to reach the customer, including digital signage, audio, video and blue-tooth technology etc. The Future Group has switched its media agency and has selected Starcom to handle its account which is around Rs. 2-2.5 billion and is said to be one of the largest accounts in the past five years. The company was earlier with Carat for the past two years. As Pantaloon expands across all formats and is rapidly increasing its sq ft space from 4 million sq ft to 30 million sq ft, the company is also looking for creative agencies. At present the company uses Mudra for its value retail segment and Percept for its lifestyle retail segment. The various promotional schemes undertaken by big bazaar are as follows:

The punch line of Big Bazaar says “IS SE SASTA AUR ACCHA KAHI NAHI”. This line gives the feeling that Big Bazaar gives merchandise which is cheapest in the market or in other words the value for money which a customer will be getting here will be more than anywhere else.

Wednesday is the cheapest day. This is done to divert some of the crowd coming on weekends to a relatively free day. Big bazaar advertises Wednesdays as the cheapest day in all the leading dailies across the capital. This offer targets housewives and encourages them to purchase groceries and vegetables because no one purchases vegetables on a weekly basis, they purchase it at least two times a week.

Big Bazaar has announced a unique exchange offer `Bring anything old and take anything new’. Under the exchange offer, old garments, utensils, furniture, plastic ware, newspapers or just about anything will be weighed and valued and customers will be given exchange coupons. There is also a direct exchange on mobile and electronic goods during the period with attractive discounts on new purchases.

Big Bazaar’s `The Great Exchange Offer’ has mobilized more than two lakh families to actually carry the junk of the house and offload it at the nearest Big Bazaar. Retail analysts say that generally February and March are dull months for consumer buying in the country and therefore this kind of a promotion campaign is needed to boost sales during the period.\

PANTALOON group’s hypermarket chain, Big Bazaar, celebrated Republic Day as the Maha Savings Day, when shoppers at Big Bazaar and Food Bazaar outlets across the country, were offered merchandise at rock bottom prices.

The Maha Savings Day saw shoppers got deals they have never seen or heard before. The offers spread across categories from electronics to utensils, from apparel to furniture and also food. For example pressure cooker for Rs 299, two Ruf n Tuf Jeans for Rs 499, and a Motorola C115 for Rs 1,399.

Big Bazaar usually runs a full page advertisement on Saturdays and Sundays in all the leading dailies communicating various offers. This is done to attract crowds on weekends because most of the people usually shop during weekends.

Pantaloons retail India limited provides Green card, this Green Card is passport to a whole new world of exclusive benefits and privileges. These includes:

Instant discounts for every time you shop at Pantaloons. Exclusive shopping days to get hold of latest merchandise. Regular updates on collections and promos via catalogues, sms and email. Special invites to the most happening events. Extended exchange periods and complimentary drops for alterations. Exclusive billing counters and much more. Big bazaar in association with ICICI banks has launched loyalty cards for the customers.

They are: ICICI Bank Big Bazaar Silver Credit Card It gives you the benefits of regular cards

and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar.

ICICI Bank Big Bazaar Gold Credit CardThe card brings to you more reasons to save and earn rewards on its usage. It gives you all the benefits of regular cards and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar.

Shakti Card Shakti is a credit card for housewives. You need not submit income proof. Simply show

your Big Bazaar bill of more than Rs. 500 and a lifestyle proof like club membership card, health club card etc. And get your ‘Shakti’. You can use Shakti at all the Big Bazaar and Food Bazaar outlets

Pantaloons Retail and Jet Airways have got into a tie-up and now a Jet Privelage customer would avail discounts in Pantaloons.

Mahendra Singh Dhoni is appointed Brand ambassador and would be campaining for the apparels of Big Bazzar(DJ&C) . The tagline is” Desh Badlo Duniya Bado”

Current Market Challenges Faced by Pantaloons

Competition:

With a sales turnover in 2008-09 FY of Rs. 5048.91 cr, pantaloon has been a clear market leader with the next competitor being Shoppers Stop with a turnover of Rs. 1244.79 cr. The numbers suggest that Pantaloon has had no competition at all.

Another interesting statistic is about the Pantaloon’s net profit for FY 2008 in comparison to Shoppers Stop. Pantaloon had a net profit of Rs.125.94 cr, while Shoppers Stop had a net loss of Rs.63.72 cr. Clearly Pantaloon remains the market leader as far as retail is concerned.

New Technologies :

Pantaloon’s greatest technological challenge till date has to be the introduction of SAP in 2006 and the introduction of RFID(Radio Frequency Identification Device)

SAP implementation :

Challenges:-

It took the company around $10 million to implement SAP. Implementation of SAP just seem to be a part of the challenge faced by the company. The

real challenge for Pantaloon was faced during “data-migration” (transfer of data into the SAP software) and managing the interim period when the project was underway for 6 months.

Maintaining the hardware was another challenge and the company outsourced its ABAP (Advanced Business Application Programming) resources.

Advantages:-

Pantaloon didn’t see any immediate benefits with the application of SAP. With the implementation in its nascent stage the company couldn’t calculate the Return on Investment.http://www.networkmagazineindia.com

RFID implementation :

Challenges:-

At each step of implementation, human intervention was required and barcode readers had to be installed at merchandising locations.

Traceability and visibility of goods in the supply chain, lack of a unique identity at each item level, and human intervention leading to errors were some of the issues faced by the company.

These challenges led to a lack of co-ordination with the backend at the stores, hampering the company’s production planning and inventory management.

Advantages:-

According to Chinar Deshpande, CIO of Pantaloon, “Recording of data became smooth at the inward and outward terminals, which helped us save time and gain accuracy. Earlier, the possibility of scanning incorrect goods was much higher”

After the RFID implementation, the time saved on the same is about 80 percent in inward warehouse processing and 12 percent in outward

Real-time visibility of items during all stages of the supply chain improved to 98 percent.