An

FINAL REPORT OF MANAGEMENT THESIS- II

On

“To study the growth of

Retail sector in India: A Case of Big Bazaar”

-: SUBMITTED BY:-

Mr. Avinash Chandrakant Silimkar

INC VASHI

7NBMN002

IN THE PARTIAL FULFILLMENT OF THE

“MASTER OF BUSINESS ADMINISTRATION’’

-: UNDER GUIDANCE OF:-

Dr. MEENA VAZIRANI

-: SUBMITTED TO:-

ICFAI NATIONAL COLLEGE, VASHI

2007-09

INRERIM REPORT Page 1

DECLARATION

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

Place: Vashi Name: Mr.

Jayesh Parte

Date: 18/12/2008

INRERIM REPORT Page 2

CERTIFICATE

This is to certify that the Management Thesis titled

___________________________________

______________________________________________________________________submitted

by_____________________________________ Enroll No: _____________________________ during

Semester _________ of the MBA Program (The Class of 2009) embodies original work

done by him.

Signature of the Faculty Supervisor

Name (in Capitals) : ____________________________________________

Designation : ____________________________________________

Campus : ____________________________________________

INRERIM REPORT Page 3

SR.NO PARTICULARSPage no

1 ACKNOWLDGEMENT 5

2 LIST OF TABLES & ILLUSTRATIONS 6

3 ABBREVIATIONS 7

4 INTRODUCTION 8

5 OBJECTIVE 12

6 RESEARCH METHODOLOGY 14

9 FINDING & SUGGESTIONS 19

10 COMPANY PROFILE 33

11 SUMMARY 42

12 CONCLUSION 43

13 REFERANCES 44

TABLE OF CONTENTS

INRERIM REPORT Page 4

ACKNOWLEDGEMENT

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

helped me to make this project a success. I would like to thankful my Dr.

Meena Vazirani who helped and guided me throughout the development of

the project, He provided me all kind of information, and inspired me to

complete the project successfully. I am also thankful to Principal for his

valuable support & guidance.

I would like to thank everyone who contributed for the

success of this project. I must thank them whose valuable guidance makes it

so simple and support me during the project development directly or

indirectly.

LIST OF TABLES & ILLUSTRATIONS

Sr.

INRERIM REPORT Page 5

no PARTICULARS PAGE NO

1Pie chart 08

2 Tables 23 & 24

3 Picture 19 & 21

ABBREVIATIONS

SWOT: strength weakness opportunities threats

Porters 5 force model

1 threat of new entrant

INRERIM REPORT Page 6

2 the bargaining power of buyers

3 the bargaining power of suppliers

4 the rivalry among existing players

5 the threat of substitute products

GDP: gross domestic product

FMCG: Fast moving consumer goods

PRIL: Pantaloon Retail India Limited

Introduction

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

accounting for over 10 per cent of the country’s GDP and around 8 per cent

of the employment. The Retail Industry in India has come forth as one of the

most dynamic and fast paced industries with several players entering the

market.

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

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

and consumer buying behavior, ushering in a revolution in shopping in India.

INRERIM REPORT Page 7

Modern retail has entered India as seen in sprawling shopping centers, multi-

storied malls and huge complexes offer shopping, entertainment and food all

under one roof. The Indian retailing sector is at an inflexion point where the

growth of organized retailing and growth in the

consumption by the Indian population is going to take a

higher growth trajectory. The Indian population is

witnessing a significant change in its demographics.

Retail and real estate are the two booming sectors of

India in the present times. And if industry experts are to

be believed, the prospects of both the sectors are mutually dependent on

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

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

players entering the market. Accounting for over 10 per cent of the country’s

GDP and around eight per cent of the employment retailing in India is

gradually inching its way toward becoming the next boom industry.

As the contemporary retail sector in India is reflected in sprawling

shopping centers, multiplex- malls and huge complexes offer shopping,

entertainment and food all under one roof, the concept of shopping has

altered in terms of format and consumer buying behavior, ushering in a

revolution in shopping in India. This has also contributed to large-scale

investments in the real estate sector with major national and global players

investing in developing the infrastructure and construction of the retailing

business. The trends that are driving the growth of the retail sector in India

are

Low share of organized retailing

Falling real estate prices

Increase in disposable income and customer aspiration

Increase in expenditure for luxury items (CHART)

INRERIM REPORT Page 8

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

increase in the young working population. In India, hefty pay packets,

nuclear families in urban areas, along with increasing working-women

population and emerging opportunities in the services sector. These key

factors have been the growth drivers of the organized retail sector in

India which now boast of retailing almost all the preferences of life -

Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries,

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

the retail sector in India is witnessing rejuvenation as traditional markets

make way for new formats such as departmental stores, hypermarkets,

supermarkets and specialty stores.

INRERIM REPORT Page 9

INDUSTRY EVOLUTION

Traditionally retailing in India can be traced to

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

convenience of the consumers

Era of government support for rural retail: Indigenous franchise

model of store chains run by Khadi & Village Industries Commission

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

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

Kumar's and Grasim first saw the emergence of retail chains

Later Titan successfully created an organized retailing concept and

established a series of showrooms for its premium watches

INRERIM REPORT Page 10

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

from Manufactures to Pure Retailers.

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

M and Music World in music; Crossword and Fountainhead in books.

Post 1995 onwards saw an emergence of shopping centers

Mainly in urban areas, with facilities like car parking

Targeted to provide a complete destination experience for all

segments of society

Emergence of hyper and super markets trying to provide customer

with 3 V’s - Value, Variety and Volume

Expanding target consumer segment: The Sachet revolution - example

of reaching to the bottom of the pyramid.

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

estimated at Rs. 13,000 crore.

OBJECTIVE

To perform a Management Thesis there must be certain objectives in

front of the student, which will show a specific way to work on Management

Thesis. In reality objectives is nothing but a part of future planning and

effective planning is half work done, when we see objectives for working on

Management Thesis we can effectively utilize our strength, time and tem

management.

For the betterment of Management Thesis I also set some objectives

in front of me, this proved very helpful in Management Thesis. I have

INRERIM REPORT Page 11

performed work according these objectives. The objectives, which we have

selected, are as bellow.

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

business environment

2. To develop guidelines to build a retailing business

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

retailing business accordingly

4. To identify significant characteristics of the end consumer,

understand its significance for the retailing business and develop

strategies accordingly

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

scope of technology / e-business and develop strategies accordingly

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

7. To know the factors affecting for retail industry.

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

Industry?

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

and the economy from Retail sector.

10. To know about Big Bazaar.

11. To know about its competitors.

12. To know about its customers

13. To know about its Promoters & Organizational structure.

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

15. To earn practical knowledge.

INRERIM REPORT Page 12

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

17. To know about marketing strategies.

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

Research Methodology

Research Plan obtain pioneer place while working on any

project. So we go through the research plan.

The research plan is as follows:-

While working on our Management Thesis, the participation of

manager, sales manager, marketing manager, auditor, employees, etc. &

our professors enlighten the use of theoretical concepts in actual business

INRERIM REPORT Page 13

world. Their views & suggestions proved very useful in the successful

completion of our Management Thesis.

We developed the research plan into various components:-

A] Data sources

B] Research instruments

C] Sampling methods

A] Data Sources

1) Primary data:-

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

We have taken in to consideration the views of manager, sales manager,

marketing manager, auditor, employees, etc. & our professors about the

relevant subject & also pay attention towards their suggestions. Their

suggestions are incorporated in the report. This data prepared the basis for

the Management Thesis report.

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

2) Secondary data:-

INRERIM REPORT Page 14

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

i) Newspapers

ii) Magazines

iii) Books on Management

iv) Text books

B] Research Instruments

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

selected some questions in concern with the organization i.e. Big Bazaar.

We used these questions as a research instruments for knowing the facts.

These questions are as follows:-

1) Questions related to their marketing management.

2) Questions related to their capital.

3) Questions related to their investment.

4) Questions related to their turn over.

5) Questions related to their advertise expenditure.

6) Questions related to their interpersonal relations with Customers

INRERIM REPORT Page 15

7) Questions related to their competitors.

8) Questions related to their organizational structure.

9) Questions related to training & development of employers

10) Questions related to motivation.

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

C] Sampling Plan

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

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

I) Sampling Unit:-

The staff of the organization including the managers of different

departments and the employees was targeted for the Management Thesis.

II) Sampling Quantity:-

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

Apart from this we also considered some customers of Big Bazaar.

INRERIM REPORT Page 16

iii) Coverage:-

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

Bazaar.

INRERIM REPORT Page 17

LIMITATION

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

difficult task because this information is very rarely available with

secondary resources therefore it requires more time and lot of efforts.

Findings and suggestions

INRERIM REPORT Page 18

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

hived off as an independent company within the Future Group. While a new

company has been floated under the name of Future Hypermarket, the

retailer is now considering a new name to represent its discount format.

Speaking to Business Line, Mr. Rajan Malhotra, Chief Executive Officer, Big

Bazaar, said, “Although we have registered a new company under the name

of Future Hypermarket, we intend changing its name. Big Bazaar is not a

hypermarket and is more of a value-for-money format and that is what the

new company would stand for.”

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

total turnover of Rs 7,000 crore. With its standalone status as a company,

Big Bazaar is expecting to drive greater efficiencies in its back-end

operations. As Mr. Malhotra says, “There would be clarity for the concept as

we become a separate company. There would be back-end efficiency in our

operations.” With amalgamation of formats under various heads ranging

from Food Bazaar to Furniture Bazaar, Big Bazaar is looking at

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

clubbed with the rest of the existing hypermarkets in the country.

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

as a national brand by giving the brand rights to Future Brands (the group

vertical handling brands in the group). Targeting the youth segment, DJ&C

is today worth Rs 200 crore in Bazaar’s kitty. “We intend re-launching it as

a national brand through other retail outlets by the end of this month. We

believe Big Bazaar has moved into a mature phase and that is a compelling

reason to launch our youth brand at a national level. The DJ&C brand has

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

next level,” states Mr. Malhotra.

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

through MoUs, Big Bazaar is open to new categories being tested through

INRERIM REPORT Page 19

its formats. “We are open to the highest selling brands such as Pears and

Dove opening the new age categories at our stores,” says Mr. Malhotra.

Meanwhile, Big Bazaar has roped in cricketer and India ODI captain

Mahendra Singh Dhoni as the brand ambassador for its extensive

collection of fashion apparel.

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

multiple retail formats in both the value and lifestyle segment of the Indian

consumer marker. Headquartered in Mumbai (Bombay), the company operates

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

India and employs over 24,000 people.

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

outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a

supermarket chain, blends the look, touch and feel of Indian bazaars with aspects

of modern retail like choice, convenience and quality and Central, a chain of

seamless destination malls. Some of its other formats include, Depot, Shoe

Factory, Brand Factory, Blue Sky, Fashion Station, all, Top 10, bazaar and Star and

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

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

Home Town, a large-format home solutions store, Collection i, selling home

furniture products and E-Zone focused on catering to the consumer electronics

segment.

Pantaloon Retail was recently awarded the International Retailer of the

Year 2007 by the US-based National Retail Federation (NRF) and the

Emerging Market Retailer of the Year 2007 at the World Retail Congress

held in Barcelona.

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

catering to the entire Indian consumption space. Future Group is one of the

country's leading business groups present in retail, asset management, consumer

finance, insurance, retail media, retail spaces and logistics. The group's flagship

company, Pantaloon Retail (India) Limited operates over 7 million square feet of

retail space, has over 1000 stores across 51 cities in India and employs over

INRERIM REPORT Page 20

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

Central, Food Bazaar...

Indian Retail Market and Growth of SMEs Source: Technopak Advisors

INRERIM REPORT Page 21

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

constitutes about 60% of private consumption and about 35% of India's

GDP. With Indian GDP expected to grow at 7-8 % in the next coming years,

the retail market is expected to touch US $860 billion by 2018. In recent

years, this sector has witnessed a lot of interest from both domestic and

global players, who have committed investments worth US $30 billion,

which will lead to increase in the share of modern retail from the current

4.5% to almost 25% of the total retail market by 2018.

INRERIM REPORT Page 22

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

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

Simultaneously, modern retail is likely to increase its share in the total

retail market to 22 per cent by 2010. Organized retail in India raked in US$

25.44 billion turnover in 2007-08 as against US$ 16.99 billion in 2006-07, a

whopping growth rate of 49.73 per cent (according to the Credit Rating and

Information Services of India). Organized retail has increased its share from

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

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

the world. Of the 12 million retail outlets present in the country, nearly 5

million sell food and related products.

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

of domestic and international organized players is set to change the

scenario. Per capita retailing space is about 2 sq. ft (compared to 16 sq. ft in

the U S). India's per capita retailing space is thus the lowest in the world.

Around 7% of the population in India is engaged in retailing, as compared to

20% in the USA.

Statistically, the global retail industry is witnessing a CAGR of 5.5% is

slated to grow at the same rate till 2009. The following graph shows an

overall trend of the global retail revenues.

Analysis of the situationIndia is standing in the threshold of a retail revolution. The Indian

consumer class consists of a 300 million strong bourgeoning middle-class,

INRERIM REPORT Page 23

expected to grow to 600 million by 2010. Overall economic growth and

increasing disposable incomes have boosted double-digit growth in

consumer spending, enabling retail sales o grow by 50-100% in 2006.

According to the India Retail Report 2007, total private consumption

reached INR 20,000 billion at current prices in 2006. The share of

organized retail stood at 4.6 per cent of the total Indian Retail Value of INR

12,000 billion ($270 billion). However, the organized sector is expected to

grow at 35-40% in the next few years as compared to overall retail growth

of 7-8%. The potential for introducing international brands, ability to make

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

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

international retail models and quality outlets in the coming few years.

Description of the concept

Manufacturers can look at the following alternatives to increase sales

volume:

1) Sales promotion and advertising in malls

Most supermarkets and hypermarkets promote in-house offers to attract

customers. They also spend a lot on visual display of promotions. These

costs can be shared by the company, thus increasing their stake in the sales

of the mall.

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

companies inside malls for two reasons:

- it increases sales of the entire category as such

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

particular products.

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

(or market share) will be more pronounced due to point-of-purchase

promotion.

INRERIM REPORT Page 24

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

store more attractive in return for slightly lower margins to the retailers.

They can set up small kiosks or shelves to display their own products. This

involvement of the company in the operation of the mall will also help build

a strategic relationship between the two.

2) Use malls to target niche segments

Malls and supermarkets typically attract the middle and upper-middle

class consumers who have considerable spending power as well as brand

awareness. Thus manufacturers can use this channel effectively to launch

specific variants of existing products or niche products for which they are

able to Concept Paper Indian Institute of Management Ahmadabad attract a

premium from such consumers. These products should be launched

exclusively in the malls and not through Kirana stores. The presence of a

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

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

India’s retail market is at its pinnacle and is drawing huge attention from

both global and local retailers.

Reasons for India’s high growth rate in the retail sector are:

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

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

7 percent

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

than 5 percent of the market is expected to grow at a compound annual

growth rate (CAGR) of 40 percent to $107 billion by 2013. India’s overall

retail sector is expected to rise to $833 billion by 2013 and to $1.3 trillion

by 2018, at a CAGR of 10 percent.

INRERIM REPORT Page 25

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

last four years the consumer spending has grew by astounding 75 percent.

This can be attributed to the significant rise in the disposable incomes of

India’s young population. It has to be noted that more than 33 percent of

Indian population is below the age of 15.

Benefits of RetailingRetailers play a major role in the transfer of goods and services from

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

benefits to customers, manufactures, wholesalers, and the economy.

Benefits to customers

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

business activities that increase the value of the goods and the service they

sell to the end users. As buying agents a retailer performs various activities

to satisfy the end consumers. These activities include

19. Breaking bulk

20. Providing assortment

21. Holding inventory

22. Providing after sales services

23. Providing information

Benefits to Manufactures and wholesalers

Manufactures and wholesalers consider retailing as a channel for

delivering their product /services to the end consumer. By selling services

INRERIM REPORT Page 26

retailers provide the manufactures great revenue, which could be

reinvested in production. Thus retailers play major role in smoothing out

the variation between the production and sales of the manufactures

product.

Benefits to the economy

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

turnover of US $6.6 trillion. Retailing plays a crucial role in the

management of world economy and retailers constitute a tenth of the

fortune 500 companies. In INDIA retailing accounts for over 10% GDP and

around 8% of the employment only next to the agriculture industry.

An Analytical study of the development of Retail

marketing in India: a case of big bazaar

INRERIM REPORT Page 27

THE PROCESS OF STRATEGIC MANAGEMENT

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

Environmental scanning

Strategy formulation

Strategy implementation

Evaluation & control

Environmental scanning:

It involves monitoring the environment, & evaluating & disseminating

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

this is to identify the strategic factors that may determine the future of the

firm. An organization derive several benefits from environmental scanning

including the development of a common perception, identification of

strengths & weaknesses, an understanding of trends & conditions, &

optimum utilization of internal & external information.

SWOT analysis is the most commonly used technique for

environmental scanning. SWOT is an acronym for the strengths,

weaknesses, opportunities & threats faced by a firm. Strengths &

weaknesses are within the control of the top management in the long run.

Opportunities & threats are external factors that are outside the control of

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

competencies that the organization can use to gain competitive advantage.

ENVIRONMENTAL SCANNING FOR BIG BAZAAR

INTERNAL SCANNING

The SWOT analysis of Big Bazaar is as follows:

INRERIM REPORT Page 28

Strengths:

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

pace.

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

They launched Big-Bazaar a hypermarket with over 1, 70,000

products as the first offering in value retailing segment. Products are

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

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

other products varies between 5 to 20%.

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

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

market.

Weakness:

Big Bazaar has not yet trapped the whole market.

Facing problems due to political environment

Opportunities

Huge untapped market

Threats

Competition from organized retail players which are in market and

emerging like Reliance, shopper’s stop, Wal-Mart

Competition from local retailers.

EXTERNAL ENVIRONMENTAL SCANNING

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

environment & find the location where the Mall should be situated. It will

also use various tools such as surveys for getting the preferences of big

bazaar. We got the opinion that Big Bazaar sustain in the market or not,

where it is situated. For gaining the opinions from the local people they will

INRERIM REPORT Page 29

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

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

adopt open forum strategy for environmental scanning. For that purpose we

have prepared a questionnaire and collected the data.

Analysis of political and legal factors:

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

corporation which belongs to Indira congress, the other is MLA which

belongs to Shivsena and BJP and MP which belongs to the national

congress. The congress political people are having contacts with common

people and not much concerned with merchants but contradictory to this

that the BJP and Shivsena they are having more concern about merchants of

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

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

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

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

Help in taking over properties and real estate

Some concessions from labor laws

Socio-cultural factors:

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

and the literacy rate has also increased this will lead into increase in

standard of living of people. As people are aware about western culture

through various Medias they are very much eager to follow the western

culture. People from talukas are coming to India as it is a district place for

shopping, taking education, for working etc. this also creates demand.

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

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

Hindus, Muslims, Christians, Jain, Sindhi and Punjabi.

Economic environment:

INRERIM REPORT Page 30

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

agricultural base which ultimately leads to higher seasonal income. Another

one is that most of the people who are residing in India they are engaged in

various jobs and businesses they is the part of regular income group. So this

will lead to higher purchasing power and a huge potential market. One

more advantage to big bazaar coming to India is availability of cheap labor.

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

the India city are in the favor of Big Bazaar coming to India. The location

preferred by them is Savedi as it is highly developed and accessible area to

all the people.

Strategy formulation:

It refers to the development of long term plans for managing

opportunities & threats in the external environment, & for utilizing the

strengths & overcoming the weaknesses within the firm. A strategist takes

into consideration components of strategic management like company

mission, company profile, external environment strategic analysis & choice,

long term objectives, grand strategy while formulating the strategy.

Strategy formulation helps an organization to;

Capitalize on available opportunities.

Address the challenges faced by the organization.

Provide leadership that understands & masters change.

Incorporate an in-depth planning model that involves the

community.

STRATEGIC FORMULATION FOR BIG BAZAAR:

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

all it will find out what are the opportunities present in the market so that

INRERIM REPORT Page 31

they can grab it so as to expand their business, trap a particular segment of

people, and establish a good client base and to generate good revenues.

They will also keep in mind the threats that they have from their

competitors and also form the small grocery shops. They will find out some

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

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

weaknesses.

COMPANY PROFILE

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

PRIL was early to realize the potential of the huge middle-class population

in India. We started the

operations with a trouser

brand, Pantaloon. In the

initial stages we had small

format outlets branded

Pantaloon Shopee, which were

franchise operations

INRERIM REPORT Page 32

realizing the problems associated with franchise model, we decided to have

our own retail outlets. They launched the own retail store, “Pantaloon’s”. In

1997, they launched Big-Bazaar a hypermarket with over 1, 70,000 products

as the first offering in value retailing segment. They have introduced the

concept of seamless malls in India through the new format Central. We have

wide network of Pantaloons stores spread across the country.

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

retailing by launching the hypermarket chain. Big Bazaar is a chain that

stocks all home need products under one roof; spread over 30,000 square

feet of land, across different cities in India. It has been positioned as ‘Is se

sasta aur acha kahin nahi,’ (Nothing cheaper and better anywhere)

indicating the value of stores. Big Bazaar stocks over 200,000 products that

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

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

cheaper by 25 to 60%while the price difference on the other products varies

between 5 to 20%.

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

retailing segment. By removing inefficiencies from the distribution chain we

are able to unleash attractive savings, which are passed on to the consumer.

Big-Bazaar is India’s first hypermarket in the discount store format. Big-

Bazaar provides more than 2,00,000 items- food, grocery, utensils, kitchen

needs, home needs, bath needs, toys, stationary, electronics & white goods

which are sold at a discount to the maximum retail price. Price is the

principal value proposition at these stores.

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

by selling wide range of products & through the “Shop-in-Shop” format. As

a result, a typical Big-Bazaar comprises shops that stocks medicines, optical

accessories, camera rolls, bakery products, dry fruits, crockery, glassware,

health & beauty products, ladies accessories, electronics infant necessities,

watches, clocks, computer accessories, food & beverages, stationary,

INRERIM REPORT Page 33

readymade garments, household appliances, home furnishings, baggage We

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

availability, the shop owner can benefit of the in structure & we enjoy

assured income without needing to stock inventory. Also the shop-in-shop

offering is able to increase the customer traffic in to the stores. The Big-

Bazaar has been positioned to the customer as a place where the customer

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

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

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

Understanding of the apparel industrial, decades of experience& a

vertically, integrated structure provides with more compelling reasons to

expand the number of private labels. We have launched a full range of

accessories to supplement the apparel business including imitation

jewellery, sunglasses, watches, mobile phones etc…

Analysts attribute the success of PRIL to cheaper sourcing of products

and lower distribution cost. Pantaloons sourced its products through

‘Consolidators.’ There was a consolidator for each product category. These

consolidators were responsible for procuring quality goods at the cheapest

possible price, and were paid commissions on their sale at the store. The

consolidator directly dealt with manufacturers, and as a result the

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

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

events such as ‘Kitchen Mela’, ‘Trouser Mela’, etc. to attract customers.

INRERIM REPORT Page 34

Management of big bazaar

Mr. Kishore Biyani, Managing Director

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

Mr. Gopikishan Biyani, Wholetime Director

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

INRERIM REPORT Page 35

Mr. Rakesh Biyani, Wholetime Director

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

Mr. Ved Prakash Arya, Director

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

Mr. Shailesh Haribhakti, Independent Director

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

BIG BAZAAR

FOR THE GREAT INDIAN MIDDLE CLASS

It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian

Middle Class. It was started as a hypermarket format in Mumbai with approx.

50,000 sqft of space. Its values and missions are to be the best in Value

Retailing by providing the cheapest prices and hence go the tag-line

“Is se sasta aur achcha kahin nahin”

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

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

INRERIM REPORT Page 36

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

Bazaar is currently at the Growth Stage.

OBSERVATION:

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

They can be summed up as follows:

Verticals inside the store relates to each category of product

o Food Bazaar Depot- books

o M-bazaar Electronic Bazaar

o Furniture Bazaar Footwear Bazaar

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

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

items.

In-house packaging not efficiently done.

INRERIM REPORT Page 37

Introduction

Growth

Maturity

Decline

Time

Cash flow Flows

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

stock maximum number in limited area.

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

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

crowd.

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

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

distinction.

POSITIONING STRATEGY

Company vision, mission and core values

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

strength, beauty, rewards and perfection. Future encourages us to explore

areas yet unexplored, write rules yet unwritten; create new opportunities

and new successes. To strive for a glorious future brings to us our strength,

our ability to learn, unlearn and re-learn our ability to evolve.

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

create future scenarios in the consumer space and facilitate consumption

because consumption is development. Thereby, we will effect socio-

INRERIM REPORT Page 38

economic development for our customers, employees, shareholders,

associates and partners.

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

where, how and when they need. They will not just post satisfactory results,

They will write success stories. They will not just operate efficiently in the

Indian economy, we will evolve it.

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

understanding of the Indian consumer to their needs of tomorrow.

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

will help us succeed in the Future. They shall keep relearning. And in this

process, do just one thing. Rewrite Rules. Retain Values.

Group Vision

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

Group Mission

They share the vision and belief that our customers and stakeholders

shall be served only by creating and executing future scenarios in the

consumption space leading to economic development.

They will be the trendsetters in evolving delivery formats, creating

retail realty, making consumption affordable for all customer

segments – for classes and for masses.

They shall infuse Indian brands with confidence and renewed

ambition.

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

whatever we do.

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

united determination shall be the driving force to make us successful.

INRERIM REPORT Page 39

Core Values

Indian ness: confidence in ourselves.

Leadership: to be a leader, both in thought and business.

Respect & Humility: to respect every individual and be humble in our

conduct.

Introspection: leading to purposeful thinking.

Openness: to be open and receptive to new ideas, knowledge and

information.

Valuing and Nurturing Relationships: to build long-term relationships.

Simplicity & Positivity: Simplicity and Positivity in our thought,

business Action.

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

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

Various Strategies

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

it is quite obvious that it will adopt some strategy for attracting the

customers. The strategy which they would adopt is that they will have low

price, high advertisements, it would offer different kind of schemes, offers,

discounts, scratch cards, coupons. They would also give stress on providing

the prompt services like home delivery, after sales services, guarantees and

warrantees, so as to sustain in the market and to create a good reputation.

Following are some additional strategies they require to adopt:

Thorough market research

Site selection and evaluation

INRERIM REPORT Page 40

Employee search and training

Less premium and low price branded goods in merchandise

assortment.

Gaming zone and restaurant

Promotional activities like advertisement, seasonal discounts, festival

offers, etc.

While formulating strategies we should keep in mind that strategies should

be flexible. This is helpful to change or revival of strategy.

Summery

This paper provides detailed information about the growth of retailing

industry in India. It examines the growing awareness and brand

consciousness among people across different socio-economic classes in

India and how the urban and semi-urban retail markets are witnessing

significant growth. It explores the role of the Government of India in the

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

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

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

will help the India Retail Industry to grow faster. The paper includes growth

of retail sector in India, strategies, strength and opportunities of retail

stores, retail format in India, recent trends, and opportunities and

challenges. This paper concludes with the likely impact of the entry of

INRERIM REPORT Page 41

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

challenges faced by the industry in near future.

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

the key attractive forces for global retail giants wanting to enter into newer

markets, which in turn will help the India Retail Industry to grow faster. Indian

retail is expected to grow 25 per cent annually. Modern retail in India could be

worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates

the shopping basket. The Mobile phone Retail Industry in India is already a US$

16.7 billion business, growing at over 20 per cent per year. The future of the

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

government policies becoming more favorable and the emerging technologies

facilitating operations.

INRERIM REPORT Page 42

CONCLUSION

The retail sector has played a phenomenal role throughout the world

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

second largest industry in US in terms of numbers of employees and

establishments. There is no denying the fact that most of the developed

economies are very much relying on their retail sector as a locomotive of

growth. The India Retail Industry is the largest among all the industries,

accounting for over 10 per cent of the country’s GDP and around 8 per

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

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

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

of the heavy initial investments that are required to break even with

other companies and compete with them. The India Retail Industry is

gradually inching its way towards becoming the next boom industry.

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

expand the business. For this purpose company is carrying out many

marketing strategy. To study this marketing strategy I will be visiting the

mall and also the manager to collect the data from them. Also I’ll be

collecting data from the customer as what strategies they liked.

REFERENCE

INRERIM REPORT Page 43

Magazines, Newspaper, pamphlets

www.google.com

www.pantaloon.com

Marketing textbook

Retail Management textbook

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

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

Opportunity India Retail, Mar 2007. Retrieved Nov 2007 from

INRERIM REPORT Page 44