big bazar

June 28, 2018 | Author: mrmanju | Category: Business Process Outsourcing, Retail, Supermarket, Inflation, Economic Growth
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Adept FoundationADEPT INSTITUTE OF MANAGEMENT STUDIES, MBA DHARWAD. (A ppr oved by SMU UNIVE RSI TY MANIP AL ) STUDY ON “A STUDY ON THE EFFECTIVE PROMOTIONAL STRATEGY WHICH INFLUENCES CUSTOMER TO PURCHASE A PRODUCT OF BIG BAZAAR” A Report Submitted in Partial Fulfillment of The Requirement for the Award of MASTER’S DEGREE IN BUSINESS ADMINISTRATION 2009-2010 Submitted by Manjunath Reddy. Exam No. 520864273 Institute Faculty Guide: Compan y Gui de: Mr. Nityanand. AIMS College, Dharwad. Mr. Arif. Asst Department Manager BIG BAZAAR, Hubli. AIMS COLLEGE, Dharwad. 1 Adept Foundation Adept Institute of Management Studies, MBA Dharwad. (Rec og nize d by ISO, & Af fili at ed t o SMU Univ ersi ty, Ma nip al ) CERTIFICATE This is to certify that Mr. Manjunath Reddy. student of Adept Institute of Management Studies, bearing Registration No. 520864273 of MBA 3rd Semester has successfully completed his summer in plant training 2009-2010. Project Guide Date: ______________ Dean INDEX AIMS COLLEGE, Dharwad. 2 AIMS COLLEGE, Dharwad. 3 CHAPTER NO. I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII XIX XX XXI XXII TOPIC Summary Acknowledgement Declaration Industry Profile Competition In Retail Board of Director Company Profile Store Study Future Plans Of Big Bazaar Organizational Structure Store Structure Vision & Mission Supply Chain Management My Learning Research Methodology Analysis & Interpretation Findings Recommendations Conclusion Limitations Annexure Bibliography PAGE NO. 5 6 7 8 15 31 32 37 51 53 54 55 59 60 61 64 74 76 77 78 79 81 AIMS COLLEGE, Dharwad. 4 EXECUTIVE SUMMARY Indian retail sector is witnessing one of the most hectic Marketing activities of all times. The companies are fighting to win the hearts of customer who is God said by the business tycoons. There is always a ‘first mover advantage’ in an upcoming sector. In India, that advantage goes to “BIG BAZAAR”. It has brought about many changes in the buying habits of people. It has created formats, which provide all items under one roof at low rates, or so it claims. In this project, we will study its marketing strategies and promotional activities. AIMS COLLEGE, Dharwad. 5 The research titled ‘A Study on the effective promotional strategy which influences customer to purchase a product of Big Bazaar’ helps us to understand the effect of promotional strategy which is responsible for attracting customer towards big bazaar This study helpful to top level management to improve the present promotional strategy of BIG BAZAAR. The report deals with the impact of promotional activity which attracting customer towards big bazaar. The research was carried out as per the steps of Marketing Research. The well supportive objectives were set for the study. To meet the objectives primary research was undertaken. The data collection approach adopted was experimental research & survey research. The instrument used for the data collection was observation & questionnaire. The target respondents were the visitors of BIG BAZAAR, with the sample size of 100 for the study of sales management of the company. Tables & charts were used to translate responses into meaningful information to get the most out of the collected data. Based on those the inferences have been drawn with peer supportive data. ACKNOWLEDGEMENT The report what I have presented is not the made outcome of my labor alone. There are dozens of hands buttressed me all through the programme it doesn’t go without thanking all of those who constantly keep me on the move. I would like to give heartily thanks to Adept Institute of Management Studies Dharwad who have given us an opportunity to learn something practical apart from books by including the in-plant training in our MBA Programme. AIMS COLLEGE, Dharwad. 6 I express my gratitude to our Dean Mr. Mahesh Masal who has supported me to complete this project. My sincere thanks to Prof. Nityanand K, Internal Guide for guiding me to work on this project. I would like to express my most sincere thanks and gratitude to External guide Mr. Arif ADM (Assistant Department manager) who have given a good support to grab the external exposure and to complete a project in Big Bazaar. I give my sincere token of thanks to all my faculties, relatives and friends who have gathered me the wisdom of knowledge. This work is dedicated to my parents who have supported me throughout my study. DECLARATION AIMS COLLEGE, Dharwad. 7 I the undersigned have completed the project entitled ‘A Study on the effective promotional strategy which influences customer to purchase a product of Big Bazaar Hubli’ submitted in partial fulfill of the requirement for the award of the Degree in Master of Business Administration to the Sikkim Manipal University, . The project work is original & the conclusions drawn are based on the data & information collected by me. Place: Hubli Date: Manjunath.Reddy. INDUSTRY PROFILE Introduction AIMS COLLEGE, Dharwad. 8 Retail means selling goods and services in small quantities directly to customers. Retailing consists of all activities involved in marketing of goods and services directly to consumer for their personnel family and household use. The Indian retailing industry is becoming intensely competitive, as more and more payers are Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers Stop, Reliance, etc., Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in retailing in India signifies the beginning of retail revolution. India's retail market is expected to grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006. India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning. India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage. Sector details 1. Introduction to retail industries. 2. Retail word is derived French word retailer means to cut off a piece. 3. Retailing includes all the activities involved in selling goods or services to the final customer for personnel or non-business use. 4. Supermarket is a retailing of a wide variety of consumer products under one roof, ample stock, stock of several brands & extended business hours. History of retailing Retail concept is old in India. World’s first departmental store started in Rome. AIMS COLLEGE, Dharwad. 9 Today’s kirana stores are based on Manusmriti & Kautilya’s arthshastra. Haats, Melas, Mandis & door to door salesmen are traditional Indian retail. Vishal Mega Mart is a retail sector, which is providing good quality of products in very reasonable price than its competitors. Retailing and wholeselling consist of many organizations designed to bring goods and services from the point of production to the point of use. Retailing includes all the activities involved in selling goods or services directly to final consumers for their personal, non-business use. Retailers can be classified in terms of store retailers, non-store retailing, and retail organizations. Store retailers include many types, such as specialty stores, department stores, supermarkets, convenience stores, superstores, combination stores, hypermarkets, discount stores, warehouse stores, and catalog showrooms. These store forms have had different longevities and are at different stages of the retail life cycle. Depending on the wheel-of-retailing, some will go out of existence because they cannot compete on a quality, service, or price basis. Non-store retailing is growing more rapidly than store retailing. It includes direct selling (door-to-door, party selling), direct marketing, automatic vending, and buying services. Much of retailing is in the hands of large retail organizations such as corporate chains, voluntary chain and retailer cooperatives, consumer cooperatives, franchise organizations, and merchandising conglomerates. More retail chains are now sponsoring diversified retailing lines and forms instead of sticking to one form such as the department store. Retailers, like manufacturers, must prepare marketing plans that include decisions on target markets, product assortment and services, store atmosphere, pricing, promotion, And place. Retailers are showing strong signs of improving their professional management and their productivity, in the face of such trends as shortening retail life cycles, new retail forms, increasing intertype competition, and polarity of retailing, new retail technologies, and many others. Wholesaling includes all the activities involved in selling goods or services to those who are buying for the purpose of resale or for business use. Wholesalers help manufacturers deliver their products efficiently to the many retailers and industrial users across the AIMS COLLEGE, Dharwad. 10 nation. Wholesalers perform many functions, including selling and promoting, buying and assortment-building, bulk-breaking, warehousing, transporting, financing, risk bearing, supplying market information, and providing management services and counseling. Wholesalers fall into four groups. Merchant wholesalers take possession of the goods and include full-service wholesalers (wholesale merchants, industrial distributors) and limited-service wholesalers (cash-and- carry wholesalers, truck wholesalers, drop shippers, rack jobbers, producers' cooperatives, and mail-order wholesalers). Agents and brokers do not take possession of the goods but are paid a commission for facilitating buying and selling. Manufacturers' and retailers' branches and offices are wholesaling operations conducted by non-wholesalers to bypass the wholesalers. Miscellaneous wholesalers include agricultural assemblers, petroleum bulk plants and terminals, and auction companies. Wholesalers, too, must make decisions on their target market, product assortment and services, pricing, promotion, and place. Wholesalers who fail to carry adequate assortments and inventory and provide satisfactory service are likely to be bypassed by manufacturers. Progressive wholesalers, on the other hand, are adapting marketing concepts and streamlining their costs of doing business. CURRENT SCENARIO India rank first in terms of emerging market potential in retail sector. Current retail market is US $ 215 billion. Growth rate of retail sector in India is 8-10% per annum. Near about 12 million retail outlets are spread across India. FDI in retail sector increases from US $ 3.1 billion in 2003 to over US $7.6 billion in 2009. TYPES OF RETAILERS Retailers are broadly classified into 3 categories • • Food Retailers. General Merchandise Retailers. AIMS COLLEGE, Dharwad. 11 • Service Retailers. OTHER SERVICES PROVIDED BY RETAILERS Retail not only provides products to the customer but also gives different types of services like:  Airlines & travel agents  Banks  Health clubs  Hotel & Restaurants  Movie theatres TECHNOLOGIES USED IN RETAILING SECTOR  In-store technologies Interactive kiosks  Virtual display case  Radio Frequency identification tags  Self-scanning & self-checkout system  Body scanning  Online technology Online display of products  Online shopping AIMS COLLEGE, Dharwad. 12 CHALLENGES  Largely urban phenomenon, pace of growth is still slow.  Not being recognized as an industry in India so availability of finance is low to new market players.  High cost of real estate.  High stamp duties.  Lack of infrastructure.  Multiple & complex taxation system.  Protest against retail sector. FUTURE STRATEGY  It is projected that up to 2010 retail sector will be worth around US $ 300 billion.  FDI is going to increase rapidly, up to 2010 retail sector will become biggest industry in India.  Retail sector is expected to create 2 million jobs up to 2010.  According to Indian Retail Report top 10 players in modern retail trade are going to invest US $ 18-20 billion in next five years. Sector Details In India, the most of the retail sector is unorganized. In India, the retail business contributes around 10 percent of GDP. Of this, the organized retail sector accounts only for about 5 percent share, and the expected annual growth rate is 5% per annum and remaining share is contributed by the unorganized sector. The main challenge facing the AIMS COLLEGE, Dharwad. 13 organized sector is the competition from unorganized sector. Unorganized retailing has been there in India for centuries, theses are named as mom-pop stores. The main advantage in unorganized retailing is consumer familiarity that runs from generation to generation. It is a low cost structure, they are mostly operated by owners, has very low real estate and labor costs and has low taxes to pay. And it also gives 8% Employment to the country annually. In late 1990's the retail sector has witnessed a level of transformation. Retailing is being perceived as a beginner and as an attractive commercial business for organized business i.e. the pure retailer is starting to emerge now. Organized retail business in India is very small but has tremendous scope. The total in 2005 stood at $225 billion, accounting for about 10% of GDP. In this total market, the organized retail accounts for only $8 billion of total revenue. According to A T Kearney, the organized retailing is expected to be more than $23 billion revenue by 2010. In organized retailing will grow faster than unorganized sector and the growth speed will be responsible for its high market share, which is expected to be $ 17 billion by 2010-11. The organized sector is expected to grow faster than GDP growth in next few years driven by favorable demographic patterns, changing lifestyles, and strong income growth. This organized retail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores, departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer hypermarkets, three Spencer super markets and 49 Spencer Daily’s. Now the company is planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of total market, today modern retailing is expected to enter a boom phase, which has major players and these players might capture 10% of total market, within next five years. The retail sales in India for future are shown below (data from 2005-2008 is based on estimates) The trend in the Industry 1. Low share of organized retailing 14 AIMS COLLEGE, Dharwad. 2. Falling real estate prices 3. Increase in disposable income and customer aspiration Increase in expenditure for luxury items (CHART) 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. Existing competition  Reliance fresh.  Aditya Birla group.  Shopper’s Shoppe. AIMS COLLEGE, Dharwad. 15  Subhiksha.  Big bazaar.  Mark and Spencer’s. The untapped scope of retailing has attracted superstores like Wal-Mart into India, leaving behind the kiranas that served us for years. Such companies are basically IT based. The other important participants in the Indian Retail sector are Bata, Big Bazaar, Pantaloons, Archies, Cafe Coffee Day, landmark, Khadims, Crossword, to name a few. Evolution of Indian Retail Industry Indian Retail Industry is standing at its point of inflexion, waiting for the boom to take place. The inception of the retail industry dates back to times where retail stores were found in the village fairs, Mela’s or in the weekly markets. These stores were highly unorganized. The maturity of the retail sector took place with the establishment of retail stores in the locality for convenience. With the government intervention the retail industry in India took a new shape. Outlets for Public Distribution System, Cooperative stores and Khadi stores were set up. These retail Stores demanded low investments for its establishment. International Brand Outlets, Hyper or Super markets, shopping malls and departmental stores Retailing in India: a forecast Future of organized retail in India looks bright. According to recent researches it is projected to grow at a rate of about 37% in 2007 and at a rate of 42% in 2008. It will capture a share of 10% of the total retailing by the end of 2010. INDIA: A Hot Spot India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% of the country's GDP. Retail industry in India is expected to AIMS COLLEGE, Dharwad. 16 rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion. Shopping in India has witnessed a revolution with the change in the consumer buying behavior and the whole format of shopping also altering. Industry of retail in India which have become modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and sprawling complexes which offer food, shopping, and entertainment all under the same roof. India retail industry is expanding itself most aggressively; as a result a great demand for real estate is being created. Indian retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. It is expected that by 2010, India may have 600 new shopping centers. In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of non- branded items. 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- AIMS COLLEGE, Dharwad. 17 scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. Growth Drivers Growth drivers in India for retail sector • Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Liberalization of the Indian economy Increase in spending Per capital Income. Advent of dual income families also helps in the growth of retail sector. Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. Consumer preference for shopping in new environs • • • • • The Internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. • • Channels are helping in creating awareness about global products for local markets. About 47% of India's population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country. • • Availability of quality real estate and mall management practices Foreign companies' attraction to India is the billion-plus population. Employment opportunities in retail sector in India AIMS COLLEGE, Dharwad. 18 India's retail industry is the second largest sector, after agriculture, which provides employment. According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the retail sector will create 50,000 jobs in next few years. Retail companies are starting retail management courses in partnership with management institutes, roping in talent from other sectors and developing comprehensive career growth and loyalty plans for existing employees. Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and ebony are virtually on their toes. Consider the plans of largest player, The Pantaloon Retail India Ltd, the company has developed a comprehensive strategy, where in it expects that in 2years, it will not recruit any new managers from outside. "The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educational Institute to run retail courses across the entire chain. Trent has also started in-house learning programmers and now goes to under graduate colleges to recruit students. Since, the job market is hugely receptive to this with more and more business schools focusing on the sector and large retailers setting up retail academics. Challenges of Retailing in India In India the Retailing industry has a long way to go, and to become a truly flourishing industry, retailing needs to cross the following hurdles: * The first challenge facing the organized retail sector is the competition from unorganized sector. * In retail sector, Automatic approval is not allowed for foreign investment. * Taxation, which favors small retail businesses. * Developed supply chain and integrated IT management is absent in retail sector. * Lack of trained work force. AIMS COLLEGE, Dharwad. 19 • • Low skill level for retailing management. Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence and low margins. * Organized retail sector has to pay huge taxes, which is negligible for small retail business. Many agencies have estimated differently about the size of organized retail market in 2010. The one thing that is common amongst these estimates is that Indian organized retail market will be very big in 2010. The status of the retail industry will depend mostly on external factors like Government regulations and policies and real estate prices, besides the activities of retailers and demands of the customers also show impact on retail industry. Competition in retail India RetailBiz attempts to capture excitement of Retail Business in India by aggregating the best in news, views, research, analysis, trends, technology, and competition dents retail sector growth. The performance of the retail sector in the last quarter of financial year 2008-09 has been a gloomy one. Not only has the quarter-on-quarter growth declined by 700 basis point, on year-on-year (YoY) basis, sales growth fell drastically from 67.8% to 49.1%. Including the recently listed Koutons and Vishal Retail, all big retailers continue to be on an aggressive expansion mode. This kind of competition is having a negative impact on margins of retailers, as the target audience for all of them, more or less, remains the same. The slowdown has triggered a volume game in the industry. Strategies like promotional campaigns, freebies, promoting private labels and online discounts are just some of the avenues that retailers are looking at to lure customers. According to analysts, this is a knee-jerk reaction by the industry to fight the inflation-induced dent in the purchasing power of customers. As they say, retail is a number game, so, big retailers are trying to push volumes. For some, it comes at the cost of profit. Meanwhile, in contrast to YoY AIMS COLLEGE, Dharwad. 20 sales growth of 49% for the sector, the interest cost has registered a whopping 96% growth. Though growing at a lesser 39%, depreciation cost has also been impacting margins. The cost factor too is adding to the woes. For instance, during the quarter, Shoppers Stop opened its new stores in various formats. Provogue and Pantaloon followed soon. The companies are increasing their geographical presence in the wake of increasing competition. Launch of new formats continues to catch the attention of these retailers. In fact, a couple of these new formats are already generating profit at the operating level, thus showing a positive sign towards growth. Like for Shoppers Stop, the average transaction size increased by about 7% for the current quarter over the same quarter in the previous year. Players like Provogue and Pantaloons too have witnessed a similar upward movement. Also, though growth in total expenses as a whole has almost been equivalent to the growth in sales at about 47%, some individual cost items like staff costs, selling and administration costs are under control. On a YoY basis, staff cost has grown at 26% against 44% in the corresponding quarter of the previous year. Nonetheless, raw material cost continues to remain high - it grew by 66% in the last quarter and now is equivalent to 74% of the industry's aggregate net sales. This is the reason why operating margins have reduced to 4.8% of the revenue sale compared with 5.7% during the corresponding quarter of the previous year. Among individual retailers, Pantaloon Retail continues to outgrow the industry - it recorded 57% a YoY growth in net sales during March 2008 quarter. Although it is lower compared with the 63% growth recorded during the December quarter, momentum continues to favour the company. New stores drove the growth in value-for-money format - strategies such as KB's Fair Price and online shopping are picking up. Their home store division has also been doing well. Next on growth charts is Provogue, which grew 40% in the last quarter, similar to the previous quarter. AIMS COLLEGE, Dharwad. 21 In short, setting up of new stores has resulted in higher working capital funding, which has raised the industry's interest outgo. For Pantaloon, interest cost has almost doubled during the current quarter - as a proportion of sales, it has increased from 2.7% to 3.2% on a YoY basis. Provogue seems to be an exception in this as it recorded the highest increase of 100 basis points in interest cost for March 2008. Overall, the profitability margin has seen a sharp decline. Only Shoppers Stop has registered some profit compared with its performance in the corresponding quarter of the previous year. The company's net profit margin now stands at 0.7% of net sales as compared to -1% in March 2007 quarter. It can be concluded that margins of retail companies seem to have been hit by costs related to their ambitious expansion programmer. Expansion plans for some of them are running behind schedule. It has led to higher interest cost, yet retail companies are trying hard to cut costs by keeping inventory and carrying costs under control. July 8, 2008 Source: Economic Times Big retailers at loggerheads with MNCs over brands A serious conflict is brewing between Indian retailers and multinationals over imports of global brands. To stay afloat in the dog-eat-dog world of retail, local retailers have reached arrangements with overseas players to bring in some international brands, rattling many MNCs who manufacture or market these products locally. In some cases, these brands have not yet been introduced in India. Several major MNCs with a long presence in India are invoking the Intellectual Property Rights (imported goods) Enforcement Rules 2007 to stop retailers from importing foreign brands. Hindustan Unilever, L’Oreal, Lancome Perfumes, Oakley Inc, Nivea and Mico have already registered several brands with the Customs department. Sources said other MNCs are expected to follow suit. AIMS COLLEGE, Dharwad. 22 Market circles perceive this as a move to prevent Indian retailers from getting first access to these brands. Some of the retailers are debating plans to legally contest the move, since they possess a free sale certificate from the source of import. Retailers like Big Bazaar & Food Bazaar, Reliance Retail, Spencer’s and Sankalp Retail (MyDollarStore), among others, have begun importing sizeable consignments of leading consumer brands and their variants for better fill rates, product variety and higher margins. However, the multinationals are not amused, and claim that it leads to loss of business opportunity, unfair competition and product cannibalization. The fundamental issue here, according to analysts, is that the Indian arms of the leading FMCG companies would like to control the way their brands are marketed and sold. They would also like to determine when new products and variants of existing products should be introduced in India. A key reason for retailers to step up imports is bottom lines. Profit margins on imported products are around 20% more than local brands, where producers and retailers are at loggerheads over sharing margins. “We are concerned over issues like protecting the properties of our brands, including quality and consumer perception. Such unplanned imports create brand confusion in the minds of consumers, since the properties of an imported brand are completely different from the domestic ones, which are localized to suit the specific region’s requirements. An unpleasant experience may work against our brand,” said a high-ranking official in a leading multinational, which makes personal care products. Retailers claim they are creating ‘demand in advance’ for the multinationals, which would otherwise have to invest heavily in marketing and ad spends to promote the brands. Analysts say the developments are the natural effects of a globalised market that India is moving towards, which upsets the conventional distribution and trade practices. July 7, 2008 Source: Economic Times Big players - plans and investments AIMS COLLEGE, Dharwad. 23 State of Competition in the Wholesale and Retail Sector The study assesses the state of competition in the Philippine wholesale and retail sector, focusing on the distribution of specialized goods and pharmaceutical products. It uses the traditional tools of analysis like concentration ratios and price-cost margins in determining the competitive state of the sector. The study also analyzes the other dimensions in retail competition like price, geographical location, and retail product and retail service. Industry data from the National Statistics Office were used in the analysis, aided by a small-scale survey conducted in the Metro Manila area. The department store and grocery sub sector appears to operate in a competitive environment despite the presence of two big dominating firms in the market. No price or quantity leader-follower behavior was observed, as validated by the tools used in the analysis. On the other hand, one firm, whose strategic advantages include economies of scope and space, retail image and consumer loyalty, dominates the distribution of pharmaceutical products. Potential market entrants face these forms of challenges-factors that are not regarded as anti-competitive and are welfare enhancing to the general public. The need for competition policy is recommended to guard against possible merger of the giant firms in the department store and grocery sub sector. Any possible collusion between the big firms could result to a monopolistic outcome. The study observes that the apparent high price of pharmaceutical products is mainly attributed to the manufacturing process, and not at the distribution of these goods. Hence, it is recommended that a study analyzing the state of competitiveness of manufacturing pharmaceutical products be conducted. Thing else that is timely, authentic Electronics retail sector could get new competition AIMS COLLEGE, Dharwad. 24 Types of Retailing There are several types we can see in Retailing. They are like: Specialty Store: Narrow product line with deep assortment, viz apparel stores, book stores etc. A clothing store would be a single line store, men's clothing store would be limited line store &men's custom-shirt store would be a super specialty store. Example: The limited, The Body Shop. Departmental Store: Several products lines-typically clothing, household goods, home furnishings- with each line operated as a separate department managed by specialist buyers or merchandisers. Example: Sears, Bloomingdale's. Supermarkets: Relatively large, low-cost, low-margin, high volume, self-service operation designed to serve total needs for food, laundry & household maintenance products. Example: Kroger, Safeway. Convenience Stores: Relatively small store located near residential area, open long hours, seven days a week and carrying a limited line of high-turnover convenience products at slightly higher prices. Example: 7-Eleven, Circle K. Discount Store: Standard merchandise sold at lower prices with lower margins and higher volumes. True discount stores regularly sell merchandise at lower prices and offer mostly national brands. Example: Wal-Mart, Kmart. AIMS COLLEGE, Dharwad. 25 Off-price retailer: Merchandise bought at less than regular wholesale prices & sold at less than retail; oftenleftover goods, overruns and irregulars obtained at reduced prices from manufacturers or other retailers. Factory outlets are owned and operated by manufacturers and normally carry the manufacturer's surplus, discontinued or irregular goods. Example: Mikasa (dinnerware), Dexter (shoes) Independent off-price retailers are owned & run by entrepreneurs or by divisions of larger retail corporations. Example: T.J.Maxx, Filene's Basement. Superstore: Averages 35,000 square feet of selling space traditionally aimed at meeting consumers' total needs for routinely purchased food and non-food items. Usually offer services such as laundry, dry cleaning, shoe repair, check cashing & bill paying. A new group called "category killers" carries a deep assortment in a particular category & a knowledgeable staff. Example: Borders books & Music, IKEA. Combination stores are a diversification of the supermarket store into the growing drugand-prescription field. Combination food & drug stores average 55,000 square feet of selling space. Example: Jewel & Osco stores. Hypermarkets range between 80,000 and 220,000 square feet and combine supermarket, discount & warehouse retailing principles. Product assortment goes beyond routinely purchased goods & includes furniture, large & small appliances, clothing items and many other items. Bulk display & minimum handling by store personnel with discounts offered to customers who are willing to carry heavy appliances and furniture out of the store. AIMS COLLEGE, Dharwad. 26 Hypermarkets originated in France. Example: Carrefour and Casino (France), Pyrca, Continente and Alcampo (Spain). Emerging trends in Indian organized retail sector BPO industry in India BPO (Business Process outsourcing) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry in India. Business Process Outsourcing refers to the delegation of one or more IT-intensive business process to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. The Indian BPO industry is constantly growing and a lot of fortune 500 companies are outsourcing services to India. There are several reasons for India’s emergence as one of leading outsourcing destinations. India is very rich in educated and talented human resource. India is one of the pioneers in software development. India has an excellent technical facilities and infrastructure for setting up call centers. Time zone difference between India and America has also worked to the advantage of Indian BPO industry. India has an 8-12 hour time zone difference with respect to the US and other developed markets. Most of the Indian cell centers servicing American customers have timings between 5:30 pm to 9:30 am this time zone difference allows Indian companies BPO’s to service American clients by working in the nights. last but not the least India has huge pool of English speaking workforce that provides excellent voice based services at extremely competitive costs resulting in huge savings for companies. Some of the leading BPO companies in India are  GE capital.  Converges  Wipro Spectra mind.  Dell  ICICI One Source  MphasiS. AIMS COLLEGE, Dharwad. 27 Inflation in India Inflation in India is at an acceptable level and remains much lower than in many other developing countries. But off late prices of essential commodities such as food grain, edible oil, vegetables etc have risen sharply and in the process driving up the inflation rate. Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises the value of currency goes down. The current rise in inflation has its roots in supply-side factors. There was shortfall in domestic production vis-à-vis domestic demand and hardening of international pieces, prices of primary commodities, mainly food items. Wheat, pulses, edible oils, fruits and vegetables, and condiments and spices have been the major contributors to the higher inflation rate of primary articles. The inflation was also accompanied by buoyant growth of money and credit. While GDP growth zoomed to 9.0 per cent per annum, the board money (M3) grew by more than 20 per cent. Inflation is calculated on the bases of Wholesale Price Index (WPI) while in other countries it is calculated on Consumer Price Index (CPI). The emerging trends in the Indian organized retail sector would help the economic growth in India. There is a fantastic rise in the Indian organized retail sector in a very short period of time between 2001 and 2006. Eventually, out of the shadows of the unorganized retail sector, India has a chance of tremendous economic growth, both in India and abroad. The emerging trends in the Indian organized retail sector are also adding up to the development of the Indian organized retail sector. The relaxation by the government on regulatory controls on foreign direct investments has added to the process of the growth of the Indian organized retail sector. AIMS COLLEGE, Dharwad. 28 The infrastructure of the retail sector will evolve radically in the recent future. The emergences of shopping malls are increasing at a steady pace in the metros and there are further plans of expansion which would lead to 150 new ones coming up in India by 2008. As the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lion’s share in food trade. The growth of the Indian organized retail sector is anticipated to be heavier than the growth of the gross domestic product. Alterations in people's lifestyle, growth in income levels, and encouraging conventions of demography are proving favorable for the new emerging trends in the Indian organized retail sector. The success of this retail sector would also lie in the degree of penetration into the lower income strata to tap the possible customers in the lowest levels of society. The demands of the buyers would also be enhanced by more access to credit facilities. With the arrival of the Transnational Companies (TNC), the Indian retail sector will undergo a transformation. At present the Foreign Direct Investments (FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they inevitably try to oust their Indian counterparts. This would be challenging to the retail sector in India. The trends to follow in the future: • • The Indian Organized retail sector will grow up to 10% of total retailing by 2010. No one single format can be assumed, as there is a huge difference in cultures regionally. The most encouraging format now would be the hyper marts. The hyper mart format would be further encouraged with the entry of the TNCs • AIMS COLLEGE, Dharwad. 29 Current Scenario • • • • • • A glimpse of the International Retail One of the world's largest industries exceeding US$ 9 trillion 47 global fortune companies & 25 of Asia's top 200 companies are retailers Dominated by developed countries US, EU & Japan constitute 80% of world retail sales. Biggest player in India is Pantaloon Retail India Limited. Percentage of Organized Retail USA - 85% Taiwan - 81% Malaysia - 55% Thailand - 40% Brazil - 36% Indonesia - 30% Poland - 20% China - 20% India - 3% Key players The existing players like Big Bazaar, More Retail outlay, Vishal Mega Mart, Shoppers' Stop, Piramyd are expanding to smaller towns and cities. Many other business houses are planning to enter the retail sector either on their own or through AIMS COLLEGE, Dharwad. 30 partnerships. New entrants like Reliance Retail Ltd and Wal-Mart are going to enter the market soon. Even rural areas will provide a huge opportunity to be explored. BOARD OF DIRECTOR Mr. Kishore Biyani, Mr. Gopikishan Biyani, Mr. Rakesh Biyani, Mrs. Veda Prakash Arya, Mr. Shailesh Haribhakti, Mr. S Doreswamy, Dr. D O Koshy, Mrs. Anju Poddar, Mrs. Bala Deshpande, Managing Director Whole time Director Whole time Director Director Independent Director Independent Director Independent Director Independent Director Independent Director Mr. Anil Harish, Independent Director AIMS COLLEGE, Dharwad. 31 Company Profile 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), the company operates through 5 million square feet of retail space, has over 331 stores across 40 cities in India and employs over 17,000 people. The company registered a turnover of Rest 2,019 crore for FY 2007-08 It owns and operates multiple retail formats including Pantaloons, Big Bazaar, Food Bazaar, Central, E-Zone, Fashion Station, Depot and many others. 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. Food Bazaar, food and grocery chain and launch Central, a first of its kind seamless mall located in the heart of major Indian cities, followed this. Some of its 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 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, Jaywalker’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. AIMS COLLEGE, Dharwad. 32 Pantaloon Retail is listed on BSE and NSE with a turnover of Rs 2,018 crores for financial year ended 2007-08. Pantaloon Retail was selected as the Best of Best Retailers in Asia by Retail Asia-Pacific Top 500 magazine in 2006. 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 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, Indecision. 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, 'Indian’s' and its corporate credo is - Rewrite rules, Retain values. Future Group Manifesto “Future” – the word which 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. We, 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 AIMS COLLEGE, Dharwad. 33 development. Thereby, we will effect socio-economic development for our customers, employees, shareholders, associates and partners. Our customers will not just get what they need, but also get them where, how and when they need. We will not just post satisfactory results, we will write success stories. We will not just operate efficiently in the Indian economy, we will evolve it. We will not just spot trends; we 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. We shall keep relearning. And in this process, do just one thing. 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. Big Bazaar stores in Metros have a gaming area and kids play area for entertainment. Cities where stores are located are, Agra, Ahmadabad, Allahabad, Ambala, Asansol, Bangalore, Bhubaneswar, Chennai, Coimbatore,Palakkad, Kolkata, Delhi, Durgapur, Ghaziabad, Gurgaon,Hyderabad, Indore, Lucknow,Kanpur, Mangalore, Mumbai, Nagpur, Nasik, Panipat, Pune, Rajkot, Surat, Thane, Thiruvananthapuram, Vishakhapatnam. Big Bazaar is not just another hypermarket. It caters to every need of customer’s family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. AIMS COLLEGE, Dharwad. 34 At Big Bazaar, customer will definitely get the best products at the best prices -- that’s what Big Bazaar guarantee. With the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise customer. And this is just the beginning. Big Bazaar plans to add much more to complete customers shopping experience. Big Bazaar is a chain of shopping malls in India currently with 29 outlets, owned by the Pantaloon Group. It works on it 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. Big Bazaar stores in Metros have a gaming area and kids play area for entertainment. Cities where stores are located Agra Ahmedabad Allahabad Ambala Asansol Bangalore Bhubaneswar Chennai Coimbatore Palakkad Kolkata Delhi AIMS COLLEGE, Dharwad. 35 Durgapur Ghaziabad Gurgaon Hyderabad Indore Lucknow Kanpur Mangalore Mumbai Nagpur Nasik Panipat Pune Rajkot Surat Thane Thiruvananthapuram Vishakhapatnam Big Bazaar is not just another hypermarket. It caters to every need of customer’s family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. AIMS COLLEGE, Dharwad. 36 At Big Bazaar, customer will definitely get the best products at the best prices -- that’s what Big Bazaar guarantee. With the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise customer. And this is just the beginning. Big Bazaar plans to add much more to complete customers shopping experience. Store study Big Bazaar Akshay centre, Akshay Park GOKUL ROAD, HUBLI-580030 Phone No: 0836-4266555 This store is of 2 flour and divided into 2 levels based on the nature of products. There are 21 departments in this store and 120 Human Resource employed. As this store is big enough with 2 levels and 21 departments has long product range and product depth. Ones a customer get inside the store he will find all kinds of products AIMS COLLEGE, Dharwad. 37 available that may be Food item, Cosmetic, Electronic, Garments, Furniture etc. Because of these features it has a very good reputation in that area and customers who are residing far away and in other areas they also visit the store. Level 1 Departments with their Products 1) Depot: General books Office stationary Children stationary Film VCD’s & DVD Major Brands in this department For VCD’s & DVD’s: AIMS COLLEGE, Dharwad. 38 Moser bear T-Series Yesh Raj Films Anand Audio Jhankar Sarvotham For Office stationary Stick Apsara Kores Fiber Castle Depo exposes Park Cello 3M Kangaroo Built Matrix For Books Penguin Roopa Bentam Classic 2) NBD (New Business Development) This is the department, which is introduced because the space is available in the store after making arrangement for other department and this department consists of the products, which are not introduced and are not regular goods. Wrist Watches Fashion Jewelry Sunglasses 39 AIMS COLLEGE, Dharwad. Auto accessories Major Brands in this department For Wrist Watches Escort Lumax 3) Gold Bazaar Navaras Gold Jewelry This is the separate unit not related to Big Bazaar they share profits on percentage basis 4) Mobile Bazaar All kinds of Handsets ranging from Rs 1000 to 25000 of different companies Mobile accessories Coddles phones & land line phones Major Brands in this department Nokia Sony Ericson Motorola Samsung AIMS COLLEGE, Dharwad. 40 Beetal Pacetel 5) Star Sitara Cosmetics Fragrances Herbals Pharmaceuticals Major Brands in this department For Fragrances MKD distributors G R fragrances BCPL Nabed Intercraft Indo French For Herbals Lotus VLCC Shehnaaz Hussain Biotech For Cosmetics Color Bar Lakme May Billine Revlon Streets wear Vega and roof 6) Shringar Bangles Jewelry sets Bracelets Hair Accessories 41 AIMS COLLEGE, Dharwad. Bindies Chains 7) Ladies Department Sarees Dress materials Under garments Nightwears Western wears Major brands in this department Shila Shristhi Kalakruthi MSIL Jeans Bretni DJ & C Ruff & Tuff Gelluse Accessories Johnson and Johnson Paris beauty VIP 8) Men’s Department Formals (Shirts & Pants) Casuals (Shirts & pants) Party wears Jeans T-Shirts Others Accessories (Lungi Dhoti etc) Fabrics (Cut pieces) Suits & Blazers Levi’s Signature garments Major brands in this department AIMS COLLEGE, Dharwad. 42 DJ & C Ruff & Tuff Levis Night hood Peter England Raymond’s 9) Furniture Department Dining Table Bedroom Accessories Hall accessories (Sofa sets, Chairs, Computer table etc) Mattresses 10) Footwear Bazaar Sports Shoes Formal Shoes Casual Shoes Men’s Sandals Ladies Sandals Ladies Casuals Ladies Chapple Ladies fancy Sleepers Ladies Sports shoes Major brands in this department Reebok Nike Puma Loto 43 AIMS COLLEGE, Dharwad. Van hussain Hallen solly New balance 11) Home Décor Flower vase Artificial Flowers Religious gifts Candle stand Umbrellas Photo Frames Assorted color Stones Frame Paintings Water falls (artificial) Birthday items 12) Home line bed sheets, Pillows , bed spreads Towels, Yellow dust Razai , Carpets, Cushion covers Chair bags Major brands in this department Riviera Oriental Orchid Home collection Home expression Sameera Home style 44 AIMS COLLEGE, Dharwad. Sweet dreams Modern 13) Toys Dept Soft toys Educational toys Board games, Action figures Dolls Major brands in this department Fun school Venus Mitashi Creatives United Shadilal & Sons Flamingo 14) Kids department Boy’s section T-Shirts, Trousers, jeans Cotton shirts, Cargo, Cod raw Ethic wears Co ordinates AIMS COLLEGE, Dharwad. 45 Rain cotes Girls Section Ethic wears Co- ordinates Cotton frocks Western wears Major brands in this department Tara Rum Pum collection Disney Pink And Blue Power ranges Promo Infants Jhablas Vests Bibs feedings Bed items Baba suits Frocks 15) Electronic Bazaar Televisions Sound System Refrigerators Washing machines Microwave AIMS COLLEGE, Dharwad. 46 Rice cookers Juicers Irons, Mixers & Grinders Major Brands in this department Sony Vidiocon LG HCL IBM Creative Philips Samsung Onida Whirlpool 16) Luggage Travel bags Trolleys Bags: Schools, Collage Ladies purse Suitcase VIP American Tourist Aristocrat Safari Milestone Level 2 Food Bazaar 1) Beverages Soft drinks Mineral water Juices AIMS COLLEGE, Dharwad. 47 Health drinks 2) Confectionaries All kinds of Chocolates & Confectionaries 3) Fruits & Vegetables 4) Staples Dal, Rice, Atta, Rava items Oil’s, Masala items Dry fruits Spicy items Ready meals Breakfast cereals 5) Process Dept Health drinks Ready to eat Corn flaks, Chips Instant mixes Soups, Bread items, pickle Spreads Major brands in this department For Beverages Maaza Slice Bisleri AIMS COLLEGE, Dharwad. 48 Cocacola Pepsi Thumps up Apply For confectionaries Dairy Milk Nestle Parle For Staples Ashirwad Pillsbury Dhara Sunflower Non-food Dept 6) Home care Phenyl, Detergents Dish wash, Tissue papers, Scratch Shoe cases, Fresh wrap, 7) Personal care Soaps, toothpaste, Shampoo Deodorants, Body spry AIMS COLLEGE, Dharwad. 49 Baby food, Talcum powder Men’s apparel Major Brands in this department For Home care Lysole HLL Nirma For Personal care: Colgate Pepsodent Parachute Lux International 8) Plastics, Utensils, Crockery (PUC) a) Plastics Buckets Casseroles Containers Boxes Flasks Bowls AIMS COLLEGE, Dharwad. 50 Jugs & sippers Bottles & Mugs Major brands in this department Milton Dream Line Cello Poly set Chetan b) Utensils Plates, Bowls, Glasses Non-stick Cookware’s Kitchen tools Tiffin Boxes c) Crockery Crockery cutlery Table Materials / Napkins Casseroles Dinner sets Wine, Juice Glasses Future Plans of BIG BAZAAR AIMS COLLEGE, Dharwad. 51 Recently they are interested to expand their retail business in Mysore and along with that they are interested to establish two retail outlets in Gulbarga District. Big Bazaar plans 300 stores by 2010-11 20 May, 2009, 1722 hrs IST, PTI NEW DELHI: Kishore Biyani-promoted Future Group's retail chain Big Bazaar is planning to have 300 hypermarkets in the country by 2010-11. The company is also mulling to increase its annual turnover to Rs 13,000 crore by 201011, up from Rs 3,600 crore last fiscal on the back of its expansion. "We started with our first store in October 2001 and have now crossed the hundred mark with three stores opened today in Pune, Cut tack and Delhi. Our plan is to increase the number of our stores to 300 by end of the 2010-11 fiscal," Big Bazaar Chief Executive Officer Rajan Malhotra said. He said the company would have another 35 odd stores by end of its fiscal in June 2009 to take the total number to 135. AIMS COLLEGE, Dharwad. 52 "We are targeting a turnover of Rs 5,000 crore this year and have plans for reaching a figure of Rs 13,000 crore by 2010-11 fiscal," Malhotra said. He added that the company would be looking at both the metros and Tier I cities, besides Tier II and smaller cities, for the expansion. The Big Bazaar hypermarkets had a footfall of 11 crore last fiscal and the company is aiming for an increase in the numbers up to 14 crore this year. The size of its hypermarkets on average is 30,000 sq ft to one lakh sq ft. The company is also launching a special festive season 'One in a Lifetime' offer across all its stores on October 1-5. The offer would run in all Big Bazaar format stores on apparels, footwear, accessories and general merchandise, he added. Organizational Structure (Zonal) President Vice President AIMS COLLEGE, Dharwad. 53 Marketing HR Manager Operation Manager Head Manager Category Manager Finance Marketing HR Head Store manager Head Head Category Head Finance Store Structure Store Manager Assist Store Manager AIMS COLLEGE, Dharwad. 54 Dept Manager Human Resource Administration Info Tech Visual Merchandise Marketing Assist DM Cashing Dept Maitanance Team Leader Assistant HR Security Team Members Cashier House keeping CSD (Customer Service desk) VISSION AIMS COLLEGE, Dharwad. 55 “TO EMERGE AS THE BEST AND THE MOST PROFITABLE RETAILER IN INDIA” MISSION "TO SPEARHED HIS COMPANY TO BE THE FINEST AND THE MOST PREFERRED CHAIN IN RETAILING” Big Bazaar on an expansion spree Countries leading retail chain Future Group is going for a major expansion of its Big Bazaar chain of outlets, with the company planning to take the total number of stores to 150 by June 2009. Big Bazaar presently has 92 outlets across the country and has plans to add over 45 stores by the end of June 2009, Future Group Director Rakesh Biyani said. Besides, the company is also exploring for a 50:50 joint venture with International Group for its kidsWear segment. AIMS COLLEGE, Dharwad. 56 "We are exploring various proposals and options to maximize our efficiency and operations," he said on the sidelines of the Pure & Play Retail Summit here. When asked About the media reports regarding Future Group plans' to split the company into two specialized segment consisting of front - end and back - end retail, Biyani refused to Comment on the issue. "The company cannot comment on speculated stories run by sources. There is no official Announcement or decision in this regards," Biyani said. He added that the company’s expansion would be fully funded, with its own capital. "The funding plans are being done by preferential allotment and we have already decided about the amount, " he said. Future Group is also starting its own ethnic women's wear stores and the first one will start by August this year. "A total ethnic in the women' wear category will come up in various cities and the stores will be on 15,000-16,000 sq feet," Biyani added that the company is planning to grow by 15-20 per cent in apparel wear and double its sales of ethnic women wear in the next few years. The company is also looking for an increase of 50-55 per cent in its total sales over the next five years. SECURITY MEASURES Pantaloon Apparel, food, etc. POS: Home-grown solution SAP Retail BI and Data warehouse: Congo’s (process of evaluation) AIMS COLLEGE, Dharwad. 57 handheld scanners at Food Bazaar VPN: Company-wide network linking all the branches They have loss prevention cell (LPC) that will be looking after the safety measures in the organizations. There are 5 members in each store. They have 3 types of tags 4. Hard tag 5. Soft tag 6. String tag These tags will be attached to the materials. If any person will take that without paying bill some process will be taken by the LPC. Process: In case any theft is done in big bazaar they will catch the person & they will fine him and they will fill one form that he had done the mistake & they will take all 10 fingers thumb impression. Departmental Managers There are 24 departments in this store like Electronic dept, Depot dept, NBD dept, Mobile Bazaar Dept, Star sitar Dept, PUC Dept, Ladies Dept, Men’s Dept, Furniture Dept, Footwear Dept, and Home Décor Dept. Each department will be assigned with targets, which have to be achieved within the assigned period that may be of Daily, Weekly, monthly and yearly. 58 AIMS COLLEGE, Dharwad. Each department has a department Manager & Assist DM. Their job is concerned mainly with sales. They look after customer’s orders delivery post sale service if any etc. All Dept managers ADM, Team members work under coordination & cooperation. They are also responsible for the placing orders of the goods incase of shortage here they have to send indent specifying the amount of products needed at the store. They have to report periodically the performance of the department to the store manager. Administration Store administration comes under Store Manager its functions are store maintenance, House Keeping, Security etc. Store manager has to control all the activities within the store. He has to communicate all the departmental managers and assistance departmental managers regarding any new offers, regarding their targets etc. Sore manager has to see the operation at the store is being performed in coordination and cooperation he has to communicate with the corporate office regarding any changes being applied at the store. AIMS COLLEGE, Dharwad. 59 Information Technology This department is responsible for the maintenance of the systems of the stores. All billing machines their functioning networking with the master machine etc. If there is any problem with the machine then this department comes into function. Cashing Dept This department is responsible for the collection of sales amount i.e. cash sales, Credit sales, etc under this department all billing machines of the stores comes. The sales amount collected throughout the day by the cashier’s has to be submitted to this department. Marketing This dept is responsible for the marketing of the store in different media like Television, Newspaper, and Holdings etc. the authorized person has to visit different companies and has to look after for tie-ups etc. The executives arranges rally’s Visual Merchandise This department is responsible for the product arrangement at the store with respect to their nature. The basic function AIMS COLLEGE, Dharwad. 60 of this dept is it divides the store into several departments based on the nature of the product and within the department it decides how the products should be arranged by keeping in mind the customer should not suffer. Human Resource Human Resource basically works for the welfare of the employees. It acts to organize the manpower and work to increase productivity of the employees. Basically Human Resource performs the functions of Recruitment, Hiring, Induction, Training and development, Performance appraisal of the employees. Human Resource studies and involves in inter life cycle of the employee from his joining the organization to till his end from the organization. CSD (Customer Service Desk) This is the separate unit, which is mainly focuses on customer service like if the customer find difficulty in finding any product, Customer complaints any replacement, Customer assistance etc. Supply chain management: Company’s supply chain was split into the broad categories of fashion, food and general merchandise, leading to a more focused approach to businesses, improved service levels, better customization of logistic and supply chain related needs, and finally deliverables. Further, with new concepts AIMS COLLEGE, Dharwad. 61 and lines of business being included during the year, as well as strategic alliances with other companies, the process of gradually integrating them have either been completed or close to completion. The existing supply chain design consists of a Master Distribution Centre (MDC) and city warehouses upgraded to Regional Distribution Centers (RDCs) and additional Distribution Centers (DCs). The company had one MDC and 16 RDCs and DCs The company has also appointed leading international and domestic players in the warehouse infrastructure and technology front. The company also introduced the concept of reverse logistics that looks at setting up a process to transfer finished goods from the consumption point to the point of origin. This reduces wastage and can lead to significant cost savings. On the technology front, all the existing MDCs, RDCs and DCs are live on SAP, thereby facilitating standardization, real time data management and reporting, as well as optimum operational efficiencies. My Learning Experience in the company I am very happy to express my practical experience at Big Bazaar. Before going to share my practical feelings 62 AIMS COLLEGE, Dharwad. regarding project work. I would like to say heartily thanks to Adept Institute of Management studies. Who have given one of the good opportunity to learn a knowledge in practical environment and along with that I would like to say heartily thanks to company guide Mr.Arif (Assistant Department Manager) of big Bazaar. I had under gone a glorious 30 days project at Big Bazaar. And along with that I had learn a lot of practical things from the corporate world. From this project i came to know that customer buying behavior and taste and priority preferences of customer towards retail sector and competition level in the sector and along with that i had learn how management is responsible for increasing sales and revenue of the company And also i learned what management make to attract the customer there are several promotional strategy which influencing purchase decision of buyers and also I learned functional department like HR, Finance and Marketing. From this project now I came to know that how to carried out business process in a systematic manner in the competition level. ADM AIMS COLLEGE, Dharwad. 63 This practical knowledge of project made me to perfect in future to stand in a any corporate world. And Finally I thanks to AIMS College Dharwad and company guide Mr.Arif Research Methodology Since the study is on retail sector first the detail study of the store is been conducted about its Management team its structure the number of departments which all brands does the store has, who are its suppliers about its warehouses. Based on the topic objectives were set and to arrive at the opinion on objectives a set of 100 questionnaires were designed of 10 questions and response is collected from the customers who are visiting the store. For data collection Random Convenient sampling method was adopted For this project the area of research is Hubli. Objective of the project AIMS COLLEGE, Dharwad. 64 To know the effective promotional strategy which influence customer to purchase a product of Big Bazaar. Sub-objectives 1) To know the promotional strategy of big bazaar 2) To know the relationship between promotional strategy and buying decision Data Collections Methods Market research requires two types of data i.e. secondary data and primary data. Primary data has been used abundantly for the study. Well-structured questionnaires were prepared & the survey was undertaken. Feedback for the display has been taken by asking questions & observation has also done to gather primary information. There is also a use of secondary data, collected from the various journals, books, and websites & from company managers. Primary data Secondary data Field Survey Big Bazaar records Text Books and journals AIMS COLLEGE, Dharwad. 65 Company Websites Area of research: Research approach: Hubli Survey method Sampling Method Since the study is restricted to Retail sector, all the functional Departments of Big Bazaar and the respondents are found at the store only so according to the convenience randomly they are being picked so sampling method is used in this study is Random Convenient Sampling. Sampling Sample size Sampling Method Sample Unit : 100 respondents : Random Convenience sampling : Customer of Big bazaar AIMS COLLEGE, Dharwad. 66 Measuring Tool : Questionnaire AIMS COLLEGE, Dharwad. 67 ANALYSIS AND INTERPRETATION AIMS COLLEGE, Dharwad. 68 Q No 1: Which store first comes to your mind when you think of purchasing a product? RESPONSE Big bazaar Vishal mega mart Others retailer Total NO OF RESPONDENTS 77 15 8 100 PERCENTAGE 77% 15% 8% 100% ANALYSIS: From the survey, from 100 respondents, 77% of them gave 1st preference to Big Bazaar 15% of them gave preference to Vishal Mega Mart and 8% were gave to other retailer . INTERPRETATION Most of the customers are given 1st preference to Big Bazaar compare to other retailers AIMS COLLEGE, Dharwad. 69 2) From which source did you come to know about Big Bazaar outlet. RESPONSE T .V Advertisement Hoardings News paper Buspaintings Total NO OF RESPONDENT 23 34 31 12 100 PERCENTAGE 23% 34% 31% 12% 100% ANALYSIS: From the above graph i can come to know that, among 100 respondents, 23% of them come to know about Big Bazaar through TV advt., 34% of the respondents told that through Hoardings, 31% of them through news paper , and 12% came to know through bus painting AIMS COLLEGE, Dharwad. 70 INTERPRETATION. Hoarding is the most influencing factor which is responsible for awareness of Big Bazaar. 3) Are you aware of promotional offers conducted by big bazaar? Response Yes No Total No of respondents 87 13 100 Percentage 87% 13% 100% AIMS COLLEGE, Dharwad. 71 ANALYSIS: Among the 100 respondents, 87% of them they are aware of promotional offers, 13% told they have told that they are not aware. INTERPRETATION: 87% of customers are aware of promotional activity in the big bazaar. 4) Please choose below the factor which attracted you most at the Big Bazaar. Rates Offer Service Quality Availability of products Total No of respondents 51 9 23 17 100 percentage 51% 9% 23% 17% 100% AIMS COLLEGE, Dharwad. 72 Analysis Among 100 respondent 51% of customer they have told that they are attracted by the offers and 9% of them told that they are attracted by service and 23% of them told that they are attracted by quality and only 17% of them told that only for availability of products Interpretation: Most of the people attracted towards big bazaar only for the promotional offers. So offer is the most influencing factor among those. 5) Which of the following factors influence in your purchase decision? Rates Offer Service Quality Effective advertisement Total No of respondents 43 11 21 25 100 percentage 43% 11% 21% 25% 100% AIMS COLLEGE, Dharwad. 73 ANALYSIS: Among 100 respondent 43 of them told that offer is responsible for their purchase decision and 9 of them told that service and 23 of them told that quality an only 25 of them told that effective advertisement INTERPRETATION: Among those factor offer is the emerging factor which is responsible for purchase decision of buyers 6) Do you think the promotional activity of Big Bazaar gives you clear message? Response Yes No Total No of respondents 77 23 100 Percentage 77% 23% 100% AIMS COLLEGE, Dharwad. 74 ANALYSIS: Among 100 respondent 77 of them told that the promotional activities of big bazaar gives clear message and 23 of them told that they do not understood. INTEPRETATION: Most of the people highly agree that promotional activity of big bazaar gives clear message 7) Will you advise anybody to visit Big Bazaar in your future shopping Response Yes No Total No of respondents 98 2 100 Percentage 98% 2% 100% AIMS COLLEGE, Dharwad. 75 ANALYSIS: Among 100 respondents 98 of them told that they will advise others to visit big bazaar in future shopping and only 2 of them told that they do not advise. INTEPRETATION: Most of the respondent they would like to advise others in future shopping 8) Looking at the promotions of Big Bazaar does your purchase pattern changes Response Yes No Total No of respondents 83 17 100 Percentage 83% 17% 100% 76 AIMS COLLEGE, Dharwad. ANALYSIS: Among 100 respondent 83 of them told that these promotional offers changes their purchase pattern and only 17 of them told do not change. INTERPRETATION: Most of the customer believed that promotions is responsible for their purchase decision 9). would you like to make your purchase under unexpected offers? Response Yes No Total No of respondents 94 6 100 Percentage 94% 6% 100% 77 AIMS COLLEGE, Dharwad. ANALYSIS: Among 100 respondents 94 of them they are interested to buy products under unexpected offers and only 6 of them told that they do not buy. INTERPRETATION: Most of the customer interested to buy under unexpected offers only. FINDINGS AIMS COLLEGE, Dharwad. 78 SURVEY FINDINGS INFORMATION SEARCH AND EVALUATION PROCESS • From the sample size of 100 samples it is found that the Brand is well positioned in the minds of customers because 77% of the respondent’s preference is Big Bazaar for their shopping. • Among 100 respondents, 23% of people told that 1st they came to know through T V advertisement and 34% of people told that through hoardings 31% of them told that through news paper and finally 12% of them highly agree that through bus painting. • Among the 100 respondents, 87% of them told that they are aware of promotional activities of big bazaar .only 13% of them told that they are not aware of promotional activity of big bazaar . • Among the 100 respondent 51% of them told that they are attracted towards big bazaar only for the offers 9% of them told that service and 23% of them told that quality and only 17% of them told that due to availability of products • Among 100 respondent 43% of them agree that offers is the most emerging factor influencing AIMS COLLEGE, Dharwad. 79 purchase decision and only 11% of them told that service 21% of told that quality and finally 25% of them told that effective advertisement is responsible for the purchase decision. • Among 100 respondent 77% of them told that promotional activities of big bazaar gives clear message and 23% of them told that they did not understood. • Among 100 respondent 98% of people interest to advise others in future shopping and only 2% of them not interest to advice. • Among 100 respondent 83% them told that promotions of big bazaar changes their purchase pattern and only 17% told that does not changes. • Among 100 respondent 94% of them told that they are interested to buy products under unexpected offers and 6% of told that they do not buy. AIMS COLLEGE, Dharwad. 80 Recommendations • Big bazaar should keep offers in regular intervals so that there should not be a long term gap, because offer is the most influencing factor which is responsible for customer purchase decision. • And they also concentrate on T V advertisement they should show ads and promotional offers in a regular interval in three languages like Kannada Hindi English. • Hoarding should be placed uncovered area. AIMS COLLEGE, Dharwad. 81 CONCLUSION Indian retail sector is witnessing one of the most hectic Marketing activities of all times. The companies are fighting to win the hearts of customer who is God said by the business tycoons. There is always a ‘first mover advantage’ in an upcoming sector. In India, that advantage goes to “BIG BAZAAR”. It has brought about many changes in the buying habits of people. It has created formats, which provide all items less than one roof at low rates. The consumer’s preferences are changing & they are moving from Traditional Kirana stores to Modern Retail outlet. It’s the main challenge to the Modern retail outlets to 82 AIMS COLLEGE, Dharwad. attract the customers towards them from that of competitors. To attract more customers companies have to carry out the promotional activities in unique way. BIG BAZAAR has maintained that uniqueness & has succeeded in attracting customers. The promotional activity of the company, which famous as Less Price than others as it says ‘Nobody Sells Cheaper and Better!’ is made its place in minds of customer. As the competition is becoming stiff in the market the activities conducted by the company are unique, that have brought fruitful result to the company. Among them sales Promotions is one of the leading activity or unique among all other activities & has high influence on the customer walk-in. LIMITATIONS • The study was restricted to only the customers of BIG BAZAAR, Hubli. • The time constant was a limiting factor, as more time required carrying out study on other aspects of the topic. AIMS COLLEGE, Dharwad. 83 • The result and analysis based on the customer survey method and small sample size has taken only 100 • Findings are related to particular areas. ANNEXTURE “A STUDY ON THE EFFECTIVE PROMOTIONAL STRATEGY WHICH INFLUENCES CUSTOMER TO PURCHASE AIMS COLLEGE, Dharwad. 84 A PRODUCT OF BIG BAZAAR” Questionnaire Name: ___________________ ___________________ Address: _____________________ Contact No: 1) Which store first comes to your mind when you think of purchase a product.? a: Big Bazaar c: other retailer b:Vishal mart 2) From which source did you come to know about Big Bazaar outlet? a; T. V. advertisement c; bus paintings b;. Hoardings. d. news paper 3) Are you aware of promotional activities conducted by Big Bazaar in Hubli.? a. Yes b. No. 4) Please choose from below the factor which attracted you most at Big Bazaar? AIMS COLLEGE, Dharwad. 85 a. Offer b. service c. quality d.availability of products 5) Which of the following factors influence in your purchase decision.? a. Offers products b. Effective services advertisement d. Effective c. Quality of 6) Do you think the promotional activity of Big Bazaar gives you the clear message? ? a. Yes b. No 7) Will you advise anybody to visit Big Bazaar in future shopping? a. Yes b. No 8. Looking at the promotions of Big Bazaar does your purchase pattern changes? a. Yes b. No 9. Would you like to make your purchase under unexpected offers? a. Yes b. No AIMS COLLEGE, Dharwad. 86 10) Any valuable suggestion ……………………………………………………………… …………………………… … Signature of Customer Bibliography Reference Books o o o o Marketing Management: Philip Kotler Advertising and Sales: Promotion Belch and Belch Retail Management: Bajaj and Srivastav Research Methodology: Cooper and Schindler JOURNALS AND MAGAZINES Business World Business Today Websites www.google.com www.pantaloon.com www.wikipedia.com www.timesofindia.com AIMS COLLEGE, Dharwad. 87 AIMS COLLEGE, Dharwad. 88


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