Chapter 1 introduction & industry profile
- 1. INTRODUCTION An increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6 percent. The Indian retail market, which is the fifth largest retail destination globally, was ranked second after Vietnam as the most attractive emerging market for investment in the retail sector. India has topped the A.T. Kearney‘s annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. Retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a ‗retailer‘ buys goods or products in large quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term ‗retailer‘ is also applied where a service provider services the needs of a large number of individual, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-customer (b2c) transactions and maul order, is forms of non-shop retailing. RVIM Page 1
- 2. Retail Sector The retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and second-rung cities alike introducing the Indian consumer to a shopping experience like never before. The sector is at an inflexion point where the growth of organised 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. Organised retail is on all- time high in India. The growth is boosted by various factors such as availability of professional practices, media proliferation, various brands which are gaining value thereby enhancing industry growth, availability of various funding options, regulations like VAT implementation to make processes simple, sea change in demographics of country and international exposure. Retailing consists of the location sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Retail is usually classified by type of products as follows: Food products Hard goods – appliances, electronics, furniture, sporting goods, etc. Soft goods- clothing, apparel, and other fabrics. There are the following retailers by marketing strategy: Departmental stores- very large stores offering a huge assortment of soft and hard goods. Discount stores- tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Supermarkets- Is a self-service store consisting mainly of grocery and limited products on non-food items. Sells mostly food products. RVIM Page 2
- 3. Warehouse stores- warehouses that offer low-cost, often high- quantity goods piled on pallets or steel shelves, warehouse clubs charge a membership fee. Variety stores- they offer extremely low-cost goods, with limited selection. Speciality stores- A typical speciality store gives attention to a particular category and provides high level of service to the customers. For example, if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the representative stores. General stores- A rural store that supplies the main needs for the local community. Convenience stores- Is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for the emergency and immediate purchases. Hypermarkets- provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. A classic example is Metro in Bangalore. Malls- range of retail shops at a single outlet. Vending machines- automated piece of equipment where customers can drop money into the machine and get the products. For example-soft drink vending at Bangalore International Airport. RVIM Page 3
- 4. Retail pricing The pricing technique used by most retailers is cost-plus pricing. This involves adding a mark-up amount (or percentage) to the retailer's cost. Another common technique is suggested. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer. In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon which the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths, students, or senior citizens. A. Transfer mechanism There are several ways in which consumers can receive goods from a retailer: Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewellery) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries like India. Delivery, where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalogue was invented in 1744 and was common in the late 19th and early 20th centuries. Ordering by telephone is now common, either from a catalogue, newspaper, television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, including telemarketing and television shopping channels, are also used to generate telephone orders. Started gaining significant market share in developed countries in the 2000s. Door-to-door sales, where the salesperson sometimes travels with the goods for sale. Self-service, where goods may be handled and examined prior to purchase. Some shops sell second-hand goods. In the case of a non-profit shop, the public donates goods to the shop to be sold. In give-away shops goods can be taken for free. RVIM Page 4
- 5. Another form is the pawnshop, in which goods sold are used as collateral for loans. There are also "consignment" shops, which are where a person can place an item in a store and if it sells, the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers. Automatic approval is not allowed for foreign investment in retail due to lack of trained work force, low skill level for retailing management, lack of Retailing Courses and study options intrinsic complexity of retailing – rapid price changes, constant threat of product obsolescence and low margins B. Sales techniques: Behind the scenes at retail, there is another factor at work. Corporations and independent store owners alike are always trying to get the edge on their competitors. One way to do this is to hire a merchandising solutions company to design custom store displays that will attract more customers in a certain demographic. The nation's largest retailers spend millions every year on in-store marketing programs that correspond to seasonal and promotional changes. As products change, so will a retail landscape. Retailers can also use facing techniques to create the look of a perfectly stocked store, even when it is not. A destination store is one that customers will initiate a trip specifically to visit, sometimes over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot traffic, which is capitalized upon by smaller retailers. C. Customer service: Customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." It is important for a sales associate to greet the customer and make himself available to help the customer find whatever he needs. When a customer enters the store, it is important that the sales associate does everything in his power to make the customer feel welcomed, important, and make sure he leave the store satisfied. Giving the customer full, undivided attention and helping him find what he is looking for will contribute to the customer's satisfaction. RVIM Page 5
- 6. Global Retail Sector The latter half of the 20th Century, in both Europe and North America, has seen the emergence of the supermarket as the dominant grocery retail form. The reasons why supermarkets have come to dominate food retailing are not hard to find. The search for convenience in food shopping and consumption, coupled to car ownership, led to the birth of the supermarket. As incomes rose and shoppers sought both convenience and new tastes and stimulation, supermarkets were able to expand the products offered. The invention of the bar code allowed a store to manage thousands of items and their prices and led to 'just-in-time' store replenishment and the ability to carry tens of thousands of individual items. Computer- operated depots and logistical systems integrated store replenishment with consumer demand in a single electronic system. The superstore was born. On the Global Retail Stage, little has remained the same over the last decade. One of the few similarities with today is that Wal- Mart was ranked the top retailer in the world then and it still holds that distinction. Other than Wal-Mart‘s dominance, there‘s little about today‘s environment that looks like the mid- 1990s. The global economy has changed, consumer demand has shifted, and retailers‘ operating systems today are infused with far more technology than was the case six years ago. The global retail industry has travelled a long way from a small beginning to an industry where the world wide retail sale alone is valued at $ 7 trillion. The top 200 retailers alone account for 30% of worldwide demand. Retail sales being generally driven by people‘s ability (disposable income) and willingness (consumer confidence) to buy, compliments the fact that the money spent on household consumption worldwide increased 68% between 1980 and 2003. The leader has in-disputably been the USA where some two-thirds or $ 6.6 trillion out of the $ 10 trillion American economy is consumer spending. About 40% of that ($ 3 trillions) is spending on discretionary products and services. Retail turnover in the EU is approximately Euros 2000 billion and the sector average growth looks to be following an upward pattern. The Asian economies (excluding Japan) are expected to grow at 6%consistently till 2005-06. Positive forces at work in retail consumer markets today include high rates of personal expenditures, low interest rates, low unemployment and very low inflation. Negative factors that hold retail sales back involve weakening consumer confidence. RVIM Page 6
- 7. World’s Top 15 Retailers- Source: http://worldb2blink.com/worldtop100retailers.htm No. Retailer Base Type Sales in U.S. Region Regional $millions Station 1 Wal-Mart Stores, lnc USA Discount Store 163,532.00 N.America Global 2 Carrefour Group FRA Hypermarkets 52,196.10 Europe Global 3 The Kroger Co USA Supermarkets 45,352.00 N.America Single Country 4 MetroAG GER Diversified 44,163.37 Europe Global 5 The Home Depot, lnc USA Hardlines 38,434.00 N.America Global 6 Albertson's, lnc USA Supermarkets 37,478.00 N.America Single Country 7 ITM Entreprises SA FRA Supermarkets 36,762.45 Europe Regional 8 Sears, Roebuck and USA Dept Store 36,728.00 N.America Regional Co 9 Kmart Corporation USA Discount Store 35,925.00 N.America Single Country 10 Target Corporation USA Discount Store 33,702.00 N.America Single Country 11 JC Penney USA Dept Store 31,503.50 N.America Global 12 Royal Ahold NET Supermarkets 31,222.15 Europe Global 13 Safeway Inc USA Supermarkets 30,801.80 N.America Regional 14 Rewe-Gruppe GER Supermarkets 30,567.69 Europe Regional 15 Tesco plc UK Supermarkets 30,404.40 Europe Global RVIM Page 7
- 8. Percentage of Organized Retail across the world: RVIM Page 8
- 9. INDIAN RETAIL SECTOR: India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. India‘s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favourable demographic outline. 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, Melas 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. The retail industry in India gathered a new dimension with the setting up of the different International Brand Outlets, Hyper or Super markets, shopping malls and departmental stores. Growth of retail sector in India: 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. RVIM Page 9
- 10. As the contemporary retail sector in India is reflected in sprawling shopping centres, 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 behaviour, 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. Key Players in the Indian Retail Sector: 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. 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. According to the Union Minister of Commerce & Industry, Shri Kamal Nath, the organized retail sector is expected to grow to a value of Rs. 2,00,000 crore (US$45 billion) and may generate 10 to15 million jobs in next 5 years. This can happen in two forms- 2.5 million of these people may be associated directly with retailing and the rest 10 million people may be gainfully employed in related sectors that will be pulled up through the strong forward and backward linkage effects. However to compete in this sector one needs to have up-to-date market information for planing and decision making. The second most important requirement is to manage costs widely in order to earn at least normal profits in face of stiff competition. RVIM Page 10
- 11. Predicted Mall Distribution Space in India 35 30 25 20 15 10 5 0 Delhi & NCR Mumbai Hyderabad Pune Bangalore Tier II cities RVIM Page 11
- 12. CHALLENGES AND OPPORTUNITIES: Retailing has seen such a transformation over the past decade that its very definition has undergone a sea change. No longer can a manufacturer rely on sales to take place by ensuring mere availability of his product. Today, retailing is about so much more than mere merchandising. It‘s about casting customers in a story, reflecting their desires and aspirations, and forging long-lasting relationships. As the Indian consumer evolves they expect more and more at each and every time when they steps into a store. Retail today has changed from selling a product or a service to selling a hope, an aspiration and above all an experience that a consumer would like to repeat. For manufacturers and service providers the emerging opportunities in urban markets seem to lie in capturing and delivering better value to the customers through retail. For instance, in Chennai CavinKare‘s LimeLite, Marico‘s Kaya Skin Clinic and Apollo Hospitals Apollo Pharmacies are examples, to name a few, where manufacturers/service providers combine their own manufactured products and services with those of others to generate value hitherto unknown. The last mile connect seems to be increasingly lively and experiential. Also, manufacturers and service providers face an exploding rural market yet only marginally tapped due to difficulties in rural retailing. Only innovative concepts and models may survive the test of time and investments. However, manufacturers and service providers will also increasingly face a host of specialist retailers, who are characterized by use of modern management techniques, backed with seemingly unlimited financial resources. Organized retail appears inevitable. For retail industry in India; things have never looked better and brighter. Challenges to the manufacturers and service providers would abound when market power shifts to organized 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 RVIM Page 12
- 13. heavy initial investments that are required to break even with other companies and compete with them. The Indian retail industry is gradually inching its way towards becoming the next boom industry. INDIA’S TOP 15 RETAILERS: 1. The Raymond Shop - The Legacy continues 2. Big Bazaar - Adding big values 3. Evok - Value for home décor 4. Lifestyle - Styling your life 5. Wills Lifestyle - The fashion solution provider 6. Siyaram‘s - Draping men in style 7. Bata India - Understanding feet‘s needs 8. Hypercity - Rich shopping experience 9. Reebok - Stay fit with style 10. Max - Maximum value 11. Hidesign - Beauty in leather 12. Nakshatra - Exuding universal appeal 13. Diya - Jewellery for every occasion 14. McDonald‘s - Burger King: Serving millions 15. Gili world - Fulfilling diamond dream. RVIM Page 13
- 14. PANTALOON RETAIL (INDIA) 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 market. Headquartered in Mumbai (Bombay), the company operates over 16 million square feet of retail space, has over 1000 stores across 73 cities in India and employs over 30,000 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 Brand Factory, Blue Sky, all Top 10 and Star and Sitara. The company also operates an online portal, futurebazaar.com. FUTURE GROUP: ―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. In Future Group they will not wait for the Future to unfold itself but create future scenarios in the consumer space and facilitate consumption because consumption is development. They will effect socio-economic development for the customers, employees, shareholders, associates and partners. 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 of its leading retail formats include, Pantaloon, Big Bazaar, Central, Food Bazaar, Home Town, Ozone, Depot, future Money and online retail format, futurebazaar.com. RVIM Page 14
- 15. Future group includes, Future Capital Holding, Future Generally India Indus league clothing and Galaxy Entertainment that manages sports Bar, Brew Bar and Bowling Co. Future Capital Holding, the group ‗s financial arm, focuses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels. The group‘s joint venture partners include Italian insurance major, generally. French retailer ETAM group. US-based stationery products retailers, Staples Inc. and UK-based Lee Cooper and India-based Talwalkar‘s, Blue Foods and Liberty Shoes. RVIM Page 15
- 16. FUTURE VALUE RETAIL Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India) Limited. This entity has been created keeping in mind the growth and the current size of the company‘s value retail business, led by its format divisions, Big Bazaar and Food Bazaar. The company operates 120 Big Bazaar stores, 170 Food Bazaar stores, among other formats, in over 70 cities across the country, covering an operational retail space of over 6 million square feet. As a focused entity driving the growth of the group's value retail business, Future Value Retail Limited will continue to deliver more value to its customers, supply partners, stakeholders and communities across the country and shape the growth of modern retail in India. BIG BAZAAR Big Bazaar is not just another hypermarket. It caters to every need of your family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. Kishore Biyani led the company‘s foray into organized retail with the opening up of the Big Bazaar in the year 2001. It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class. It was started as a hypermarket format head quartered in Jogeshwari, 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 It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the city. Usually the items are clubbed together for offers as on the lines of Wal- Mart and Carrefour, offer weekend discounts and works on the same economy model as Wal- Mart and has considerable success in many Indian cities and small towns. RVIM Page 16
- 17. It currently operates out of more than 150 stores and top 25 stores register a cumulative footfall of 30 lakh a month on an average. 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. Also, 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 you. First Food Bazaar format was added as Shop-In-Shop within Big Bazaar in the year 2002.Big Bazaar and Food Bazaar blend the look, feel and touch of Indian Bazaar with modern retail concepts of choice, convenience and quality. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping experience. At Big Bazaar, you will definitely get the best products at the best prices - that‘s what they 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 you. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping experience. AFFILIATE COMPANIES: Home Solutions Retail (India) Limited Home Solutions Retail (India) Limited (HSRIL) offers complete retailing solutions for all products and services related to home building and home improvement. The key product categories are Consumer Durable & Electronics (CDE), Furniture, Home furnishing & decor, Home improvement and Home services. HSRIL operates retail format Collection-i, Furniture Bazaar, Electronics Bazaar, Home Town and e-zone. Future Brands Limited Future Brands Limited (FBL) has been incorporated on November, 2006 and is involved in the business of creating, developing, managing, acquiring and dealing in consumer-related brands and IPRs (Intellectual Property Rights). RVIM Page 17
- 18. Future Media (India) Limited Future Media (India) Limited (FMIL) was incorporated as the Group‘s media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consumers. FMIL offers relevant engagement through its media properties like Visual Spaces, Print, Radio, Television and Activation. Future Supply Chain Solutions Limited Future Supply Chain Solutions Limited (FSCS) has been incorporated as a separate entity and is involved in the business of providing logistics, transportation and warehousing services for all group companies and third-parties. Future Axiom Telecom Limited Future Axiom Telecom Limited is a Joint Venture with Axiom Telecom LLC, UAE. The Company has a 50% stake in Future Axiom Telecom Limited (FATL) which is a joint venture Company with Axiom Telecom LLC, UAE. The Company would be engaged in sourcing and wholesale distribution of mobile handsets, accessories and in setting up service centres for mobile handsets in India. Pantaloon Food Product (India) Limited Pantaloon Food Product (India) Limited (PFPIL) was incorporated with the object of sourcing and backward integration of food business of the Company. PFPIL has sourcing and distribution bases at all key cities across the country. Future Knowledge Services Limited Future Knowledge Services Limited (FKSL) was incorporated on January, 2007 and is engaged in the business of business process outsourcing and knowledge process outsourcing. Future Capital Holdings Limited Future Capital Holdings Limited (FCH) was formed to manage the financial services business of Pantaloon Retail (India) Limited and other group entities. FCH is one of the fastest growing financial services company in India, with presence in Asset Advisory, Retail Financial Services and Proprietary Research. RVIM Page 18
- 19. Future Generali India Insurance Company Limited Future Generali India Insurance Company Limited (FGIICL) was incorporated on October 30, 2006 to undertake and carry on the business of general insurance. The approval for carrying on General Insurance Business has been received from the Insurance Regulatory and Development Authority of India (IRDA) on September 4, 2007. Future Generali India Life Insurance Company Limited Future Generali India Life Insurance Company Limited (FGILICL) was incorporated on October 30, 2006 to establish and conduct the business of life insurance in India, which comprises of whole life insurance, endowment insurance, double benefit and multiple benefits insurance etc. The approval for carrying on Life Insurance Business has been received from the IRDA in September, 2007. Futurebazaar India Limited Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience. Futurebazaar.com was launched on January 2, 2007, and has emerged as one of the most popular online shopping portals in India. It was awarded with the ―Best Indian Website‖ award, in the shopping category, by the PC World Indian Website Awards. Staples Future Office Products Private Limited Staples Future Office Products Private Limited (SFOPPL) was incorporated on January, 2007 and is involved in the business of dealing in all kinds of office supplies, office equipments and products. SFOPPL is a joint venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). The company‘s first retail outlet opened in Bangalore in December, 2007. RVIM Page 19
- 20. Group Vision Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner. Group Mission We 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. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses. We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost- conscious and committed to quality in whatever we do. We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful. Core Values Indianness: 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 and action. Adaptability: to be flexible and adaptable, to meet challenges. Flow: to respect and understand the universal laws of nature. RVIM Page 20
- 21. Major Milestones 2011 April 2011 – KB‘s Fairprice celebrates opening its 200 stores in India May 2011 – Future Supply Chains becomes ISO certified 2010 Future Group launches its telecom brand T24 in partnership with Tata Teleservices to provide additional loyalty benefits to its customers. Future Group launches products in key FMCG categories through Sach, a brand co- created with Sachin Tendulkar. Future Group connects over 4000 small and medium Indian manufacturers and entrepreneurs with consumers. 2009 Future Group celebrates its first Shopping Festival across all retail formats in key Indian cities. Future Innoversity starts its campuses in Ahmedabad, Bangalore and Kolkata to offer degree programs through a tie-up with IGNOU. Future Group partners with Hong Kong-based Li & Fung Group to strengthen its supply chain and logistics network across the country. 2008 Future Capital Holdings becomes the second group company to make a successful Initial Public Offering (IPO) in the Indian capital market. Big Bazaar crosses the 100-store mark, marking one of the fastest expansions of the hypermarket format anywhere in the world. Total operational retail space crosses the 10 million square feet mark. Future Group acquires rural retail chain Aadhar from the Godrej Group, which has a presence in 65 rural locations. RVIM Page 21
- 22. 2007 Future Group crosses the $1 billion turnover mark. Specialized companies in retail media, logistics, IPR and brand development and retail-led technology services become operational. Pantaloon Retail wins the International Retailer of the Year award at US-based National Retail Federation convention in New York, and Emerging Retailer of the Year award at the World Retail Congress held in Barcelona. Online portal Futurebazaar.com becomes India‘s most popular shopping portal. 2006 Future Capital Holdings, the group‘s financial arm, is formed to manage over $1.5 billion in real estate, private equity and retail infrastructure funds. Home Town, the home building and improvement products retail chain, is launched along with consumer durables format Ezone and furniture chain Furniture Bazaar. Future Group enters into joint venture agreements to launch insurance products with Italian insurance major Generali. Future Group forms joint ventures with US office stationery retailer Staples. 2005 Future Group moves beyond retail and acquires a stake in Galaxy Entertainment, Indus League Clothing and Planet Retail. Future Group sets up Kshitij, India‘s first real estate investment fund, to build a chain of shopping malls 2004 Future Group launches India‘s first seamless mall, Central, in Bangalore. 2002 Food Bazaar, the supermarket chain is launched. 2001 Future Group launches three Big Bazaar stores within a span of 22 days in Kolkata, Bangalore and Hyderabad. RVIM Page 22
- 23. 1997 Future Group enters modern retail with the launch of the first 8000-sq. ft. store Pantaloons in Kolkata. 1995 Future Group launches John Miller, a brand for Formal shirts. 1994 The Pantaloon Shoppe, Future Group‘s exclusive menswear store in a franchisee format is launched across the nation. The company starts distribution of branded garments through multi-brand retail outlets across the nation 1992 Pantaloon Retail India Ltd makes an Initial public offer (IPO). 1991 BARE, an Indian denim brand is launched. 1987 The company is incorporated under the name of Manz Wear Private Limited. Pantaloons, one of India‘s first formal trouser brands,is launched. Exhibit 2: Growth Story of Big Bazaar RVIM Page 23
- 24. ABOUT BIG BAZAAR BANASHANKARI It was started in the year 24th June 2005. It has four main product and service profile namely apparels, general merchandise, food bazaar and other. It has a product portfolio of around 5000 and a sales force of 350 employees. This store is a value format based and pricing strategy is mainly psychological. It has a promotional strategy mainly based on discounts bigger than any other competitor in the industry. It has customer service such as home delivery, free gift wrapping, free alteration desk, exchange counter, sitting umbrellas, drinking water, big parking area, trial and rest rooms, lifts, baggage counters etc….. Some of the promotions strategies include in the store are Wednesday Bazaar, Monthly Savings Bazaar, Pehli Tarik etc. Wednesday Bazaar is the day in the week in which the price of all products will be less than any other day. In this day, there will be lots of offers and this will create in the minds of the customers an awareness to grab their most liking products at a cheaper rate. Every first ten days in a month there is a monthly savings bazaar where the prices will be less. This is to attract the customers as soon as they get their salaries. It has a promotional strategy mainly based on discounts bigger than any other competitor in the industry. The head of the organization is store manager. There are eight assistant store managers. Department managers and asst. dept. managers count to 18 in numbers. There is one HR manager and asst. HR manger. The main departments are cash, administration, visual merchandising, logistics, facilities, customer service desk and HR department. The Next following chart shows the four main product and service profile namely apparels, general merchandise, food bazaar and other. RVIM Page 24
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- 27. UNDER GROUND FLOOR This floor is only for the parking of two and four wheelers. It has the capacity of 100 to 120 cars parking space at a time. The customer can come after shopping directly to the parking lobby by lift or by stairs. GROUND FLOOR This floor comprises of products like PUC (Plastics, Utensil, and Crockery), FOOD BAZAAR (Food, Non food, Staples, Fruits & Vegetables, and Wellness), and counters like, 10 Cash counters and 3 Express cash counters, T24counter, Home delivery counter, Exchanges counter, baggage counter and logistics are available . RVIM Page 27
- 28. 1ST FLOOR This floor comprises of products like Apparels for (Men, Ladies, and Kids), General merchandise (Toys, Footwear, and Sports goods), SIS (Navras gold jewelry) CSD (customer service desk), free gift wrapping and free alteration desk. 2ND FLOOR In this floor products like Electronics, Furniture, Luggage and Home Fashion (bed sheets, blankets) are exhibited. 3RD FLOOR In this floor service like Star & Sitara Saloon, Food Court and F123 (Fun World) are offered. 4TH FLOOR This floor is only to the employees of the big bazaar which includes functional department like HR, Marketing, IT, meeting rooms, staff room, training room and locker facility to the employees of the store. RVIM Page 28
- 29. ORGANISATIONAL STRUCTURE Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization‘s actions. RVIM Page 29
- 30. 7P Analysis of Big Bazaar 7P Marketing Mix is more useful for services industries and knowledge intensive industries. Successful marketing depends on number of key issues. The seven keys issues are explained as: - 1. Product: Big Bazaar offers a wide range of products which range from apparels, food, farm products, furniture, child care, toys, etc of various brands like Levis, Allen Solly, Pepsi, Coca- Cola, HUL, ITC, P&G, LG, Samsung, Nokia, HP etc. Big Bazaar also promotes a number of in house brands like: DJ & C ,Tasty Treat, Clean Mate, Sensei, Care Mate, Koryo and 44 other brands. 2. Pricing: The pricing objective at Big Bazaar is to get ―Maximum Market Share‖. Pricing at Big Bazaar is based on the following techniques: Value Pricing (EDLP – Every Day Low pricing): Big Bazaar promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping. Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is also used to attract customers. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja). Differentiated Pricing: Differentiated pricing i.e. difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which is aggressively used by Big Bazaar.e.g. Wednesday Bazaar Bundling: It refers to selling combo-packs and offering discount to customers. The combo-packs add value to customer and lead to increased sales. Big Bazaar lays a lot of importance on bundling.e.g. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22);5kg oil + 5kg rice + 5kg sugar for Rs 599. RVIM Page 30
- 31. 3. Place: The Big Bazaar stores are operational across three formats — hypermarkets spread over 40,000-45,000 sq ft, the Express format over 15,000-20,000 sq ft and the Super Centres set up over 1 lakh sq ft. Currently Big Bazaar operates in over 34 cities and towns across India with 116 stores. Apart from the Metros these stores are also doing well in the tier II cities. These stores are normally located in high traffic areas. Big Bazaar aims at starting stores in developing areas to take an early advantage before the real estate value booms. Mr. Biyani is planning to invest around Rs 350 crore over the next one year expansion of Big Bazaar. In order to gain a competitive advantage Big Bazaar has also launched a website www.futurebazaar.com, which helps customers to orders products online which will be delivered to their doorstep. This helps in saving a lot of time of its customers. 4. Promotion: The various promotion schemes used at Big Bazaar include: ―Saal ke sabse saste 3 din‖ Hafte ka sabse sasta din ―Wednesday bazaar‖ Exchange Offers ―Junk swap offer‖ Future card(3% discount) Shakti card Advertisement (print ad, TV ad, radio) Brand endorsement by M.S Dhoni and Asin Big Bazaar has come up with 3 catchy lines written on hoardings taking on biggies like Westside, Shoppers stop and Lifestyle. They are: ―Keep West- a Side. Make a smart choice!‖ ―Shoppers! Stop. Make a smart choice!‖ ―Change your Lifestyle. Make a smart choice!‖ 5. People: Well trained staff at stores to help people with their purchases. Employ close to 10,000 people and employ around 500 more per month. Well-dressed staff improves the overall appearance of store. Use scenario planning as a tool for quick decision making multiple counters for payment, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere. RVIM Page 31
- 32. 6. Process: Big Bazaar places a lot of importance on the process right from the purchase to the delivery of goods. When customers enter the stores they can add the products they which to purchase in their trolley from the racks. There are multiple counters where bill can be generated for purchases made. Big Bazaar also provides delivery of products over purchases of Rs. 1000. 7. Physical Evidence: Products in Big Bazaar are properly stacked in appropriate racks. There are different departments in the store which display similar kind of products. Throughout the store there are boards/written displays put up which help in identifying the location of a product. Moreover boards are put up above the products which give information about the products, its price and offers. Big Bazaar stores are normally ‗U shaped‘ and well planned & designed RVIM Page 32
- 33. 6 Days Maha Savings Offer This 6 Din Mahabachat sale is valid at all the Big Bazaar Stores in India and is applicable on electronics, clothing, accessories, food, cosmetics, kitchenware, mobile phones, LCD TVs, etc. This is also the part of their previous offers namely Sabse Saste offers and the most important sale days for Big Bazaar, this Independence Day Offer, in terms of sales compared with the whole year. The gates will be open from 9 a.m. onwards during this exclusive sale period. This offer is valid on Food Bazaar, Furniture Bazaar, Electronics Bazaar, Fashion, etc, at all Big Bazaar in India . Buying Tip This offer at Big Bazaar varies from store to store as well as from city to another city, so it is important for the consumer to check the same at the nearest Big Bazaar store to get the offer details individually from each stores. Spend wisely on such sales and find only on genuine offers and go for it as all offers are not worthy to go for. It is essential think twice before spending on the same! Never indulge in impulsive shopping lured by these offers as most of them are available even after the offer period but some won't as well! So use this offer period to save and not over spend! Big Bazaar Mahabachat offer for this year, 2011, ―Mehengai ka ek hi jawab chalo‖ Big Bazaar MahaBachat good offers that are ongoing with the Mahabachat or 6 Days Maha Savings offer at Big Bazaar. Although some offers are exclusively available only at the store while some are applicable for both the store and online at their website. Big Bazaar presents a five day ‗Mahabachat‘ shopping mela from August 10th to 15th August. There are huge, discounts. In addition to that, there will be discount for food products, fabrics, furniture‘s and home appliances. Future Bazaar is the online venture of the Future Group, owner of India‘s largest retail brands Big Bazaar, Pantaloons, and Central and E zone. Future Bazaar sells a wide range of products like Fashion including Men‘s apparel, Women‘s apparel, Mobiles, Mobile accessories, Electronics like LCD TVs, Flat TVs, DVD players, Home Theatres, iPods, MP3 players, MP4 players, Digital Cameras, Video Cameras, RVIM Page 33
- 34. Music systems, Home appliances, Kitchen Appliances, Dream line Kitchen ware, Hindi movies, English movies, DVDs, VCD, Gold jewellery, Diamond jewellery, Fiction Books, Non-Fiction Books, Car Accessories. With the rise in commodity prices every day, ´Maha Bachat´ with its heavy discounts across various product categories promises to be the 'perfect answer to inflation', enabling maximum savings for the Indian consumer .'Maha Bachat' which started off in 2006 as a single day campaign has been getting bigger and better with every year. True to its commitment of offering BIG savings every year, Big Bazaar´s ´6 Days Maha Bachat´ will have an exciting array of attractive offers and discounts. From daily household needs of food and grocery to apparel, footwear, toys, luggage, kitchenware, bed and bath ware, home decor, furniture, electronics, fine gold jewellery and more; 'Maha Bachat' will ensure there is something for everyone in the family, to shop for and thereby enjoy maximum savings. 'Maha Bachat' includes all major sub-formats such as Food Bazaar, Furniture Bazaar, Electronic Bazaar and Home Bazaar, ensuring something for each and everyone in the family, to shop for, and a maximum 'value for money' occasion for the entire family. RVIM Page 34
- 35. BOARD OF DIRECTORS 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. He has led Pantaloon Retail‘s emergence as the India‘s leading retailer operating multiple retail formats that now cater to almost the consumption basket of a large section of Indian consumers. Kishore Biyani was born in August, 1961 and is married to Sangita and they have two daughters. He recently authored a book, ‗It Happened in India‘ that captures his entrepreneurial journey and the growth of modern retailing in India. Mr. Gopikishan Biyani, Director Mr. Rakesh Biyani, Wholetime Director Mr. Vijay Biyani, Wholetime Director Mr. Kailash Bhatia, Wholetime Director Mr. Vijay Kumar Chopra, Independent Director Mr. Shailesh Haribhakti, Independent Director Mr. S Doreswamy, Independent Director Dr. D O Koshy, Independent Director Ms. Bala Deshpande, Independent Director Mr. Anil Harish, Independent Director RVIM Page 35
- 36. ACHIEVEMENTS AND AWARDS 2011 Golden Spoon Awards 2011 2010 Images Fashion Awards 2010 Coca-Cola Golden Spoon Awards 2010 CNBC Awaaz Consumer Awards 2009 Images Fashion Forum 2009 Indian Retail Forum Awards 2008 The INDIASTAR Award 2008 Retail Asia Pacific 500 Top Awards 2008 Coca-Cola Golden Spoon Awards 2008 The Reid & Taylor Awards for Retail Excellence 2008 2007 Images Retail Awards National Retail Federation, New York World Retail Congress, Barcelona Hewitt Best Employers 2007 PC World Indian Website Awards Reader’s Digest Trusted Brands Platinum Awards 2006 Retail Asia Pacific Top 500 Awards, Singapore Asiamoney Awards Ernst & Young Entrepreneur of the Year Award CNBC Indian Business Leaders Awards Lakshmipat Singhania – IIM Lucknow National Leadership Awards CNBC Awaaz Consumer Awards Images Retail Awards Reader’s Digest Awards Reid & Taylor Awards for Retail Excellence 2005 Images Retail Awards 2004 Voted by Business Today magazine as one of the DAKS London 2004 Images Retail Awards 2004 Reid & Taylor and DLF Awards 2003 Indian Express Award RVIM Page 36
- 37. FUTURE PLANS Kishore Biyani-led Pantaloon Retail India Ltd (PRIL) will hive-off its value segments--Big Bazaar and Food Bazaar-- into a separate company called Future Value Retail from January 1st. Future Value Retail Limited is looking to set up a new format of standalone stores only for fruits and vegetables. The company is enhancing the focus on fresh fruits and vegetables as a category. Fruits and vegetables is a profitable category and promises up to 10% margin after taking into account wastages and supply chain losses. Currently, fruits and vegetables are sold at about 160 Food Bazaar outlets located across India. Within the Food Bazaar outlets, fruits and vegetables currently contribute about 3 to 4% to the total revenues. The company is working on strengthening its supply chain and increasing direct sourcing from farmers going ahead. The company is setting up consolidation and collection centres to cater to a set of outlets. The size of Food Bazaar outlets ranges from 8,000 sq.ft. to 15,000 sq.ft. and the company is looking at dedicating an area of 1,000-2,000 square feet only for fruits and vegetables within the store. RVIM Page 37
- 38. DEPARTMENTAL STUDY There are mainly seven functional departments which are shown in the following chat. Human Resource Administ Finance ration Departments Customer Service Marketin g Desk Sales Logistics RVIM Page 38
- 39. Human Resource Department: The Department consists of one HR manager, one Assistant HR manager, two HR Executive and a Team Members. In this department the Team Members may be the supporting staffs, which in total complete the work of the department. The HR department of Big Bazaar is very dynamic. Employees are the biggest strength and asset of any organization and the HR dept realizes this very well. This is very evident from the way the HR department handles all its employees. They take utmost care to select, train, motivate and retain all the employees. They have continuous developmental programs for all the employees. Currently Big Bazaar Banashankari is employing 350employees. There are two shifts for the employees. The first shift employees arrive at 10AM in the morning and leave at 7.30 in the evening, while the second shift employees report at 11.30 in the afternoon and leave at the time of Store closing (10pm). 1. Sources of Recruitment: The following are the main sources through which Big Bazaar recruits its employees. a) Consultancy Services: For top level management, employees are recruited through private consultants. They are usually appointed as Departmental Managers. b) Walk-ins: This is the main source through which Big Bazaar recruits its employees. People seeking job usually themselves approach the HR department for job vacancy. Employees usually selected from this source are appointed at the entry level as team members. RVIM Page 39
- 40. c) Employee Referrals: This is the other main source through which employees are selected. Candidates who have given their previous employer as referrals are first interviewed and from their previous employer, opinion is taken about their behaviour and performance in the job. If they receive a positive opinion from their previous employer they are selected. d) Campus Recruitment: Young people bring new ideas and fresh enthusiasm. Therefore Big Bazaar visits some of the reputed educational institutions to hire some of the most talented and promising students as its employees. 2. Selection Procedure: The following is the selection procedure that the HR department practices to hire its employees. a) Interview: For entry level jobs, the candidates are interviewed by a HR person. They are asked a few basis questions about their education, previous work experience if any, languages known etc. This is done to evaluate the candidate‘s ability to communicate freely and also other skills. b) Psychometric Tests: For higher and top level jobs, candidates are asked to answer a few questions which basically test their sharpness, analytical ability, ability to handle stress, presence of mind etc. This is done as Managers are required to work under stress all the time and still maintain a cool head to make some vital decisions. c) Group Discussion: In campus recruitment students are involved in a Group Discussion, where they will be given a topic on which the group has to deliberate, discuss and arrive at a solution or a decision which is accepted by the whole group. Along with the G D they are also given a written aptitude test. Finally a formal interview will be conducted to assess the overall skills of the student. 3. Induction: New employees selected will be given a 13 day induction and training program. They will be given information about the company‘s business, different departments etc. They will be informed of their roles, duties and responsibilities. They will also be informed about the HR policies and rules of the company. The new employees will be on probation for a period of 6 months. After this period the HR period along with the department manager will review the performance of the employee. If the employee‘s performance is good and encouraging, the employee‘s services will be confirmed. RVIM Page 40
- 41. 4. Compensation & Rewards: The employees are rewarded suitably with attractive pay packages. The salary of an employee includes basic pay. HRA, special allowance, PF, ESI, Med claim etc. Annual bonus will be given at the time of Diwali. The employees and their dependents are also entitled for medical treatment in recognized hospitals with cashless hospitalization with which the company has tie- ups. If a hospital is not recognized, the amount spent by the employee wills be reimbursed. Along with these all the employees are given a card known as Employee Discount card (EDC) through which they can buy any product at Big Bazaar at a special discount of 20-30 %. 5. Leaves and other rules: An employee during his probationary period is entitled for 7 days of leave. A confirmed employee is entitled for 30 days of leave in a year. There is only one type of leave the employees can take which is known as All Purpose Leave (APL).All the employees will be given identity cards which they have to wear and also swipe while at the time of entering and leaving the Store. 6. Performance Appraisal: The HR department conducts performance appraisal of all the employees annually in the month of April. Based on their performance increments will be given in their pay. In addition to this if an employee achieves or exceeds the target given to along with their team members will be provided with attractive cash and other incentives. Training & Development: Future group has its own training division for all its employees, known as Future Learning & Development Limited (FLDL). All the employees are given training for20 days in a year spread over different periods. Gurukul which is a part of FLDL gives training to all the employees on various skills like team work, dedication discipline improving customer service etc to make them more knowledgeable and productive. RVIM Page 41
- 42. Finance Department The department consists of one Finance manager, one Assistant Finance manager, four Department Finance Heads who also play role of team Leaders and there are 26 cashiers in the store who are working in two shifts. Finance is the life blood of any business. The Finance department of Big Bazaar, Banashankari performs a few basic functions, such as preparing the Store Income and Expenditure Statement giving full particulars of all items. It also prepares the budget for expenditure at various levels on different items. This department is also responsible for deciding and giving the weekly, monthly and yearly sales targets and the margins for all the departments separately. The Finance department is also responsible for collecting and depositing the cash received in the company‘s bank account daily. The big bazaar Banashankari annual turnover for last year was 74 + crores. The following graph shows the percentage contribution sales of the particular product and service. 45 40 c 40 35 r 30 o 25 19 r 20 16 15 e 10 8 5 4 5 s 5 2 1 0 RVIM Page 42
- 43. Marketing Department The department consists of one Marketing manager, one Assistant Marketing manager, one Marketing Executive for each floor and supported by Team Leaders and a Team Members. Marketing concept is a customer orientation backed by integrated marketing aimed at generating customer satisfaction as the key to satisfying organizational goals. For a firm in order to implement the marketing concept it has to focus its attention on the consumer, ascertain his/her needs, discuss and wants before. Every Brand appeals to individual customers in different ways. Good customer service is the life blood of any business. Good customer service is all about attending to existing and potential customers. This maintaining good relationship with the customers is the key to business success and hence the concept relationship marketing. Traditionally, marketers have located their target market segments, presented their offer, and made the sales. It's always been a single step process. Relationship marketing looks at customers and clients over a longer term. It takes into account the lifetime value of a customer. Many experts think it costs anywhere from six to ten times as much, to find a new customer, than to sell to an existing one. With those financial realities in mind, the approach makes some sense, and some real Rupees. Relationship marketing is based on the idea that people prefer to do business with people who they know and like. After all, it's easier to buy from a friend, than from someone you've never heard of before. It's a matter of building trust. It's said that people need to hear an offer at least seven times before they buy. That concept certainly works against the single step marketing method. The Marketing department is responsible for marketing of Big Bazaars products through different media like TV, radio, newspapers, banners, placards etc. The marketing department has to decide and identify the RVIM Page 43
- 44. most effective medium to attract the customers to Big Bazaar thereby increasing the sales the department has to design creative and attractive advertisements through which the company‘s products can be promoted to the customers. The company has to visit different companies and has to enter in tie-ups for all its advertisement campaign. The marketing department also consists of another separate department which is known as Visual Merchandising. Visual merchandising is an art by which a retailer makes the store talk to its customers. The colour, signage, lights, look and feel, everything is taken into account. It is very important to figure out what is the story, the picture, the idea that is being sold to the customers. Another concept that was incorporated in Big Bazaar from the beginning was that of Category management as opposed to the brand merchandising practice that is followed by many retailers. Category management is based on the belief that a customer walks into a store looking for party shirt or a formal trouser, rather than a particular brand. Therefore the store is designed according to the categories like men‘s formal wear, women‘s western wear or a casual wear, etc. Within the organization too, teams were divided according to the categories that they managed, rather than the brands. Big Bazaar wanted to have a complete bouquet of products in each category at different price-points, design, fabric, size and colour. The objective was to create traffic drivers within the Store rather than make brands compete with each other. Focusing on categories also helped to achieve a level of perfection within the specific segments. RVIM Page 44
- 45. Logistics Department The department consists of one Department manager for Logistics, one Assistant departmental manager, two Executive and Team Members. In this department the Team Members may be the supporting staffs, who assist in all the activities of the department. Logistics is a very important department of Big Bazaar. It is responsible for procuring the stock of all the products of the different departments. The logistics department receives the goods from the warehouse. The Warehouse of Big Bazaar for the entire South zone is located at Hosakote, Karnataka. The logistics department receives the stock of different goods and verifies the quantity and quality of the goods with the particulars given in the Goods Received Statement which it receives along with the stock. Then it checks for any damage in the stock received. If there is no damage in the stock, after recording it in the Stock Inward Register dispatches the goods to there specie department taking the signature of the Departmental Manager .On the other hand if there is a damage in the goods or if the goods do not match the details given in the Goods Received Statement, it enters in the Stock Outward Register and sends it back to the warehouse along with a Goods Returned Note giving full information regarding the reason for returning back the goods and the defect or damage in the goods. RVIM Page 45
- 46. The logistics department receives two truckloads of stock every day. It is the respective departmental Managers who place an order to the Zonal head office through e-mail for stock of goods when they feel that the stock has to be replenished. The logistics department works in complete coordination with all the other departments to ensure that the stocks are received and maintained properly continuously for the smooth functioning of Big Bazaar and avoid any inconvenience to the customers. RVIM Page 46
- 47. Sales Department The department consists of one Sales manager, one Assistant sales manager, five sales Executive, Team Leaders and a Team Members. In this department the Team Members are the Sales staffs, who deal whit all selling activities. This department is responsible for the collection of sales amount i.e., cash sales. There are in all 25 cash counters in the Store. There is a Head Cashier to whom all the cahiers report and submit the total sales amount collected throughout the day by the cashiers. In addition to cash all leading credit and debit cards are accepted at no extra charge. Also Big Bazaar vouchers and Sodexho coupons are also accepted. A cashier at the time of opening his billing counter will be given an opening balance of Rs.1000. The cashier has to ensure that all the offers applicable on respective products are given to the customer in his/ her bill. Also if any free items are given on some purchases, it should be informed to the customer clearly. After the billing is done, the cashier has to pack the products neatly in a plastic cover according to the customers needs. At the time of closing the billing counter, the cashier has to give a statement of cash, with all particulars of different denominations of cash, amount collected through credit cards, amount collected in debit cards, amount collected in Sodexho coupons & Big Bazaar vouchers and also amount collected through Credit Notes. Wednesday Bazaar is a very important and popular event in Big Bazaar. Every Wednesday fabulous offers and great discounts are given on most of the products. Customers arrive in large numbers as they realize that it is on Wednesday that products are offered at the lowest prices. RVIM Page 47
- 48. On Saturday and Sunday also the customer turnout is high, as it is on the weekends that most of the customers find time for shopping. They arrive along with their family to enjoy the shopping experience. Good discounts and offers are also provided to attract more number of customers. Retailing is not just about selling products it is about selling an idea. Why do people in shop when they are bored or depressed? It is not just because they have the money to buy, but because they want to go through an experience. It is very crucial in retailing to make customers relate to every product that is being sold, as well as the Stores environment. RVIM Page 48
- 49. Administration Department The department consists of one Store manager (SM), one Assistant Store manager (ASM), IT Manager, five department managers, five Assistant department managers, Team leaders and Team Members. In this department the Team Members may be the maintenance, housekeeping, security which in total completes the work of the department. The Store administration comes under the Store Manager. Its functions are store maintenance, housekeeping, security etc. The store maintenance is concerned with the proper running of the store in co- ordination with all the departments. It also has to ensure proper back up power supply in times of power cuts. The Housekeeping is concerned with keeping all the departments of the Store clean and neat all the time. Covers and other wastes should be properly cleaned and the floor is swept regularly to keep it clean. The Security section is concerned with the security of the entire store. Security department keeps a vigilant check on all the people entering and departing at the various entry and exit points in the store. RVIM Page 49
- 50. They also maintain all the registers like employee‘s attendance register, stock register, and visitors register etc. They check all customers bill before letting them out of the store. They ensure orderliness in the store and prevent shrinkage or pilferage of goods to minimize the loss arising out of it. The housekeeping and security are outside agencies employed by the store on a contract basis to take care of the respective functions. The Administration department also has a separate section known as Information Technology. This department is responsible for the maintenance of all the systems of the Store; all billing machines their functioning networking with the master machine etc. If there is any problem with the machine in any department in the store, then this department comes into function. This dept integrates all the systems in the store and properly maintains all of them. RVIM Page 50
- 51. Customer Service Desk The department consists of one Customer service manager, Team leaders and a Team Members. In this department the Team Members are the supporting staffs, which in total complete the work of the department. The customer service desk is for the helping the customer at every need. It provides facilities like free home delivery, free gift wrapping, free alteration, exchange counter, customer help line, announcement and customer help desk. RVIM Page 51
- 52. Strengths Everyday low prices, which attracts customers. The Big Bazaar Outlets sell a variety of products at prices which is lower than the market price. Almost every product has some kind of discount in Big Bazaar. High brand equity is enjoyed by big bazaar because it showcases 20,000 products at one place. It offers most exclusive brands under all the categories. Biggest value retail chain in India. Big Bazaar is definitely the number one retailer in India. It has built an emotional as well as cordial relationship with its customers. It is also intending to build long term relationship with all its stakeholders which is very essential for a successful business venture. It offers a family shopping experience, where entire family can visit together. Ambience of Big Bazaar is not like the hypermarket in West, which follows liner layout. It is not only providing good parking ,AC ambience to create a ― no hassle‖ shopping experience but also designed in such a way that it provides a traditional bazaar like environment, where the Indians feel comfortable. It also has facilities such as online booking and delivery of goods. It is basically retailing through Internet & web based technologies. Highly dedicated, responsive & young management team. It is found that more than 60% of employees are of the age group of 20-35. From this it reveals that company is having a young and energetic workforce who are very creative, enthusiastic and also very determined to grow in their career and in turn helping the company to grow. Almost all big bazaar outlets are Located in the city. Customers are delighted with the location of Big Bazaar as it is located in the city. Utilization of latest technology retailing through Internet & web based technologies. RVIM Page 52
- 53. Huge display area both outside and inside the store. Big Bazaar displays all their grocery and all other product that customer can touch and feel the quality. They also offer self service. Well designed Infrastructure which helps in easy navigation for the customers as well as staff. They have a huge flooring area in an average of 30,000 square feet. Product diversity, There are more then 20000 thousand type of products in the store. Big Bazaar offers the maximum variety for each category of products. Free services like home delivery, gift wrapping and alteration are provided by the store. The home delivery service is provided with in the range of 5KM. Healthy and positive relationship between employees and managers. The employees of the company are satisfied with their job profile which in turn increases efficiency of the company. RVIM Page 53
- 54. Weakness: General perception: ‗Low price = Low quality‘. In general Big Bazaar is positioned as a low priced and good quality store. But it is only the low price which has clicked with the customers i.e. the consumer regards Big Bazaar as a store for reasonable price and not good quality. Overcrowded during offers (Big 6 Days). During Big 6 days it was noticed that customers were waiting in queue. These queues deter many customers to make a purchase, even worse enter into the store. Long lines at billing counters which are time consuming. During the peak hours (weekends & evenings) the customers face problems due to less billing counters. Limited only to value offering low price products. A number of branded products are still missing from Big Bazaar‘s line of products. E.g. Jockey, Van heusen, Store is unable to meet the growing consumer demand. The demand for stores like big bazaar is growing day by day and stores are not fully meeting their needs. No Seating arrangements are made for customers as well as for employees. Some of the elderly customers were facing problem after the shopping to take some rest. Employees‘ knowledge about the product is not satisfactory. They do not have complete knowledge about the products and the promotional offers running in the store. RVIM Page 54
- 55. Opportunity A lot of scope is there in the organized Indian retail business. The unorganized retail sector in India is 97% were as organized is only 3%. There is a lot of scope in future for organized sector. Increasing mall culture in India. More people these days prefer to visit big stores where they can find large variety of products under one roof. II tier cities will open up new world of opportunities. The company recognizes the tremendous potential in the food industry is seeking to venture into rice & other food grain products. Global Expansion: There are the some untapped, developing and under developing countries were it can enter. RVIM Page 55
- 56. Threats Competition from other value retail chains such as Shoprite, Reliance (Fresh and trends), Hyper city and D mart. Unorganized retail also appears to be a threat to Big Bazaar‘s business. A large population still prefers to visit local convenient stores for daily purchases Changing Government policies. Every year the government policies are changed and the companies should frame the policies matching with government policies. Large Foreign Competitors like Wal-Mart are entering to the Indian retail market. Burgeoning real estate prices which leads to high rentals. Some of the stores are owned by the company but for some store they need to pay rent and because of the growing real estate prices it may leads to high rental. RVIM Page 56
- 57. Findings Big Bazaar is undoubtedly the number one retailer in India. It has built a very emotional and cordial relationship with its customers. It is also very intending to build long term relationship with all its stakeholders which are very essential for a successful business venture. It is observed that the organization hierarchy is professional as all the departmental Managers directly report to the Store Manager who in turn reports to the Zonal Head. There exist a healthy and positive relationship between employees and managers. It is found that more than 60% of employees are of the age group of 20-35. From this it reveals that company is having young and energetic workforce who are very creative, enthusiastic and also very determined to grow in their career and in turn helping the company to grow. Customers were not happy with the long queues at the billing counter. Most of them are satisfied with the price, variety and promotional offers. Print ads is the most successful medium of advertising offers and discounts for big bazaar, at the store displays also play an important role. It was noticed that stocks were disappearing very quickly but replenishments were not done at timely manner and because of this a lot of customers were going back without making any purchase. Big Bazaar has definitely succeeded in keeping up its image of a value for money store, as its price has been rated positively. The promotions are not hitting the target. Although Big Bazaar has been promoting their offers, most of the customers are introduced to these only at the store. Today customers look beyond price, such as quality, employee behavior, store atmosphere etc. Big Bazaar has scope for improvement in these yields. RVIM Page 57
- 58. SUGGESTIONS During the peak hours (weekends & evenings) the customers face problems due to less billing counters and less number of employees to attend to them, hence increase in the number of billing counters and salesperson during peak hours is recommended. Employees should be trained well and they should have complete knowledge about the products and the promotional offers running in the store. Big Bazaar has been successful in keeping up its promise of providing value for money goods, but today customers look beyond price, such as quality, employee behavior, store atmosphere etc. Big Bazaar has scope for improvement in these yields. More hoardings could be placed that could bring awareness to people. Seating arrangements must be made for customers as well as for employees. Care to be taken to maintain proper inventory levels and the varieties and offer the customer what is needed rather than offering what is available. Aggressive expansive plans in II tier cities will open up new world of opportunities RVIM Page 58
- 59. CONCLUSION The customer needs are increasing day-by-day because of increase in there purchasing power they need new and innovative products. The modern hyper market format has truly changed and taken up the expectation of Indian customer to a new level. In recent years the mall culture is increased in India because of its unique shopping experience. Today customer as a wide range of choice at one roof and only because of the hyper market and big bazaar is one among the leading hyper market in the country. Big bazaar concentrates on all level of the customers. Big Bazaar has been successful in keeping up its promise of providing value for money, but today customers look beyond price, such as quality, employee behaviour, store atmosphere etc. Big Bazaar has scope for improvement in these yields. RVIM Page 59