Big Bazar Final

8/3/2019 Big Bazar Final

1/32

H K INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 1

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.

The research titled A Study on the effective promotional strategy through private labels which

influences customer to purchase a product of Big Bazaar helps us to understand the effect ofpromotional 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.


2/32


INDUSTRY PROFILE

INTRODUCTION

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.


3/32


HISTORY OF RETAILING

Retail concept is old in India. Worlds first departmental store started in Rome.

Todays kirana stores are based on Manusmriti & Kautilyas 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 whole selling 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,


4/32


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 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 counselling. 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 $8.6 billion in 2010.


5/32


TYPES OF RETAILERS

Retailers are broadly classified into 3 categories

Food Retailers. General Merchandise Retailers. Service Retailers.

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 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


6/32


super markets and 49 Spencer Dailys. 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 retailing2. Falling real estate prices3. 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


7/32


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. Hyper city D Mart Big bazar Spencers.

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,

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. International Brand Outlets, Hyper or Super markets, shopping malls and departmental

stores.


8/32


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 2011.

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 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.


9/32


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- brandeditems.

As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls

and huge complexes offer shopping, entertainment and food all under one roof, the concept of

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

shopping in India. This has also contributed to large-scale investments in the real estate sector with

major national and global players investing in developing the infrastructure and construction of the

retailing business.

Growth drivers in India for retail sector

Rising incomes and improvements in infrastructure are enlarging consumer markets andaccelerating 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.


10/32


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, Jaywalkers,

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.

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
http://futurebazaar.com/http://futurebazaar.com/


11/32


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, 'Indians' 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.

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.

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.
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Pantaloon_Grouphttp://en.wikipedia.org/wiki/Pantaloon_Grouphttp://en.wikipedia.org/wiki/Wal-Marthttp://en.wikipedia.org/w/index.php?title=Kishore_Biyani&action=edithttp://en.wikipedia.org/w/index.php?title=Kishore_Biyani&action=edithttp://en.wikipedia.org/wiki/Agrahttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Allahabadhttp://en.wikipedia.org/wiki/Ambalahttp://en.wikipedia.org/wiki/Asansolhttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Bhubaneswarhttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Coimbatorehttp://en.wikipedia.org/wiki/Palakkadhttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Durgapurhttp://en.wikipedia.org/wiki/Ghaziabadhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Hyderabad_%28India%29http://en.wikipedia.org/wiki/Indorehttp://en.wikipedia.org/wiki/Lucknowhttp://en.wikipedia.org/wiki/Kanpurhttp://en.wikipedia.org/wiki/Mangalorehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Nagpurhttp://en.wikipedia.org/wiki/Nasikhttp://en.wikipedia.org/wiki/Panipathttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Thanehttp://en.wikipedia.org/wiki/Thiruvananthapuramhttp://en.wikipedia.org/wiki/Vishakhapatnamhttp://en.wikipedia.org/wiki/Vishakhapatnamhttp://en.wikipedia.org/wiki/Thiruvananthapuramhttp://en.wikipedia.org/wiki/Thanehttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Panipathttp://en.wikipedia.org/wiki/Nasikhttp://en.wikipedia.org/wiki/Nagpurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mangalorehttp://en.wikipedia.org/wiki/Kanpurhttp://en.wikipedia.org/wiki/Lucknowhttp://en.wikipedia.org/wiki/Indorehttp://en.wikipedia.org/wiki/Hyderabad_%28India%29http://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Ghaziabadhttp://en.wikipedia.org/wiki/Durgapurhttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Palakkadhttp://en.wikipedia.org/wiki/Coimbatorehttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Bhubaneswarhttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Asansolhttp://en.wikipedia.org/wiki/Ambalahttp://en.wikipedia.org/wiki/Allahabadhttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Agrahttp://en.wikipedia.org/w/index.php?title=Kishore_Biyani&action=edithttp://en.wikipedia.org/wiki/Wal-Marthttp://en.wikipedia.org/wiki/Pantaloon_Grouphttp://en.wikipedia.org/wiki/Pantaloon_Grouphttp://en.wikipedia.org/wiki/India


12/32


Big Bazaar is not just another hypermarket. It caters to every need of customers family. Where Big

Bazaar scores over other stores is its value for money proposition for the Indian customers.

At Big Bazaar, customer will definitely get the best products at the best prices -- thats 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.


13/32


Store study

Big Bazar

101 Growel plaza, Off Western Express Highway, Akurli Road,

Kandivali (e), Mumbai; 400101.

Ph: +912267593600, 18002002255, 1800223050.

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 they will find all kinds of products 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.


14/32


SECURITY MEASURES

They have loss prevention cell (LPC) that will be looking after the safety measures in the

organizations.

They have 3 types of tags

1. Hard tag2. Soft tag3. 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, Mens Dept, Furniture Dept, Footwear Dept, and Home

Dcor 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.

Each department has a department Manager & Assist DM. Their job is concerned mainly with sales.

They look after customers 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 anynew offers, regarding their targets etc. Sore manager has to see the operation at the store is being


15/32


performed in coordination and cooperation he has to communicate with the corporate office

regarding any changes being applied at the store.

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 cashiers 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 rallys

Visual Merchandise

This department is responsible for the product arrangement at the store with respect to their

nature. The basic function 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.


16/32


Importance of Supply Chain and Logistics Management

One of the most important challenge in organized retail in India is faced by poor supply chain and

logistics management. The importance can be understood by the fact that the logistics management

cost component in India is as high as 7% -10% against the global average of 4% - 5% of the total retail

price. Therefore, the margins in the retail sector can be improved by 3% - 5% by just improving the

supply chain and logistics management.

In India, with demand for end-to-end logistics solutions far outstripping supply, the logistics market

for organised retail is pegged at $50 million and is growing at 16%. It is expected to reach $120-$130

million by 2010. Organised retail on the other hand is growing at 400% and is expected to reach

around $30 billion by 2010.Even supply chain and logistics firms like Hong Kong based Heng Tai

Consumables and ABS Procurement Co and ACM China (the greenhouse specialist) is also eying the

opportunity for managing the supplies.

The supply chain management is logistics aspect of a value delivery chain. It comprises all of the

parties that participate in the retail logistics process: Manufacturers, Wholesalers, Third Party

Specialists like Shippers, Order Fulfilment House etc. and the Retailer. Here, logistics is the total

process of planning, implementing and coordinating the physical movement of merchandise from

manufacturer to retailer to customer in the timeliest, effective and cost efficient manner possible.

Logistics regards order processing and fulfilment, transportation, warehousing, customer service and

inventory management as interdependent functions in the value delivery chain. It oversees

inventory management decisions as items travel through a retail supply chain. If a logistics system

works well, the retail firm reduces stock outs, hold down inventories and improve customer service

all at the same time.

Logistics and Supply Chain enables an organized retailer to move or store products more effectively.

Efficient logistics management not only prevents needless movement of goods, vehicles transferring

products back and forth; but also frees up storage space for more productive use.

Retail analysts say on-time order replenishments will become even more critical once the Wal-Mart/

Bharti combine begins operations - the American retailer works almost entirely on cross-docking and

is likely to demand higher service levels, including potential levies for delays in shipment.


17/32


The efficiency and effectiveness of supply chain and logistics management can also be understood

by the fact that m modern retail stores maintain lower inventories than traditional retail. In India,

generally in the traditional kirana stores, three weeks inventories are kept; while in a modern retail

store like Hyper city, it's nine days and it's under two weeks for Food Bazaar. Now, it is beneficial for

both the manufacturer as well as the retailer. If we go through the following food supply chain in

India, we find that a lot can be improved by maintaining the supply chain and logistics.

Future Group

Future Group is the country's leading retail business group that caters to the entire Indian

consumption space. It operates through six verticals: Future Retail (encompassing all lines of retail

business), Future Capital (financial products and services), Future Brands (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 spaces).

The group's flagship company, Pantaloon Retail (India) Limited operates over 5 million square feet

through 450 stores in 40 cities. Some of its leading retail formats include, Pantaloons, Big Bazaar,

Central, Food Bazaar, Home Town, EZone, Depot, Health & Beauty Malls and online retail format,

www.futurebazaar.com.

The group's joint venture partners include Italian insurance major, Generali, French retailer ETAM

group, US-based stationary products retailer, Staples and UK-based Lee Cooper and India-based

Talwalkar's, Blue Foods and Liberty Shoes.

Future Group is working on the vendor network as well as the logistics network. The company has

identified up to 40 anchor vendors, each with turnovers of US$45 million, to achieve economies of

scale. The group is also keen to ensure that its smaller vendors are able to reach turnovers of around

US$1 million and a growth rate of 40% annually, to be able to pass on the benefits of scales. The

company is also working towards bringing its 1,200 vendors online, like Wal-Mart.

Going further in this direction, the Future Group has also launched Future Logistics initially aimed at

handling the supply chain logistics of the group. However, sensing immense opportunity in this area,

the company is now looking to offer its services to its 1000-odd vendors, spread across consumer

related goods, to reach a targeted turnover of about Rs.700 crore by 2010.The thrust at present will


18/32


be on modes of surface transport like roads and rail only. However, at a later stage, sea and air

modes might also be considered as per the requirement, said sources.

In India, Future group derives significant economies of scale in managing their supply chain. With

more than 170000 products, the company maintains a strong supplier relationship in a partnership

mode, avoiding the exploitative supplier buyer transactional philosophy. The IT enabled back-end

operations and supply chain management increases the reliability and efficiency of the business.

Companys 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 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.


19/32


PRIVATE LABEL

Private label describes products manufactured for sale under a specific retailers brand. They areoften designed to compete against branded products, offering customers a cheaper alternative to

national brands. Though the public generally used to see them as low-cost imitations of branded

products, private labels have overcome this reputation and achieved significant growth in recent

years. The most commonly known private label goods are the store brands sold by food retailers,

though this is just one example of many. Department stores, electronics stores, and office supply

retailers all offer private label products or services.

Private labels offer several benefits to both retailers and customers, driving the segment's rising

popularity. For retailers, margins on private label goods are an average of 10% higher than those on

similar branded products. Customers benefit from private labels' lower prices, which are often

significantly less than those of national brands. This combination, while beneficial to retailers and

consumers, can put substantial pressure on the manufacturers of branded goods, who have to

compete against their own customers (the retailers) for market share.

Impact of Private Label

Brand Loyalty

National brands are sold all over, so there's no real sense of brand loyalty in terms of where

consumers buy them. Because private labels are unique to one retail chain, there is the possibility

for retailers to cultivate a sense of brand loyalty. Though they used to be seen as knock-offs of

"name brands", private labels have become increasingly more accepted by the public as quality has

increased and retailers have expanded their offerings of private label goods. Many consumers now

seriously consider private labels as acceptable alternatives to national brands. Retailers can

capitalize on this shift in public perception by offering quality private label products, which can

foster a feeling of brand loyalty. This can give retailers a significant advantage over competitors.

Lower Prices/Higher Margins

Private label goods are generally much cheaper to produce than branded goods, due to the lack of

advertising and marketing expenses. As such, retailers are able to purchase private label goods for

much less than they would have to pay for comparable branded products. The cost difference is

usually large enough that retailers can offer customers lower prices while still making higher profit


20/32


margins themselves. Lower prices can be enticing to customers and increase a stop on a product's

way from the manufacturer to the consumer. Retailers are now becoming increasingly established as

brands themselves, marketing their private label products as alternatives to national brands. This

has resulted in a growing shift in the balance of power between retailers and manufacturers, with

retailers not only becoming less dependent on manufacturers for product offerings but actually

making manufacturers dependent on them for sales volume.

Private label product at Big Bazaar

Big Bazaar, the hypermarket of Pantaloon Retail, has come out with a breakfast cereal range under

its private label, Tasty Treat. Big Bazaar already sells noodles, pasta, vermicelli, soups, namkeens,

chips, toast, khari, papads, jams, pickles, carbonated drinks, ketchup and fruit beverages under

the brand. It has now added breakfast cereals to the range.

The breakfast cereals will be available in three variants plain cornflakes, chocolate-flavoured

Choco Gols and honey-flavoured Honey Circles. There are two reasons for launching the product,

says Pantaloon Retails head of private brands, Devendra Chawla. One is that private brands give us

far higher margins, and the second is that cornflakes as a category is under-penetrated and has a lot

of scope to grow. The market for breakfast cereals is still small. While the packaged food market is

valued at Rs 33,234 crore, the organised breakfast cereal market is just Rs 250 crore less than one

per cent. But the market is growing fast, given the growing health consciousness in the country,

especially the urban middle class. Kelloggs monopolises the market for breakfast cereals with its

range of flakes. Some other multinational players have also shown keen interest in this market.

PepsiCo has already entered with its bestseller brand, Quaker Oates. Heinz India, which has a hugely

strong bond with households because of its Complan health drinks, too has joined the bandwagon.

In spite of the presence of a large number of players in the branded packaged food segment, Tasty

Treat is growing at about 70 per cent. This perhaps has given Big Bazaar the confidence to try its luck

in breakfast cereals as well.

In a recent development, Pantaloon Retail, promoted by Kishore Biyani, has boycotted Kelloggs at all

its retail formats for turning down its demand for higher margins. Not surprisingly, Big Bazaar is


21/32


pushing its own brand of cornflakes now. This is not the first time Big Bazaar is doing this. A while

back Cadburys and PepsiCo owned snack food brand Frito Lay had to bear the brunt.

As an introductory offer, the cornflakes brand will be priced at Rs 99 along with a free bowl worth Rs

60.

According to Chawla, the brand will provide 10 to 15 per cent value when compared to rivals. We

have the option of pricing it lower as we dont have to pay intermediaries and can pass on that

advantage to consumers, says Chawla.


22/32


OBJECTIVE OF THE PROJECT

To know the consumers perception and attitude toward private label of Big Bazar. To know the relationship between promotional strategy and buying decision.


23/32


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 Field Survey

Secondary data Big Bazaar records

Text Books and journals

Company Websites

Area of research: Kandivali (Mumbai)

Research approach: Survey method


24/32


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 : 100 respondents

Sampling Method : Random Convenience sampling

Sample Unit : Customer of Big bazaar

Measuring Tool : Questionnaire


25/32


ANALYSIS AND FINDINGS

Q No 1: Which store first comes to your mind when you think of purchasing a product?

Ans:

Big Bazar D Mart Reliance fresh other outlets

ANALYSIS:

From the survey, from 100 respondents, 61% of them gave 1

st

preference to Big Bazaar 15% of themgave preference to D Mart 19% were gave to Reliance Fresh and only 5% gave to other retailer .

Most of the customers are given 1st preference to Big Bazaar compare to other retailers

Big Bazar D Mart Reliance fresh other outlets

0

10

20

30

40

50

60

70


26/32


2) From which source did you come to know about Big Bazaar outlet.

Ans:

T .V Advertisement Hoardings News paper Buspaintings

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

Hoarding is the most influencing factor which is responsible for awareness of Big Bazaar.

0

5

10

15

20

25

30

35

40

T .V Advertisement Hoardings News paper Bus paintings


27/32


3) Are you aware about private labels of big bazaar?

Ans:

Yes No

ANALYSIS: Among the 100 respondents, 87% of them they are aware of promotional offers, 13%

told they have told that they are not aware.

87% of customers are aware about private labels of the big bazaar.

0

10

20

30

40

50

60

70

80

90

100

Yes No


28/32


4) Please choose below the factor which attracted you most at the Big Bazaar.

Ans:

Offer Service Quality Availability of products

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

Most of the people attracted towards big bazaar only from the Private Labels. So offer is the most

influencing factor among those.

0

10

20

30

40

50

60

Offer( PL) Service Quality Availability of

products


29/32


5) Looking at the private labels of Big Bazaar does your purchase pattern changes?

Ans:

Yes No

ANALYSIS:

Among 100 respondent 83 of them told that these private labels concept changes their purchase

pattern and only 17 of them told do not change.

Most of the customer believed that promotions is responsible for their purchase decision

0

10

20

30

40

50

60

70

80

90

Yes No


30/32


SURVEY FINDINGS

From the sample size of 100 samples it is found that the Brand is well positioned in theminds of customers because 77% of the respondents preference is Big Bazaar for their

shopping.

Among 100 respondents, 23% of people told that 1st they came to know through T Vadvertisement 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 about Private Labels ofbig bazaar .only 13% of them told that they are not aware of Private Labels of big bazaar .

Among the 100 respondent 51% of them told that they are attracted towards big bazaaronly for the offers ie: Private Labels 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.


31/32


Recommendations

Big bazaar should keep offers in regular intervals so that there should not be a long termgap, 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 promotionaloffers in a regular interval in two languages like Hindi English.

Hoarding should be placed uncovered area.


32/32

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 consumers preferences are changing & they are moving from Traditional Kirana stores to

Modern Retail outlet. Its the main challenge to the Modern retail outlets to 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 private label concept 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.

Documents

Big Bazar Final