M. P. Birla Institute of Management 1 An In-depth Analysis on Big Bazaar retail outlet (Koramangla) In Bangalore Metropolitan Area Submitted in partial fulfillment of the requirements of The M. B. A. Degree Course of Bangalore University Submitted By Adipta Singh Chauhan (REGD. NO: 05XQCM6007) Under The Guidance and Supervision OF Mr. Ritesh Ranjan Mrs. Sumithra Sreenath Store Manager, Big Bazaar Professor, MPBIM (External Guide) (Internal Guide) M. P. BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan # 43 Race Course Road, Bangalore-560001 2006-07
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M. P. Birla Institute of Management
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An In-depth Analysis on Big Bazaar retail outlet (Koramangla) In Bangalore Metropolitan Area
Submitted in partial fulfillment of the requirements of
The M. B. A. Degree Course of Bangalore University
Submitted By
Adipta Singh Chauhan
(REGD. NO: 05XQCM6007)
Under The Guidance and Supervision OF
Mr. Ritesh Ranjan Mrs. Sumithra Sreenath Store Manager, Big Bazaar Professor, MPBIM (External Guide) (Internal Guide)
M. P. BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan
# 43 Race Course Road, Bangalore-560001 2006-07
M. P. Birla Institute of Management
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DECLARATION I hereby declare that this report titled “An In-depth Analysis on Big Bazaar retail outlet (Koramangla) in Bangalore Metropolitan Area” at Big Bazar is a record of independent work carried out by me towards the partial fulfillment of MBA course of Bangalore University at M. P. Birla Institute of Management. This has not been submitted in part or fulfillment towards any degree.
PLACE: BANGALORE DATE Adipta Singh Chauhan
(05XQCM6007)
M. P. Birla Institute of Management
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PRINCIPAL’S CERTIFICATE
This to certify that this report titled An In-depth Analysis on Big Bazaar
retail outlet (Koramangla) in Bangalore Metropolitan Area has
been prepared by Adipta Singh Chauhan bearing the Reg. No. 05XQCM6007
under the guidance and supervision of Mrs. Sumithra Sreenath, Professor,
MPBIM, Bangalore.
Place: Bangalore Principal
Date: (Dr. N. S. Malavalli)
M. P. Birla Institute of Management
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GUIDE’S CERTIFICATE This is to certify that the Project Report entitled “An In-depth Analysis on
Big Bazaar retail outlet (Koramangla) in Bangalore Metropolitan
Area” done by Adipta Singh Chauhan bearing Registration No.05XQCM6007
is a bonafide work done carried under my guidance during the academic year
2005-07 in a partial fulfillment of the requirement for the award of MBA degree
by Bangalore University. To the best of my knowledge this report has not
formed the basis for the award of any other degree.
Place: Bangalore Mrs. Sumithra Sreenath
Date: (Professor MPBIM)
M. P. Birla Institute of Management
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ACKNOWLEDGEMENT
I am indebted to Mr. Ritesh Ranjan, the store manger, Big Bazaar Kormangala for
providing me guidance throughout the project.
A very special thanks to Mrs. Sumithra, Faculty, MPBIM, Bangalore who has always helped
the students to achieve the best through his words of encouragement and being very
supportive by providing us with an excellent Concepts of Retail Marketing.
Finally, I remain indebted to my parents who helped me throughout the project by giving me
their invaluable feedback, inspiring me and guiding me.
Mrs. Rujuta Mayekar, HR manager, Kormangala Big Bazar.
Mr. Elangovan Sanbamdam, Store Manager.
Mr. Ajay Obhan, ASM, Food Bazaar
Mr. Rajesh Tawade, ASM, Apparels, Big Bazaar
Mr. Tanveer shaikh, ASM, GM, Big Bazaar
Mr. Hitesh Somani, ASM, Big Bazaar
Mr. Jitendra Talreja, DM, Food bazaar
Mr. Amrit, Management Trainee
And all the team leaders and team members who helped me out in knowing the
grassroot functioning of the store.
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Table of Content
1. Executive Summary 7
2. Objective of Study 8
3. Scope of Study 9
4. Industry background 10
5. Introduction to Operational Parameter 16
6 Research methodology 17
7. Sales of the Store 21
8. Footfall 23
9. Sales VS Footfall 25
10. Average number of bills per day 26
11. Conversion 26
12. Ticket Size 28
13. Average Sales per square feet 29
14. Average value per piece and per bill 31
15. Study of Impulse buying behavior 34
16. Researchers Opinion 36
17. Comaparitive Study with other stores 39
18. Ideas that can work for store 41
19 Attractive Offers 43
20 Bibliography 45
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Executive Summary
This project is a study of Big Bazar Operation parameters (OP) in Kormangla,
Bangalore and the overview of the factors on which a efficiency of stores depends.
Other than general overview of the current operations parameters, the project aims to
look into the details of how a floor area is being used by the stores to increase their
profit or earnings, thereby increasing the productivity and efficiency of the outlets.
Based on the findings of a Six-week study, this report identifies certain loopholes in the
merchandising policy as well as in outlets policy.
Finally, the report provides possible solution to the above problems in the form of
recommendation as well as certain suggestion for more optimal use of outlet.
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Objective of the study:
• To know the organized retail segment in Bangalore.
• To understand how they are managing their operations in super
stores.
• To analyze the daily Sales of the Store and to understand about the
product movements.
• To analyze the number of Customers visited the store/Footfall per
day
• To analyze number of Bills/ transactions per day
• To understand the Conversion percentage
• To analyze average value per bill
• To analyze average value per piece
• To analyze average piece per bill
• To analyze average Sales per square feet
• To understand the brand and the price preference of the store
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SCOPE OF THE STUDY
The scope is limited to the extent of the place, time, organization and their information
collected during the project. It is done as a part of academic study. The scope o f the
study limited to information supplied by the Department Head and information
collected by standing order and settlement copies of the company.
The information collected is limited to the academic knowledge gained by the student
during the study of the course.
The study is confined only to Big Bazar (Kormangla), Bangalore.
The study is not proposed to be an expert study as it was done by a student for the
purpose of a partial fulfillment of the course is the planned training, which is an
integral part, in completion and reward of MBA.
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Industry Background
Retailing consists of those business activities involved in the sale of goods and services to
consumers for their personal, family, or household use. Retailing comprises of four elements:
customer orientation, coordinated effort, value-driven, and goal orientation.
Drivers of change in retailing
- Changing demographics and industry structure
- Expanding Computer technology
- Emphasis on lower cost and prices
- Emphasis on convenience and service
- Focus on productivity
- Added experimentation
India emerges as most attractive retail market
According to AT Kearney’s report – ‘Emerging Market Priorities for Global Retailers’, The
2006 Global Retail Development Index TM, India ranks as the most attractive emerging
market as a retail destination. India’s retail market has grown by 10% on an average in the past
five years. The report attributes the changing retail landscape in the country to the increasing
mobility among the middle and upper classes and increasing urbanization. The table below
displays the ranking of different countries and the various parameters considered in arriving at
these rankings.
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Essentials of Retailing
Customer orientation- The retailer makes a careful study of the needs of the customer and
attempts to satisfy those needs.
Goal orientation – The retailer has clear cut goal and devises strategies to achieve those goals.
Value driven approach- the retailer offers good value to the consumer with merchandise
having the price and quality appropriate for the target market.
Coordinated efforts- Every activity of the firm is aligned to the goal and is designed to
maximize its efficiency and deliver value to the consumer.
Four Axes of Retail scale up
The broad parameters along which the retailing activity can be scaled up. It represents the
choices available before a retailer in terms of how the business model can be designed. The
four parameters are the products that can be offered, the markets in which the retailer
may have a presence, the retailing format that may be adopted for operation and
the profile of the customers that are identified as the target segment. These four parameters
are interlinked and together frame the strategic disposition of the retail business.
Organized Retail is evolving with changing customer aspirations
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Organized retailing in most economies has typically passed through four distinct phases in its
evolution cycle. In the first phase, new entrants create awareness of modern formats and raise
consumer expectations. In the second phase consumers demand modern formats as the markets
develop – thereby leading to strong growth. As with the life cycle in any industry, the high rate
of growth would lead to a stage where the market would reach maturity and all the players
would strengthen their positions. This will be followed by the final phase where the market
would reach saturation, the growth would be limited and for sustainable growth, retailers
would explore new markets as well as evaluate inorganic opportunities.
Stages in growth of organized Retail
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Glimpse of Big bazaar
Big Bazar 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 Rs 2,019 crore for FY 2005-06.
Big Bazar Retail forayed into modern retail in 1997 with the launching of fashion retail
chain, Big Bazar 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. This was followed by Food Bazaar, food and grocery chain and launch Central, a first of
its kind seamless mall located in the heart of major Indian cities. Some of its other formats include,
• Average ticket size has increased in April by 10% on the weekdays, 6 % on Saturdays
and 14.69% on Sundays over the previous 4 months
• Price challenges and attractive offers were the reason for the increasing ticket size in
the month of April
• Aggressive marketing of Big Day in the local newspaper as well as distribution of
leaflets in the local areas
Average Sales per square feet
Sales per square foot are a very important retail performance benchmarking ratio. It is the sales
revenue generated per square foot of Retail space.
It is calculated as:
Sales per Sq feet = Gross sales/ retail space sq. ft.
Since cost of Retail space is a significant cost element in the retail business, this ratio is
instrumental in gauging the store sales performance.
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Months Weekdays sales per square feet
Saturday sales per square feet
Sunday sales per square feet
Jan 6361 11793 10860
Feb 3861 6829 10767
Mar 3605 7230 11168
Apr 5728 10686 15870
0
2000
4000
6000
8000
Jan Feb March April
Weekdays Sales per Square feet
JanFebMarchApril
02000400060008000
1000012000
Jan Feb March April
Saturdays Sales per Square feet
JanFebMarchApril
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0
5000
10000
15000
20000
Jan Feb March April
Sundays Sales per Square feet
JanFebMarchApril
Comments:
• Average sales per square feet has increased in the month of April by 22% in the
weekdays and Saturdays and there has been a jump of 35% on Sundays
• This indicates the efficient utilization of the selling space and increasing sales due
to earlier stated reasons
• The average sales per square feet follow a ratio trend of 1:2:3 in
weekdays : Saturdays :Sunday Average piece per bill Average piece is the amount of pieces sold to a particular customer. This parameter helps to track the inventory turnover of the products in the store. Higher the number of pieces per bill, higher will be the ticket size and the sales of the store. For example Buy 1 soap for Rs 10/- And if an offer is there which says Buy 3 soaps for Rs. 25/- The customers will go for that offer and thus the ticket size and sales increases. Average value per piece Average value per piece means the average value of each piece in the particular bill. We get this figure by dividing the total bill amount by number of units in the bill.
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IMPLICATIONS OF STUDY
Footfall optimization
• Aggressive outdoor marketing at the local level specially in Kormangla as awareness is
very low among the people in some areas of the city
• Leaflet distribution on regular basis in the local newspaper Kormangla
• Our Big Bazaar in-store brands needs awareness thus should be marketed well and a
well known brand ambassador such as Shahid kapoor and his father Pankaj kapoor
for apparels and footwear to attract the customers
• Quality of the products should be improved so that it is value for money not just
cheap products
• Emphasis should be laid customer service and customer satisfaction
• Easy and fast billing facility can increase the ticket size as well as the footfalls
• Electronic display board outside the store can help in increasing the footfalls
• Attractive displays, good assortment and wide range of products in every category
helps in increasing footfalls
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Conversion rate optimization
Conversion will result due to the combined effect of merchandise, in store display and
marketing and selling skills of sales staff. In case of a mall opening mall adjacent to our store,
large part of customer entry could be the customers just hang out, thus the selling skills of the
staff and in store display and promotions will play most important part in conversion.
* Putting the description of the product along with the product price of home
solution products
INCLINATION NO INCLINATION
NEED Conversion will happen
To ensure conversion:
• Good assortment
• Good service level
• Selling skills of the staff
• Good In store promotions
• Make them spend more time
In the store
Will have to work hard on
conversion
They have perhaps just come to see the
store and not make any purchase.
To ensure conversion:
• Display and In store promotion
• Personalized service
• Convincing skill of the staff
comes into play
WITHOUT
NEED
Can be converted easily
To ensure conversion:
• In store promotion of impulse items
• Selling skill of the staff
• Attractive product display
Most difficult to convert
To ensure conversion:
• Promotion should be very
tempting
• Conversion might not happen in
this visit but a seed of need is sown
in their mind
• Good Assortment, variety and
displays
• Aisle route to ensure visibility
to a large number of categories
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Study of Impulse buying behavior to increase the ticket size
Impulse buying goods
Impulse goods: Impulse purchases are goods or services that are acquired in a spontaneous or
an unplanned manner without any prior thought. These kinds of purchases can only be
encouraged through the help of aggressive marketing techniques that are adopted by a
business. Once have found out what your customers want and how to reel them in, it becomes
very easy to encourage impulse purchases.
• Consumer research shows that we’re vulnerable to subtle (and even not-so-subtle)
marketing techniques — impulse buying accounts for a significant proportion of
supermarket purchases.
Strategic inputs to increase the Business
Positioning of the goods: More expensive items tend to be right in the line of sight of the
target consumer. Cheaper or supermarket own-brands tend to be located on the higher or lower
shelves.
Concept behind: Separation of popular staples is a common element of supermarket design.
So that customers spend more time in the store negotiating the way past all those flashy and
tempting impulse-buy items.
Discounts offered: Heavily discounted and advertised goods that are designed to get customer
into the store. The idea is that customers pick up a few more items while they are there.
Combinations: Positioning ‘natural’ combinations like chips with dips or biscuits near tea and
coffee may seem logical.
Temptation: Magazines and confectionery live here. They succumbed to the temptation and
nagged into buying by kids.
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• FOOD retail outlets should position impulse products at the entrance as a customer is
making impulse buying decisions in the first 15 seconds of entering a supermarket or a
retail outlet, a study has revealed.
• Big packets should be kept at eye level and smaller packets at a lower level. "This is
because, people will first pick up products at eye level as against bending down and
picking up a product
• The placement of goods should follow the progress of the day starting with products
that are used in the morning, followed by breakfast items, morning health foods,
toiletries, food grains, pulses and utility items ending with the gifting section.
• There should be a person from the house keeping department kept at the entrance doors
so that the person who is not actually a customer ends up purchasing something.
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Researchers Opinion
At the Food and Brand Lab, University of Illinois, researchers found that promotions using
multi-unit pricing (for example, three for $3), purchase suggestions (‘stock up for upcoming
Festival’) or with purchase limits (‘limit three per customer’) increased the amount
consumers purchased. “All three types of promotion increase purchase amounts by 30% to
105% over what consumers would normally plan on buying,” it said.
Other research showed that more than 50% of shoppers couldn’t resist a ‘buy-one-get-one-
free’ promotion. But did you even need one in the first place, never mind two?
According to a survey the following things we found out:
Do you use a shopping list for today’s shopping?
• Yes, I have planned everything or nearly everything: 38% (Segment 1)
• Yes, partly and in addition I buy what comes to my mind
When I am in the store: 40% (Segment 2)
• No, I do not plan in advance –I buy what comes to my mind
When I am in the store: 20% (Segment 3)
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Customers are not targets!!! “Customers are probably a firm’s most valuable asset and they should be
nurtured, developed and treated accordingly. Each n every customer should be
the objective of proactive bonding relationship”
• There should be continuous interaction with the customers to get inputs and
feedback
• Action should be taken on the customer complaints till the point they are
reasonable
• Customer satisfaction level should be checked at proper time intervals
A customer’s perception of the product and benefits accrued is the main motivating factor
for his decision to buy and the money that he is willing to pay for it. Lets look at the
CARE concept of customer service.
C- Creative Communication
A-Atmospherics and appreciation for all
R- Responsiveness and respect for being
E- Empathy and enthusiasm
Creative communication plays a pivotal role in brining about this and is an inseparable
adjunct towards building a strong and successful retail brand. It must bring excitement
into the customer’s life – excitements that bring to the fore their latent needs and makes
them feel respected and “larger than life”.
Retailers need to understand that things such as customer loyalty and excitement are the
key to success. They must learn to value people- the customers- in new ways to allow
them to connect their dreams and desires with what they do and what they buy. Emphasis
the deeper, broader purpose of each person. Stimulate pride and excitement through the
ways they facilitate decision making during buying process. Promote a spirit of one-ship
or pride in belonging to an elite peer group or a unique clientele- a family of valued
customers.
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Comparative Study with Other Store
Comparative study is a tool that is been used by the stores to know themselves and the
parameters on which they are performing well and on which they have to work on. This
study helps the organization to improve their efficiency and sharp their competitive edge
over their competitors.
Parameters Big Bazaar/
Food Bazaar
Shoprite D mart TruMart Hypercity Spar
1) Sales Staff
a) Grooming 3 3 2 4 5 4
b) Knowledge 4 3 3 3 4 4
c) Behavior 4 2 4 3 4 4
2) Security Staff
a) Greetings 4 3 2 3 3 2
b) Handling of
baggage
5 3 4 3 3 2
2) Ambience
a) lighting 4 3 4 3 5 4
b) room freshness 2 3 4 4 3 4
c) movement space 4 3 2 3 5 3
d) Music 3 3 4 2 3 3
e) Entrance 4 3 3 3 3 3
3) In store
Merchandising
a) Placing of
Mannequins
3 - - - 4 -
b) Stacking 3 4 4 5 5 4
c) Placing of Ads 3 4 4 5 5 5
d) New schemes 4 3 3 3 4 3
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e)Branded Display 3 4 4 4 3 4
f) Own Brands
Display
4 3 2 3 5 3
4) Amenities
a) Trial rooms 5 - - - 4 -
b)Elevators/Lifts/stairs 3 4 4 4 5 3
c) Toilets 1 3 4 2 5 4
d) Drinking Water 2 3 3 3 4 3
Customer satisfaction is the key to success in the retail industry. Therefore to check the
customer satisfaction level and the small survey was conducted. According to the survey
conducted with a sample size of 40 respondents as well as the observations made during
the visits to the different malls and stores across Mumbai city the following results came
out:
Analysis:
1. Sales staff needs a bit of grooming.
2. Room fresher spray should be done in the store in order to create a pleasant
shopping environment.
3. Space for movement of the customers is fine except the movement in the food
bazaar.
4. Mannequin displays are appropriate.
5. Improper stock stacking is an issue.
6. Inventory movement is also one of the issues especially in the rush hours.
7. Displays of the electronic goods are not attractive and tidy.
8. Lack of proper toilets and drinking water facility.
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Conclusion
Ideas that can work for the store
Proposal 1
Sell the Air time
The store can earn income by selling the store’s announcement and music Air times for
playing the jingles of the products kept at the store and in turn earn advertisement money
from the companies as they spend heavily on advertisement and in this way we can get a
bit of their advertisement budget. We can charge different charged on different days of
the week and even different hours of the day. This will act as a revenue generation for
the store and that revenue can be used for out door marketing of the store. It is also a win
win situation for the store as the ticket size and sales will increase as it will lead to
impulse buying as well as need felt buying by the customer.
For Example, Jingle of Surf Excel, soft drinks etc.
NOTE: We will not play the jingles the whole day, instead we will keep a restriction of
total 15 minutes of these jingles per day so that the announcements are not hindered.
Proposal 2
Ration Day
This is one of the concepts that we can use it to get associated with our store. This
concept can be applied to 1st Saturday of every month. On this day we can bring
down our margins and concentrate on our top line (i.e. Sale Volumes). This will
act as a brand building exercise for the concept life Big Bazaar and people will
associate Ration day with Big Bazaar.
Proposal 3
Special offer
The concept of special offer should be used in a tactical way. The announcements
should be made of the special offers on the weekends in advance during the
M. P. Birla Institute of Management
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weekdays and the special days such as BIG DAY should be publicized a month
before and there should be teasers regarding this.
Proposal 4
Display screen It is said that the visual displays have more impact as compared to any other medium of
information. The store can use electronic display screen, displaying the running offers
and the venue for those offer. So that the customer is aware of all the offers running in
the store and it is convenient for them to locate the place of the offer as Kormangla Big
Bazaar has two floors.
Proposal 5
Optimizing the offer price Testing of various price points to maximize conversion rate and total profits. It’s
generally better to start high and reduce your price in subsequent testing to find the level
of maximum profit.
Proposal 6
Phone a friend This is a very old concept but what we can differentiate is by keeping a fixed category of
products in a particular package. For example:
Package Name: Ration Starters (RS)
Products:
1. 5 Kg Wheat
2. 3 kg sugar 3. 3 kg Rice 4. 250 gm tea 5. 1 toothpaste 6. 5 soaps
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7. 1 shampoo
The total of the above will exceed Rs. 500 which will be a considerable amount of
business for the store. The customer can order this package and along with that the other
needs of his on the phone itself and the delivery will be made the next day and cash can
be collected. A separate telephone line is required and a person in charge for it should
also be there to take orders and take care of the delivery. The phone orders should be
taken between the non peak hours from 10 am to 3 pm. Attractive offer
Apparels
(a.) Buy 2 shirts worth Rs. 449/- each
And
Get 1 trouser free worth Rs. 449/-
(b.) Complete Wardrobe (MEN)
1. Formal shirt- Rs. 349/-
2. Trouser - Rs. 499/-
3. Leather Belt- Rs. 199/-
4. Tie - Rs. 149/-
Total = Rs. 1196
BB Price = Rs. 999/-
(c.) Concept of Friday Fashions at the store giving special emphasis on
apparels.
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Some important Conclusions of the research is:
• Big Bazar has a very good brand Value in the market.
• The Big Bazar staff is considered as a top most groomed staff of the
Indian retail businee.
• Big Bazar has to update itself according to the new upcoming Retail
outlets.
• It caters a wide range of consumer from the wide range of segments.
• It has experienced the maximum industry footfall in his outlets.
• It has widest range of products to offer.
• It has a wider acceptability all over India in comparison to other