Operations at Retail Industry BIG BAZAR

ACKNOWLEDGEMENT

I would like to thank the teaching staff of the Specialization team of Operation

department for their successful completion of our project.

I am thankful to our project guide Prof. Vaibhav pawar whose continuous

encouragement and support me to work and manage the project in best possible

manner.

With sincere gratitude for all the knowledge, experience that I had gained within

short period of time, I am eternally grateful to the person who had helped me in

making my project successful.

Page 1 of 107

1. Objective of the Study

To Study of Operational Management in Big Bazaar

To study the emergence of Retailing in India.

To understand the perception of people about retailing.

To understand people’s acceptance and willingness to subscribe to by in mall –

Big Bazaar

To study the latest trends in Maha Bachat Big Bazaar offer – 2011

Page 2 of 107

2. Hypothesis

The following are the hypotheses of this project:

People are quite aware about retailing in mall culture.

People are to buy in Big Bazaar

People are willing to spend more Maha Bachat by Big Bazaar.

Page 3 of 107

3. Methodology

Data Collection Method

Primary Data

The data was collected by drafting a questionnaire and thereby interpreted or

analyzed by using the Microsoft Excel. The prominent features of the

questionnaire were:

The questionnaire contained a set many research structured and organized

questions.

The conclusions were drawn according to their views and opinions The

questionnaire, multiple choice questions (Alternative Options listed)

Research is done along with behavior of customer for Organized retailing &

Unorganized retail

Secondary data

Secondary data was collected by the means of Newspapers, Internet,

Reports, Magazines and Books.

Page 4 of 107

4. Executive Summary

Demographics continue to show a positive report to spur retailing growth. Consumers aged

20-45 years is emerging as the fastest growing consumer group and the mean age of

Indians is now pegged at 27, a mean age that reinforces spending across all the retailing

channels of grocery, non-grocery and non-store.

The government stance of protecting local retailers and prohibiting 100% foreign direct

investment in retailing continued, restraining international retailers' entry. However, there

was gradual economic reform, giving way to easier and faster franchising agreements as

well as the loosening of zonal regulations on retail expansion, thus stimulating retailing.

Non-store retailing is expected to continue its fast-paced growth from a miniscule base.

Across all channels, growth in retailing is expected to be boosted heightened competition

during the forecast period due to the growing.

Page 5 of 107

5. Introduction

India’s retail market which is seen as THE GOLDMINE by global players has grabbed

attention of the most developed nations. This is no wonder to the one who knows that

the total Indian retail market is US $350bn. (16, 00,000 crore INR approx.) of which

organized retailing is only around 3 percent i.e. US $8bn (36,000 crore INR approx).

“Retailing includes all activities involved in selling goods or services directly to final

consumers for personal, non-business use. A retailer or retail store is any business

enterprise whose sales volume comes primarily from retailing.” Retail is India's largest

industry, accounting for over 10 per cent of the country's GDP and around eight per cent

of the employment. Retail industry in India is at the crossroads. It has emerged as one

of the most dynamic and fast paced industries with several players entering the market.

The presence of 15million kirana stores brings into light the very fact that the Indian

retail industry is highly fragmented/ unorganized. Retailing in India is gradually inching

its way toward becoming the next boom industry, organized retailing in particular. The

whole concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India. Modern retail has entered India

as seen in sprawling shopping centers, multi-storeyed malls and huge complexes offer

shopping, entertainment and food all under one roof.

Page 6 of 107

The future of Indian retailing may even witness the concept of 24 hour retailing. Even

though this concept has been in existence in few retail segments like pharmaceuticals

and fuel, it still remains to be a challenge for other segments like food and groceries,

apparel etc to adopt this trend.

Although the organized retailing in India is coming up in a big way, it cannot simply

ignore the competition from the conventional stores because of various factors like

reach, extending credit facility and other intangible factors like the human touch which

are provided only by the conventional stores.

The urban retail market has been embracing various new formats and the malls turned

out to be the trend setters by promising the concept of shoppertainment. The trends in

the rural market also have been changing from the old Haats and Melas to the rural

malls like ‘Chaupal Sagar’ launched by ITC, DCM Shriram Groups one-stop shopping

destination called ‘Hariyali Bazaar’, Godrej groups agri store ‘Adhar’ etc.

Page 7 of 107

5.1 What is Retail?

The word 'retail' is derived from the French word 'retaillier' meaning 'to cut a piece off' or

'to break bulk'. In simple terms it involves activities whereby product or services are sold

to final consumers in small quantities. Although retailing in its various formats has been

around our country for many decades, it has been confined for along time to family

owned corner shops.

Englishmen are great soccer enthusiasts, and they strongly think that one should never

give Indians a corner. It stems from the belief that, if you give an Indian a corner he

would end up setting a shop. That is how great Indians retail management skill is

considered.

The Facts

Retailing in more developed countries is big business and better organized that what it

is in India. Report published by McKinsey & Co. in partnership with Confederation of

Indian Industry (CII) states that the global retail business is worth a staggering US $ 7

trillion. The ratio of organized retailing to unorganized in US is around 80 to 20, in

Europe it is 70 to 30, while in Asia it comes to around 20 to 80.

In India the scenario is quiet unique, organized retailing accounts for a mere 5% of the

total retail sector. Although there are around 5 million retail stores in India, 90% of these

Page 8 of 107

have a floor space area of 500 sq.ft. or less. The emergence of organised retailing in

India is a recent phenomenon and is concentrated in the top 20 urban towns and cities.

The Reason:

This emergence of organized retailing has been due to the demographic and

psychographic changes taking place in the life of urban consumers.

Growing number of nuclear families, working women, greater work pressure, changing

values and Lifestyles, increased commuting time, influence of western way of life etc.

have meant that the needs and wants of consumers have shifted from just being Cost

and Relationship drive to Brand and Experience driven, while the Value element still

dominating the buying decisions.

5.2 Global Scenario

Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in

USA.

China on the other hand has attracted several global retailers in recent times. Retail

sector employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour

have already entered the Chinese market. In the year 2003, Wal-Mart & Carrefour had

sales of US $ 70.4 Crore & US $ 160 Crore respectively.

Page 9 of 107

The global retail industry has traveled a long way from a small beginning to an industry

where the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers

alone accounts for 30 % of the worldwide demand. Retail turnover in the EU is

approximately Euros 2,00,000 Crore and the sector average growth is showing an

upward pattern. The Asian economies (excluding Japan) are expected to grow at 6%

consistently till 2005-06.

On the global Retail stage, little has remained 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

& it still holds that distinction. Other than Wal-Mart's dominance, there's a little about

today's environment that looks like the mid-1990s. The global economy has changed,

consumer demand has shifted & retailers' operating systems today are infused with far

more technology than was the case six years ago. 

5.3Scenario of Retailing in India

Retailing is the most active and attractive sector of last decade. While the retailing

industry itself has been present since ages in our country, it is only the recent past that

it has witnessed so much dynamism. The emergence of retailing in India has more to do

with the increased purchasing power of buyers, especially post-liberalization, increase

in product variety, and increase in economies of scale, with the aid of modern supply

and distributions solution.

Indian retailing today is at an interesting crossroads. The retail sales are at the highest

point in history and new technologies are improving retail productivity. though there are

Page 10 of 107

many opportunities to start a  new retail business, retailers are facing numerous

challenges.

KEY CHALLENGES:

1)LOCATION:

"Right Place, Right choice"

Location is the most important ingredient for any business that relies on customers, and

is typically the prime consideration in a customer’s store choice. Locations decisions are

harder to change because retailers have to either make sustainable investments to buy

and develop real estate or commit to long term lease with developers. When formulating

decision about where to locate, the retailer must refer to the strategic plan.

2) MERCHANDISE:

The primary goal of the most retailers is to sell the right kind of merchandise and

nothing is more central to the strategic thrust of the retailing firm. Merchandising

consists of activities involved in acquiring particular goods and services and making

them available at a place, time and quantity that enable the retailer to reach its goals.

Merchandising is perhaps, the most important function for any retail organization, as it

decides what finally goes on shelf of the store.

Page 11 of 107

3)PRICING:

Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and

its interaction with other retailing elements. The importance of pricing decisions is

growing because today's customers are looking for good value when they buy

merchandise and services. Price is the easiest and quickest variable to change.

4)TARGETAUDIENCE:

"Consumer the prime mover"

"Consumer Pull", however, seems to be the most important driving factor behind the

sustenance of the industry. The purchasing power of the customers has increased to a

great extent, with the influencing the retail industry to a great extent, a variety of other

factors also seem to fuel the retailing boom.

5) SCALE OF OPERATION:

Scale of operations includes all the supply chain activities, which are carried out in the

business. It is one of the challenges that the Indian retailers are facing. The cost of

business operations is very high in India

Page 12 of 107

Let us look at the evolution process:

Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGES-

KSA report says that the last few years have seen rapid transformation in many areas

and the setting of scalable and profitable retail models across categories. Indian

consumers are rapidly evolving and accepting modern formats overwhelmingly. Retail

Page 13 of 107

Space is no more a constraint for growth. India is on the radar of Global Retailers and

suppliers / brands worldwide are willing to partner with retailers here. Further, large

Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa

& Piramal Groups etc and also foreign investors and private equity players are firming

up plans to identify investment opportunities in the Indian retail sector. The quantum of

investments is likely to skyrocket as the inherent attractiveness of the segment lures

more and more investors to earn large profits. Investments into the sector are estimated

at    INR 2000 - 2500 Crore in the next 2-3 years, and over INR 20,000 Crore by end of

2010.

Few of India's top retailers are:

1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is

already India's biggest retailer. In the year 2003-04, it had revenue of Rs 658.31 crores

& by 2010; it is targeting revenue of Rs 8,800 Crore.

2. Food World: Food World in India is an alliance between the RPG group in India with

Dairy Farm International of the Jardine Matheson Group.

3. Trinethra : It is a supermarket chain that has predominant presence in the southern

state of Andhra Pradesh. Their turnover was Rs 78.8 Crore for the year 2002-03.

4. Apna Bazaar: It is a Rs 140-crore consumer co-operative society with a customer

base of over 12 lakh, plans to cater to an upwardly mobile urban population.

Page 14 of 107

5. Margin Free: It is a Kerala based discount store, which is uniformly spread across

240 Margin Free franchisees in Kerala, Tamil Nadu and Karnataka.

Wholesale trading is another area, which has potential for rapid growth. German giant

Metro AG and South African Shoprite Holdings have already made headway in this

segment by setting up stores selling merchandise on a wholesale basis in Bangalore

and Mumbai respectively. These new-format cash-and-carry stores attract large

volumes from a sizeable number of retailers who do not have to maintain relationships

with multiple suppliers for all their needs.

5.4 RETAIL FORMATS:

Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the

modern Indian shopper.

Merchandise: food grocery to clothing to spots goods to books to stationery.

Space occupied: 50000 Sq .ft. and above.

SKUs: 20000-30000.

Example: Pantaloon retail’s Big Bazaar, RPG’s Spencers (Giant).

Supermarket: A subdued version of a hypermarket.

Merchandise: Almost similar to that of a hypermarket but in relatively smaller

proposition.

Page 15 of 107

Space occupied: 5000 Sq. ft. or more.

SKUs: Around 10000.

Example: Nilgiris, Apna Bazaar, Trinethra.

Convenience store: A subdued version of a supermarket.

Merchandise: Groceries are predominantly sold.

Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.

Example: stores located at the corners of the streets, Reliance Retail’s Fresh and

Select.

Page 16 of 107

Department store: A retail establishment which specializes in selling a wide range of

products without a single prominent merchandise line and is usually a part of a retail

chain.

Merchandise: Apparel, household accessories, cosmetics, gifts etc.

Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and

higher volumes.

Merchandise: A variety of perishable/ non perishable goods.

Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.

Specialty store: It consists of a narrow product line with deep assortment.

Merchandise: Depends on the stores

Example: Bata store deals only with footwear, RPG’s Music World, Crossword.

MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in

busy market places and Metros.

Merchandise: Offers several brads across a single product category.

Kirana stores: The smallest retail formats which are the highest in number (15 million

approx.) in India.

Page 17 of 107

Merchandise: Mostly food and groceries.

Space occupied: 50 sq ft and even smaller ones exist.

Malls: The largest form of organized retailing today. Located mainly in metro cities, in

proximity to urban outskirts.

Merchandise: They lend an ideal shopping experience with an amalgamation of

product, service and entertainment, all under a common roof.

Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.

Example: Pantaloon Retail’s Central, Mumbai’s Iorbit.

The percentage of organized retail per sector wise is very miniscule and this does not

mean that there is stagnation of growth because if we look at the following table we can

clearly observe the burgeoning pace of growth happening in all the sectors of Indian

retailing.

Page 18 of 107

The organized retail industry is growing at 25- 30 percentage and is expected to

reach the mark of 1, 00,000 crore INR by 2010 from the present figure of 35,000 crore

INR approx. With such a mouth watering figures the organized retailing has been

attracting many players and even persuading the existing retailers to expand and

experiment with newer formats. This can also be substantiated by looking the estimation

of the organized retail space to be around 72 million sq ft. by the end of 2007. The

present players and their retail formats details are presented below:

Page 19 of 107

Trends in Present Retail Market:

New Product Categories:

For a long time, the corner grocery store was the only choice available to the

consumer, especially in the urban areas. This is slowly giving way to international

formats of retailing. The traditional food and grocery segment has seen the emergence

of supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar), convenience

stores (ConveniO, HP Speedmart) and fast-food chains (McDonalds, Dominos).

It is the non-food segment, however that foray has been made into a variety of

new sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus,

LifeStyle, Westside), apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts

(Archies, MusicWorld, Crosswords, Landmark), appliances and consumer durables

(Viveks, Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo).

Increasing competition in the retail market:

New entrants such as Reliance, Bharti Enterprises and the AV Birla group will

compete against well-established retailers, such as Pantaloon Retail, Shoppers’ stop,

Trent, Spencer’s and Lifestyle stores. Foreign retailers are keenly evaluating the Indian

market and identifying partners to forge an alliance with in areas currently permitted by

regulations. With an estimated initial investment of USD 750 million, Reliance is

planning to launch a nationwide chain of hypermarts, supermarkets, discount stores,

Page 20 of 107

department stores, convenience stores and speciality stores. These 5,500 stores will be

located in 800 cities and towns in India.

Increase in Private Labels:

With the emergence of organized retail and modern retail formats, private labels

have been gaining significance. They enhance the profitability levels of product

categories, increase retailers’ negotiation powers and create consumer loyalty. More

retailers are introducing their own brands in all categories including Food & Groceries,

apparel, accessories, footwear. These own brands also do not have to manage

intermediaries since retailers maintain oversight of the supply chain.

The label penetration is in a huge rise. Private Label penetration has been on a

rise. It is mainly growing among FMCG products in most supermarkets with groceries

accounting for 45.9%

Expanding to Tier II and III cities:

Indian retailers are planning to extend operations into Tier II and Tier III cities as

heightened IT offshoring activity in these locations have increased consumers’

disposable income. The population in these cities is typically well educated and willing

to purchase goods and services. Some major retailers, like Globus, Reliance Retail and

Pantaloon, have already begun building a retail presence in Tier III cities before many

retailers have finalized their Tier II retail operations.

Foray into Retail Agri-Business:Page 21 of 107

India’s most prestigious business houses and global retailers are planning to

enter retail agri-business. Market entrants plan to invest in the entire value chain,

moving goods “from the farm to the fridge at home.” Viewed as India’s next “Sunrise

Sector,” retailers are employing contract farming as a means of boosting their ventures.

Contract farming enables farmers to access land, manpower and farming skill without

having to purchase land. Of the total Cultivable land of 400 million acres in India,

contract farming represents 7 million acres thus indicating a tremendous opportunity.

For pure corporate contracts between farmers and companies, only 2,00,000 acres are

used.

Experimenting with formats:

Selecting the right retail format is essential in modern retailing. The difference

between urban and rural customers is one of the reasons why multiple formats are

required in India. Local conditions and insights into buying-behaviour shape the format

choice. No single format will be suitable for an all India strategy and selecting the

relevant format is the key success factor.

Page 22 of 107

Big Bazaar to offer six-day maha-bachat from Aug 11

Big Bazaar, the largest chain of hypermarkets from Future Group, has once again come

up with their special Independence Day offer of ‘Mahabachat’ for six days from August

10 to August 15, 2011 at its all 153 Big Bazaar outlets across the country.

"With an aim to provide the best shopping deals and savings to consumers in today’s

age of inflation, Big Bazaar is all set to make this year’s Independence Day shopping

truly memorable with the best deals and mega offers leading to great savings. Apart

from Big Bazaar stores, ‘Mahabachat’ offers will also be available at all major sub-

formats such as Food Bazaar, Furniture Bazaar, Home Bazaar and Electronic Bazaar.

Big Bazaar’s ‘six-day Mahabachat’ will have an exciting array of attractive offers and

discounts,” said Sachin Sonawane, store manager said at a press conference.

Page 23 of 107

To beat the inflation and to save on your shopping, as usual, even this year for the

Independence Day, Big Bazaar has come up with the 6 Days Maha Bachat Sale or the

6 Days Maha Savings offer! This offer is exclusively for this year’s Independence Day

and is going live from August 10, 2011 to August 15, 2011. With this maha savings offer

you can avail discounts, offers, freebies and exclusive deals on almost all the products

sold at Big Bazaar. This offer is also valid on at their online website

bigbazaar.futurebazaar.com.

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.

Page 24 of 107

onwards during this exclusive sale period. This offer is valid on Food Bazaar, Furniture

Bazar, Electronics Bazaar, Fashion, etc, at Bigbazaar.

Special Offers

Daawat Devaaya Basmati Rice 5 kg + Pillsbury Atta 5kg + Gold Winner

Sunflower Oil 5 L is priced at Rs. 699 (as against Rs. 1125).

Fortune Sunflower Oil 5 L + Sugar 5 Kg + Pillsbury Atta 5 Kg for Rs. 666 as

against Rs. 965.

Men’s formal, casual and party wear shirts priced Rs. 499-799, buy 2 for Rs. 799

and buy 3 for Rs. 1099.

Akai 32 inch LCD TV with USB Movie and 400 W sound output for just Rs.

15,690.

Buy Prestige 4 burner glass top gas stove (Price Rs. 8045) and get Prestige

Mixer Grinder, 5 L pressure cooker and 3 pieces non-stick tawa set worth Rs.

6600 for free.

Buy Samsung mobile E2222 and Fly DS 106 for just Rs. 3599. Also you will get a

chance to win bike, car, and LCD TVs on purchase of mobile phones.

Free 24 KG SugarPage 25 of 107

If you can shop for just Rs. 499 and above you can avail 24 kg sugar but in the form of

sugar coupons which can be redeemed against future purchases. You will be issued

with 12 sugar coupons. These coupons can be redeemed on a minimum purchase of

Rs. 499 and more during the Wednesdays only from August 17 to November 2, 2011.

Electronics

The Kodak C195 digital camera (14 MP, 5X zoom) is priced at Rs. 3990

Acer eMachines with 320 GB Hard disk, 2 GB RAM, 14” screen, Windows 7 OS,

is priced at Rs. 19,990 and also get 8 GB pen drive for Rs. 475 with this offer

Philips 5.1 Channel home theatre system is sold at an offer price of Rs. 6990.

Buy Kelvinator 180 L fridge and get free Reebok Watch

Fashion Offers

There are buy 2 get 1 and flat 50% off offers on men’s, ladies and kids wear like kurta,

churidar, ladies western, kid’s wear boys and girls, and men’s jeans and trousers, etc.

Home Needs

Page 26 of 107

Buy Nirlep non-stick kadai worth Rs. 799 and get free Tava, Tadka Pan and Frypan

• Buy Prestige Induction cook top stove for Rs. 3995 and get free 5 pieces induction

cookware worth Rs. 7675.

• Also available offers on super lock containers, Opalware and Melamine dinner set, etc.

Home Fashion

Buy 1 and get 1 free with the designer bed sheets. Persian carpets available at 51% flat

discount. Recron pillows buy 1 get 1 offer.

Other Offers

There are also daily needs or groceries offers at Food Bazaar, on various brands like

Rin, Pepsi, Hamam, Fortune Sunflower Oil combo, Top Ramen and many more. Do

check the store for details on the same. Also can avail on furniture like the dining set,

Ria Diwan mattress and more. Footwear you can avail flat 50% off on RBK, Lotto,

Spalding, Converse All Star brands. Also Flat 40% off on Lee Cooper and ID Casual

Shoes. Special offers is also available on luggage of flat 50% off on Skybags, Safari

and AT select range of soft trolleys. Milestone Union Soft Trolleys is priced at Rs. 3299

for a set of 3 as against Rs. 6597. The offer is also applicable on kid’s toys range.

Buying TipPage 27 of 107

These offers at Big Bazaar varies from store to store as well as from city to another city,

so do check the same at your nearest Big Bazaar store to get the offer details

individually on each stores. Spend wisely on such sales and find only the very genuine

offers and go for it during the time of such financial situation as not all offers are worthy

to go for, think twice before spending on the same! Never indulge in compulsive

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!

Page 28 of 107

Marketing Mix Big Bazaar

Big bazaar shopping mall is one of the finest shopping malls all over India. It is the most

liking mall who always prefers to shop for again and again. Hats off to Big Bazaar and

hope it comes up more popular then now no doubt as now also it is but expecting for

more n more progress.....

Readmore:

http://wiki.answers.com/Q/How_is_big_bazaar_shopping_mall#ixzz1WxucE02b

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

Page 29 of 107

Sensei

Care Mate

Koryo and 44 other brands.

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

Page 30 of 107

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

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

Centers 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.

Promotion:

The various promotion schemes used at Big Bazaar include:

Page 31 of 107

“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- aSide. Make a smart choice!”

“Shoppers! Stop. Make a smart choice!”

“Change your Lifestyle. Make a smart choice!”

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.

Page 32 of 107

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.

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.

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

Page 33 of 107

[Image Above: "The Keep West-aSide. Make a smart choice !" Billboard on Hosur Road

(Just Before Forum Mall), Bangalore]

Apparently its part of Big Bazaar‘s (owned by Biyani’s Future Group) new Guerrilla

Marketing Strategy according to agencyfaqs.com Surely one must have heard about the

guerilla warfare strategies during one of those boring history sessions in school

(generally its boring!!), wherein guerrilla force is divided into small groups that

selectively attacks the target at its weak points. Wah lah, enter the future and in the

world of cut throat competition, corporates use extension of the same strategy in

Page 34 of 107

marketing…hmmmm never imagined this while we were in our shorts !! Corporates like

coke, pepsi, etc have been using the same for quite some time now and the latest

entrant is our very own ‘Future Group’- Big Bazaar, Pantaloons, Future Bazaar,

eZone are all part of this group and they are taking on the biggies like Shoppers Stop,

Lifestyle, and Tata’s Westside.

In order to do the same, Future Group have come up with 3 catchy/cocky and cheeky

ad campaign which surely does catch your eyes (whether one changes their loyalty or

not, only time will tell) and surely one cant resist appreciating the same..

Keep West-aSide. Make a smart choice !

Shoppers! Stop. Make a smart choice !

Change Your Lifestyle. Make a smart choice ! (See Image Below)

Page 35 of 107

Not surprisingly; according to the latest release in ET the campaign has made the

competition very uncomfortable because they somehow feel “the ads make a subtle

reference to them”. Heloooooo, subtle is a very weak word used here !!

With retail market in India especially in metros where standard of living and disposable

income is at an all time high, competitors will vie for the market share and can stoop

to any levels while marketing their products. Guerilla marketing is just one of the

strategies and surely one can learn a lot from the ongoing battle, especially people

interested in marketing/marketing techniques.

Things have already started to boil coz of this ad campaign and both Lifestyle,

Shoppers Stop are analyzing the effect of the strategy used by Mr Biyani and Future

Group. Lifestyle are even planning to take Future Group and their ad campaign to

Advertising Standards Council of India (ASCI). I just feel, Future Group have done a

very creative job and surely time will tell the effect of this strategy – by this I refer to both

Future Group and their competitors.

Keep watching this space for more cuz I am sure this is just is just the beginning !!

Page 36 of 107

Pricing strategies

1. Cost - Plus Pricing - The company will work out how much it costs them to

make of buy in a product then add on an amount for the profit.

2. Our Base Pricing - Some companies offer services and they need to set prices

for those services. It is normal for service companies to set a price per-hour. E.g.

Solicitors, plumbers, gardeners, electricians.

3. Skimming - Some times when a product is launched, a high price is set, but as

more customers buy it, the price may need to be lowered, to maintain sales, e.g.

PSP's, DVD's, games, game consoles etc.

4. Penetrating Pricing - A low price, maybe used at the start to attract customers

to an introductory price. As people become more familiar with the product the

price is raised to a normal level

1. Lost Leaders - Shops often set low prices on certain products to attract

customers in, they hope that when customers are in they will buy other normal

price products, e.g. Iceland's Roast Dinner, Special Offers.

2. Destroyer Pricing - This happens when a large company deliberately sets very

low prices hoping the competition cannot match them. They hope to put the

competition out of business.

Page 37 of 107

A* Extra

A products price has strong connections with its point in the life cycle. In the introduction

phase, a skimming or a penetration price might be used; in the maturity phase,

promotional and discount prices may be used; and in the decline phase, sale, or mark-

down prices may be used to get rid of unwanted stock.

Big Bazaar: The Brand Building Challenge

Kishore Biyani

Big Bazaar: Brand's Identity, Personality & Symbolism

Big Bazaar is Indian personification of retail. It's like an Indian bazaar or mandi or mela,

the environment created by traders to give shoppers a sense of moment. Its personality

is of being an entity away from fancy or pretty and being authentically "no-frills". Kishore

Biyani never hired any foreign consultant for Big Bazaar which is evident from Indian-

specific personality of the brand. The brand's personality is self-explanatory by its tag-

line only. This statement places Big Bazaar at the top of customer's mind. It reflects that

entrepreneurship and simplicity are the essence of character of Big Bazaar. To use

predatory pricing is not in the personality of Big Bazaar, they never sell goods below the

price they have purchased it. Big Bazaar, the "Indian Wal-Mart", is the modern Indian

family's favorite store. Big Bazaar symbolizes modern retail, the business which isn't

looked up to in our country, is now in the eyes of many multi-national biggies. Big

Bazaar has shown a robust growth in recent years.

Page 38 of 107

Demerits of Marketing a Commodity Market

Brands evolve from ‘unbranded commodities' to references, where the name is used for

identification. This is also evident from the Goodyear's (1996) chronological brand

categorization

There is lack of differentiation if marketing of commodity is done. Commodities and

differentiated products are the two ends of the product spectrum. Each unit of a

commodity is exactly like every other unit. A product is a commodity when all units of

production are identical, regardless of who produces them. Commodities tend to be raw

materials like corn, wheat, copper, crude oil, etc. The stone marble is mined and sold by

many companies in Rajasthan; it's like an unbranded commodity, where each producer

is selling identical product.

People that produce commodities are referred to as "price-takers". This means that an

individual producer has no control over his/her price. On the other hand, people who are

owners of brands or differentiated products are "price-makers". Producer of a

differentiated product creates a separate market for his/her individual product.

Page 39 of 107

Value of Branding

Branding plays a crucial role for all the products and services. A successful brand is an

identifiable product or service, and buyers or users perceive values in it which matches

their needs.

There are certain advantages of branding. They are: -

Product dies but a good brand never dies: The first car T-model is no more

but the brand 'FORD' is still alive. 'Pears' soap that was launched somewhere in

the end of 1800 is still alive although they have changed the product. Even they

are looking for line extension but basic brand names are the same.

Sales or market share: A brand generates familiarity and trust, and hence,

leads to greater sales. Branded products have an edge over unbranded

products.

Premium price: Brands generate trust, a brand manager can charge extra price

and people pay for that trust.

Differentiation: Creating a brand is nothing but creating a strong association.

This association clearly differentiates the branded product from the rest.

According to brand evolution model developed by Kunde (2000) (as the value of brand

becomes stronger and more relevant to customers, the brand becomes more involving,

Page 40 of 107

and thus, managers need to make their brand values more relevant to increase

customer's involvement. This is explained by religion model also. The model

distinguishes 5 types of brands: -

Product Brand: Products without any form of added value connected to the

generic element.

Concept Brand: Brands that are driven by emotional values - as opposed to

product characteristics.

Corporate Concept Brand: Brands that merge with the company and present

themselves in a sustained and consistent way.

Brand Culture Brand: Brands that are so strong that they - in the eyes of the

consumer - have become equated with the function they represent.

Brand Religion Brand: The ultimate brand position is that of brands that - in the

eyes of the consumer - have become a "must", a faith to which they profess.

Page 41 of 107

Big Bazaar: Positioning & Establishment

Big Bazaar has established itself in the first quadrant of Organization Value and

Customer Value Matrix of current strategy of Big Bazaar elaborates the core

competencies and areas of improvement. The key features that have shaped in

establishing of brand includes: -

Big Bazaar ensures that no other kirana store / departmental store are offering

considerable discount compared to its own price. This helped Big Bazaar in

being the "value for money" store.

Big Bazaar scores high on product mix as compared to kirana store.

Cheap and local products are heavily stocked in Big Bazaar which make it easier

to attract lower middle class category of customers.

Promotion of kirana is rare event but Big Bazaar used this channel efficiently to

establish itself as national brand.

Customer loyalty resulting in high up sell, i.e., selling to existing customers.

Big Bazaar refrains from high-end locations for business which reduces its rental

budget and provides competitive advantage over competitors. Kishore Biyani has

taken "early movers advantage" in many retail spaces. Page 42 of 107

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: -

Product

Big Bazaar offers a wide range of products which range from apparels, food, farm

products, furniture, child care, toys, etc. . Products of all the major brands are available

at Big Bazaar .Also, there are many in house brands promoted by Big Bazaar. Big

Bazaar sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-

ovens. In all, the fashion, electronics and travel segments made up about 70% of sales.

Last year, these categories made up only about 60%.

Price

The tag-line is "Is se sasta aur accha aur kahin nahi". They work on the model of

economics of scale. There pricing objective is to get "Maximum Market Share". The

various techniques used at Big Bazaar are: -

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 used as promotional

tool. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi

Padva, and Durga Pooja).

Page 43 of 107

Differentiated Pricing: Time 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.

Bundling: Selling combo-packs and offering discount to customers. The combo-

packs add value to customer.

Place

Big Bazaar stores are located in 50 cities with 75 outlets.Big Bazaar has

presence in almost all the major Indian cities. They are aggressive on their

expansion plans.

Promotion

Big Bazaar started many new and innovative cross-sell and up-sell strategies in Indian

retail market. The various promotion techniques used at Big Bazaar include "saal ke

sabse saste teen din", Future Card (the card offers 3% discount), Shakti Card,

Brand Endorsement by M. S. Dhoni, Exchange Offer - ‘Junk Swap Offer', Point-of-

Purchase Promotions.

Advertising has played a crucial role in building of the brand. Big Bazaar advertisements

are seen in print media, TV, Radio (FM) and road-side bill-boards.

People

Page 44 of 107

They are one of the key assets for any organization. The salient features of staff of Big

Bazaar are: -

Well-trained staff, the staff employed by Big-Bazaar is well-suited for modern

retail.

Well-dressed staff improves the overall appearance of store.

Employees are motivated to think out-of-the-box. Retail sector is in growth stage,

so staff is empowered to take innovative steps.

Employs close to 10,000 people and recruits nearly 500 people every month.

Use of technology like scenario planning for decision making.

Multiple counters for payment, staff at store to keep baggage and security guards

at every gate, makes for a customer-friendly atmosphere.

Process

The goods' dispatch and purchasing area has certain salient features which include: -

Multiple counters with trolleys to carry the items purchased.

Proper display / posters of the place like (DAL, SOAP, etc.).

Home delivery counters also started at many places.

Physical Evidence

Page 45 of 107

It deals with the final deliverable or the display of written facts. This includes the current

system and available facilities.

Big Bazaar: Brand Extensions Actually Made & Future Possibilities

Future Group is planning to split Big Bazaar into two entities. One will be front-end

consumer-oriented entity and other will be for back-end operations. Back-end entity may

enter into joint venture with leading international cash and carry retailers. Foreign

partners like Carrefour, Metro, Costco, etc., are in the race, and their role will be to

improve efficiency in sourcing and logistics, which will help drive down prices and boost

margins.

The front-end operations will be further divided in three categories, Big Bazaar

Express with store area less than 40,000 sq. ft., Standard Big Bazaar with store area

between 40,000 to 75,000 sq. ft., and Big Bazaar Supercentres with store area more

than 75,000 sq. ft. . Future Group is also planning to distribute financial products like

consumer loans and insurance through Big Bazaar outlets.

Consumer Insights & Perceptions

Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolize Change,

Confidence and Consumption, and according to this theory, "Change and confidence is

leading to rise in Consumption". They divided Indian customers in three categories: -

[removed][removed] [removed][removed] [removed]// <!

[CDATA[ google_protectAndRun("ads_core.google_render_ad", google_handleError,

google_render_ad); // ]]>[removed]  

Page 46 of 107

India One

Consuming class, constitutes only 14% of Indian population.

They are upper middle class and most of customers have substantial disposable

income.

Initial focus of Big Bazaar.

India Two

Serving class which includes people like drivers, house-hold helps, office peons,

washer-men, etc.

For every India One, there are at least India Two and have around 55% of Indian

population.

India Three

Struggling class, remaining population of India.

Cannot afford to inspire for better living, have hand-to-mouth existence.

Needs cannot be addressed by current business models.

The potential customers of Big Bazaar are India One and India Two. The customer

insights were developed by close observation of the target set. The insights that came

out were: -

Page 47 of 107

The clean and shiny environment of modern retail stores creates the perception

that such store are too expensive and exclusive, and are not meant for India

Two.

India Two finds moves and find a lot of comfort in crowds, they are not

individualistic. They prefer to be in queues.

Indian-ness is not about swadeshi, it's about believing in Indian ways of doing

things.

Indian customers prefer to purchase grains, grams, etc., after touching them, so

it's better not to sell in polythene packs. Big Bazaar has counters where you can

touch wheat, rice, sugar, etc., before purchasing.

Advertisements about schemes and offers through local newspapers, radio in

local languages, inspires customer more than the traditional ways.

The guards, salesman at the Big Bazaar outlets should not look smarter than

customer, so they prefer not to have tie, etc., in their uniform.

Hypermarkets in India should be situated in city unlike western countries where

they are located away from city.

Page 48 of 107

Purchased bags / goods should be sealed at check-out as customer can enter

and exit multiple times.

For Indians, shopping is an entertainment; they come in groups, with families so

Big Bazaar should offer something for every section of family. That also led

separate section for clothes, vegetables, food, etc., that is multiple clusters within

a bazaar.

Developed a diversity tracing cell to cater local patterns, demands, festivals, as

every region of customers has unique demands.

Advertising: The Essential of Brand Building Process

Advertising is an essential component of brand building. The advertisement and brand

building is done through various ways, the techniques used are: -

Tag-line: Big Bazaar tag-lines are the key components of advertising. These tag-lines

are modified according to demographic profile of customers. These catch-phrases

appeared on hoardings and newspapers in every city where Big Bazaar was launched.

Everybody understood and connected easily with these simple one-liners. The catch-

liners include "Hindi - Chane ke bhaw kaaju", "Bengali - Rui er dame illish", "Hindi - Stall

ke bhaw balcony", etc.

Print Ads: Big Bazaar newspaper advertisements are present just before launch of any

new scheme. This creates aura about the Big Bazaar brand in the minds of customers.

TV Ads: Kishore Biyani spends a lot of money in brand building exercise. Big Bazaar

commercials are shown on various channels in India. Presently, Fashion@Big Bazaar

commercial is aired.Page 49 of 107

Road-side Advertisements: Big Bazaar bill-boards are displayed on prime locations in

various cities as a brand building exercise. They display the catch-phrases now-a-days.

Radio Ads: This technique is used in cities like Sangli (Tier 1 / Tier 2 cities). Now-a-

days, it is replaced by advertisements on FM channels. This informs customers about

all new happenings at Big Bazaar.

Fashion Shows: "FASHION @ BIG BAZAAR - Desh Badla, Bhesh Badlo" is the latest

invention of the Indian iconic brand. In an effort to take the Fashion to the masses, Big

Bazaar, the flagship hypermarket brand of retail chain of Future Group, organized a

three-day Fashion Show on the streets of Bandra, Mumbai.

Brand Endorsement by Celebrity: Big Bazaar is always associated with celebrities for

advertising and marketing of its brand name. The current campaign is starred by Brand

Ambassador and Indian Cricket ODI Captain Mahendra Singh Dhoni. Earlier Himesh

Reshammiya and Sanath Jaisuriya were associated with Big Bazaar.

Factors that Shaped Big Bazaar During its Life Cycle

The Big Bazaar brand name is in its growth stage  Pantaloon Group faced various small

and large scales troubles in the introductory stage of the brand.

Present years are the high growth years in retail sphere as market has high potential to

sustain growth. The sales are increasing, more and more firms are coming to market,

foreign players are entering into retail sector, and pie of organized retail is increasing in

retail sector.

Page 50 of 107

The factors that shaped the brand during its life cycle are: -

Influence of Sarvana Stores Located in Theyagraya Nagar, Chennai

Many people think that Big Bazaar was inspired by Wall-Mart but the truth is that

Kishore Biyani and his team members are neither inspired by US ways of doing

retailing nor they have been to US much. The credit for foundation and

inspiration goes to Saravana Store, a family-run 25-years-old store, whose

philosophy was - low margin, high turnover. In that store, food, groceries, clothes,

everything had a separate section. It had around 120 people just to manage

crowd. The single shop was doing business of more than INR 200 Crore per

year. This shop was the template for Big Bazaar.

Observing Customers Regularly

Regular customer feedback is also an influential factor for the success of Big

Bazaar. The Big Bazaar has a separate team that looks for customer's

purchasing pattern and how they like or dislike products, how they approach

particular products. For example, unlike other stores where the most expensive

and catchy item is placed at the front display, Big Bazaar places the "Value for

Money" items at check-out points.

Imbibed Entrepreneurial Spirit in Organization

Decision making power is given to every level of employees at Big Bazaar.

Kishore Biyani has given risk-taking power, which led to exposure of

entrepreneurial spirit in every employee. Everybody in Big Bazaar operates with

speed and confidence when it comes to decision making. Page 51 of 107

Building on Core Values

Core values of Indian-ness, valuing and nurturing relationships, and simplicity

shaped the brand. Kishore Biyani always believes in long-term relationships, with

customers, suppliers and employees. Once thinking about offering gifts to

employees close to Diwali, Kishore Biyani suggested giving them wall-paints to

keep their house clean. The paint is used in Indian culture to keep house clean

and brings freshness. The motive behind this was to keep everything clean and

bring freshness in organization.

Strategic Decisions Taken to Build the Big Bazaar Brand

The strategic decisions that lead to building of Big Bazaar were: -

Real Estate Game

For a retailer, location is one of the most important things. According to Kishore Biyani,

real estate cost should be less than 5% of total sales of store in order to provide

maximum benefits to customer.

The strategic decisions to secure spaces before other retailers join in have resulted in

cost-saving. Also, it has created early presence in market.

[removed][removed] [removed][removed] [removed]// <!

[CDATA[ google_protectAndRun("ads_core.google_render_ad", google_handleError,

google_render_ad); // ]]>[removed]  

Page 52 of 107

Nurturing Relationships

Kishore Biyani follows strategy to develop trust and nurture relationships with suppliers.

This trust led to strategically correct decisions most of the time. Whoever works with

Future Group, either leaves in initial deals or continues forever.

Use of Technology, Scenario-Planning & Story-Telling

Big Bazaar planning and design used advance technologies like scenario-planning and

story-telling. These techniques were mainly used for store-design layout, store-location

selection. The strategy to use user-focused, prototype-based development tool made

the brand adapt to the fast-changing external environment.

Design Management

Design-led thinking helped Big Bazaar to achieve ‘customer-first' objective and

ultimately led to better financial performance. Big Bazaar strategy to focus on design led

to creation of Idiom, an independent design and consultancy firm, based in Bangalore.

They are one of the few organizations in India having economists, ethnographers and

sociologists working across various teams as a part of Design Management team.

Back-end Operations, Supply Chain

Harvard Business School just did a case study on Pantaloons' Supply Chain and it says

that Pantaloons' is the most cost-effective supply chain in the world. India may not have

a modern supply chain but it definitely has a cost-effective one. Retailers have made

use of the existing supply chain.

Page 53 of 107

Page 54 of 107

6. Introduction to Operation Management

Operations management is an area of business that is concerned with the production of

good quality goods and services, and involves the responsibility of ensuring

that business operations are efficient and effective. It is the management of resources,

the distribution of goods and services to customers.

APICS The Association for Operations Management also defines operations

management as "the field of study that focuses on the effectively planning, scheduling,

use, and control of a manufacturing or service organization through the study of

concepts from design engineering, industrial engineering, management information

systems, quality management, production management, inventory

management, accounting, and other functions as they affect the organization".

Additionally, The Operations Management Body of Knowledge (OMBOK) Framework

defines the scope of operations management and the activities and techniques that are

a part of the operations management profession.

Operations also refer to the production of goods and services, the set of value-added

activities that transform inputs into many outputs. Fundamentally, these value-adding

creative activities should be aligned with market opportunity for optimal enterprise

performance.

Page 55 of 107

Operations as a Transformation Process

Inputs Transformation Output

Operations management is about the way organizations produce goods and services.

Everything you wear, eat, sit on, use, read or knock about on the sports field comes to

you courtesy of the operations managers who organized its production. Every book you

borrow from the library, every treatment you receive at the hospital, every service you

expect in the shops and every lecture you attend at university all have been produced.

This definition reflects the essential nature of Operations Management; it is a central

activity in organizing things. Another way of looking at an operation is to consider it as a

transformation process.

Operations are a transformation process; they convert a set of resources (INPUTS) into

services and goods (OUTPUTS). These resources may be raw materials, information,

Page 56 of 107

or the customer itself. These resources are transformed into the final goods or services

by way of other 'transforming' resources - the facilities and staff of the operation.

Raw Materials

An obvious example is a cabinet maker, who takes some wood, cuts and planes

it, and then polishes it until a piece of furniture is produced.

Information

A tourist office gathers and provides information to holiday makers, and assists in

advising on places to stay or visit.

Customers

At an airport, you are one of the many resources being processed. The operation

you are involved in is about processing your ticket and baggage, moving from

ticket desk through the customs and duty-free areas, to deliver you to the

awaiting plane.

Extending the process...

If we add a few more parts to the transformation process, we can see the key elements

that operations managers need to consider. Operations is about designing services,

products and delivery systems;

1. Managing and controlling the operations system.

Page 57 of 107

2. Finding ways to improve operations.

Operations Management is all about providing customers with products and

services.

You survive by giving customers with what they want

Every Product or Service is really a bundle of different attributes.

Product, place, price, performance, quality, timing, service, etc.

Customers are looking for a bundle of characteristics

Total bundle provides the level of value customers deem appropriate

Buying products with the attributes they want at the lowest price possible

Page 58 of 107

Attributes

Price

Quality

Image

Performance

Safety

Place – distribution

Time – delivery, availability

How do you decide which product to produce?

How do you find out what attributes your product should have?

How do you get those attributes into your product?

What process?

What resources do you need?

Where do you get those resources?

Page 59 of 107

Examples of Operations Decisions

Operations managers must make decisions on three levels

Strategic

Tactical

Operating

STRATEGIC DECISIONS:

Longer term decisions

Usually made at the senior management level

Product and service strategy

Competitive priorities

Positioning strategy

Location, capacity

Long term partnerships

Quality system and overall approach to quality

TACTICAL DECISIONS

Page 60 of 107

Medium term decisions

Tactical in nature

Made by middle and senior managers

Process design

Technology management

Job design and workforce management

Capacity management

Facility location

Facility layout

Page 61 of 107

OPERATING DECISIONS

Shorter term decisions

Made at middle and lower management levels

Forecasting

Materials management

Inventory management

Aggregate planning

Master production scheduling

Production control

Scheduling

Page 62 of 107

7. Technology in Retail:

Over the years as the consumer demand increased and the retailers geared up to meet

this increase, technology evolved rapidly to support this growth. The hardware and

software tools that have now become almost essential for retailing can be into 2 broad

categories.

Customer Interfacing Systems:

Bar Coding and Scanners

Point of sale systems use scanners and bar coding to identify an item, use pre-stored

data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a

new concept where the consumer pushes the full shopping cart through an electronic

gate to the point of sale. In a matter of seconds, the items in the cart are hit with laser

beams and scanned. All that the consumer has to do is to pay for the goods.

Payment

Page 63 of 107

Payment through credit cards has become quite widespread and this enables a fast and

easy payment process. Electronic cheque conversion, a recent development in this

area, processes a cheque electronically by transmitting transaction information to the

retailer and consumer's bank. Rather than manually process a cheque, the retailer voids

it and hands it back to the consumer along with a receipt, having digitally captured and

stored the image of the cheque, which makes the process very fast.

Internet

Internet is also rapidly evolving as a customer interface, removing the need of a

consumer physically visiting the store.

Operation Support Systems:

ERP System

Various ERP vendors have developed retail-specific systems which help in integrating

all the functions from warehousing to distribution, front and back office store systems

and merchandising. An integrated supply chain helps the retailer in maintaining his

stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs,

while servicing the customer better.

CRM Systems

The rise of loyalty programs, mail order and the Internet has provided retailers with real

access to consumer data. Data warehousing & mining technologies offers retailers the

Page 64 of 107

tools they need to make sense of their consumer data and apply it to business. This,

along with the various available CRM (Customer Relationship Management) Systems,

allows the retailers to study the purchase behavior of consumers in detail and grow the

value of individual consumers to their businesses.

Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way from

raw material suppliers right through to the retail shelf. These APS packages

complement existing (but often limited) ERP packages. They enable consolidation of

activities such as long term budgeting, monthly forecasting, weekly factory scheduling

and daily distribution scheduling into one overall planning process using a single set of

data

The major reasons behind the development of new trends are:

Scalable and profitable Retail models are well established for most of the

categories

Rapid Evolution of New-age Young Indian Consumers

Retail Space is no more a constraint for growth

Partnering among Brands, retailers, franchisees, investors and malls

India is on the radar of Global Retailer Suppliers

Page 65 of 107

Page 66 of 107

8. FUTURE TREND: SCOPE OF 24hr RETAILING

The concept of 24hr. retailing in India has been present only in very limited formats like

the pharmaceuticals (Apollo) and fuel retail outlets (H.P, Reliance etc.) and the other

retail formats used to operate only till the early hours of the night. But because of the

changing lifestyles and the buying habits of the consumers the retailers have been

extending their operating hours till late nights.

Most of the Indian retail formats though capable of operating their formats round the

clock do not choose to do so because of the non feasibility of the idea at present taking

in conjunction the customers’ readiness. For instance if any of the hyper market or

supermarket is functioning during the night the retailer has to bear the extra costs of

electricity, labor and maintenance if the number of footfalls are less very low during the

late nights which otherwise would be profitable to him. Anyways, the shopping time of

the consumer is considerably increasing. Moreover, in India most of the retailing is all

about food and groceries. It might not be a rational prediction that all the consumers will

step into the retail outlet at midnights to buy food and groceries.

This problem can be overcome by implementing the idea in places which have a floating

population even during the nights like railway stations and bus stations. However with

the upcoming culture of malls and the changing lifestyles of the people one can design

a small part of the store or a mall for a new 24/7 retail format which consists of the

essential products like medicines, fruits and vegetables, groceries and some other

Page 67 of 107

FMCG products and test market it. Once if the sales start showing some consistent

positive figures and if the crowd increases then the store can come in a bigger way to

reach out to their customers.

The other option for trying the concept of 24hr retailing is that the retailer can have a

mobile outlet which can place itself in the areas which have substantial night traffic for

the sales to happen. And once the people are to the 24hr shopping then the retail plans

can be altered accordingly.

Rural Vs Urban Retail Trends

India's largely rural population has also caught the eye of retailers looking for new areas

of growth. ITC launched the country's first rural mall ‘ Chaupal Sagar' , offering a

diverse product range from FMCG to electronics appliance to automobiles, attempting

to provide farmers a one-stop destination for all of their needs. There has been yet

another initiative by the DCM Sriram Group called the ‘ Hariyali Bazaar' , that has

initially started off by providing farm related inputs and services but plans to introduce

the complete shopping basket in due course. Other corporate bodies include Escorts,

and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide

products/services targeted at the farmer in order to tap the vast rural market.

Commenting on the Rural Retailing chapter in INDIA RETAIL REPORT 2005, Mr. Adi B.

Godrej, Chairman, The Godrej Group (India's one of the leading corporate majors) said

Page 68 of 107

that his group had also launched the concept of agri-stores named 'Adhaar', which

served as one-stop shops for farmers selling agricultural products such as fertilisers &

animal feed and also providing farmers knowledge on how to effectively utilise these

products. "There are 8 stores already operating in Maharashtra and Gujarat and further

expansion is very much on the cards. He added.

FDI could indeed do a lot in this sector as entry of international retailers would bring in

the required expertise to set the supply chain in place which would result in elimination

of wastage, better prices and quality for consumers and higher income for farmers

besides of course farm produce retailing getting a facelift, said Mr. Godrej.

Tapping the fresh farm produce sector, the group plans to take its recently

launched retail concept – Nature's Basket - to newer cities steadily. Godrej Group's

Agro and Food division, Godrej Agrovet Ltd. (GAVL) operates the format, selling a

variety of vegetables, fruits and herbs - both local and exotic thereby introducing the

concept of 'farm-to-plate' to urbanites. Godrej plans to open four more Nature's Basket

stores in Mumbai before taking them national. Setting up cost of a store is about INR 5-

10 million and per stores sales are expected in the range of INR 30- Rs 50 million a

year.

Interestingly, the world's largest corporation, Wal-mart, also had its roots in rural

America. Unlike many other retailers who started from urban centres and then trickled

down to rural areas, Wal-mart had started from rural areas and then came closer to

cities over a period of time. Many more such concepts are likely to be tested in the

Page 69 of 107

future as marketers and retailers begin to acknowledge that the rural consumer is more

than a ‘poor cousin' of the urban counterpart. The IMAGES KSA Report avers that these

concepts are likely to go a long way in bringing a huge untapped population within the

purview of organized retailing, thereby, increasing the size of the total market

The above chart makes it clearly evident why the rural retail market has been attracting

the big giants to invest in it.

Urban Trends

The urban retailing has been experimenting with many formats like the supermarkets,

hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be

embracing the trend of mall culture. It is a rich man's world too, with multi-screen

cinemas, restaurants, games and branded shops - well out of the reach of many of the

Page 70 of 107

country's one billion people. But India's middle-classes, widely travelled and with deep

pockets, are flocking to malls.

RAPID GROWTH:

India's organized retail industry accounts for just 3% of the country's total retail sales,

though it is poised to grow by 97% per year in the next five years to a staggering $24bn.

Fuelling this growth are India's sprawling shopping malls, which are increasingly

challenging High Street stores, corner shops and village markets alike. Just five years

ago, there were shopping arcades but no malls. Today there are nearly 100 big

shopping malls in the country, more than half of them in Delhi and Mumbai alone. And

in two years there will be 360 malls across the country. More than 20 are in various

stages of development in Delhi and Mumbai. Among them is India's biggest shopping

mall, Ambi, which is being built in Gurgaon, near Delhi. Spread over 3.2 million square

feet, it is set to become a virtual town, where multi-screen cinemas, recreational

facilities for adults and children, food courts and branded outlets will fill the space. It will

have exclusive showrooms of international brands, where, according to the developers,

customers will have to shop by prior appointment. Analysts comment that this is just the

beginning and this is going to experience a ‘sea change’ once the platform is opened up

for the FDI.

Page 71 of 107

9. SWOT ANALYSIS:

A SWOT analysis of the Indian organized retail industry is presented below:

STRENGTH:

1. Retailing is a "Technology-intensive" industry. It is technology that will help the

organized retailers to score over the unorganized retailers. Successful organized

retailers today work closely with their vendors to predict consumer demand, shorten

lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart

pioneered the concept of building competitive advantage through distribution &

information systems in the retailing industry. They introduced two innovative logistics

techniques – cross-docking and EDI (electronic data interchange)

2. On an average a super market stocks up to 5000 SKU's against a few hundred

stocked with an average unorganized retailer. This will provide variety in products

(required breadth & depth for consumers)

3. As a consequence of high volumes, procurement will be direct from the Manufacturer.

Hence, merchandise can be offered at lower costs.

WEAKNESS:

Page 72 of 107

1. Less Conversion level: Despite high footfalls, the conversion ratio has been very

low in the retail outlets in a mall as compared to the standalone counter parts. It is seen

that actual conversions of footfall into sales for a mall outlet is approximately 20-25%.

On the other hand, a high street store of retail chain has an average conversion of

about 50-60%. As a result, a stand-alone store has a ROI (return on investment) of 25-

30%; in contrast the retail majors are experiencing a ROI of 8-10%

2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise

mix for the mall outlets. Since the stand-alone outlets were established long time back,

so they have stabilized in terms of footfalls & merchandise mix and thus have a higher

customer loyalty base.

Opportunity :

1. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore

by 2010 making India one of the largest consumer markets of the world. The IMAGES-

KSA projections indicate that by 2015, India will have over 55 Crore people under the

age of 20 - reflecting the enormous opportunities possible in the kids and teens

retailing segment.

2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow

at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.

3. Percolating down: In India it has been found out that the top 6 cities contribute for

66% of total organized retailing. While the metros have already been exploited, the

Page 73 of 107

focus has now been shifted towards the tier-II cities. The 'retail boom', 85% of which has

so far been concentrated in the metros is beginning to percolate down to these smaller

cities and towns. The contribution of these tier-II cities to total organized retailing sales

is expected to grow to 20-25%.

4. Rural Retailing: India's huge rural population has caught the eye of the retailers

looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga"

offering a diverse range of products from FMCG to electronic goods to automobiles,

attempting to provide farmers a one-stop destination for all their needs." Hariyali Bazar"

is started by DCM Sriram group which provides farm related inputs & services. The

Godrej group has launched the concept of 'agri-stores' named "Adhaar" which offers

agricultural products such as fertilizers & animal feed along with the required knowledge

for effective use of the same to the farmers. Pepsi on the other hand is experimenting

with the farmers of Punjab for growing the right quality of tomato for its tomato purees &

pastes.

Threats :

1. If the unorganized retailers are put together, they are parallel to a large supermarket

with no or little overheads, high degree of flexibility in merchandise, display, prices and

turnover.

2. Shopping Culture: Shopping culture has not developed in India as yet. Even now

malls are just a place to hang around with family and friends and largely confined to

window-shopping.

Page 74 of 107

3. Cultural Variation leads to variation in merchandise in India at different geographical

locations.

Challenges in Retail

The following are the key areas that may pose a threat to those retail companies that

ignore the impacts of giving less importance to manage their demand and supply: -

Forecasting and Inventory Management for JIT replenishments of products.

Peak Season Demand Handling.

Order Management in case of retailers with multiple outlets.

Warehouse Management in case of multiple outlets.

Introducing new products.

Handling variety of items.

Page 75 of 107

Proposed Supply Chain Strategies for Retail Industry

Supply Chain Strategies in Retail

Bulk-Breaking: Orders can be done in smaller lots with a good understanding with the

supplier. This can be achieved by following ways: -

Spatial Convenience: Strategically locating the outlet with distribution

networks and warehouses located proximally.

Supplier holds inventory.

Page 76 of 107

Vendor Managed Inventory: In this case, the vendor himself is given the responsibility to

handle the inventory. A space for the vendor is rented in the outlet, and he takes care of

the shelves and the space. It is a 2-way agreement wherein the vendor gets the space

to market his product by interacting one-to-one with the customers.

Point of Sale Information System: As soon as one stock keeping unit moves out of the

store when purchased by a customer, the information readily flows to the supplier.

He is given access to the inventory database.

A re-order point can be imposed based on consumption pattern and the supplier

is asked to fill the shelf upon inventory reaching the re-order point.

SRM - Supplier Relationship Management:

Relationship with supplier should not be a marriage of convenience. Supplier has

to act in ways more than what is required.

By providing special offers, discounts and incentives, the supplier savors the

relationship. This also serves as a promotion strategy for the outlet.

Competitive Areas of Importance

Fulfillment:

Stock filling is taken care of at both customer end (end product) and at the end of

shelves at the shop. Reaching the customer at the right time and constant check on

stocks and making sure right quantity is ordered at the right time.

Page 77 of 107

Logistics:

Safe and reliable transport at as much low price as possible.

Constant contact with distribution teams (trucks, trains, etc.) and track where

material is.

Partnership with transportation firms so that cost and transport can be shared if

the shipment does not occupy the whole truck space.

Procurement: (Vendor’s side points to take care)

Strong Relationship

Information sharing and updating plan change

Combine vendors by minimizing transportation cost

Choose vendors in proximity

Optimum lot size taking vendors into confidence

Production:

Line should run smoothly without delays due to ordering and transportation (fulfillment

and logistics have to be met first).

Model in Detail

Integrated Demand Management:

Page 78 of 107

The sales in the outlet is kept track of bill after bill hour after hour.

Store register work is made online and paper work is done with.

Forecasting made with data on past consumption and present market trend.

Optional forecasting is made in case of seasonal requirements.

Periodic offers and incentives are made available to the customers to generate

demand.

Tips for Controlling Retail Inventory

Part of the answer to the "buying problem" is inventory control. In fact, the biggest

reason retail businesses fail is that they lack inventory control. However, when

employed aggressively against competitors, effective management of your inventory

can be a lethal weapon. Imagine doubling your inventory turnover rate (certainly not far-

fetched with proper control): you could sell product at half the normal margin and still

gross the same amount of dollars in a given time period. Inventory control has been

used to take down many competing retailers.

Like much of the new technology available to business owners, Management

Information Systems (MIS) is still evolving, and along the way it becomes both more

sophisticated and less expensive. MIS tools can be implemented to gain a significant

Page 79 of 107

advantage over competitors. However, it is critical that you understand the uses and

goals of an inventory management system before implementing. Possibly the best

examples of inventory management come from big retailers. To put it simply: Kmart

neglected inventory control and failed, and Wal-Mart concentrated on becoming the

leading edge of inventory control and is now one of the world's largest companies.

It is a common misconception among small retailers that only industry giants like Wal-

Mart can use MIS effectively. Sam Walton himself began as a small retailer, but one of

his most advantageous assets was his deep understanding of inventory control's

importance.

MIS is commonly regarded as a daunting system to implement by those with limited

experience in this highly-technical area; however it is critical to understand exactly what

MIS can accomplish. Although internal hires are available, MIS is made greatly

accessible to the small retailer by consulting companies. The basic goal of a point-of-

purchase inventory control system is to provide information on profitability, status, and

rate of sale for every item a retailer stocks, instantly. These metrics can then be used to

improve inventory turnover and return on investment.

Once an MIS infrastructure is established, it makes sense for the retailer to integrate

vendors into the system. Vendors are subject to an incentive to keep their inventory on

store shelves, and systems are available which provide vendors with sales and stock

information directly from the point of sale system. Providing your vendors with timely

Page 80 of 107

information and making them responsible for maintaining inventory your overall

efficiency is improved as your own workload is diminished. The net impact on your

business is increased turnover rates and fewer runs on inventory.

Anything that results in making the chain between Vendors, Retailers and Customers

more efficient also results in additional profit. FRID, an example of an electronic

recognition system, enables tracking of items via a computer chip embedded in the

product or packaging, which is detected at various stages along the distribution process.

Product information obtained in this way is uploaded instantly to the inventory control

system, which reduces the time spent in receiving and stocking and allows for a more

efficient shipping process. It is imperative for retailers to be aware of inventory

performance and its effects on profitability.

Inventory control is not, however, the answer to all questions. Inventory controls

systems can tell you how the inventory in stock is performing. It doesn't tell you that new

products you should carry. Buying is a great area of opportunity, especially for the small

retailer who is close to customers and much more responsive to their demands than is

the national chain.

Of course, inventory control is not the ultimate solution to retailers' problems. For

example, inventory control tells you what products are performing well, but it can't tell

you what new products to stock. Inventory control is a great way for small retailers to act

like one of the big guys, and gain an advantage over other small competitors.

Page 81 of 107

Primary Data

Operations are classified into 3 functions below:

Management Function

General Merchandise

Inventory & Credit Management

MANAGEMENT FUNCTION:

Management is creative problem solving. This creative problem solving is accomplished

through four functions of management

Planning

Organizing

Staffing

Directing

Controlling

Page 82 of 107

The intended result is the use of an organization's resources in a way that accomplishes

its mission and objectives.

Planning is the ongoing process of developing the business' mission and objectives

and determining how they will be accomplished. Planning includes both the broadest

view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for

accomplishing a specific goal.

Organizing is establishing the internal organizational structure of the organization. The

focus is on division, coordination, and control of tasks and the flow of information within

the organization. It is in this function that managers distribute authority to job holders.

Staffing is filling and keeping filled with qualified people all positions in the business.

Recruiting, hiring, training, evaluating and compensating are the specific activities

included in the function. In the family business, staffing includes all paid and unpaid

positions held by family members including the owner/operators.

Directing is influencing people's behavior through motivation, communication, group

dynamics, leadership and discipline. The purpose of directing is to channel the behavior

of all personnel to accomplish the organization's mission and objectives while

simultaneously helping them accomplish their own career objectives.

Controlling is a four-step process of establishing performance standards based on the

firm's objectives, measuring and reporting actual performance, comparing the two, and

taking corrective or preventive action as necessary.

Page 83 of 107

Managerial levels and hierarchy

The management of a large organization may have three levels:

1. Senior management (or "top management" or "upper management")

2. Middle management

3. Low-level management, such as supervisors or team-leaders

4. Foreman

5. Rank and File

Top-level management

Require an extensive knowledge of management roles and skills.

They have to be very aware of external factors such as markets.

Their decisions are generally of a long-term nature

Their decisions are made using analytic, directive, conceptual and/or

behavioral/participative processes

They are responsible for strategic decisions.

They have to chalk out the plan and see that plan may be effective in the future.

Page 84 of 107

They are executive in nature.

Middle management

Mid-level managers have a specialized understanding of certain managerial

tasks.

They are responsible for carrying out the decisions made by top-level

management.

Lower management

This level of management ensures that the decisions and plans taken by the

other two are carried out.

Lower-level managers' decisions are generally short-term ones

Foreman / lead hand

They are people who have direct supervision over the working force in office

factory, sales field or other workgroup or areas of activity.

Rank and File

The responsibilities of the persons belonging to this group are even more

restricted and more specific than those of the foreman.Page 85 of 107

General Merchandise

In marketing, a product is anything that can be offered to a market that might satisfy a want or

need. In retailing, products are called merchandise. It is an art and science of displaying

merchandise within store, it is about implementing effective design, ideas to educate customer,

create desire and finally increase store traffic and sales volume.

Home Lien Items

Electronic Items

Mobile Zone

Furniture

Star Sitara

Opticians

Men, Ladies and Kids wear

Foot Wear

Music

Toys

Stationery

Page 86 of 107

Inventory & Credit Operations (Using JETRMS Software )

Inventory Management

Inventory Management and Inventory Control must be designed to meet the dictates

of the marketplace and support the company's strategic plan. The many changes

in market demand, new opportunities due to worldwide marketing, global sourcing of

materials, and new manufacturing technology, means many companies need to change

their Inventory Management approach and change the process for Inventory Control.

Despite the many changes that companies go through, the basic principles of Inventory

Management and Inventory Control remain the same. Some of the new approaches and

techniques are wrapped in new terminology, but the underlying principles for

accomplishing good Inventory Management and Inventory activities have not

changed.

The Inventory Management system and the Inventory Control Process provides

information to efficiently manage the flow of materials, effectively utilize people and

equipment, coordinate internal activities, and communicate with customers.

Inventory Management and the activities of Inventory Control do not make decisions or

manage operations; they provide the information to Managers who make more

accurate and timely decisions to manage their operations.

Page 87 of 107

The basic building blocks for the Inventory Management system and Inventory Control

activities are:

Sales Forecasting or Demand Management

Sales and Operations Planning

Production Planning

Material Requirements Planning

Inventory Reduction

The emphases on each area will vary depending on the company and how it operates,

and what requirements are placed on it due to market demands. Each of the areas

above will need to be addressed in some form or another to have a successful

program of Inventory Management and Inventory Control.

JETRMS Software is classified in to 6 operations which controls the Inventory, Credit

and Security management

Inventory & Credit Operations

Employee Management System

Scanning System

Smart System

Vendor Management SystemPage 88 of 107

Security Management System

Employee Management System

Employee Details

Margin Tracking

Smart System

Daily Sales Report

Billing Report

Total Discount & Revenue Reports

Scanning System

Product Discount

Product Pricing Decision

Product Management

Vendor Management System

Inventory Management System

Purchasing Order Management

Invoice Purchasing Order System

Page 89 of 107

Security Management

CHECK POINT SYSTEM

CC SYSTEM

Soft checks

Hard checks

Page 90 of 107

7 P’s of Services

1st P: PRODUCT

Product- refers to the merchandise i.e. the range of clothes.

Supplementary services -include a component of fashion, life style and Ambient

shopping as an addition to the core product.

Today, customers buy experiences and not brands or products.

2nd P : PRICING

Page 91 of 107

Cost plus price and Percentage method pricing:

Most widely used technique to price apparels.

Ex:- COLOR PLUS and IN-HOUSE brands like those of SHOPPER’S STOP or

WESTSIDE use this technique.

3rd P : PLACE

Apparel Retailing Business is driven by one crucial factor:

Location

Approachable

Parking

4th P: PROMOTION

Print medium.

Loyalty programs

In-store Visual merchandising

5th P: PEOPLE

Every second a customer spends inside the store has to be viewed as Moment of Truth

Page 92 of 107

“People” is that aspect of the marketing mix which adds tangibility to the service of

creating an experience

6th P: PROCESSES

7th P : PHYSICAL EVIDENCE

Managing Appearance of the building & Location

Maintaining Temperature , Music, Lighting and Fragrance inside the store

Availability of services like Prams, Wheel Chair, Valet Parking etc

Stylish Stocking of Merchandise

Page 93 of 107

10. CHANGES IN RETAILING

Page 94 of 107

Page 95 of 107

Page 96 of 107

Page 97 of 107

11. Conclusion

For a start, these retailers need to invest much more in capturing more specific market.

Intelligence as well as almost real-time customer purchase behavior information. The

retailers also need to make substantial investment in understanding/acquiring some

advanced expertise in developing more accurate and scientific demand forecasting

models. Re-engineering of product sourcing philosophies-aligned more towards

collaborative planning and replenishment should then be next on their agenda. The

message, therefore for the existing small and medium independent retailers is to closely

Page 98 of 107

examine what changes are taking place in their immediate vicinity, and analyze

Whether their current market offers a potential redevelopment of the area into a more

modern multi-option destination. If it does, and most commercial areas in India do have

this potential, it would be very useful to form a consortium of other such small retailers

in that vicinity and take a pro-active approach to pool in resources and improve the

overall infrastructure. The next effort should be to encourage retailers to make some

investments in improving the interiors of their respective establishments to make

shopping an enjoyable experience for the customer.

As the retail marketplace changes shape and competition increases, the potential for

improving retail productivity and cutting costs is likely to decrease. Therefore, it will

become important for retailers to secure a distinctive position in the marketplace based

on value, relationships or experience.

R ~ Rain check

E ~ Establishment

T ~ Trade

A ~ Affiliated Chains

I ~ Investment Oppt

L ~ Low Price Guaranty

Page 99 of 107

Finally, it is important to note that these strategies are not strictly independent of each

other; value is function of not just price, quality and service but can also be enhanced by

Personalization and offering a memorable experience. In fact, building relationships with

customers can by itself increase the quality of overall customer experience and thus the

perceived value. But most importantly for winning in this intensely competitive

marketplace, it is critical to understand the target customer's definition of value and

make an offer, which not only delights the customers but also is also difficult for

competitors to replicate.

Page 100 of 107

Survey

A customer normally prefers malls, supermarkets, department stores as against kirana

stores for variety of reasons. To get a clear idea on why do customers favor shopping in

supermarkets in opposition to Kiranas, a survey has been conducted with this objective. By

this survey, it became easy to compare Traditional Retail vs. Modern Retail with the view of

customers. A questionnaire was prepared and reviews of consumers have been noted down

and it is presented in the form of following analysis:

1. Which is the most appropriate time when you would like to go out for shopping?

Observation

Page 101 of 107

Option

No of

consumers

while going to office 8

while returning from office 15

while dropping kids to home 24

while dropping kids to school 10

on Sundays/ holidays 43

Most of them didn’t visited super markets while going to office or

returning from office. Very few consumers have opted for this option. But most of

them visited on Sundays and holidays with their friends family or many of them

visited alone also. The strongest point to note here is that a major chunk of our

sample population never visits supermarkets while going to or returning from

office nor do they visit while leaving kids to school or taking them back from

school. The major reason behind this is that these activities generally take place

early morning or during afternoon which is the time not preferred by consumer for

shopping.

2. On the basis of following parameters, indicate your preference to visit supermarket?

Page 102 of 107

Factor No of consumers

Range of products 28

Ease of purchase 18

Store timings 15

Behavior of sales

personnel 18

Discounts 21

Observation

More number of consumer visit super market because of range of

product. All other factor is equal. By observing, it can be seen that consumer go

for super market because of convenience and also discounts offered by super

market.

3. According to you, which retailing format provides best services in terms of discounts,

offers or free home delivery?

Page 103 of 107

Retailers No of consumers

Supermarkets 76

Kirana Stores 18

Others 6

Observation

Comparing the overall features of supermarkets and Kirana stores in terms of

discounts, free home delivery, offers etc, people prefer supermarkets over Kirana

stores by a large margin. The reason being, that kirana stores have a limited turn

over and generally cannot indulge into providing offers and hence looses out on

the bargain.

Page 104 of 107

Conclusion

Kiranas and organised retail will co-exist. After analyzing the retail

Industry, it can conclude that the organized retail has opportunities to grow in

India in spite of the kirana stores because these kirana shops will also get benefit

of the growing economy. The argument that the kirana shops will be affected by

these malls is only myth. The organized retail is attracting more and more Indian

as well as foreign players of the Retail Industry.

The Boundaries between the offerings by malls and one-shop vendors

are gradually breaking. Single shop-owners are becoming increasingly aware of

customers needs, hygiene factors and varied requirements. At the same time,

Retail Chains are opening stores in residential areas and focusing on customer

relationship management, with a hub and spoke model where one large store

supports various smaller stores in the nearby residential areas. However, the key

to success for Organised Retailers will always be their large size, variety and

ambience on offer, and thus, the scale.

As the study shows that a major portion of the Organized Retail will be

developed in small cities and towns, this opportunity has not been enchased by

Kirana stores and they are unable to meet the requirements of the customers.

Therefore both the Malls and Kirana stores can play simultaneously in India so

no need get afraid due to the malls.

Page 105 of 107

Here even I would like to add my view point from whatever I have learnt

from the experience gained while making this project. Most of the kirana stores

have survived. But growth has been very slow for them and no new kirana stores

are opening up in neighborhoods where Big Retailers have opened shop. And

secondly, Big Retail will have to wait a long time before they can ‘invade’ small

towns in India.

Towns with less than a million-half a million population will have to wait.

And no big retailers will venture there until they’ve gained some useful insights

from the big cities. And the countryside will be largely left untouched which will be

served by local Kirana Stores. “Big Retail Chains won’t kill small shops”

“Small is beautiful. Malls are all very good for one-day shopping, but the

Kirana store is for the odd quantities in life. Like when you need one-fourth

of a packet of rice.”

Bibliography

Page 106 of 107

Books:

Retailing – K. Suresh

Retail Management – Gibson C. Vedamani

Marketing Management – Philip Kotler

Retail Marketing Management – David Gilbert

Newspapers:

The Economic Times

DNA

Websites:

www.hindubusinessline.com

www.atkearney.com

www.businessworldindia.com

www.wikipedia.com

www.economictimes.com

www.dnaindia.com

Page 107 of 107