Retail Doc (1)

INTRODUCTION

India has often been called a nation of shopkeepers. Presumably the

reason for this is; that, a large number of retail enterprises exist in India. In

2004, there were 12 million such units of which 98% are small family

businesses, utilizing only household labour. Even among retail enterprises,

which employ hired workers, a majority of them use less than three workers.

Retailing is the combination of activities involved in selling or renting

consumer goods and services directly to ultimate consumers for their

personal or household use. In addition to selling, retailing includes such

diverse activities as, buying, advertising, data processing and maintaining

inventory.

While sales people regularly call on institutional customers, to initiate

and conclude transactions, most end users or final customers, patronize

stores. This makes store location, product assortment, timings, store

fixtures, sales personnel, delivery and other factors, very critical in drawing

customers to the store.

Final customers make many unplanned purchases. In contrast those

who buy for resale or use in manufacturing are more systematic in their

purchasing. Therefore, retailers need to place impulse items in high traffic

locations, organize, store layout , trains sales people in suggestion , and

place related items next to each other, to stimulate purchase.

WHAT DOES THE RETAILING INDUSTRY INCLUDE?

Department Stores

Discount Stores

Clothing Stores

Specialty retailers

Convenience Stores

Grocery Stores

Drug Stores

Home furnishing retailers

Auto Retailers

Direct Sales Catalog and mail order companies

Some e-commerce businesses

THE IMPORTANCE OF RETAILING

Organized retailing in India was estimated at Rs.18,000 crores in 2002-

2003 and has grown at about 40% over the last 3 years (Source KSA Retail

Outlook).

Retailing has a tremendous impact on the economy. It involves high

annual sales and employment. As a major source of employment retailing

offers a wide range of career opportunities including; store management,

merchandising and owning a retail business.

Consumers benefit from retailing in that, retailers perform marketing

functions that makes it possible for customers to have access to a broad

variety of products and services. Retailing also helps to create place, time

and possession utilities. A retailer's service also helps to enhance a product's

image.

In general, retailers perform four distinct function as, shown in Figure

1.1 below:

1) Retailers participate in the sorting process by collecting an assortment

of goods and services from a wide variety of suppliers and offering

them for sale. The width and depth of assortment depend upon the

individual retailer's strategy.

2) They provide information to consumers through advertising, displays

and signs and sales personnel. Marketing research support is given to

other channels, members.

3) They store merchandise, mark prices on it, place items on the selling

floor and otherwise handle products; usually they pay suppliers for

items before selling ,,them to final customers. They complete

transactions by using appropriate locations, and timings, credit

policies, and other services e.g. delivery.

4) Retailing in a way, is the final stage in marketing channels for

consumer products. Retailers provide the vital link between producers

and ultimate consumers.

RETAIL STRATEGY AND STRUCTURE

Successful retail operations depend largely on two main dimensions:

margin and turnover. How far a retail enterprise can reach in margin and

turnover depends essentially on the type of business (product lines) and the

style and scale of the operations. In addition the turnover also depends upon

the professional competence of the enterprise.

In a given business two retail companies may choose two different

margin levels, and yet both may be successful, provided the strategy and

style of management are appropriate.

Margin Turnover Model

Ronald R. Gist "Suggested a conceptual frame work, using margin and

turnover, for understanding the retail structure and evolving a retail

strategy."

Margin is defined as the percentage mark tip at which the inventory in

the store is sold and turnover is the number of times the average inventory

is sold in a year. The Figure below is a diagrammatic representation of the

frame work and can be applied to almost any type of retail business.

Depending upon the, combination of the two parameters, a retail

business will fall into one of the four quadrants. For instance L-L signifies a

position which is low on both margin and turnover; whereas, H-L indicates

high margin and low turnover.

Low Margin High Turnover Stores

Such an operation assumes that low price is the most significant

determinant of customer patronage. The stores in this category price their

products below the market level. Marketing communication focuses mainly

on price. They provide very few services; if any, and they normally entail an

extra charge whenever they do. The merchandise in these stores are

generally pre-sold or self sold. This means that the customers buy the

product, rather than the store selling them.

These stores are typically located in isolated locations and usually

stock a wide . range of fast moving goods in several merchandise lines. The

inventory consists of well known brands for which a consumer pull is created

by the manufacturer through national advertising. Local promotion focuses

on low price. Wal-mart in the United States is an example and Pantaloon

Chain or Subhiksha are Indian examples of such stores.

High Margin Low Turnover

This operation is based on the premise that distinctive merchandise,

service and sales approach are the most important factors for attracting

customers. Stores in this category price their products higher than those in

the market, but not necessarily higher than those in similar outlets. The

focus in marketing communication is on product quality and uniqueness.

Merchandise is primarily sold in store and not pre-sold. These stores

provide a large number of services and sell select, categories of products.

They do not stock national brands which are nationally advertised. Typically,

a store in this category is located in a down town area or a major shopping

center. Sales depends largely on salesmanship and image of the outlet.

High Margin High Turnover Stores

These stores generally stock a narrow line of products with turnover of

reasonably high frequency. They could be situated in a non commercial area

but not too far from a major thoroughfare. Their locational advantage allows

them to charge a higher price. High over head costs and, low volumes also

necessitate a higher price.

Low Margin-Low Turnover Stores

Retail enterprises in this category are pushed to maintain low margins

because of price wars. Compounding this problem is the low volume of sales,

which is probably a result of poor management, unsuitable location etc. such

businesses, normally get wiped out over a period of time.

RETAILING FORMATS (CLASSIFYING RETAIL FIRMS)

Regardless of the particular type of retailer (such as a supermarket or

a department store), retailers can be categorized by (a) Ownership, (b) Store

strategy mix, and (c) Non store operations. Figure 1.3 illustrates this

concept.

FORM OF OWNERSHIP

A retail business like any other type of business, can be owned by a

sole proprietor, partners or a corporation. A majority of retail business in

India are sole proprietorships and partnerships.

1) Independent Retailer

Generally operates one outlet and offers personalized service, a

convenient location and close customer contact. Roughly 98% of all

the retail businesses in India, are managed and run by independents,

including barber shops, drycleaners, furniture stores, bookshops, LPG

Gas Agencies and neighbourhood stores. This is due to the fact that

into retailing is easy and it requires low investment and little technical

knowledge. This obviously results in a high degree of competition.

Most independent retailers fail because of the ease of entry, poor

management skills and inadequate resources.

2) Retail Chain

It involves common ownership of multiple units. In such units,

the purchasing and decision making are centralized. Chains often rely

on, specialization, standardization and elaborate control- systems.

Consequently chains are able to serve a large dispersed target market

and maintain a well known company name. Chain stores have been

successful, mainly because they have the opportunity to take

advantage of "economies of scale" in buying and selling goods. They

can maintain their prices, thus increasing their margins, or they can

cut prices and attract greater sales volume. Unlike smaller,

independent retailers with lesser financial means, they can also take

advantage of such tools as computers and information technology.

Examples of retail chains in India are Shoppers stop; West side and

IOC, convenience stores at select petrol filling stations.

3) Retail Franchising

Is a contractual arrangement between a "franchiser" (which may

be a manufacturer, wholesaler, or a service sponsor) and a

"franchisee" or

franchisees, which allows the latter to conduct a certain form of

business under an established name and according to a specific set of

rules. The franchise agreement gives the franchiser much discretion in

controlling the operations of small retailers. In exchange for fees,

royalties and a share of the profits, the franchiser offers assistance and

very often supplies as well. Classic examples of franchising are;

McDonalds, Pizza Hut and Nirulas.

4) Cooperatives

A retail cooperative is a group of independent retailers,that have

combined their financial resources and their expertise in order to

effectively control their wholesaling needs. They share purchases,

storage, shopping facilities, advertising planning and other functions.

The individual retailers retain their independence, but agree on broad

common policies. Amul is a typical example of a cooperative in India.

STORE STRATEGY MIX

Retailers can be classified by retail store strategy mix, which is

an integrated combination of hours, location, assortment, service,

advertising, and prices etc. The various categories are:

1) Convenience Store: Is generally a well situated, food oriented

store with long operating house and a limited number of items.

Consumers use a convenience store; for fill in items such as

bread, milk, eggs, chocolates and candy etc.

2) Super markets: Is a diversified store which sells a broad range

of food and non food items. A supermarket typically carries small

house hold appliances, some apparel items, bakery, film

developing, jams, pickles, books, audio/video CD's etc. The Govt.

run Super bazaar, and Kendriya Bhandar in Delhi are good

examples of a super market. Similarly in Mumbai, we have Apna

Bazar and Sahakari Bhandar.

3) Department Stores: A department store usually sells a general

line of apparel for the family, household linens, home furnishings

and appliances. Large format apparel department stores include

Pantaloon, Ebony and Pyramid. Others in this category are:

Shoppers Stop and Westside.

4) Speciality Store: Concentrates on the sale of a single line of

products or services, such as Audio equipment, Jewellery, Beauty

and Health Care, etc. Consumers are not confronted with racks of

unrelated merchandise. Successful speciality stores in India

include, Music World for audio needs, Tanishq for jewellery and

McDonalds, Pizza Hut and Nirula's for food services.

5) Hyper Markets: Is a special kind of combination store which

integrates an economy super market with a discount department

store. A hyper market generally has an ambience which attracts

the family as whole. Pantaloon Retail India Ltd. (PRIL) through its

hypermarket "Big Bazar", offers products at prices which are

25% - 30% lower than the market price.

NON STORE RETAILING

In non store retailing, customers do not go to a store to buy. This

type of retailing is growing very fast. Among the reasons are; the

ability to buy merchandise not available in local stores, the increasing

number of women workers, and the presence of unskilled retail sales

persons who can not provide information to help shoppers make

buying decisions

The major types of non store retailing are:

1) In Home Retailing: Where, a sales transaction takes place in a

home setting - including door-door selling. It gives the sales

person an opportunity to demonstrate products in a very

personal manner. He/She has the prospect's attention and there

are fewer distractions as compared to a store setting. Examples

of in home retailing include, Eureka Forbes vaccum cleaners and

water filters.

2) Telesales/Telephone Retailing: This involves contact between

the prospect and the retailer over the phone, for the purpose of

making a sale or purchase. A large number of mobile phone

service providers use this method. Other examples are private

insurance companies, and credit companies etc.

3) Catalog Retailing: This is a type of non store retailing in which

the retailers offers the merchandise in a catalogue, which

includes ordering instructions and customer orders by mail. The

basic attraction for shoppers is convenience. The advantages to

the retailers include lover operating costs, lower rents, smaller

sales staff and absence of shop lifting. This trend is catching up

fast in India. Burlington's catalogue shopping was quite popular

in recent times. Some multi level marketing companies like

Oriflame also resort to catalogue retailing.

4) Direct Response Retailing: Here the marketers advertise

these products/ services in magazines, newspapers, radio and/or

television offering an address or telephone number so that

consumers can write or call to place an order. It is also

sometimes referred to as "Direct response advertising." The

availability of credit cards and toll free numbers stimulate direct

response by telephone. The goal is to induce the customer to

make an immediate and direct response to the advertisement to

"order now." Telebrands is a classic example of direct response

retailing. Times shopping India is another example.

5) Automatic Vending: Although in a very nascent stage in India,

is the ultimate in non personal, non store retailing. Products are

sold directly to customers/buyers from machines. These

machines dispense products which enable customers to buy after

closing hours. ATM's dispensing cash at odd hours represent this

form of non store retailing. Apart from all the multinational

banks, a large number of Indian banks also provide ATM services,

countrywide.

6) Automatic Vending: Although in a very nascent stage in India,

is the ultimate in non personal, non store retailing. Products are

sold directly to customers/buyers from machines. These

machines dispense products which enable customers to buy after

closing hours. ATM's dispensing cash at odd hours represent this

form of non store retailing. Apart from all the multinational

banks, a large number of Indian banks also provide ATM services,

countrywide.

7) Electronic Retailing/E-Tailing: Is a retail format in which

retailers communicate with customers and offer products and

services for sale, over the internet. The rapid diffusion of internet

access and usage, and the perceived low cost of entry has

stimulated the creation of thousands of entrepreneurial

electronic retailing ventures during the last 10 years or so.

Amazon.com, E-bay and Bazee.com HDFCSec.com are some of

the many e-tailers operating today.

RETAILING DECISIONS

There are many factors for retailers to consider while developing and

implementing their marketing plans. Among the major retailing

decisions are these related to (a) Target markets (b) Merchandise

management (c) Store location (d) Store image (e) Store personnel (f)

Store design (g) Promotion, and (h) Credit and collections. This is

shown diagrammatically in Figure

Target Markets: Although retailers normally aim at the mass market, a

growing number are engaging in marketing research and market

segmentation, because they are finding it increasingly difficult to satisfy

everyone. Through a careful definition of target markets, retailers can use

their resources and capabilities to position themselves more effectively and

achieve differential advantage. The tremendous growth in number of

speciality stores in recent years is largely due to their ability to define

precisely the type of customers, they want to serve.

Merchandise Management: The objective here is to identify the

merchandise that customers want, and make it available at the right price, in

the right place at the right time. Merchandise Management includes (i)

merchandise planning (ii) merchandise purchase, and (iii) merchandise

control. Merchandise planning deals with decisions relating to the breadth

and depth of the mix, needed to satisfy target customers to achieve the

retailers return on investment. This involves sales forecasting, inventory

requirements, decisions regarding gross margins and mark ups etc.

Merchandise buying involves decisions relating to centralized or

decentralized buying, merchandise resources and negotiation with suppliers.

Merchandise Control: deals with maintaining the proper level of inventory

and protecting it against shrinkage (theft, pilferage etc.).

Store Location: Location is critical to the success of a retail store. A store's

trading-area is the area surrounding the store from which the outlet draws a

majority of its customers. The extent of this area depends upon the

merchandise sold. For example some people might be willing to travel a

longer distance to shop at a speciality store because of the unique and

prestigious merchandise offered. Having decided on the trading area a

specific site must then be selected. Factors affecting the site include, traffic

patterns, accessability, competitors' location, availability and cost and

population shifts within the area.

Store Image: A store image is the mental picture, or personality of the

store, a retailer likes to project to customers. Image is affected by

advertising, services; store layout, personnel, as well as the quality, depth

and breadth of merchandise. Customers tend to shop in stores that fit their

images of themselves.

Store Personnel: Sales personnel at a retail store can help build customer

loyalty and store image. A major complaint in many lanes of retailing, is the

poor attitude of a salesperson. There is a growing trend now, to provide

training to, these sales clerks to convert them from order takers to effective

sales associates.

Store Design: A store's exterior and interior design affect its image and

profit potential. The exterior should be attractive and inviting and should

blend with the store's general surroundings. The term "Atmospherics" is used

to refer to the retailer's effort at creating the right ambience. Merchandise

display is equally important. An effective layout guides the customer though

the various sections in the store and facilitates purchase.

Promotion: retail promotion includes all communication from retailers to

consumers and between sales people and customers. The objective is to

build the stores image, promote customer traffic, and sell specific products.

It includes, both, personal and non personal promotion. Personal

communication is personal selling - the face to face interaction between the

buyer and the seller. Department stores and speciality stores, emphasize

this form of promotion. Non personal promotion is advertising. The media

used are TV, Radio, Newspapers, Outdoor displays and direct mail, other

forms of promotion include, displays, special sales, give always and contests

etc.

Credits & Collections: Retailers are generally wary of providing credit,

because of additional costs-financing accounts receivables, processing forms

and bad debts etc. But many customers prefer some form of credit while

purchasing. This explains the popularity of different types of credit cards and

debit cards.

EMERGING TRENDS IN RETAILING

In recent years the nature of retailing has changed dramatically, as firms try

to protect their positions in the market place. Many customers are no longer

willing to spend as much time on shopping as they once did. Some sectors of

retailing have become saturated, several retailers are operating under high

levels of debt and number of retailers after running frequent "sales", have

found it difficult to maintain regular prices.

Retailers are adapting to the shopping needs and time constraints of working

women, dual earner households and the increased customer interest in

quality and customer service:

Shopping Malls: A growing number of shopping malls are coming up all

over the country. In north India; there seems to be a proliferation of such

malls surrounding Delhi, in places like Gurgaon and Noida. In general they

target higher income customers, with their prestigious speciality shops,

restaurants and department stores.

Factory Outlets: Manufacturers are opening factory outlets to sell off

surplus inventories and outdated merchandise. This forward vertical

integration gives manufacturers greater control' over distribution, than selling

the merchandise to off price retailers. Mohini knitwear of Ludhiana (Punjab)

and number of woolen and hosiery manufacturers set up their outlets in

Delhi during winters.

Non Store Retailing: Non store retailing is accelerating at a faster rate

than in store retailing. This includes direct marketing. In Home shopping TV

shopping and e-tailing etc.

Diversification of Offerings: Scrambled (unrelated products or services)

merchandising is taking on a broader meaning and inter type competition

among retailers is growing. For instance Citibank is organizing tourist trips

and sending mail order catalogues to its credit card customers.

Impact of Technology on Shopping Behaviour: The way retailers

present their merchandise and conduct their transactions are changing.

Cable TV Channels are used to present merchandise, Videos have replaced

catalogues and computer linkages to acquire information and make

purchases are on the increase. Virtual shopping through PDA's is another

possibility.

Multi Channel Retailing: Traditional store based and catalogue retailers

are placing more emphasis on their electronic channels and evolving into

multi channel retailers, because they can reach new markets and overcome

limitations posed by traditional formats.

CASE STUDY 1: BIG BAZAAR (FUTURE GROUP)

Pantaloon Retail (India) Limited, is India's leading retailer that operates

multiple retail formats in both the value and lifestyle segment of the Indian

consumer marker. Headquartered in Mumbai (Bombay), the company

operates over 7 million square feet of retail space, has over 1000 stores

across 51 cities in India and employs over 24,000 people.

The company's leading formats include Pantaloons, a chain of fashion

outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a

supermarket chain, blends the look, touch and feel of Indian bazaars with

aspects of modern retail like choice, convenience and quality and Central, a

chain of seamless destination malls. Some of its other formats include,

Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Station, all, Top 10,

bazaar and Star and Sitara. The company also operates an online portal,

futurebazaar.com.

A subsidiary company, Home Solutions Retail (India) Limited, operates

Home Town, a large-format home solutions store, Collection i, selling home

furniture products and E-Zone focused on catering to the consumer

electronics segment.

Pantaloon Retail was recently awarded the International Retailer

of the Year 2007 by the US-based National Retail Federation (NRF)

and the Emerging Market Retailer of the Year 2007 at the World

Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business

group catering to the entire Indian consumption space. Future Group is one

of the country's leading business groups present in retail, asset

management, consumer finance, insurance, retail media, retail spaces and

logistics. The group's flagship company, Pantaloon Retail (India) Limited

operates over 7 million square feet of retail space, has over 1000 stores

across 51 cities in India and employs over 24,000 people. Some of its leading

retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar...

Big Bazaar is planning to position itself as a value retailer after being

hived off as an independent company within the Future Group. While a new

company has been floated under the name of Future Hypermarket, the

retailer is now considering a new name to represent its discount format.

Speaking to Business Line, Mr. Rajan Malhotra, Chief Executive Officer, Big

Bazaar, said, “Although we have registered a new company under the name

of Future Hypermarket, we intend changing its name. Big Bazaar is not a

hypermarket and is more of a value-for-money format and that is what the

new company would stand for.”

Currently, Big Bazaar contributes 64 per cent of the Future Group’s

total turnover of Rs 7,000 crore. With its standalone status as a company,

Big Bazaar is expecting to drive greater efficiencies in its back-end

operations. As Mr. Malhotra says, “There would be clarity for the concept as

we become a separate company. There would be back-end efficiency in our

operations.” With amalgamation of formats under various heads ranging

from Food Bazaar to Furniture Bazaar, Big Bazaar is looking at distinguishing

itself as a ‘value’ retailer in its segment rather than being clubbed with the

rest of the existing hypermarkets in the country.

Besides, it is looking forward to re-launching its private label, DJ & C,

as a national brand by giving the brand rights to Future Brands (the group

vertical handling brands in the group). Targeting the youth segment, DJ&C is

today worth Rs 200 crore in Bazaar’s kitty. “We intend re-launching it as a

national brand through other retail outlets by the end of this month. We

believe Big Bazaar has moved into a mature phase and that is a compelling

reason to launch our youth brand at a national level. The DJ&C brand has

crossed a turnover of Rs 200 crore and now has enough pull to take it to its

next level,” states Mr. Malhotra.

Having forged long-term relationships with a host of FMCG players

through MoUs, Big Bazaar is open to new categories being tested through its

formats. “We are open to the highest selling brands such as Pears and Dove

opening the new age categories at our stores,” says Mr. Malhotra.

Meanwhile, Big Bazaar has roped in cricketer and India ODI captain

Mahendra Singh Dhoni as the brand ambassador for its extensive

collection of fashion apparel male whereas Asin as the brand ambassador

for fashion apparel.

AN ANALYTICAL STUDY OF THE

DEVELOPMENT OF RETAIL MARKETING IN

INDIA: A CASE OF BIG BAZAAR

THE PROCESS OF STRATEGIC MANAGEMENT

A process in management is defined as a perceptible flow of information through

interrelated stages of analysis directed towards the achievement of an aim.

There are four basic elements in the process of strategic management;

Environmental scanning

Strategy formulation

Strategy implementation

Evaluation & control

Environmental scanning:

It involves monitoring the environment, & evaluating & disseminating

information obtained from the internal & external environments. The aim of

this is to identify the strategic factors that may determine the future of the

firm. An organization derive several benefits from environmental scanning

including the development of a common perception, identification of

strengths & weaknesses, an understanding of trends & conditions, &

optimum utilization of internal & external information.

SWOT analysis is the most commonly used technique for

environmental scanning. SWOT is an acronym for the strengths, weaknesses,

opportunities & threats faced by a firm. Strengths & weaknesses are within

the control of the top management in the long run. Opportunities & threats

are external factors that are outside the control of the organization. The key

strengths of the firm become the core competencies that the organization

can use to gain competitive advantage.

ENVIRONMENTAL SCANNING FOR BIG BAZAAR

INTERNAL SCANNING

The SWOT analysis of Big Bazaar is as follows:

Strengths:

The strengths of Big Bazaar are it is leading and growing at the faster

pace.

It has many outlets all over India. It has a good customer base.

They launched Big-Bazaar a hypermarket with over 1, 70,000 products

as the first offering in value retailing segment. Products are cheaper

than the market price by as much as 5 to 60%.

Apparels are cheaper by 25 to 60% while the price difference on the

other products varies between 5 to 20%.

The Big-Bazaar has been positioned to the customer as a place where

the customer can shop for each & everything for which if goes to a

market.

Weakness:

Big Bazaar has not yet trapped the whole market.

Facing problems due to political environment

Opportunities

Huge untapped market

Threats

Competition from organized retail players which are in market and

emerging like Reliance, shopper’s stop, Wal-Mart

Competition from local retailers.

EXTERNAL ENVIRONMENTAL SCANNING

Before Big Bazaar coming to India their strategy was to scan the

environment & find the location where the Mall should be situated. It will also

use various tools such as surveys for getting the preferences of big bazaar.

We got the opinion that Big Bazaar sustain in the market or not, where it is

situated. For gaining the opinions from the local people they will prepare the

questionnaire and get it filled from the people. Then they will form a focus

group for getting more and more of information. They can also adopt open

forum strategy for environmental scanning. For that purpose we have

prepared a questionnaire and collected the data.

Analysis of political and legal factors:

In India there is a political triangle this consist of the municipal

corporation which belongs to Indira congress, the other is MLA which belongs

to Shivsena and BJP and MP which belongs to the national congress. The

congress political people are having contacts with common people and not

much concerned with merchants but contradictory to this that the BJP and

Shivsena they are having more concern about merchants of the city. As

Municipal Corporation is in the hands of congress party and they are ready to

have big bazaar in India that is the reason they are ready to provide some

kind of perks to big bazaar they are as follows:

Subsidy from octroi, different taxes like land tax and water tax

Help in taking over properties and real estate

Some concessions from labor laws

Socio-cultural factors:

Now a days in India also proportion of working women’s is increasing

and the literacy rate has also increased this will lead into increase in

standard of living of people. As people are aware about western culture

through various Medias they are very much eager to follow the western

culture. People from talukas are coming to India as it is a district place for

shopping, taking education, for working etc. this also creates demand. There

is a majority of middleclass people in India and it is a most populated district

consisting 13 talukas. The major communities in India city are Hindus,

Muslims, Christians, Jain, Sindhi and Punjabi.

Economic environment:

As this district is having 13 talukas and most of them are having good

agricultural base which ultimately leads to higher seasonal income. Another

one is that most of the people who are residing in India they are engaged in

various jobs and businesses they is the part of regular income group. So this

will lead to higher purchasing power and a huge potential market. One more

advantage to big bazaar coming to India is availability of cheap labor.

From the external analysis we came to know that the people residing

the India city are in the favor of Big Bazaar coming to India. The location

preferred by them is Savedi as it is highly developed and accessible area to

all the people.

Strategy formulation:

It refers to the development of long term plans for managing

opportunities & threats in the external environment, & for utilizing the

strengths & overcoming the weaknesses within the firm. A strategist takes

into consideration components of strategic management like company

mission, company profile, external environment strategic analysis & choice,

long term objectives, grand strategy while formulating the strategy.

Strategy formulation helps an organization to;

Capitalize on available opportunities.

Address the challenges faced by the organization.

Provide leadership that understands & masters change.

Incorporate an in-depth planning model that involves the

community.

STRATEGIC FORMULATION FOR BIG BAZAAR:

Big Bazaar will form some strategies for the long-term goals. First of all

it will find out what are the opportunities present in the market so that they

can grab it so as to expand their business, trap a particular segment of

people, and establish a good client base and to generate good revenues.

They will also keep in mind the threats that they have from their competitors

and also form the small grocery shops. They will find out some strategies to

overcome the threat and to sustain in the market for a longer period of time.

They will also try to utilize their strengths and overcome the weaknesses.

Management of big bazaar

Mr. Kishore Biyani, Managing Director

Kishore Biyani is the Managing Director of Pantaloon Retail (India)

Limited and the Group Chief Executive Officer of Future Group. To know

more, click here.

Mr. Gopikishan Biyani, Wholetime Director

Gopikishan Biyani, is a commerce graduate and has more than twenty

years of experience in the textile business.

Mr. Rakesh Biyani, Wholetime Director

Rakesh Biyani, is a commerce graduate and has been actively involved in

category management; retail stores operations, IT and exports. He has

been instrumental in the implementation of the various new retail

formats.

Mr. Ved Prakash Arya, Director

Ved Prakash Arya, is an engineer by training and is a graduate of the

Indian Institute of Management, Ahmedabad. Prior to joining Pantaloon

Retail, he was the CEO of Globus.

Mr. Shailesh Haribhakti, Independent Director

Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant,

and a Certified Internal Auditor. He is the Deputy Managing Partner of

Haribhakti & Co., Chartered Accountants and past president of Indian

merchant Chambers. He is on the Board of several Public Limited

Companies, including Indian Petrochemicals Corporation Ltd., Ambuja

Cement Eastern Ltd. etc. He is on the Board of Company since June 1,

1999.

BIG BAZAAR

FOR THE GREAT INDIAN MIDDLE CLASS

It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian

Middle Class. It was started as a hypermarket format in Mumbai with approx.

50,000 sqft of space. Its values and missions are to be the best in Value

Retailing by providing the cheapest prices and hence go the tag-line

“IS SE SASTA AUR ACHCHA KAHIN NAHIN ”

It sells variety of merchandise at affordable rates, the prices of which it claims

are lowest in the city but the level of services offered is also very low.

The following graph shows the retail life cycle and we can say that Big Bazaar

is currently at the Growth Stage.

Introduction

Growth

Maturity

Decline

Time

Cash flow Flows

OBSERVATION:There were various observations made from the time I entered the store. They

can be summed up as follows:

Verticals inside the store relates to each category of product

o Food Bazaar Depot- books

o M-bazaar Electronic Bazaar

o Furniture Bazaar Footwear Bazaar

Trolleys are not easily available, especially on other than ground floor.

Little attention to cleanliness. Dust on shelves as well as some product

items.

In-house packaging not efficiently done.

Crowded store interiors. Items are arranged in a cluttered way. Tried to

stock maximum number in limited area.

Sign boards are not prominent. Lack of direction creates confusion.

Family crowd is evident. Youth comprises of only around 10% of the

crowd.

Food Bazaar very efficiently managed. It is a bit over-staffed but layout

is very good. Shelf space is used very well to stock products with clear

distinction.

POSITIONING STRATEGY

COMPANY VISION, MISSION AND CORE VALUES

“Future” – the word that signifies optimism, growth, achievement,

strength, beauty, rewards and perfection. Future encourages us to explore

areas yet unexplored, write rules yet unwritten; create new opportunities

and new successes. To strive for a glorious future brings to us our strength,

our ability to learn, unlearn and re-learn our ability to evolve.

They, in Future Group, will not wait for the Future to unfold itself but

create future scenarios in the consumer space and facilitate consumption

because consumption is development. Thereby, we will effect socio-

economic development for our customers, employees, shareholders,

associates and partners.

Their customers will not just get what they need, but also get them

where, how and when they need. They will not just post satisfactory results,

They will write success stories. They will not just operate efficiently in the

Indian economy, we will evolve it.

They will not just spot trends; They will set trends by marrying our

understanding of the Indian consumer to their needs of tomorrow.

It is this understanding that has helped us succeed. And it is this that will

help us succeed in the Future. They shall keep relearning. And in this

process, do just one thing. Rewrite Rules. Retain Values.

Group Vision

Future Group shall deliver Everything, Everywhere, Every time for Every

Indian Consumer in the most profitable manner.

Group Mission

They share the vision and belief that our customers and stakeholders

shall be served only by creating and executing future scenarios in the

consumption space leading to economic development.

They will be the trendsetters in evolving delivery formats, creating

retail realty, making consumption affordable for all customer segments

– for classes and for masses.

They shall infuse Indian brands with confidence and renewed ambition.

They shall be efficient, cost- conscious and committed to quality in

whatever we do.

They shall ensure that our positive attitude, sincerity, humility and

united determination shall be the driving force to make us successful.

Core Values

Indian ness: confidence in ourselves.

Leadership: to be a leader, both in thought and business.

Respect & Humility: to respect every individual and be humble in our

conduct.

Introspection: leading to purposeful thinking.

Openness: to be open and receptive to new ideas, knowledge and

information.

Valuing and Nurturing Relationships: to build long-term relationships.

Simplicity & Positivity: Simplicity and Positivity in our thought, business

Action.

Adaptability: to be flexible and adaptable, to meet challenges.

Flow: to respect and understand the universal laws of nature.

Various Strategies

After big bazaar coming to India it will be at its introduction stage so it

is quite obvious that it will adopt some strategy for attracting the customers.

The strategy which they would adopt is that they will have low price, high

advertisements, it would offer different kind of schemes, offers, discounts,

scratch cards, coupons. They would also give stress on providing the prompt

services like home delivery, after sales services, guarantees and warrantees,

so as to sustain in the market and to create a good reputation.

Following are some additional strategies they require to adopt:

Thorough market research

Site selection and evaluation

Employee search and training

Less premium and low price branded goods in merchandise

assortment.

Gaming zone and restaurant

Promotional activities like advertisement, seasonal discounts, festival

offers, etc.

While formulating strategies we should keep in mind that strategies should

be flexible. This is helpful to change or revival of strategy.

CASE STUDY 2: GLOBUS

The Company:

Strong, Competitive, Innovative, Adaptive

History:

Launched in January 1998, Globus is a part of the Rajan Raheja group.

The company opened its first store in 1999 at Indore followed by the launch

of its second store in Chennai (T-Nagar). Soon to follow was another in

Chennai located in Adyar. The flagship store in Mumbai was opened on 1st

November 2001 followed by a swanky new outlet in New Delhi in South

Extension Part-2.

The sixth & seventh stores are in Bangalore in Koramangala & Richmond

Road respectively. The Eighth store in Ghaziabad at Shipra Mall followed by

the ninth, tenth and eleventh in Kalaghoda, Mumbai, Thane and Ghaziabad,

twelfth store at Kanpur and thirteenth store in Ahmedabad & fourteenth

store in Lucknow.As of September 2007, Globus has opened its 21th Store in

Thane -Dahisar and the journey continues..

Mission:

Achieve customer delight by offering quality products and services

through a process of continuous innovation and adaptation.

Build a dynamic team of committed and passionate employees through

sustained learning and grooming.

Develop mutually beneficial relationships with our business partners.

Employ cost-effective processes and thereby create a strong

organization.

Infrastructure:

Future:

Globus combines state of art international information technology, the

highest quality human resources and sustained financial commitment to

realize the long term vision. We are rapidly expanding and the target is to

have an additional 100 fashion stores by the end of 2012.

http://info.shine.com/ListofCompany/Retail/139.aspx

Globus Stores Pvt. Ltd. was formed to contribute in the revolution sweeping

the retail industry. Globus promises to bring about a perceptible change in

the way apparel and lifestyle retailing has been carried so far.

Towards this end, modern international technology has been brought in and

heavy investments have been made in investing and acquiring the best, tried

and tested processes and procedures of operation.

Research & Design

Production & Merchandising

Marketing & Brand Development

Service

Human resources

Administering policies & procedures