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EXECUTIVE SUMMARY

Indian retail sector is witnessing one of the most hectic Marketing activities of all times. The
companies are fighting to win the hearts of customer who is God said by the business tycoons.
There is always a ‘first mover advantage’ in an upcoming sector. In India, that advantage goes to
“BIG BAZAAR”. It has brought about many changes in the buying habits of people. It has
created formats, which provide all items under one roof at low rates, or so it claims. The project
covers marketing strategies and promotional activities of retail outlets like BIG BAZAAR and
___

The research titled ‘Retail Marketing in India’ helps us to understand the effect of
promotional strategy which is responsible for attracting customer towards big bazaar This study
will be helpful to management of BIG BAZAAR to improve the present promotional strategy .

The report deals with the impact of promotional activity which attracting customer towards big
bazaar.

The research was carried out as per the steps of Marketing Research. The well supportive
objectives were set for the study. To meet the objectives primary research was undertaken. The
data collection approach adopted was experimental research & survey research. The instrument
used for the data collection was observation & questionnaire. The target respondents were the
visitors of BIG BAZAAR, with the sample size of 20 for the study of sales management of the
company. Tables & charts were used to translate responses into meaningful information to get
the most out of the collected data. Based on those the inferences have been drawn with peer
supportive data. Appropriate statistical methods will be used for data analysis.

Objective of the project

1) To know the promotional strategy of big bazaar


2) To know the relationship between promotional strategy and buying decision
3) To know the effective promotional strategy which influence customer to purchase a
product of Big Bazaar.
4)

Data Collections Methods

Market research requires two types of data i.e. secondary data and primary data. Primary data has
been used abundantly for the study. Well-structured questionnaires were prepared & the survey
was undertaken. Feedback has been taken from the respondents who visited the outlet by
questionnaire & observation method. Attempt will be made to collect data from retailers of the
concerned retail outlet.

Secondary data is collected from the various journals, books, and websites & from company
managers.

Primary data Field Survey

Secondary data Big Bazaar records

Text Books and journals

Company Websites

Area of research: Vashi

Research approach: Survey method


Sampling Method

Since the study is restricted to Retail sector, all the functional Departments of Big Bazaar and the

respondents are found at the store only so according to the convenience randomly they are being

picked so Random Convenient Sampling method is used for the purpose of research.

Sampling

Sample size : 20 respondents


Sampling Method : Random Convenience sampling
Sample Unit : Customer of Big bazaar
Measuring Tool : Questionnaire
Questionnaire

Name: ___________________ Contact No: ___________________

Address: _____________________

1) Which store first comes to your mind when you think of purchase a product.?
a: Super Market b:General store c: other retailer

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

a; T. V. advertisement b;. Hoardings. c;


bus paintings d. news paper

3) Are you aware of promotional activities conducted by Big Bazaar in Vashi.?


a. Yes b. No.
4) Please choose from below the factor which attracted you most at Big Bazaar?
a. Offers b. service c. quality d.availability of products

5) Which of the following factors influence in your purchase decision.?

a. Offers c. Quality of products


b. Effective services d. Effective advertisement

6) Do you think the promotional activity of Big Bazaar gives you the clear message? ?
a. Yes b. No

7) Will you advise anybody to visit Big Bazaar in future shopping?

a. Yes b. No

8. Looking at the promotions of Big Bazaar does your purchase pattern changes?

a. Yes b. No

9. Would you like to make your purchase under unexpected offers?

a. Yes b. No

10) Any valuable suggestion

……………………………………………………………………………………………
INDUSTRY PROFILE

Introduction

Retail means selling goods and services in small quantities directly to customers. Retailing
consists of all activities involved in marketing of goods and services directly to consumer for
their personnel family and household use.

The Indian retailing industry is becoming intensely competitive, as more and more payers are
Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers
Stop, Reliance, etc.,

Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in
retailing in India signifies the beginning of retail revolution. India's retail market is expected to
grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity
shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006.
India's retail market is expected to grow tremendously in next few years. India shows US$330
billion retail market that is expected to grow 10% a year, with modern retailing just beginning.
India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for
retailers, because now India is in peaking stage.

Sector details
1. Introduction to retail industries.
2. Retail word is derived French word retailer means to cut off a piece.
3. Retailing includes all the activities involved in selling goods or services to the final
customer for personnel or non-business use.
4. Supermarket is a retailing of a wide variety of consumer products under one roof, ample
stock, stock of several brands & extended business hours.

History of retailing
Retail concept is old in India. World’s first departmental store started in Rome.
Today’s kirana stores are based on Manusmriti & Kautilya’s arthshastra.
Haats, Melas, Mandis & door to door salesmen are traditional Indian retail.
Vishal Mega Mart is a retail sector, which is providing good quality of products in very
reasonable price than its competitors. Retailing and wholeselling consist of many organizations
designed to bring goods and services from the point of production to the point of use.
Retailing includes all the activities involved in selling goods or services directly to final
consumers for their personal, non-business use. Retailers can be classified in terms of store
retailers, non-store retailing, and retail organizations.
Store retailers include many types, such as specialty stores, department stores, supermarkets,
convenience stores, superstores, combination stores, hypermarkets, discount stores, warehouse
stores, and catalog showrooms. These store forms have had different longevities and are at
different stages of the retail life cycle. Depending on the wheel-of-retailing, some will go out of
existence because they cannot compete on a quality, service, or price basis.
Non-store retailing is growing more rapidly than store retailing. It includes direct selling (door-
to-door, party selling), direct marketing, automatic vending, and buying services.
Much of retailing is in the hands of large retail organizations such as corporate chains, voluntary
chain and retailer cooperatives, consumer cooperatives, franchise organizations, and
merchandising conglomerates. More retail chains are now sponsoring diversified retailing lines
and forms instead of sticking to one form such as the department store.
Retailers, like manufacturers, must prepare marketing plans that include decisions on target
markets, product assortment and services, store atmosphere, pricing, promotion,
And place. Retailers are showing strong signs of improving their professional management and
their productivity, in the face of such trends as shortening retail life cycles, new retail forms,
increasing intertype competition, and polarity of retailing, new retail technologies, and many
others.
Wholesaling includes all the activities involved in selling goods or services to those who are
buying for the purpose of resale or for business use. Wholesalers help manufacturers deliver their
products efficiently to the many retailers and industrial users across the nation. Wholesalers
perform many functions, including selling and promoting, buying and assortment-building, bulk-
breaking, warehousing, transporting, financing, risk bearing, supplying market information, and
providing management services and counseling. Wholesalers fall into four groups. Merchant
wholesalers take possession of the goods and include full-service wholesalers (wholesale
merchants, industrial distributors) and limited-service wholesalers (cash-and- carry wholesalers,
truck wholesalers, drop shippers, rack jobbers, producers' cooperatives, and mail-order
wholesalers). Agents and brokers do not take possession of the goods but are paid a commission
for facilitating buying and selling. Manufacturers' and retailers' branches and offices are
wholesaling operations conducted by non-wholesalers to bypass the wholesalers. Miscellaneous
wholesalers include agricultural assemblers, petroleum bulk plants and terminals, and auction
companies.
Wholesalers, too, must make decisions on their target market, product assortment and services,
pricing, promotion, and place. Wholesalers who fail to carry adequate assortments and inventory
and provide satisfactory service are likely to be bypassed by manufacturers. Progressive
wholesalers, on the other hand, are adapting marketing concepts and streamlining their costs of
doing business.

CURRENT SCENARIO

India rank first in terms of emerging market potential in retail sector. Current retail market is US
$ 215 billion. Growth rate of retail sector in India is 8-10% per annum.
Near about 12 million retail outlets are spread across India.
FDI in retail sector increases from US $ 3.1 billion in 2003 to over US $7.6 billion in 2009.
CHALLENGES

 Largely urban phenomenon, pace of growth is still slow.


 Not being recognized as an industry in India so availability of finance is low to
new market players.
 High cost of real estate.
 High stamp duties.
 Lack of infrastructure.
 Multiple & complex taxation system.
 Protest against retail sector.

FUTURE STRATEGY
 It is projected that up to 2010 retail sector will be worth around US $ 300 billion.
 FDI is going to increase rapidly, up to 2010 retail sector will become biggest industry in
India.
 Retail sector is expected to create 2 million jobs up to 2010.
 According to Indian Retail Report top 10 players in modern retail trade are going to
invest US $ 18-20 billion in next five years.

Sector Details

In India, the most of the retail sector is unorganized. In India, the retail business contributes
around 10 percent of GDP. Of this, the organized retail sector accounts only for about 5 percent
share, and the expected annual growth rate is 5% per annum and remaining share is
contributed by the unorganized sector. The main challenge facing the organized sector is the
competition from unorganized sector. Unorganized retailing has been there in India for centuries,
theses are named as mom-pop stores. The main advantage in unorganized retailing is consumer
familiarity that runs from generation to generation. It is a low cost structure, they are mostly
operated by owners, has very low real estate and labor costs and has low taxes to pay. And it also
gives 8% Employment to the country annually.

In late 1990's the retail sector has witnessed a level of transformation. Retailing is being
perceived as a beginner and as an attractive commercial business for organized business i.e. the
pure retailer is starting to emerge now. Organized retail business in India is very small but has
tremendous scope. The total in 2005 stood at $225 billion, accounting for about 10% of GDP. In
this total market, the organized retail accounts for only $8 billion of total revenue. According to
A T Kearney, the organized retailing is expected to be more than $23 billion revenue by 2010.

In organized retailing will grow faster than unorganized sector and the growth speed will be
responsible for its high market share, which is expected to be $ 17 billion by 2010-11.

The organized sector is expected to grow faster than GDP growth in next few years driven by
favorable demographic patterns, changing lifestyles, and strong income growth. This organized
retail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores,
departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer
hypermarkets, three Spencer super markets and 49 Spencer Daily’s. Now the company is
planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of
total market, today modern retailing is expected to enter a boom phase, which has major players
and these players might capture 10% of total market, within next five years. The retail sales in
India for future are shown below (data from 2005-2008 is based on estimates)

The trend in the Industry

1. Low share of organized retailing


2. Falling real estate prices
3. Increase in disposable income and customer aspiration

Existing competition

 Reliance fresh.
 Aditya Birla group.
 Shopper’s Shoppe.
 Subhiksha.
 Big bazaar.
 Mark and Spencer’s.

The untapped scope of retailing has attracted superstores like Wal-Mart into India, leaving
behind the kiranas that served us for years. Such companies are basically IT based. The other
important participants in the Indian Retail sector are Bata, Big Bazaar, Pantaloons, Archies, Cafe
Coffee Day, landmark, Khadims, Crossword, to name a few.

Evolution of Indian Retail Industry


Indian Retail Industry is standing at its point of inflexion, waiting for the boom to take place.
The inception of the retail industry dates back to times where retail stores were found in the
village fairs, Mela’s or in the weekly markets. These stores were highly unorganized. The
maturity of the retail sector took place with the establishment of retail stores in the locality for
convenience. With the government intervention the retail industry in India took a new shape.
Outlets for Public Distribution System, Cooperative stores and Khadi stores were set up. These
retail Stores demanded low investments for its establishment. International Brand Outlets, Hyper
or Super markets, shopping malls and departmental stores

Retailing in India: a forecast


Future of organized retail in India looks bright. According to recent researches it is projected to
grow at a rate of about 37% in 2007 and at a rate of 42% in 2008. It will capture a share of 10%
of the total retailing by the end of 2010.

INDIA: A Hot Spot

India retail industry is the largest industry in India, with an employment of around 8% and
contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25%
yearly being driven by strong income growth, changing lifestyles, and favorable demographic
patterns.

It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion.
India retail industry is one of the fastest growing industries with revenue expected in 2007 to
amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is
expected in the industry of retail in India by growth in consumerism in urban areas, rising
incomes, and a steep rise in rural consumption. It has further been predicted that the retailing
industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5
billion.

Shopping in India has witnessed a revolution with the change in the consumer buying behavior
and the whole format of shopping also altering. Industry of retail in India which have become
modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and
sprawling complexes which offer food, shopping, and entertainment all under the same roof.

India retail industry is expanding itself most aggressively; as a result a great demand for real
estate is being created. Indian retailers preferred means of expansion is to expand to other
regions and to increase the number of their outlets in a city. It is expected that by 2010, India
may have 600 new shopping centers.

In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9%
annually. The branded food industry is trying to enter the India retail industry and convert Indian
consumers to branded food. Since at present 60% of the Indian grocery basket consists of non-
branded items.

As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex-
malls and huge complexes offer shopping, entertainment and food all under one roof, the concept
of shopping has altered in terms of format and consumer buying behavior, ushering in a
revolution in shopping in India. This has also contributed to large-scale investments in the real
estate sector with major national and global players investing in developing the infrastructure
and construction of the retailing business.

Growth Drivers

Growth drivers in India for retail sector

• Rising incomes and improvements in infrastructure are enlarging consumer markets and
accelerating the convergence of consumer tastes.
• Liberalization of the Indian economy
• Increase in spending Per capital Income.
• Advent of dual income families also helps in the growth of retail sector.
• Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
• Consumer preference for shopping in new environs

The Internet revolution is making the Indian consumer more accessible to the growing
influences of domestic and foreign retail chains. Reach of satellite T.V.

• Channels are helping in creating awareness about global products for local markets.
• About 47% of India's population is under the age of 20; and this will increase to 55% by
2015. This young population, which is technology-savvy, watch more than 50 TV satellite
channels, and display the highest propensity to spend, will immensely contribute to the
growth of the retail sector in the country.
• Availability of quality real estate and mall management practices
• Foreign companies' attraction to India is the billion-plus population.

Employment opportunities in retail sector in India

India's retail industry is the second largest sector, after agriculture, which provides employment.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the
retail sector will create 50,000 jobs in next few years.

Retail companies are starting retail management courses in partnership with management
institutes, roping in talent from other sectors and developing comprehensive career growth and
loyalty plans for existing employees.

Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and ebony
are virtually on their toes.

Consider the plans of largest player, The Pantaloon Retail India Ltd, the company has developed
a comprehensive strategy, where in it expects that in 2years, it will not recruit any new managers
from outside.
"The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at
Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educational Institute to
run retail courses across the entire chain. Trent has also started in-house learning programmers
and now goes to under graduate colleges to recruit students.

Since, the job market is hugely receptive to this with more and more business schools focusing
on the sector and large retailers setting up retail academics.

Challenges of Retailing in India


In India the Retailing industry has a long way to go, and to become a truly flourishing industry,
retailing needs to cross the following hurdles:

* The first challenge facing the organized retail sector is the competition from unorganized
sector.
* In retail sector, Automatic approval is not allowed for foreign investment.
* Taxation, which favors small retail businesses.
* Developed supply chain and integrated IT management is absent in retail sector.
* Lack of trained work force.
• Low skill level for retailing management.
• Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence
and low margins.
* Organized retail sector has to pay huge taxes, which is negligible for small retail business.
Many agencies have estimated differently about the size of organized retail market in 2010.
The one thing that is common amongst these estimates is that Indian organized retail market
will be very big in 2010. The status of the retail industry will depend mostly on external factors
like Government regulations and policies and real estate prices, besides the activities of
retailers and demands of the customers also show impact on retail industry.

Competition in retail

India RetailBiz attempts to capture excitement of Retail Business in India by aggregating the best
in news, views, research, analysis, trends, technology, and competition dents retail sector
growth.
The performance of the retail sector in the last quarter of financial year 2008-09 has been a
gloomy one. Not only has the quarter-on-quarter growth declined by 700 basis point, on year-on-
year (YoY) basis, sales growth fell drastically from 67.8% to 49.1%. Including the recently listed
Koutons and Vishal Retail, all big retailers continue to be on an aggressive expansion mode. This
kind of competition is having a negative impact on margins of retailers, as the target audience for
all of them, more or less, remains the same.

The slowdown has triggered a volume game in the industry. Strategies like promotional
campaigns, freebies, promoting private labels and online discounts are just some of the avenues
that retailers are looking at to lure customers. According to analysts, this is a knee-jerk reaction
by the industry to fight the inflation-induced dent in the purchasing power of customers. As they
say, retail is a number game, so, big retailers are trying to push volumes. For some, it comes at
the cost of profit. Meanwhile, in contrast to YoY sales growth of 49% for the sector, the interest
cost has registered a whopping 96% growth. Though growing at a lesser 39%, depreciation cost
has also been impacting margins.

The cost factor too is adding to the woes. For instance, during the quarter, Shoppers Stop opened
its new stores in various formats. Provogue and Pantaloon followed soon. The companies are
increasing their geographical presence in the wake of increasing competition. Launch of new
formats continues to catch the attention of these retailers. In fact, a couple of these new formats
are already generating profit at the operating level, thus showing a positive sign towards growth.

Like for Shoppers Stop, the average transaction size increased by about 7% for the current
quarter over the same quarter in the previous year. Players like Provogue and Pantaloons too
have witnessed a similar upward movement. Also, though growth in total expenses as a whole
has almost been equivalent to the growth in sales at about 47%, some individual cost items like
staff costs, selling and administration costs are under control. On a YoY basis, staff cost has
grown at 26% against 44% in the corresponding quarter of the previous year.

Nonetheless, raw material cost continues to remain high - it grew by 66% in the last quarter and
now is equivalent to 74% of the industry's aggregate net sales. This is the reason why operating
margins have reduced to 4.8% of the revenue sale compared with 5.7% during the corresponding
quarter of the previous year.

Among individual retailers, Pantaloon Retail continues to outgrow the industry - it recorded 57%
a YoY growth in net sales during March 2008 quarter. Although it is lower compared with the
63% growth recorded during the December quarter, momentum continues to favour the
company. New stores drove the growth in value-for-money format - strategies such as KB's Fair
Price and online shopping are picking up. Their home store division has also been doing well.
Next on growth charts is Provogue, which grew 40% in the last quarter, similar to the previous
quarter.

In short, setting up of new stores has resulted in higher working capital funding, which has raised
the industry's interest outgo. For Pantaloon, interest cost has almost doubled during the current
quarter - as a proportion of sales, it has increased from 2.7% to 3.2% on a YoY basis. Provogue
seems to be an exception in this as it recorded the highest increase of 100 basis points in interest
cost for March 2008. Overall, the profitability margin has seen a sharp decline.

Only Shoppers Stop has registered some profit compared with its performance in the
corresponding quarter of the previous year. The company's net profit margin now stands at 0.7%
of net sales as compared to -1% in March 2007 quarter. It can be concluded that margins of retail
companies seem to have been hit by costs related to their ambitious expansion programmer.
Expansion plans for some of them are running behind schedule. It has led to higher interest cost,
yet retail companies are trying hard to cut costs by keeping inventory and carrying costs under
control.

July 8, 2008
Source: Economic Times

Current Scenario
• A glimpse of the International Retail
• One of the world's largest industries exceeding US$ 9 trillion
• 47 global fortune companies & 25 of Asia's top 200 companies are retailers
• Dominated by developed countries
• US, EU & Japan constitute 80% of world retail sales.
• Biggest player in India is Pantaloon Retail India Limited.

Percentage of Organized Retail

USA - 85%

Taiwan - 81%

Malaysia - 55%

Thailand - 40%

Brazil - 36%

Indonesia - 30%

Poland - 20%

China - 20%

India - 3%

Research Methodology

Since the study is on retail sector first the detail study of the store is been conducted about its

Management team its structure the number of departments which all brands does the store has,

who are its suppliers about its warehouses.

Based on the topic objectives were set and to arrive at the opinion on objectives a set of 100

questionnaires were designed of 10 questions and response is collected from the customers who

are visiting the store. For data collection Random Convenient sampling method was adopted

For this project the area of research is Hubli.

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