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About Big Bazaar

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 ¢ain Features
_ Understanding needs of Indian Consumers
_ Traditional bazaar ambience
_ Create a Shopping experience
_ Low Pricing of products
_ Value for your ¢oney
_ Cater to every possible retail need of a consumer
_ Economies of Scale
 Products
Food

Apparels Farm
Products
Child Care
and Toys
Furniture Chill
Station
Other
Services
Fashion Home and
and Personal
Jewellery Electronics Care
 PRIL Profit and Loss Statement
Fiscal Year Ending
June 30 °
° ° °  °  ° 
(USD millions)

Total Net Sales 41.65 65.80 102.54 151.78 250.41

Percent increase 58% 56% 48% 65%

EBITD 3.39 5.29 8.79 13.15 20.90

PRIL Balance Sheet
þalmart Statistics
 Traditional Retailing in India
È In 2005,Indian Retail ¢arket was world͛s
eighth largest and represented 33.3% of
Indian GDP.
È It was valued at $250 Billion and projected to
grow by more that 7% annually
È India had over 12 million retail outlets ʹ more
than the rest of the world combined
 Traditional Retail ¢ix
È Traditional retailers dominated the industry as
it was highly fragmented.
È In 2003, 82% of the retail sales were made
through the local ͞kirana͟ stores, small local
and family businesses
È They were a success because of their location,
low prices and offered credits and the
personal touch factors
 Traditional Retail

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 ¢odern Supermarkets
È The Retail supermarkets and hypermarket had only 0.4% -
3.5% share of the retail sales in 2003 - 2005.
È Even though there was high volume of foot traffic the
conversion ratio was less than 5% which lead to store closure
due to high rentals.
È þith the government easing restrictions on the FDI, it became
easier to import consumer goods which added more variety
to the Indian market.
È Still a long way to go due constraints of complex taxes, high
supply chain cost, infrastructure problems, inflexible labor
laws.
 FOREIGN DIRECT INVEST¢ENT
È Economic reforms in 1990 fueled growth as Govt implemented broad
liberalization policies relating to imports and FDIs.
È GDP grew faster which stimulated increased demand for consumer goods
in rich and middleclass ʹ leading to retail sector growth.
È As a result, Foreign retailers entered India and began expanding their
operations
È Domestic retail community grew concerned as the new competition would
result in job losses and closures hence -lobbied against FDI͛s.
È Government banned FDI in 1997 but left loopholes which allowed foreign
retailers to enter Indian markets. Ex ʹ ¢acdonalds, ¢ S
FDI continued..
È In Feb ʹ 2005 Indian Govt. passed 100% FDI in
construction and development sector ʹ paving the
way for the foreign investments to develop shopping
malls and warehouses.
È A year later, the cabinet approved policy allowing
͞Single Brand͟ retailers to operate.
È Analyst believe that entry of foreign retailers is just a
matter of time citing 2005 ʹ 2009 as a window of
opportunity for domestic retailers to shape up
 (-.-*6..6





È Consisted of department stores and single brand

outlets and franchises which sold ͞aspirational͟
merchandise

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È Includes hypermarkets, food supermarkets and

discount retailers who focused on offering low
prices.
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ÈAll Organized stores accounts for less than 2%.

ÈBig Bazaar Innovative promotions allowed Big Bazaar to draw in

consumers who had not yet shopped at organized retailers.

ÈBig Bazaar also organize its Big Day specially on local religious
festivals to provide look and feel of organized stores for aspirational
consumers
 (.-.*!/0$1.-*6
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In August, 2005, PRIL management noted same store growth of 30% in the
value retailing segment and 19% in the lifestyle

In march 2006, PRIL sold merchandise in 5 segments fashion, food, general

merchandise, leisure and entertainment. Fashion was the company¶s
leading category and accounted 50% of its revenue
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PRIL respond¶s to the market with their well diverse retail portfolio consists of
four retail category : department stores, discount hypermarkets, grocery stores
and seamless malls.
È  



͞High fashion͟ family department, geared toward Indian middle
and upper classes. In 2005, pantaloons rolled out a new
merchandise and brand communication campaign to position
itself as fashion trendsetter appeal to India͛s youth.
È 
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Positioned as destination where consumers could ͞shop, eat
and celebrate.
È   
In 2007, PRIL debuted its Big Bazaar hypermarket concept,
designed to blend elements of a typical Indian bazaar with
modern retailing features such as parking, and air conditional
shopping environment and merchandise return privileges.
È !

  
Food Bazaar, a grocery retailer, opened its first outlet in June
2002, within a Big Bazaar store, six month later the chain had
grown to 42 outlets: 18 stand alones.
 .6*666

È Pantaloon considered itself a ͞Class-less͟ retailer, appealing to

all demographic and socio-economic types.

È The average consumer at a Big Bazaar store spent roughly $8

per visit and took around an hour to complete the transaction

È þith rising incomes, hectic lives, and often dual career

households, Indian families are frequently constrained for
times and want a no-hassle shopping experience

È The management uses innovative promotions to assure

consumers that its prices are competitive.
ÈAttractive tag lines like ³Umeed se dugna´ , ³pahela
sasta, doosra usse bhi sasta´ and ³Joona do, naya lo´
are used to attract more aspirational consumers

ÈPantaloons vision is to capture as much share of the

customer¶s wallet as possible by retailing.
 
 



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³The Indian consumer is not yet ready for a store with clean linear layouts´,
Kishore Biyani, Owner Bigbaazar, Pantaloon group.

³We have to convince the consumer that we understand his or her needs the
way the neighborhood retail does´ Arvind singhal of Technopak, a retail
consultancy.
(6.6./36.!6#6-
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ÈFood bazaar stores were located within big

bazaar stores occupying 15,000 sqf in a 50,000 sqf
store

ÈBiyani thought that Food bazaar Big bazaar

were the crown jewels In PRIL͛s portfolio
 64
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Company planned to grow to over 100 FB

stores by 2008 and annual revenues of
$350 million

ÈTo rent properties from shop owners in exchange

of profits generated from store

Èpurchase food grains directly from manufactures

Èto develop private label brands and devote 60 %

shelf space to it.
 *6*.6/36.6!(
FACTORY
ÈLOCAL ENTREPRENEUR
ÈINTERFACE BETþEEN STATE
GOVT ¢ANUFACTURER
È4.75% margin for C F AGENT È1% CO¢PANY SALES /TON
traditional retailer
ÈNet margin of 0.5%
DISTRIBUTOR

þholesaler Large ¢odern

retailer trade retailer

8% gross 15% gross

margin margin
Small
retailer
64

 

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ÈDistributors did not impose on minimum order

quantity and shipments were made in small
batches

ÈOder quantity could be changed a day or two in

advance of delivery

ÈFor premium products ,Food bazaar received

1%-2%of sales ʹ DISPLAY INCO¢E
4% - DISCOUNT FRO¢ ¢ANUFACTURE
3% - DISCOUNT FRO¢ DISTRIBUTOR
 

7777

ÈIn case of a Product-specific promotion, volumes

would swamp a distributors capabilities

Èþall mart Reliance were likely to enter market

with modern supply chain
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È Creator, Preserver Destroyer

È SþOT Analysis

È Organizational Life Cycle

È Organizational / Customer Value ¢atrix

È 4P ¢arket ¢ix

È Future Challenges . .
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*-.*
ÈHigh Brand Equity in evolving )-6#.-
retails markets ÈUnable to meet store
ÈState-of-art infrastructure of Big opening target so far
Bazaar outlets ÈFalling revenue per square
ÈPOP to increase the purchase feet
ÈOne stop shop for variety of
products, increasing customer
time and available choices

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ÈCompetitors, global big
ÈOrganized retail is just
players planning to foray into
4.15%of total pie of Indian
market
retail market
ÈUnorganized retail market of
ÈEvolving Customer
India
preferences in recent years
ÈGovernment policies are not
well-defined in India
 Life Cycle


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ÈHigh Organization ÈHigh Organization

Value Value
ÈLow Customer ÈHigh Customer
Value Value

ÈLow Organization ÈLow Organization

Value Value
ÈLow Customer ÈLow Customer
Value Value
 4P Marketing Mix
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Offers wide range of products, range from
apparels, food, farm products, furniture,
child care, toys, etc.
All Major Brands
Fashion, electronics and travel segments
made up about 70% of sales.
Many In-house brands promoted by Big
Bazaar.
 4P Marketing Mix Contd..
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Economics of scale
Pricing objective is to get "Maximum Market Share͟
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Promises consumers the lowest available price

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È Time pricing, i.e., difference in rate based on peak and
non-peak hours or days of shopping



È Combo-packs
È alue to customer.
 4P Marketing Mix Contd..
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Psychological
discounting (Rs. 99,
Rs. 49, etc.)
Special Event
Pricing (Close to
Diwali, Gudi Padva,
and Durga Pooja)
 4P Marketing Mix Contd..
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È Stores are located in 50 cities and 100 stores in
operation
È Presence in almost all the major Indian Cities.
Aggressive on their expansion plans.
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È New and innovative cross-sell and up-sell
strategies in Indian retail market.
È Future Card (the card offers 3% discount)
È Endorsement by M. S. Dhoni
È Point-of-Purchase Promotions.
È Advertising in Print media, T , Radio (FM) and
Road-Side Bill-Boards.
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͞Joona Do, Naya Lo͟
 ͞Sabse Saste 3 Din͟
Republic Day Sales Images
25-26-27 Jan 2006
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È Need Infrastructure Development, Own
Logistic Solutions
È Global Big Players and Competitors Planning
to foray into ¢arket
Bharti-Wal-Mart, Carrefour is all set to gain
its foothold in India
È Government Regulations and Taxation
FDI, Taxes Duties
 
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È Endless Opportunities to Serve Indian ¢arket
India's retail market is forecast to double in
another six years from the current $375
billion
È Introduced ¢anagement Training Programme
in Retailing for Employees
È Lack of ¢alls problem is being taken care of by
Property Funds managed by PRIL
 


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