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M. P.

Birla Institute of Management

An In-depth Analysis on Big Bazaar retail outlet (Koramangla)


In Bangalore Metropolitan Area
Submitted in partial fulfillment of the requirements of

The M. B. A. Degree Course of Bangalore University

Submitted By
Adipta Singh Chauhan
(REGD. NO: 05XQCM6007)

Under The Guidance and Supervision


OF

Mr. Ritesh Ranjan Mrs. Sumithra Sreenath


Store Manager, Big Bazaar Professor, MPBIM
(External Guide) (Internal Guide)

M. P. BIRLA INSTITUTE OF MANAGEMENT


Associate Bharatiya Vidya Bhavan
# 43 Race Course Road, Bangalore-560001
2006-07

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M. P. Birla Institute of Management

DECLARATION

I hereby declare that this report titled “An In-depth Analysis on Big
Bazaar retail outlet (Koramangla) in Bangalore Metropolitan
Area” at Big Bazar is a record of independent work carried out by me towards
the partial fulfillment of MBA course of Bangalore University at M. P. Birla
Institute of Management. This has not been submitted in part or fulfillment
towards any degree.

PLACE: BANGALORE

DATE Adipta Singh Chauhan


(05XQCM6007)

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M. P. Birla Institute of Management

PRINCIPAL’S CERTIFICATE

This to certify that this report titled An In-depth Analysis on Big Bazaar
retail outlet (Koramangla) in Bangalore Metropolitan Area has
been prepared by Adipta Singh Chauhan bearing the Reg. No. 05XQCM6007
under the guidance and supervision of Mrs. Sumithra Sreenath, Professor,
MPBIM, Bangalore.

Place: Bangalore Principal


Date: (Dr. N. S. Malavalli)

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M. P. Birla Institute of Management

GUIDE’S CERTIFICATE

This is to certify that the Project Report entitled “An In-depth Analysis on
Big Bazaar retail outlet (Koramangla) in Bangalore Metropolitan
Area” done by Adipta Singh Chauhan bearing Registration No.05XQCM6007
is a bonafide work done carried under my guidance during the academic year
2005-07 in a partial fulfillment of the requirement for the award of MBA degree
by Bangalore University. To the best of my knowledge this report has not
formed the basis for the award of any other degree.

Place: Bangalore Mrs. Sumithra Sreenath


Date: (Professor MPBIM)

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M. P. Birla Institute of Management

ACKNOWLEDGEMENT

I am indebted to Mr. Ritesh Ranjan, the store manger, Big Bazaar Kormangala for
providing me guidance throughout the project.

A very special thanks to Mrs. Sumithra, Faculty, MPBIM, Bangalore who has always helped
the students to achieve the best through his words of encouragement and being very
supportive by providing us with an excellent Concepts of Retail Marketing.

Finally, I remain indebted to my parents who helped me throughout the project by giving me
their invaluable feedback, inspiring me and guiding me.

Mrs. Rujuta Mayekar, HR manager, Kormangala Big Bazar.


Mr. Elangovan Sanbamdam, Store Manager.
Mr. Ajay Obhan, ASM, Food Bazaar
Mr. Rajesh Tawade, ASM, Apparels, Big Bazaar
Mr. Tanveer shaikh, ASM, GM, Big Bazaar
Mr. Hitesh Somani, ASM, Big Bazaar
Mr. Jitendra Talreja, DM, Food bazaar
Mr. Amrit, Management Trainee

And all the team leaders and team members who helped me out in knowing the
grassroot functioning of the store.

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Table of Content

1. Executive Summary 7
2. Objective of Study 8
3. Scope of Study 9
4. Industry background 10
5. Introduction to Operational Parameter 16
6 Research methodology 17
7. Sales of the Store 21
8. Footfall 23
9. Sales VS Footfall 25
10. Average number of bills per day 26
11. Conversion 26
12. Ticket Size 28
13. Average Sales per square feet 29
14. Average value per piece and per bill 31
15. Study of Impulse buying behavior 34
16. Researchers Opinion 36
17. Comaparitive Study with other stores 39
18. Ideas that can work for store 41
19 Attractive Offers 43
20 Bibliography 45

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M. P. Birla Institute of Management

Executive Summary

This project is a study of Big Bazar Operation parameters (OP) in Kormangla,


Bangalore and the overview of the factors on which a efficiency of stores depends.

Other than general overview of the current operations parameters, the project aims to
look into the details of how a floor area is being used by the stores to increase their
profit or earnings, thereby increasing the productivity and efficiency of the outlets.

Based on the findings of a Six-week study, this report identifies certain loopholes in the
merchandising policy as well as in outlets policy.

Finally, the report provides possible solution to the above problems in the form of
recommendation as well as certain suggestion for more optimal use of outlet.

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M. P. Birla Institute of Management

Objective of the study:

• To know the organized retail segment in Bangalore.


• To understand how they are managing their operations in super
stores.
• To analyze the daily Sales of the Store and to understand about the
product movements.
• To analyze the number of Customers visited the store/Footfall per
day
• To analyze number of Bills/ transactions per day
• To understand the Conversion percentage
• To analyze average value per bill
• To analyze average value per piece
• To analyze average piece per bill
• To analyze average Sales per square feet
• To understand the brand and the price preference of the store

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SCOPE OF THE STUDY

The scope is limited to the extent of the place, time, organization and their information
collected during the project. It is done as a part of academic study. The scope o f the
study limited to information supplied by the Department Head and information
collected by standing order and settlement copies of the company.

The information collected is limited to the academic knowledge gained by the student
during the study of the course.

The study is confined only to Big Bazar (Kormangla), Bangalore.

The study is not proposed to be an expert study as it was done by a student for the
purpose of a partial fulfillment of the course is the planned training, which is an
integral part, in completion and reward of MBA.

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Industry Background

Retailing consists of those business activities involved in the sale of goods and services to
consumers for their personal, family, or household use. Retailing comprises of four elements:
customer orientation, coordinated effort, value-driven, and goal orientation.

Drivers of change in retailing

- Changing demographics and industry structure


- Expanding Computer technology
- Emphasis on lower cost and prices
- Emphasis on convenience and service
- Focus on productivity
- Added experimentation

India emerges as most attractive retail market

According to AT Kearney’s report – ‘Emerging Market Priorities for Global Retailers’, The
2006 Global Retail Development Index TM, India ranks as the most attractive emerging
market as a retail destination. India’s retail market has grown by 10% on an average in the past
five years. The report attributes the changing retail landscape in the country to the increasing
mobility among the middle and upper classes and increasing urbanization. The table below
displays the ranking of different countries and the various parameters considered in arriving at
these rankings.

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Essentials of Retailing

Customer orientation- The retailer makes a careful study of the needs of the customer and
attempts to satisfy those needs.
Goal orientation – The retailer has clear cut goal and devises strategies to achieve those goals.
Value driven approach- the retailer offers good value to the consumer with merchandise
having the price and quality appropriate for the target market.
Coordinated efforts- Every activity of the firm is aligned to the goal and is designed to
maximize its efficiency and deliver value to the consumer.

Four Axes of Retail scale up

The broad parameters along which the retailing activity can be scaled up. It represents the
choices available before a retailer in terms of how the business model can be designed. The
four parameters are the products that can be offered, the markets in which the retailer
may have a presence, the retailing format that may be adopted for operation and
the profile of the customers that are identified as the target segment. These four parameters
are interlinked and together frame the strategic disposition of the retail business.

Organized Retail is evolving with changing customer aspirations

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M. P. Birla Institute of Management

Organized retailing in most economies has typically passed through four distinct phases in its
evolution cycle. In the first phase, new entrants create awareness of modern formats and raise
consumer expectations. In the second phase consumers demand modern formats as the markets
develop – thereby leading to strong growth. As with the life cycle in any industry, the high rate
of growth would lead to a stage where the market would reach maturity and all the players
would strengthen their positions. This will be followed by the final phase where the market
would reach saturation, the growth would be limited and for sustainable growth, retailers
would explore new markets as well as evaluate inorganic opportunities.

Stages in growth of organized Retail

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Glimpse of Big bazaar

Big Bazar Retail (India) Limited, is India's leading retail company with presence across multiple
lines of businesses. The company owns and manages multiple retail formats that cater to a wide
cross-section of the Indian society and is able to capture almost the entire consumption basket of the
Indian consumer. Headquartered in Mumbai (Bombay), the company operates through 5 million
square feet of retail space, has over 331 stores across 40 cities in India and employs over 17,000
people. The company registered a turnover of Rs 2,019 crore for FY 2005-06.

Big Bazar Retail forayed into modern retail in 1997 with the launching of fashion retail
chain, Big Bazar in Kolkata. In 2001, it launched Big Bazaar, a hypermarket chain that combines
the look and feel of Indian bazaars, with aspects of modern retail, like choice, convenience and
hygiene. This was followed by Food Bazaar, food and grocery chain and launch Central, a first of
its kind seamless mall located in the heart of major Indian cities. Some of its other formats include,
Collection (home improvement products), E-Zone (consumer electronics), Depot (books, music,
gifts and stationary), ALL (fashion apparel for plus-size individuals), Shoe Factory (footwear) and
Blue Sky (fashion accessories). It has recently launched its retailing venture, futurebazaar.com.

The group's subsidiary companies include, Home Solutions Retail India Ltd, Big Bazar
Industries Ltd, Galaxy Entertainment and Indus League Clothing. The group also has joint venture
companies with a number of partners including French retailer Etam group, Lee Cooper, Manipal
Healthcare, Talwalkar's, Gini & Jony and Liberty Shoes. Planet Retail, a group company owns the
franchisee of international brands like Marks & Spencer, Debenhams, Next and Guess in India.

Big Bazar Retail is the flagship enterprise of the Future Group, which is positioned to cater to the
entire Indian consumption space. The Future Group operates through six verticals: Future Retail
(encompassing all retail businesses), Future Capital (financial products and services), Future
Brands (management of all brands owned or managed by group companies), Future Space
(management of retail real estate), Future Logistics (management of supply chain and
distribution) and Future Media (development and management of retail media).

Future Capital Holdings, the group's financial arm, focuses on asset management and consumer
finance. It manages two real estate investment funds (Horizon and Kshitij) and consumer-related

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private equity fund, In division. It also plans to get into insurance, consumer credit and other
consumer-related financial products and services in the near future.

Future Group's vision is to, "Deliver Everything, Everywhere, Everytime to Every Indian Consumer
in the most profitable manner." One of the core values at Future Group is, 'Indianess' and its
corporate credo is - Rewrite rules, Retain values.

Big Bazaar
Kormangla

The customers in Big Bazaar are in the zone of indifference and there is a need to bring the
customers from the zone of indifference to the zone of loyalty as with the coming of new
players in the industry and the level of competition increasing, it becomes critically important
for the stores to create loyalty customers rather than just customers. A customer satisfaction
index is a snapshot at a point in time. People’s views change continuously and the performance
of companies in delivering customer satisfaction is also changing. Measuring satisfaction must
be a continuous process. Tracking surveys provide benchmarks of one’s own company’s
performance and, if competitor suppliers are also being measured, there will be measurements
of relative performance.

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Introduction to the Operational Parameters

When we want to evaluate the store efficiency, we can divide it into three critical to quality
components: Customer Intimacy, Product availability, and employee efficiency.

Customer Intimacy- The ability to provide a seamless cross channel shopping experience
through a single view of customer information and establishment of an going, interactive
relationships throughout the entire shopping process.
Product Availability – The ability to ensure in stock conditions without excess supply chain
inventory, pricing integrity preservation or a consistent view of product information across all
channels.
Employee Efficiency- The ability to empower every store associate to deliver top quality
service, improve productivity and comply more effectively with home office directed
initiatives.

When we talk about the operational parameters we try to track down the following:

- Daily Sales of the Store


- Number of Customers visited the store/Footfall per day
- Number of Bills/ transactions per day
- Conversion percentage
- Average value per bill
- Average value per piece
- Average piece per bill
- Average Sales per square feet

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RESEARCH METHODOLODGY

Type of research:
It is the descriptive type of research which envolves various parameters of the store. This
research takes care of all the operational parameters in detail.

Analysis method:

Regression and Correlation analysis

Regression and correlation analysis shows us how to determine both the nature and the
strength of a relationship between two variables.

Y= a+ b X

In this analysis there are two types of variables:-


(a.) Independent variables – Footfall(X)

(b.) Dependent variable – Sales(Y)

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Sales(Y) Footfall(X) XY Y2 X2
30 79 2370 900 6241
11 32 352 121 1024
10 34 340 100 1156
10 29 290 100 841
12 33 396 144 1089
20 48 960 400 2304
30 86 2580 900 7396
11 30 330 121 900
10 34 340 100 1156
10 27 270 100 729
10 30 300 100 900
11 38 418 121 1444
20 50 1000 400 2500
26 64 1664 676 4096
12 32 384 144 1024
11 27 297 121 729
9 28 252 81 784
9 31 279 81 961
13 39 507 169 1521
27 64 1728 729 4096
45 110 4950 2025 12100
12 38 456 144 1444
10 42 420 100 1764
9 36 324 81 1296
9 37 333 81 1369
11 40 440 121 1600
17 52 884 289 2704
25 85 2125 625 7225
10 36 360 100 1296
10 42 420 100 1764
8 24 192 64 576
Y=468 X=1377 XY=25961 Y2=9338 X2=74029

Mean of X(x) = 44.42


Mean of Y(y) = 15.10

(XY)-n(x)(y)
b= ---------------------
(X2) – n(x)2

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M. P. Birla Institute of Management

25961-31(44.42)(15.1)
b= ------------------------------
74029- 31(44.42)

b= .402
a=y-bx
a= 15.10 – (.402)(44.42)
a = -2.757

Y= -2.757+.402X

The above equation can be used for projections of the future sales. For example:
Taking X= 50 (i.e. we take that footfall will be 5000)
We get,
Y= - 2.757 + .402(50)
Y= 17.343 (i.e. the sales will be around 17 lacs, if footfall is 5000)

Correlation Analysis

Correlation analysis is the statistical tool we can use to describe the degree to which one
variable linearly related to another.

a(Y)+ b(XY) –n(y)2


r2 = ----------------------------
Y2- n(x)2

r2= .915
r= .9567

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Finding of Analysis:

There is a high degree of correlation between sales and footfall of the store.
If we want to increase the sales we should focus on the footfalls as we can see that there is a
positive correlation of .9567. this shows that both sales and footfall are highly correlated to
each other and hence if store wants to increase is sales then it has to concentrate on increasing
the footfall inside the stores

Shortcomings of the above analysis


• Figures are rounded off for the purpose of calculations
• Sales are in lakhs and footfalls are in hundreds

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Sales of the store per day

A sale is the major indicator of the performance of the store as a whole. The responsibility lies
on the shoulder of both the in-door and out-door marketing as well as the product range, the
human resource and customer service plays a vital role in the movement of the sales figure.

Months Weekdays Saturday Sales Sundays Sales


January 1272180 2358716 2171998
February 772182 1365835 2152877
March 720952 1445894 2233612
April 1146286 2137182 3174132
April(Excluding
Big Day) 989715 1932475 2728789

Sales for the month of April

3500000
3000000 Sunday
2500000
2000000 Saturday
sales
1500000
1000000 weekdays
500000
0
weekdays Saturday Sunday

Week days Sales Trend

1500000

1000000 Jan
Feb
500000 March
April
0
Jan Feb March April

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M. P. Birla Institute of Management

Saturdays Sales Trend

2500000
2000000
Jan
1500000
Feb
1000000 March
500000 April
0
Jan Feb March April

Sundays Sales Trend

3000000
2500000
2000000 Jan
1500000 Feb
1000000 March
500000 April
0
Jan Feb March April

Comments

• As Big Day(Jan 26,27,28) was held in the month of January therefore the
average sales has gone up to 1272180 on weekdays but if we exclude the Big day sales
the average sales comes out to be Rs. 689413,Saturdays average sales is Rs. 1405293.
• Similarly in April, we had Big Day(April 19,20,21), therefore the average sales have
jumped by 5% on weekdays, around 14-15% on Saturdays and around 16% on
Sundays.
• Sales had dipped in the months of February and March but in April the sales are
showing growing trends.

Reasons:
1. Price challenge campaign.
2. Schemes were attractive and advertised well media.
3. The retail industry grew by .5%.

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4. In the month of February and March shortage of stock was a problem but the
problem was overcome in the subsequent month.

Footfall

Footfall is the number of people visiting the store in a day. These customers can be old
customers or can be the new customers. Footfall data provides user-friendly management
reports, which will help us answer questions about operational efficiency and marketing
effectiveness, allowing us to implement change and realize significant savings.

footfall as a tool for measurement

Footfall figures are an important Key Performance Indicator and also combine with other
KPI’s, such as sales data, to provide management information capable of helping to drive
improved productivity from our shoppers and staff. Use as the basis for planning the running
and organisation of our stores, or to understand strategic or tactical market opportunities.

Months Weekdays Footfalls Saturday Footfall Sunday Footfall


Jan 4975 9797 7561
Feb 2633 3948 6439
Mar 2418 3686 5784
Apr 3561 5339 8565
Excluding Big day(April) 2728 3994 7081

Weekdays footfall Trend

5000
4000
Jan
3000
Feb
2000 March
1000 April
0
Jan Feb March April

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Saturdays Footfall Trend

10000
8000
Jan
6000
Feb
4000 March
2000 April
0
Jan Feb March April

Sundays Footfall Trend

10000
8000
Jan
6000
Feb
4000 March
2000 April
0
Jan Feb March April

April Footfall Trend

10000
8000
6000 Weekday
4000 Saturday
Sunday
2000
0
Weekday Saturday Sunday

Comments:
• Footfalls have similar trends on weekdays and Saturdays, whereas footfalls increase
during the Sundays.
• Footfalls have increased in the month of April due to summer vacations.

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Sales Vs Footfall
The tracking these operational parameters help us to establish relationship between the footfall
and sales of the store. From the below graph we can say that there is a direct relationship
between the two parameters.

Relationship Sales and Footfall

5000000 12000

4500000
10000
4000000

3500000
8000
3000000
F o o tfa l l
S A le s

Series2
2500000 6000
Series1
2000000
4000
1500000

1000000
2000
500000

0 0
2- Ma y
3- Ma y
4- Ma y
5- Ma y
6- Ma y
7- Ma y
8- Ma y
10 - Ma y
1 1 -M a y
1 2 -M a y
1 3 -M a y
1 4 -M a y
1 5 -M a y
1 6 -M a y
1 7 -M a y
1 8 -M a y
1 9 -M a y
2 0 -M a y
2 1 -M a y
2 2 -M a y
2 3 -M a y
2 4 -M a y
2 5 -M a y
2 6 -M a y
2 7 -M a y
2 8 -M a y
2 9 -M a y
3 0 -M a y
3 1 -M a y
-M y
ay
9 Ma
1-

DAYS

Sales Vs Footfall

1400000 6000
1200000 5000
1000000
4000
F o o tfa ll
Ru p ees

800000 Sales
3000
600000 Footfall
2000
400000
200000 1000
0 0
1 2 3 4 5
Months

The sales and the footfall depends upon two factors i.e. out-store marketing and in-store
marketing. Out-store marketing is more to related with hoardings and television
advertisements. This all helps in attracting the customers and more of creating awareness about
the various schemes available in the store. Whereas in-store marketing deals with visual
merchandising and attractive offers to lure the customers and providing “Value for Money”
to the customers. It also includes the selling capabilities of the sales team, who constitute the
most important part of the store.

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A good promotion by the marketing department, effective merchandising and a good service
level makes the existing customers buy from our store or resulting in favorable word of
mouth publicity, which helps in attracting new customers.

Average Number of Bills (Transactions) per day

This figure indicates the actual number of customer in proportion to the footfall. Higher the
number of bill vis-a-vi the number of walk-ins is an indicator of the efficiency of the store in
terms of product availability, customer service and merchandising. The focus area here is in-
store marketing as it involves making sure about the availability of wide range of products,
attractive displays, value for money offers and customer service.

Conversions

A measure of how many of our walk ins are actually buying something. Conversion is a result
of combined efforts of merchandise, in store displays and marketing and selling skills of the
staff.

Calculation Conversion Ratios

We know how many people make a purchase, what we don’t know is how many people don’t!
Integrate our sales data with footfall to get a detailed picture of the conversion ratios in our
store and calculate our missed opportunities.

Months Weekdays conversion Saturday Conversion Sunday Conversion


Jan 60 54 54
Feb 67 65 60
Mar 67 70 58
Apr 62 68 59

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M. P. Birla Institute of Management

Conversions
Weekdays Conversion
90
80 68
C o n v e r s io n R a te

70
60 66
50 64
Conversion rate
40
62 Conversion
30
20 60
10 58
0
56
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31
Jan Feb Mar Apr
Days

Saturdays Conversion Sundays Conversion

80 62
60
60
58
40 Conversion 56 Conversion
54
20
52
0 50
Jan Feb Mar Apr Jan Feb Mar Apr

Comments:

• Average conversion rate has fallen in the month of April on all the days of the week.
• The average conversion rate is higher on the weekdays as compared to the weekends as
there are more serious buyers in the weekdays, which is quite understandable.
• The conversion rate for the coming month’s shows decreasing trends due to summers.

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Ticket Size

Ticket size is the average amount of money each buyer spent in the store in one visit. Higher
ticket size indicates a good assortment and variety of merchandise in the store. The availability
of right merchandise is the main thing. Therefore display, promotion and selling skills will
ensure a higher ticket size.

Months Weekdays Ticket Size Saturday Ticket size Sunday Ticket Size
Jan 472 635 538
Feb 445 529 572
Mar 434 574 614
Apr 505 612 679

Weekdays ticket size

520
500
480 Jan
460 Feb
440
March
420
400 April
380
Jan Feb March April

Saturdays ticket size

800

600
Jan
400 Feb
March
200
April
0
Jan Feb March April

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Sundays ticket size

800

600
Jan
400 Feb
March
200
April
0
Jan Feb March April

Comments:

• Average ticket size has increased in April by 10% on the weekdays, 6 % on Saturdays
and 14.69% on Sundays over the previous 4 months
• Price challenges and attractive offers were the reason for the increasing ticket size in
the month of April
• Aggressive marketing of Big Day in the local newspaper as well as distribution of
leaflets in the local areas

Average Sales per square feet

Sales per square foot are a very important retail performance benchmarking ratio. It is the sales
revenue generated per square foot of Retail space.
It is calculated as:

Sales per Sq feet = Gross sales/ retail space sq. ft.

Since cost of Retail space is a significant cost element in the retail business, this ratio is
instrumental in gauging the store sales performance.

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Weekdays sales per square Saturday sales per square Sunday sales per square
Months feet feet feet

Jan 6361 11793 10860

Feb 3861 6829 10767

Mar 3605 7230 11168

Apr 5728 10686 15870

Weekdays Sales per Square feet

8000

6000
Jan
4000 Feb
March
2000
April
0
Jan Feb March April

Saturdays Sales per Square feet

12000
10000
8000 Jan
6000 Feb
4000 March
2000 April
0
Jan Feb March April

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Sundays Sales per Square feet

20000

15000
Jan
10000 Feb
March
5000
April
0
Jan Feb March April

Comments:

• Average sales per square feet has increased in the month of April by 22% in the
weekdays and Saturdays and there has been a jump of 35% on Sundays
• This indicates the efficient utilization of the selling space and increasing sales due
to earlier stated reasons

• The average sales per square feet follow a ratio trend of 1:2:3 in
weekdays : Saturdays :Sunday

Average piece per bill

Average piece is the amount of pieces sold to a particular customer. This parameter helps to
track the inventory turnover of the products in the store. Higher the number of pieces per bill,
higher will be the ticket size and the sales of the store.

For example

Buy 1 soap for Rs 10/-


And if an offer is there which says
Buy 3 soaps for Rs. 25/-
The customers will go for that offer and thus the ticket size and sales increases.

Average value per piece

Average value per piece means the average value of each piece in the particular bill. We get
this figure by dividing the total bill amount by number of units in the bill.

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IMPLICATIONS OF STUDY

Footfall optimization

• Aggressive outdoor marketing at the local level specially in Kormangla as awareness is


very low among the people in some areas of the city

• Leaflet distribution on regular basis in the local newspaper Kormangla

• Our Big Bazaar in-store brands needs awareness thus should be marketed well and a
well known brand ambassador such as Shahid kapoor and his father Pankaj kapoor
for apparels and footwear to attract the customers

• Quality of the products should be improved so that it is value for money not just
cheap products

• Emphasis should be laid customer service and customer satisfaction

• Easy and fast billing facility can increase the ticket size as well as the footfalls

• Electronic display board outside the store can help in increasing the footfalls

• Attractive displays, good assortment and wide range of products in every category
helps in increasing footfalls

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Conversion rate optimization

Conversion will result due to the combined effect of merchandise, in store display and
marketing and selling skills of sales staff. In case of a mall opening mall adjacent to our store,
large part of customer entry could be the customers just hang out, thus the selling skills of the
staff and in store display and promotions will play most important part in conversion.
* Putting the description of the product along with the product price of home
solution products
INCLINATION NO INCLINATION
NEED Conversion will happen Will have to work hard on
To ensure conversion: conversion
• Good assortment They have perhaps just come to see the
• Good service level store and not make any purchase.
• Selling skills of the staff To ensure conversion:
• Good In store promotions • Display and In store promotion
• Make them spend more time • Personalized service
In the store • Convincing skill of the staff
comes into play
WITHOUT Can be converted easily Most difficult to convert
NEED To ensure conversion: To ensure conversion:
• In store promotion of impulse items • Promotion should be very
• Selling skill of the staff tempting
• Attractive product display • Conversion might not happen in
this visit but a seed of need is sown
in their mind
• Good Assortment, variety and
displays
• Aisle route to ensure visibility
to a large number of categories

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Study of Impulse buying behavior to increase the ticket size

Impulse buying goods

Impulse goods: Impulse purchases are goods or services that are acquired in a spontaneous or
an unplanned manner without any prior thought. These kinds of purchases can only be
encouraged through the help of aggressive marketing techniques that are adopted by a
business. Once have found out what your customers want and how to reel them in, it becomes
very easy to encourage impulse purchases.

• Consumer research shows that we’re vulnerable to subtle (and even not-so-subtle)
marketing techniques — impulse buying accounts for a significant proportion of
supermarket purchases.

Strategic inputs to increase the Business

Positioning of the goods: More expensive items tend to be right in the line of sight of the
target consumer. Cheaper or supermarket own-brands tend to be located on the higher or lower
shelves.

Concept behind: Separation of popular staples is a common element of supermarket design.


So that customers spend more time in the store negotiating the way past all those flashy and
tempting impulse-buy items.

Discounts offered: Heavily discounted and advertised goods that are designed to get customer
into the store. The idea is that customers pick up a few more items while they are there.

Combinations: Positioning ‘natural’ combinations like chips with dips or biscuits near tea and
coffee may seem logical.
Temptation: Magazines and confectionery live here. They succumbed to the temptation and
nagged into buying by kids.

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• FOOD retail outlets should position impulse products at the entrance as a customer is
making impulse buying decisions in the first 15 seconds of entering a supermarket or a
retail outlet, a study has revealed.
• Big packets should be kept at eye level and smaller packets at a lower level. "This is
because, people will first pick up products at eye level as against bending down and
picking up a product

• The placement of goods should follow the progress of the day starting with products
that are used in the morning, followed by breakfast items, morning health foods,
toiletries, food grains, pulses and utility items ending with the gifting section.

• There should be a person from the house keeping department kept at the entrance doors
so that the person who is not actually a customer ends up purchasing something.

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Researchers Opinion

At the Food and Brand Lab, University of Illinois, researchers found that promotions using
multi-unit pricing (for example, three for $3), purchase suggestions (‘stock up for upcoming
Festival’) or with purchase limits (‘limit three per customer’) increased the amount
consumers purchased. “All three types of promotion increase purchase amounts by 30% to
105% over what consumers would normally plan on buying,” it said.
Other research showed that more than 50% of shoppers couldn’t resist a ‘buy-one-get-one-
free’ promotion. But did you even need one in the first place, never mind two?

According to a survey the following things we found out:


Do you use a shopping list for today’s shopping?

• Yes, I have planned everything or nearly everything: 38% (Segment 1)


• Yes, partly and in addition I buy what comes to my mind
When I am in the store: 40% (Segment 2)
• No, I do not plan in advance –I buy what comes to my mind
When I am in the store: 20% (Segment 3)

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M. P. Birla Institute of Management

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M. P. Birla Institute of Management

Customers are not targets!!!

“Customers are probably a firm’s most valuable asset and they should be
nurtured, developed and treated accordingly. Each n every customer should be
the objective of proactive bonding relationship”

• There should be continuous interaction with the customers to get inputs and
feedback
• Action should be taken on the customer complaints till the point they are
reasonable
• Customer satisfaction level should be checked at proper time intervals

A customer’s perception of the product and benefits accrued is the main motivating factor
for his decision to buy and the money that he is willing to pay for it. Lets look at the
CARE concept of customer service.

C- Creative Communication
A-Atmospherics and appreciation for all
R- Responsiveness and respect for being
E- Empathy and enthusiasm

Creative communication plays a pivotal role in brining about this and is an inseparable
adjunct towards building a strong and successful retail brand. It must bring excitement
into the customer’s life – excitements that bring to the fore their latent needs and makes
them feel respected and “larger than life”.

Retailers need to understand that things such as customer loyalty and excitement are the
key to success. They must learn to value people- the customers- in new ways to allow
them to connect their dreams and desires with what they do and what they buy. Emphasis
the deeper, broader purpose of each person. Stimulate pride and excitement through the
ways they facilitate decision making during buying process. Promote a spirit of one-ship
or pride in belonging to an elite peer group or a unique clientele- a family of valued
customers.

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Comparative Study with Other Store

Comparative study is a tool that is been used by the stores to know themselves and the
parameters on which they are performing well and on which they have to work on. This
study helps the organization to improve their efficiency and sharp their competitive edge
over their competitors.

Parameters Big Bazaar/ Shoprite D mart TruMart Hypercity Spar


Food Bazaar
1) Sales Staff
a) Grooming 3 3 2 4 5 4
b) Knowledge 4 3 3 3 4 4
c) Behavior 4 2 4 3 4 4

2) Security Staff
a) Greetings 4 3 2 3 3 2
b) Handling of 5 3 4 3 3 2
baggage

2) Ambience
a) lighting 4 3 4 3 5 4
b) room freshness 2 3 4 4 3 4
c) movement space 4 3 2 3 5 3
d) Music 3 3 4 2 3 3
e) Entrance 4 3 3 3 3 3
3) In store
Merchandising
a) Placing of 3 - - - 4 -
Mannequins
b) Stacking 3 4 4 5 5 4
c) Placing of Ads 3 4 4 5 5 5
d) New schemes 4 3 3 3 4 3

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M. P. Birla Institute of Management

e)Branded Display 3 4 4 4 3 4
f) Own Brands 4 3 2 3 5 3
Display
4) Amenities
a) Trial rooms 5 - - - 4 -
b)Elevators/Lifts/stairs 3 4 4 4 5 3
c) Toilets 1 3 4 2 5 4
d) Drinking Water 2 3 3 3 4 3

Customer satisfaction is the key to success in the retail industry. Therefore to check the
customer satisfaction level and the small survey was conducted. According to the survey
conducted with a sample size of 40 respondents as well as the observations made during
the visits to the different malls and stores across Mumbai city the following results came
out:

Analysis:

1. Sales staff needs a bit of grooming.


2. Room fresher spray should be done in the store in order to create a pleasant
shopping environment.
3. Space for movement of the customers is fine except the movement in the food
bazaar.
4. Mannequin displays are appropriate.
5. Improper stock stacking is an issue.
6. Inventory movement is also one of the issues especially in the rush hours.
7. Displays of the electronic goods are not attractive and tidy.
8. Lack of proper toilets and drinking water facility.

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Conclusion

Ideas that can work for the store


Proposal 1
Sell the Air time
The store can earn income by selling the store’s announcement and music Air times for
playing the jingles of the products kept at the store and in turn earn advertisement money
from the companies as they spend heavily on advertisement and in this way we can get a
bit of their advertisement budget. We can charge different charged on different days of
the week and even different hours of the day. This will act as a revenue generation for
the store and that revenue can be used for out door marketing of the store. It is also a win
win situation for the store as the ticket size and sales will increase as it will lead to
impulse buying as well as need felt buying by the customer.
For Example, Jingle of Surf Excel, soft drinks etc.

NOTE: We will not play the jingles the whole day, instead we will keep a restriction of
total 15 minutes of these jingles per day so that the announcements are not hindered.

Proposal 2
Ration Day
This is one of the concepts that we can use it to get associated with our store. This
concept can be applied to 1st Saturday of every month. On this day we can bring
down our margins and concentrate on our top line (i.e. Sale Volumes). This will
act as a brand building exercise for the concept life Big Bazaar and people will
associate Ration day with Big Bazaar.

Proposal 3
Special offer
The concept of special offer should be used in a tactical way. The announcements
should be made of the special offers on the weekends in advance during the

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weekdays and the special days such as BIG DAY should be publicized a month
before and there should be teasers regarding this.

Proposal 4
Display screen
It is said that the visual displays have more impact as compared to any other medium of
information. The store can use electronic display screen, displaying the running offers
and the venue for those offer. So that the customer is aware of all the offers running in
the store and it is convenient for them to locate the place of the offer as Kormangla Big
Bazaar has two floors.

Proposal 5
Optimizing the offer price
Testing of various price points to maximize conversion rate and total profits. It’s
generally better to start high and reduce your price in subsequent testing to find the level
of maximum profit.

Proposal 6
Phone a friend
This is a very old concept but what we can differentiate is by keeping a fixed category of
products in a particular package. For example:

Package Name: Ration Starters (RS)


Products:

1. 5 Kg Wheat
2. 3 kg sugar
3. 3 kg Rice
4. 250 gm tea
5. 1 toothpaste
6. 5 soaps

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7. 1 shampoo

The total of the above will exceed Rs. 500 which will be a considerable amount of
business for the store. The customer can order this package and along with that the other
needs of his on the phone itself and the delivery will be made the next day and cash can
be collected. A separate telephone line is required and a person in charge for it should
also be there to take orders and take care of the delivery. The phone orders should be
taken between the non peak hours from 10 am to 3 pm.

Attractive offer
Apparels

(a.) Buy 2 shirts worth Rs. 449/- each


And
Get 1 trouser free worth Rs. 449/-

(b.) Complete Wardrobe (MEN)

1. Formal shirt- Rs. 349/-


2. Trouser - Rs. 499/-
3. Leather Belt- Rs. 199/-
4. Tie - Rs. 149/-
Total = Rs. 1196
BB Price = Rs. 999/-

(c.) Concept of Friday Fashions at the store giving special emphasis on


apparels.

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Some important Conclusions of the research is:

• Big Bazar has a very good brand Value in the market.


• The Big Bazar staff is considered as a top most groomed staff of the
Indian retail businee.
• Big Bazar has to update itself according to the new upcoming Retail
outlets.
• It caters a wide range of consumer from the wide range of segments.
• It has experienced the maximum industry footfall in his outlets.
• It has widest range of products to offer.
• It has a wider acceptability all over India in comparison to other
stores.

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BIBLIOGRAPHY TEXT

Daily sales report (DSR)


Articles from RetailBiz
Statistics for management by Levin Rubin
www.retailacademy.com
http://www.lawson.co.jp/company/e/ir/library/presentation/2005/ps_2005_e/html/17.html

www.bigbazar.org
www.indiaretailbiz.com
www.retail.edu

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