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“The Culture of Unorganized in the Organized” BIG BAZAAR
Submitted in the partial fulfillment of requirements of POST GRADUATE PROGRAM IN MANAGEMENT 2010-2012
BY SANDEEP ANUMANDLA PGPM 2nd YEAR ID NO: 050101023
UNITED WORLD SCHOOL OF BUSINESS HYDERABAD
I hereby declare that this report, submitted in partial fulfillment of the requirement for the award of the POST GRADUATE PROGRAM IN MANAGEMENT, to United World School of Business. It is my original work and not used anywhere for award of any degree or diploma.
Place: HYDERABAD Date: 25 – 02 - 2012 Signature SANDEEP ANUMANDLA PGPM – 2nd YEAR 050101023
This is to certify that the dissertation submitted in partial fulfillment for the award of Post graduate program in management of United World School of Business is a result of the bonofied research work carried out by Mr. SANDEEP ANUMANDLA under my supervision and guidance. No part of this report has been submitted for award of any other degree or diploma
Date: 25 – 02 - 2012 Place: HYDERABAD Faculty guide: MUSHTAQ AHMED Signature: Core Faculty United World School of Business, Hyderabad
MUSHTAQ AHMED. 4 . it is very important to get the right guidance and support which I got from my Faculty Guide Mr.ACKNOWLEDGEMENT I take this as an opportunity to thank with bottom of my heart all those without whom the journey of doing my project would not have been as pleasant as it has been to me. I am very thankful to DEAN. I express my gratitude to my faculty guide for inspiring me throughout the project. Working on my project was a constant learning experience with all sweat and tear which was its due but not without being richly stimulating experience of life time. MANASA CHAKRAVARTHY for giving me their valuable advice and guidance towards fulfillment of the project For any project to be a success.
8 Scope of the Study ……………………………………………………………………. 7 Objectives of the Study ………………………………………………………………. 11 – 16 Organized Retailing …………………………………………………………………… 17 – 19 FUTURE Group …………………………………………………………………. 20 – 22 BIG BAZAAR …………………………………………………………………………...... 050101023 TABLE OF CONTENTS Executive Summary …………………………………………………………………… 6 Introduction …………………………………………………………………………….. SANDEEP ANUMANDLA Roll.. 23 – 33 5 ...Finally I would like to convey my heartiest thanks to all my well wishers for their blessing and co-operation throughout my study.... 9 Research Methodology ……………………………………………………………….. 10 About the Industry ……………………………………………………………………... No.
Modern retail has entered India as seen in sprawling shopping centers.. 36 – 39 7 P’s of BIG BAZAAR ………………………………………………………………… 40 – 51 Conclusion – The strategy of BIG BAZAAR ………………………………………..... Retailing in India is gradually inching its way toward becoming the next boom industry.Competitors …………………………………………………..………………………. 61 EXECUTIVE SUMMARY Retailing in India is dominated by Unorganized which constitutes about 90 %. It is expected that the percentage of the Organized Retailing will increase to15 % by 2015.. The Organized retailing laid its roots after liberalization and was growing at a rapid pace. ushering in a revolution in shopping in India. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the 6 . 34 – 35 Project Findings ………………………………………………………………………. 52 – 60 End Notes ……………………………………………………………………………….. The Organized Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. The whole concept of shopping has altered in terms of format and consumer buying behavior. multi-storied malls and huge complexes offer shopping. entertainment and food all under one roof.
There have been many factors responsible for the changing market scenario. Technology is one of the major factors which is responsible for this paradigm shift in the mark. life styles and social class of people have completely changed now than that of olden days. The Indian population is witnessing a significant change in its demographics. the market scenario is also changing from time to time. The Big Bazaar is one of such organized players in India which is trying to capture the market of unorganized sector. Income level of the people has changed. There has been a shift in the market demand in today’s world. In this report we try to understand Big Bazaar’s strategies and analyze how it is representing the unorganized culture. INTRODUCTION As customer’s tastes and preferences are changing.Indian population is going to take a higher growth trajectory. Today we can see a new era in market with the opening up of many departmental stores. New generation people are no more dependent on haat market and far off departmental stores. Today’s market scenario is very different from that of the market scenario before 1990. hyper 7 . It is the changing tastes and preference of customer which has bought in a change in the market.
branded retail outlets and specialty stores. Marketing activities. It is a type of market where various kinds of products are available under one roof at low price. • To highlight Big Bazaar’s pricing tactics. malls. Sales people. In today’s world shopping is not any more tiresome work rather it’s a pleasant outing phenomenon now. Big bazaar is a new type of market which came into existence in India since 1994. buying behavior of customer’s in big bazaar and the satisfaction level of customers in big bazaar. My study is on determining the culture of “Unorganized” in the “Organized” sector by its Strategies. • To highlight its marketing and promotional activities.market. OBJECTIVES OF THE STUDY • To understand how Big Bazaar represents unorganized culture. My study is based on the secondary research on a hypermarket named big bazaar. • To identify its competitors. Pricing tactics. 8 . shopper’s stop.
The research is purely based on secondary data.SCOPE AND IMPORTANCE OF STUDY The scope of the research is to identify the changing trends in the organized sector. internet research and direct observation. The study 9 . It aims to understand the skill of the company in the areas like highlighting the culture of unorganized being an organized player. It provides help for further research in the organized retail sector.
RESEARCH METHODOLOGY Technology. Research Methodology is a set of various methods to be followed to find out various information 10 .shows Opportunities and challenges for Big Bazaar respect of internal & external environment. The research says about main competitors in the field of organized retail sectors. customers tastes and preferences play a vital role in today’s generation.
Area of study: The study is exclusively done in the area of marketing. It is a process requiring care. business judgment. sophistication. Research Design: • • Exploratory Research. Internet is the tool. and imagination for which there can be no mechanical substitutes. THE RETAIL INDUSTRY 11 . Research Methodology is required in every industry for acquiring knowledge of their products.regarding market strata of different products. experience.
both as a global base and a domestic market. Further. the Raheja’s Rs1.Consumer Markets. "Companies expect that the next cycle of change in Indian consumer markets will be the arrival of foreign players in consumer retailing.9bn Food World . most companies believe that will not be for long. And it seems to be the retail sector that will give the desi consumer royal status.8bn Shopper’s Stop . There is no supply chain management perspective. A study by McKinsey points out that India's market for consumer goods is about $450 billion by 2011 . KPMG India. finds that the next leap in the growth of the consumer market will be spearheaded by the changing dynamics of the retail sector. Although FDI remains highly restricted in retailing. Raheja’s and Piramal’s has set up stores/malls and built businesses within retail. the last link in supply chain – connecting the bulk procedures of commodities to the final consumers. These include the Rs1.making it one of the five largest in the world." says Deepankar Sanwalka. however.The Indian consumer could well be crowned King with all economic indicators in the right place." The report. Over the last five years. While 12 .a multi-brand departmental outlet and the Crossroads Mall set up by the Piramal’s. a number of large business groups such as Tata’s. Retailing in India is thoroughly unorganized. Executive Director and Head .the next big thing?' has said: "India represents an economic opportunity on a massive scale. KPMG in a recent report titled `Consumer Markets in India .a leading supermarket chain set up by RPG. Queuing up for the coronation ceremony is a multitude of global companies that are looking at India as the next consumer market powerhouse. Retailing is the final step in the distribution of merchandise. RPG.
Viveks . With Indian GDP expected to grow at 7-8 % in the next coming years. they are beginning to assume the contours of a serious business today. Also. notably BPCL and HPCL are also expanding their presence from fuel retail to grocery and convenience stores. diversifying business to reduce reliance on the commodity nature of fuel retail business and improve margins are the key factors that has lead fuel majors to enter into the retailing.5% to almost 25% of the total retail market by 2018. 13 .a 40-year old Chennai based chain selling consumer durables and Narula’s . existing family owned businesses are expanding their businesses. manufacturers are also looking for forward integration and are building chains around brands.the food chain in North India. which will lead to increase in the share of modern retail from the current 4. The more successful of them are the Nilgiris . The retail market in India is estimated at about US$ 410 billion and constitutes about 60% of private consumption and about 35% of India's GDP.a Bangalore base food retailer.many of these initiatives were initially driven by the need to use existing real estate. the retail market is expected to touch US $860 billion by 2018. this sector has witnessed a lot of interest from both domestic and global players. optimal utilization of real estate. who have committed investments worth US $30 billion. Fuel retailers. footwear and durables have driven the growth of specialty chains and upgraded existing multi-brand outlet. In recent years. Brands in apparel. Suitability of location. Interestingly.
multi-storied malls and huge complexes offer shopping.The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior. Modern retail has entered India as seen in sprawling shopping centers. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the 14 . entertainment and food all under one roof. ushering in a revolution in shopping in India.
ushering in a revolution in shopping in India. And if industry experts are to be believed. Retail. The trends that are driving the growth of the retail sector in India are: • • • • Low share of organized retailing Falling real estate prices Increase in disposable income and customer aspiration Increase in expenditure for luxury items 15 . Retail and real estate are the two booming sectors of India in the present times.Indian population is going to take a higher growth trajectory. 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. Accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry. has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. The Indian population is witnessing a significant change in its demographics. multiplexmalls and huge complexes offer shopping. entertainment and food all under one roof. As the contemporary retail sector in India is reflected in sprawling shopping centers. one of India’s largest industries. the prospects of both the sectors are mutually dependent on each other. the concept of shopping has altered in terms of format and consumer buying behavior.
These 16 . Shopper's Stop and Pantaloons along with other foreign single brand outlets have taken the leading organized retailing. Kumar's. One sign of the modernization of Indian retailing is the rapid growth in the number of specialty malls and theme malls. including large real estate companies. ITC. thanks mainly on account of an increase in the disposable incomes of middle and upper-middle class households. independent. Another credible factor in the prospects of the retail sector in India is the increase in the young working population. it happens to be the country's second largest employer after agriculture. Tatas. More and more corporate houses.THE CONCEPT OF “MALL” Although the retail sector in India highly fragmented and consists predominantly of small. Rahejas. Omaxe and mega retailers like Crosswords. In India. The Piramals. hefty pay packets. RPG Enterprises. nuclear families in urban areas. are now entering the retail business directly or indirectly. S. owner-managed shops. Aerens. The country is currently witnessing a boom in retailing. along with increasing working-women population and emerging opportunities in the services sector.
Electronics. Cosmetics and Toiletries. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores. supermarkets and specialty stores. Home & Office Products.key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life . Appliances. hypermarkets. 17 . Travel and Leisure and many more.Apparel & Accessories.
At the beginning of this decade. lifestyle products.EMERGENCY OF SPECIALITY RETAILING: Though organised retailing is still at a nascent stage . Auto Mall. organised retailing 19 . With consumer sentiment positive during most of 2004. In recent times. One could venture so far as to say specialty and theme based retailing will drive the growth of organized retailing in India. etc catering to specific needs and occasions have been completed or announced. clothing and lifestyle. rapid growth of existing players. ORGAINZED RETAILING Organized retailing got a leg up during 2004 with the opening of new format stores.accounting for only around two per cent of the $180 billion retail market in India . Many top developers are now toying with the idea of developing specialty malls. Wedding Mall. Four product categories have led the organised retailing wave: foods. Specialty malls are already a success in the West. whereas the concept is in its infancy in India.it is likely to touch 15 per cent by the end of this decade. consumer durables and electronics. Electronic Mall. automobiles and telecom products. the Government's intention of allowing a certain level of foreign direct investment in retail and the formation of a retailers' association. several theme malls such as Gold Souk (jewellery malls). it led to substantial spending across a number of categories such as consumer durables. apparel. start-up of new-generation shopping malls.
the share of organised retail in the retail pie will jump three times to reach 15-16 per cent. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. In this process retailer delivers many benefits to customers.9 billion in India. and the economy. The future is promising the market is growing government policies are becoming more favorable and emerging technology and facilitating operations.25 per cent of the estimated total retail market. Benefits to customers: 20 . Growth projections for retail business vary widely.accounted for a mere $2. Some studies estimate that by 2015. BENEFITS OF RETAILING Retailers play a major role in the transfer of goods and services from the manufactures to the end users. manufactures. wholesalers. This share has already grown to 2 per cent. Retail in India is the largest industry accounting for over 13% of the country GDP and around 10% of the employment. This is only 1. Retail industry in India is at the cross road.
Retailing plays a crucial role in the management of world economy and retailers constitute a tenth of the fortune 500 companies. which could be reinvested in production. These activities include: • • • • • Breaking bulk Providing assortment Holding inventory Providing after sales services Providing information Benefits to Manufactures and wholesalers: Manufactures and wholesalers consider retailing as a channel for delivering their product /services to the end consumer. By selling services retailers provide the manufactures great revenue. Benefits to the economy: The retailing business is the largest privet industry in the world with turnover of US $6.6 trillion. They perform various business activities that increase the value of the goods and the service they sell to the end users. Thus retailers play major role in smoothing out the variation between the production and sales of the manufactures product.Retailers act as a buying agent for consumers. As buying agents a retailer performs various activities to satisfy the end consumers. In INDIA retailing accounts for over 10% GDP and around 8% of the employment only next to the agriculture industry. 21 .
FUTURE GROUP 22 .
Future group led its founder & group CEO Mr. Kishore Biyani is one of India leading business house with multiple businesses spanning across the consumption space. While retail firms are the core business activity of future group, group subsidiaries are present in consumer finance, capital, insurance, brand development & entertainment. The companies leading formats include Pantaloons a chain of fashion outlet, Big bazaar, uniquely Indian hypermarket chain, food Bazaar a supermarket chain blends he look, touch and feel of Indian Bazaars with aspects of modern retail like choice convenience and quality and control a chain of seamless destination malls. 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. Future Group is present in 61 cities and 65 rural locations. The group’s flagship company, Pantaloon Retail (India) Limited operates over 10,000,000 square feet (930,000 m2) of retail space, has over 1,000 stores and employs over 30,000 people. Some of its leading retail formats include Pantaloons, Big Bazaar, and Central, Food Bazaar, Home Town, eZone, Depot, Future Money and online retail format www.futurebazaar.com. Future Group companies includes, Future Capital Holdings, Future Generali India, Indus League Clothing and Galaxy Entertainment which manages Sports Bar, Brew Bar and Bowling Co. Future Capital Holdings, the group’s financial arm, focuses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels.
The group’s joint venture partners include Italian insurance major Generali, French retailer ETAM group, US-based stationary products retailer Staples Inc and UK-based Lee Cooper and India-based Talwalkar’s, Blue Foods and Liberty Shoes. Future Group’s vision is to, “Deliver Everything, Everywhere, Everytime to Every Indian Consumer in the most profitable manner.” The group considers ‘Indian-ness’ as a core value and its corporate credo is - Rewrite rules, Retain values.
GROUP VISION Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner. • 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.
• • • • • • • • •
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.
Toys. The ambience and customer care adds on to the shopping experience. Hyderabad and Bangalore. Household Appliances and more. They have had considerable success in many Indian cities and small towns. Big Bazaar provides quality items but at an affordable price. It is a very innovative idea and this hypermarket has almost anything under one roof….BIG BAZAAR Big Bazaar is a chain of shopping malls in India. owned by the Pantaloon Group and which work on Wal-Mart type economies of scale. The headquartered in Mumbai the company operates over 12 million square feet of 26 . The first set of Big bazaar store open in 2001 in Kolkata. Footwear.Apparel.
Big Bazaar comes under the Pantaloon Retail India Limited (PRIL).000 people.’ (Nothing cheaper and better anywhere) indicating the value of stores. Hence. They launched the own retail store. apart from retailing lifestyle products. It has been positioned as ‘Is se sasta aur acha kahin nahi. Apparels are cheaper by 25 to 60%while the price difference on the other products varies between 5 to 20%. which are passed on to the consumer. 2001. it ventured into value retailing by launching the hypermarket chain.000 square feet of land. food products.retail space as over one thousand stores across 71 cities in India and employees over 35. They have introduced the concept of seamless malls in India through the new format Central. they launched Big. In the initial stages we had small format outlets branded Pantaloon Shopee. We started the operations with a trouser brand. Big-Bazaar is India’s first hypermarket in the 27 .Bazaar a hypermarket with over 1.000 products as the first offering in value retailing segment. spread over 30. we decided to have our own retail outlets. On Oct. across different cities in India. 12. which were franchise operations realizing the problems associated with franchise model. 70. Big Bazaar is a chain that stocks all home need products under one roof. Big Bazaar stocks over 200. Pantaloon.000 products that include apparel. We have wide network of Pantaloons stores spread across the country. “Pantaloon’s”. Products are cheaper than the market price by as much as 5 to 60%. By removing inefficiencies from the distribution chain we are able to unleash attractive savings. we launched ‘Big-Bazaar’ as offering in the value retailing segment. home appliances and cosmetics. PRIL was early to realize the potential of the huge middle-class population in India. In 1997.
sunglasses. health & beauty products. integrated structure provides with more compelling reasons to expand the number of private labels. decades of experience& a vertically. food & beverages. crockery. the shop owner can benefit of the in structure & we enjoy assured income without needing to stock inventory. The number of Big-Bazaar stores has increased from 4 in 2002 to 21 Oct 24. dry fruits.000 items. Price is the principal value proposition at these stores. bakery products. glassware. This is achieved by selling wide range of products & through the “Shop-in-Shop” format. 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. bath needs. A big driver of the Big Bazaar is the product variety. As a result. They have also launched private label initiative in Big-Bazaar. Pantaloons sourced its products through ‘Consolidators. baggage We believe this is a win-win situation as the customer is assured of product availability. grocery. computer accessories. stationary. ladies accessories. clocks.Bazaar comprises shops that stocks medicines. watches. home needs. electronics infant necessities. home furnishings. Understanding of the apparel industrial. Big-Bazaar provides more than 2. 2005. watches.00. kitchen needs. We have launched a full range of accessories to supplement the apparel business including imitation jewellery. These consolidators were responsible for procuring quality goods at the 28 . stationary. electronics & white goods which are sold at a discount to the maximum retail price.food. a typical Big. optical accessories.’ There was a consolidator for each product category. toys. household appliances. mobile phones etc… Analysts attribute the success of PRIL to cheaper sourcing of products and lower distribution cost. Also the shop-in-shop offering is able to increase the customer traffic in to the stores.discount store format. readymade garments. camera rolls. utensils.
SECTION DESCRIPTION) • WOOLEN CLOTHS FOR KIDS 29 . and as a result the distribution cost could be slashed as no intermediates were involved. The consolidator directly dealt with manufacturers. etc. Big Bazaar also held events such as ‘Kitchen Mela’. In addition to discounts on products through the year. LAY OUT OF BIG BAZAAR OUTLET: • • • • • • • HELP DESK KIDS ACCESSORIES JACKETS BABA SUITS LADIES TOPS TRIAL ROOM PILLARS USED FOR DISPLAYING INFORMATION (SIZE CHART. and were paid commissions on their sale at the store. to attract customers. ‘Trouser Mela’.cheapest possible price.
• • • • • • • • • • • • • • • • • • • • • • WINTER WEAR KIDS CASUAL WEAR KIDS JEANS AND SHORTS INFANT SHIRTS AND T-SHIRTS MEN ACCESSORIES – SUNGLASSES. CARPETS) MEN FORMAL SHIRTS MEN TROUSERS 30 . WRIST WATCHES ETC SOFT TOYS HOME DECORATIVE ITEMS MUSIC COUNTER LADIES ETHINIC LADIES WESTERN LADIES FORMALS (OFFICE WEAR) LADIES ACCESSORIES – LINGERIES LADIES PERFUMERIES LADIES COSMETICS LUGGAGE FOOTWEAR SPORTS SCHEME BASED PROMOTIONAL ITEMS CASH COUNTER HOME FURNISHING (CURTAIN CLOTHS.
• • • MEN SUITS AND BLAZERS MEN FABRICS MEN ETHINICS 31 .
Mr. Managing Director Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group Chief Executive Officer of Future Group. Mr. retail stores operations. is an engineer by training and is a graduate of the Indian Institute of Management. Wholetime Director Gopikishan Biyani. Gopikishan Biyani. is a commerce graduate and has more than twenty years of experience in the textile business. he was the CEO of Globus. 34 . He has been instrumental in the implementation of the various new retail formats. Prior to joining Pantaloon Retail. Kishore Biyani.BOARD OF DIRECTORS Mr. IT and exports. Rakesh Biyani. Director Ved Prakash Arya. Ahmedabad. Wholetime Director Rakesh Biyani. is a commerce graduate and has been actively involved in category management. Ved Prakash Arya. Mr.
Chennai and Bangalore. He is on the Board of several Public Limited Companies. 1999. holds a doctorate from IIT. Doreswamy. O. including Indian Petrochemicals Corporation Ltd. holds a Bachelor of Engineering from University of Oklahoma and is a Director. Independent Director Shri Shailesh Haribhakti. He has over 24 years of rich experience in the textiles and garment industry and was instrumental in the setting up of NIFT centres in Delhi. Independent Director S. Koshy.. Independent Director Anju Poddar. Bala Deshpande. Chartered Accountants and past president of Indian merchant Chambers. Independent Director 35 . D O Koshy. Mr. He is the Deputy Managing Partner of Haribhakti & Co. Independent Director D. Delhi and is the Director of National Institute of Design (NID). Ms.. She also serves on the board of Maharishi Commerce Ltd and Samay Books Ltd. Dr. Cost Accountant. Anju Poddar. Hyderabad chapter.Mr. NIFT. is a former Chairman and Managing Director of Central Bank of India and serves on the board of DSP Merrill Lynch Trustee Co and Ceat Limited. Ambuja Cement Eastern Ltd. Ms. and a Certified Internal Auditor. Ahmedabad. He is a renowned consultant specializing in international marketing and apparel retail management. etc. S Doreswamy. Shailesh Haribhakti. is a Chartered Accountant. He is on the Board of Company since June 1.
Independent Director Anil Harish. Associates & Solicitors and an LLM from University of Miami. 36 . and also serves on the boards of Deccan Aviation. Unitech. Welspun India and Indus League Clothing Ltd. Mr. Nagarjuna Construction. Anil Harish. is Independent Director. is the partner of DM Harish & Co. IndusInd Bank and Hinduja TMT. Pantaloon Retail (India) Ltd.Bala Deshpande. He also serves on the board of Mahindra Gesco.
ORGANIZATIONAL CHART 37 .
Max. E-Zone etc. Steel junction. In orbit Lifestyle International-Lifestyle. The other three groups are focusing either on perishables and groceries. The Mahindra group is the fourth large Indian business group to enter the business of retail after Reliance Industries Ltd. Fashion Station. The Tata Group-Formats: Westside. Hyper City. and Titan Industries with World of Titans showrooms. the Aditya Birla Group. Star India Bazaar.MAJOR COMPETITORS The low-intensity entry of the diversified Mahindra Group into retail is unique because it plans to focus on lifestyle products. K Raheja Corp Group-Formats: Shoppers’ Stop. Spencer’s Hyper. Fun City and International Franchise brand stores. Central. Depot. and Bharti Enterprises Ltd. Crossword. Landmark. Spencer’s Super. Food Bazaar. Tanishq outlets. Pyramid Retail-Formats: Pyramid Megastore. aLL. Brand Factory. Chroma. or a range of products. RPG Retail-Formats: Music World. Daily & Fresh Pantaloon Retail-Formats: Big Bazaar. Books & Beyond. Pantaloons. Home Centre. or both. TruMart Nilgiri’s-Formats: Nilgiri's’ supermarket chain 39 .
Trinethra.Formats: Fabmall supermarket chain and Fabcity hypermarket chain Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out Reliance Retail-Formats: Reliance Fresh Reliance ADAG Retail-Format: Reliance World German Metro Cash & Carry Shoprite Holdings-Formats: Shoprite Hyper 40 .Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.
forming about 55% of the country’s population. service and of course the discounts Big Bazaar offers to customers. India-1 is the Upper middle class. which is struggling for the existence. Serving to this India-1 is India-2. There are some very good reasons and learning lessons for all those who aspire to earn from the buying potential of swelling middle class of India. even though the comparison is out-of-place and unnecessary. maid servants etc. who have very meager salaries and live a hand-to-mouth existence. cleaners. The third part is the balance 31% of India-3. The Kirana shops which sell goods.PROJECT FINDINGS SUCCESS OF BIG BAZAAR – THE CULTURE OF UNORGANIZED 7 P’s OF BIG BAZAAR Big Bazaar has received great success on its own steam and can be called our own home grown “India’s Wal-mart”. do not offer the choice. ambience. etc. Some of the reasons are: 1) Big Bazaar has given freedom of choice to those who did not have it in their life Big Bazaar’s founder Kishore Biyani has popularized the very logical categorization of India in 3 divisions. peons. about 14% of the population that is the actual consuming class. These are drivers. Big Bazaar gave 41 .
touch and feel them. compare and then decide to buy. Big Bazaar has understood it clearly and others have not 42 . such choice is really convenient and facilitating the buyers. This choice is one very important reason for Big Bazaar’s success. Observe Big Bazaar’s communication. we observe any of the advertisements of Big Bazaar competitors.choice. It offers a very wide range of goods required for daily needs. 2) Big Bazaar connects with the masses effectively The communication of brand Big Bazaar is sharply focused and to-the-point. Isse Sasta Aur Accha Kahin Nahin Saal Ka Sabse Sasta Din Hafte ka Sabse Sasta Din Sell your Bhangar at great rates Purana Do Naya Lo… Badal Dalo Stall ke Bhaav Balcony Chane ke Bhaav Kaju Paise Jodo Kaam Aayenge All this smart communication has worked wonders. Their tag lines are still in English. This Angrez attitude does not connect with Indians. With the plethora of FMCG items occupying the shelves of stores. A freedom to choose. Today also. Big Bazaar talks in local language. Customers can have a look.
2) Big Bazaar has understood changes reshaping India very well With increasing urbanization. but not overtly smart. 1) Big Bazaar has understood its target customer very well “If you go to a super store in any mall. In villages. Big Bazaar is perceived as a store which knows India and Indians well. we may find some very smart boys and girls greeting us. If they are greeted by people smarter than them. 43 . Somwaari Bazaar.g. So. In such mandi set up. This is one very smart strategy of Big Bazaar and it reflects its deep understanding of the customer psyche. At Big Bazaar. The customer coming to Big Bazaar is of the middle class. They are dressed much well than me. because they are so much better looking than me.yet woken up to this simple fact. This is very practical. Ravivaar Bazaar etc. Big Bazaar has ensured that customers are not made to feel small by overbearing staff members. Its communication has been successful in achieving this objective. but in nearby towns there are weekly ‘mandi’ e. giving Big Bazaar a clear. see. The customers don’t get frightened by their style. but people like me sometimes get frightened by these fine and smart people. They speak so much better than me. one gets to look. they feel uncomfortable. I get put off by all this and hence avoiding such stores who have very smart people greeting me”. Budhwaaar Bazaar. This may be good for some. more and more people are migrating to cities from villages. distinctive position in customer’s mind. the staff is helpful. there are no big stores.
farm products. And I think. Kishore Biyani and Big Bazaar have succeeded in getting to the true understanding of Indian middle class. The mythical 50 Crore Indian middle class is a part of many smart projections of world leader retail giants willing to enter India. But. P&G. They had to ask for what they want and get away from there. LG. toys. This a very important learning lesson for all those who wish to succeed in retail in India. clean. HP and around more than 500 brands. and that too.Cola. Samsung. Coca. HUL. furniture. etc of various brands like Levis. ITC. Nokia.touch and feel all the ware that is for sale. air conditioned ambiance with helpful staff to support the customer. Allen Solly. 44 . The current demographic shifts happening in India are understood very well by Big Bazaar and are implemented profitably. this is profoundly important from a customer’s point of view.. child care. food. in elegant. When they come to cities. they had to buy from small kirana shops. It gives them the same open display of all that is available. This is what the village customers are habituated to do. Pepsi. Big Bazaar recreates that mandi environment for them. 3) Various Product offerings: Big Bazaar offers a wide range of products which range from apparels. where the goods were not displayed freely.
PRICING TACTICS The pricing objective at Big Bazaar is to get “Maximum Market Share”. or comparison shopping. Promotional Pricing: 45 . waiting for discount promotions. Pricing at Big Bazaar is based on the following techniques: Value Pricing (EDLP – Every Day Low pricing): Big Bazaar promises consumers the lowest available price without coupon clipping.
Rs. Big Bazaar lays a lot of importance on bundling. Currently Big Bazaar operates in over 34 cities and towns across India with 116 stores. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22) 5kg oil + 5kg rice + 5kg sugar for Rs 599 PLACE The Big Bazaar stores are operational across three formats — hypermarkets spread over 40. 49.000 sq ft.00045. etc.g. e. Wednesday Bazaar Bundling: It refers to selling combo-packs and offering discount to customers. Gudi Padva. The combo-packs add value to customer and lead to increased sales. and Durga Pooja). These stores 46 .000-20. which is aggressively used by Big Bazaar.Big Bazaar offers financing at low interest rate. difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail. The concept of psychological discounting (Rs. Big Bazaar also caters on Special Event Pricing (Close to Diwali.g. 99.) is also used to attract customers. Differentiated Pricing: Differentiated pricing i.000 sq ft and the Super Centers set up over 1 lakh sq ft. e.e. Apart from the Metros these stores are also doing well in the tier II cities. the Express format over 15.
futurebazaar.are normally located in high traffic areas. In order to gain a competitive advantage Big Bazaar has also launched a website www.com. PROMOTION The various promotion schemes used at Big Bazaar include: • “Saal ke sabse saste 3 din” 47 . which helps customers to orders products online which will be delivered to their doorstep. Mr. Big Bazaar aims at starting stores in developing areas to take an early advantage before the real estate value booms. This helps in saving a lot of time of its customers. Biyani is planning to invest around Rs 350 crore over the next one year expansion of Big Bazaar.
good ambience.• • • • • • Hafte ka sabse sasta din “Wednesday bazaar” Exchange Offers “Junk swap offer” Future card(3% discount) Shakti card Advertisement (print ad.000 products at 6 to 60 % discount. Make a smart choice!” “Shoppers! Stop. 70.aSide. Close to two lakh products are available under one roof at prices lower by 2 to 60 per cent over the corresponding market prices. the first of its kind in India. Shoppers stop and Lifestyle. Make a smart choice!” • “Is se sasta aur acha kahin nahin” Big bazaar is the company’s foray into the world of hypermarket discount stores.S Dhoni and Asin Big Bazaar has come up with 3 catchy lines written on hoardings taking on biggies like Westside. TV ad. radio) Brand endorsement by M. implicit guarantees and continuous discount programs have helped in changing the face of the Indian retailing industry. Make a smart choice!” “Change your Lifestyle. 48 . A leading foreign broking house compared the rush at Big Bazaar to that of a local suburban train. The high quality of service. They are: • • • “Keep West. Price and the wide array of products are the USP’s in Big Bazaar. What's in store for you at Big Bazaar? 1.
masalas. to provide the much important ‘touch & feel’ factor which Indian housewives are used to in the local bazaar. With unbeatable prices and vast variety (there are 42 varieties of rice on sale). Fruits and vegetables are sold at prices comparable to wholesale prices. Touch and Feel the products. tea. spices. jams. The company has recently launched an aggressive private label programme with its own brands of tea. FMCG products. 49 . pulses.000 stock keeping units which cover grocery. rice wheat etc. besides fruits and vegetables. • "Ab Ghar Chalaana kitna Aasaan”: This positioning platform of Food Bazaar is evident from the higher discounts and the wholesale price-points which is below MRP. Food Bazaar replicates a local ‘mandi’. Food Bazaar represents the company’s entry into food retail and is targeted across all classes of population. salt. Range and Price associated with large format stores and also the comfort to See. juices. coupled with an international shopping experience.At Big Bazaar. pulses. All products are sold below MRP and discounts range between 2% to 20%. • FOOD BAZAAR: WHOLE SALE PRICES: Food Bazaar’s core concept is to create a blend of a typical Indian Bazaar and International supermarket atmosphere with the objective of giving the customer all the advantages of Quality. milk products. Food Bazaar has proved to be a hit with customers all over the country. Food Bazaar has over 50. sugar. ketchups etc. you will get a wide range of products at 6 – 60 % lower than the corresponding market price.
makes for a customer-friendly atmosphere. Use scenario planning as a tool for quick decision making multiple counters for payment. staff at store to keep baggage and security guards at every gate.PEOPLE • • • • Well trained staff at stores to help people with their purchases Employ close to 10. 56 . Well-dressed staff improves the overall appearance of store.000 people and employ around 500 more per month.
1000. 57 .PROCESS Big Bazaar places a lot of importance on the process right from the purchase to the delivery of goods. There are multiple counters where bill can be generated for purchases made. When customers enter the stores they can add the products they which to purchase in their trolley from the racks. Big Bazaar also provides delivery of products over purchases of Rs.
PHYSICAL EVIDENCE Products in Big Bazaar are properly stacked in appropriate racks. There are different departments in the store which display similar kind of products. Throughout the store there are 58 .
its price and offers. Big Bazaar stores are normally ‘U shaped’ and well planned & designed. 59 .boards/written displays put up which help in identifying the location of a product. Moreover boards are put up above the products which give information about the products.
The 3-C determines change. or like "I think they will continue to be priced lower than others. It also becomes an important source for penetration of new segments. A consistent and sustained marketing on price inevitably generates expressions from consumers like. there is a bit of skepticism over the quality of the product owing to the lower price of the product. confidence and consumption.leads to the phenomenon of "Price leadership". “change and confidence is leading to rise in consumption”. Big Bazaar targeted exactly this.STRATEGY OF BIG BAZAAR In a hyper competitive market where the basic feature of almost all the products is the same. the focus inevitably shifts to price. "I think they are the ones who offer maximum value for money ". and according to this theory.They divided Indian customers into 3 categories: India one: 61 . Big bazaar is based on 3-C theory of Kishore Biyani." While at an initial phase. consistently marketing it as a discount brand and delivering value to the consumer . Price is an important vehicle for capturing customers from the rival product's consumer base.
Over a period of time consumers are bound to shift to B. India three: • • • • Struggling class. etc For every India One there are at least India Two and have 55% of Indian population. remaining population of India. Let us consider a simple example. Initial focus of big bazaar India two: • • Serving class which includes people like drivers. Let A be the market leader and B be the new consistent discount player. Cannot afford to inspire for better living. Need cannot be addressed by current business model. because B offers the same product at a much lower rate. Upper middle class and most of the customers have substantial disposable income. constitutes only 14% of Indian population.while A does retain its initial advantages of economies of scale and scope.• • • Consuming class. office peons. it is bound to follow B at some point of time by lowering its prices in order to 62 . house-hold helps. The potential customers of big bazaar are India One and India Two.
The next step is to focus on just the services needed from the product by a vast majority of the consumer base and eliminating most of the peripheral services thus reducing their overall costs and providing them the scope to ensure greater discounts. What it led to is Air Deccan was offering fares as low as INR 1000 at a time when the market leader (Jet Airways) was offering fares in the tune of INR 5000 for similar travel. Unlike other players who focused on the quality of service offered to consumers. For example. But how does B deliver its product at a consistent discount over others? This is what Big Bazaar consistently does.( Air Deccan has now been acquired by Kingfisher airlines and no longer operates as a low cost airline) Overall the strategy of the discount player like Big Bazaar is 3 fazed: • • Identify the area of need Reduce costs by reducing peripheral services 63 . Such a strategy quickly led to Air Deccan emerging as the pioneer of low cost flying in the Indian skies. No great support staff and little in-flight support. The very initial strategy of any discount player is to differentiate a product into two distinct segments: necessary services and peripheral (or additional ) services.retain market share. the basic focus of Air Deccan. the discount aviation player in the Indian skies just focused on one simple thing: Making the traveler reach his destination. Air Deccan just focused on the need for flying: No free meals.
How has that been possible? The answer is simple. The discount strategy product does not claim to be a better product than the high priced product. the Indian discount retail chain. as it is stripped of most of the peripheral services that the high priced product offers. it will look something like this: 64 . which have been deemed important to the masses. it creates an increased focus on those parameters. If we tend to compare graphically the strategy of traditional vs discount players. allowing for an improved service in those areas. But it still succeeds because it concentrates just on the services that are needed and hence due to its narrow approach.it focused on its priority: Delivering at the lowest price to the end consumer. Today it is rated as one of the best retail chains in India with an extremely efficient supply chain and a host of private labels of its own. When it first started the concept of discount retailing in India. it was perceived to be supplying defective products. A clear example in this regard can be the example of Big Bazaar. Often consumers tend to believe that a higher quality product is priced higher.• Offer discount and act on the lines of cost leadership The question of a perceived lower quality owing to discount is important here.
but it is undoubtedly better or equal to traditional products on specific key product or service features. Saving is the key to the Indian middle class consumer. That is the major difference in approach in the two strategies. So how can a product be better when it has little additional features? So if the product is not better. whereas for a discount player the focus is on increasing performance with no increase in price. Big Bazaar works on these lines of principles. That's the secret to its success: Value for money! As long as it continues to do so.The traditional players in the market normally tend to increase perceived performance with an increase in price. how can it be a market leader? The discount product might not be better in the strictest sense of the term. The 65 . it will remain a force to reckon with in the competitive market.
had to offer value to the consumer. In India. As the store would offer a large mix of products at a discounted price.store. the concept of Big bazaar was created. which would be created. a typical thought is to seek it from the bazaar. with a large product offering (at times modified to suit local needs) and to offer a good depth and width in terms of range. 66 . the name Big bazaar was finalized. when a customer needs something for the home. The idea was to re-create a complete bazaar. This is true across India. A bazaar is a place where a complete range of products is always available to the consumer. Keeping this in mind.
High Service 68 .
Low Service Low Price High 69 .
SWOT ANALYSIS 70 .
END NOTES 71 .
com Retailing.in Retail seminar.in Organizedretail.co.co.co.References: • • • • • • • Bigbazaar. In Literature review on Big Bazaar.in Wikipedia Google pictures 72 .