DISSERTATION

ON

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

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UNITED WORLD SCHOOL OF BUSINESS HYDERABAD

DECLARATION

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

CERTIFICATE
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

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. 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. I am very thankful to DEAN. MANASA CHAKRAVARTHY for giving me their valuable advice and guidance towards fulfillment of the project For any project to be a success, it is very important to get the right guidance and support which I got from my Faculty Guide Mr. MUSHTAQ AHMED. I express my gratitude to my faculty guide for inspiring me throughout the project.
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Finally I would like to convey my heartiest thanks to all my well wishers for their blessing and co-operation throughout my study.

SANDEEP ANUMANDLA Roll. No. 050101023

TABLE OF CONTENTS

Executive Summary 6 Introduction . 7 Objectives of the Study ... 8 Scope of the Study ... 9 Research Methodology ... 10 About the Industry . 11 16 Organized Retailing 17 19 FUTURE Group .......... 20 22 BIG BAZAAR . 23 33
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Competitors ..... 34 35 Project Findings .. 36 39 7 Ps of BIG BAZAAR 40 51 Conclusion The strategy of BIG BAZAAR .... 52 60 End Notes .. 61

EXECUTIVE SUMMARY

Retailing in India is dominated by Unorganized which constitutes about 90 %. The Organized retailing laid its roots after liberalization and was growing at a rapid pace. It is expected that the percentage of the Organized Retailing will increase to15 % by 2015. 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. 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, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the

Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. The Big Bazaar is one of such organized players in India which is trying to capture the market of unorganized sector. In this report we try to understand Big Bazaars strategies and analyze how it is representing the unorganized culture.

INTRODUCTION

As customers tastes and preferences are changing, the market scenario is also changing from time to time. Todays market scenario is very different from that of the market scenario before 1990. There have been many factors responsible for the changing market scenario. It is the changing tastes and preference of customer which has bought in a change in the market. Income level of the people has changed; life styles and social class of people have completely changed now than that of olden days. There has been a shift in the market demand in todays world. Technology is one of the major factors which is responsible for this paradigm shift in the mark. New generation people are no more dependent on haat market and far off departmental stores. Today we can see a new era in market with the opening up of many departmental stores, hyper
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market, shoppers stop, malls, branded retail outlets and specialty stores. In todays world shopping is not any more tiresome work rather its a pleasant outing phenomenon now.

My study is based on the secondary research on a hypermarket named big bazaar. Big bazaar is a new type of market which came into existence in India since 1994. It is a type of market where various kinds of products are available under one roof at low price. My study is on determining the culture of Unorganized in the Organized sector by its Strategies, Pricing tactics, Marketing activities, Sales people, buying behavior of customers in big bazaar and the satisfaction level of customers in big bazaar.

OBJECTIVES OF THE STUDY

To understand how Big Bazaar represents unorganized culture.

To highlight Big Bazaars pricing tactics. To highlight its marketing and promotional activities.
To identify its competitors.

SCOPE AND IMPORTANCE OF STUDY

The scope of the research is to identify the changing trends in the organized sector. The research is purely based on secondary data, internet research and direct observation. It provides help for further research in the organized retail sector. It aims to understand the skill of the company in the areas like highlighting the culture of unorganized being an organized player. The study

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.

RESEARCH METHODOLOGY

Technology, customers tastes and preferences play a vital role in todays generation. Research Methodology is a set of various methods to be followed to find out various information

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regarding market strata of different products. Research Methodology is required in every industry for acquiring knowledge of their products.

Area of study:
The study is exclusively done in the area of marketing. It is a process requiring care, sophistication, experience, business judgment, and imagination for which there can be no mechanical substitutes.

Research Design:
Exploratory Research. Internet is the tool.

THE RETAIL INDUSTRY

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The Indian consumer could well be crowned King with all economic indicators in the right place. Queuing up for the coronation ceremony is a multitude of global companies that are looking at India as the next consumer market powerhouse. And it seems to be the retail sector that will give the desi consumer royal status. Retailing is the final step in the distribution of merchandise, the last link in supply chain connecting the bulk procedures of commodities to the final consumers. Retailing in India is thoroughly unorganized. 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 - making it one of the five largest in the world. Further, KPMG in a recent report titled `Consumer Markets in India - the next big thing?' has said: "India represents an economic opportunity on a massive scale, both as a global base and a domestic market." The report, however, finds that the next leap in the growth of the consumer market will be spearheaded by the changing dynamics of the retail sector. "Companies expect that the next cycle of change in Indian consumer markets will be the arrival of foreign players in consumer retailing. Although FDI remains highly restricted in retailing, most companies believe that will not be for long," says Deepankar Sanwalka, Executive Director and Head - Consumer Markets, KPMG India. Over the last five years, a number of large business groups such as Tatas, RPG, Rahejas and Piramals has set up stores/malls and built businesses within retail. These include the Rs1.9bn Food World - a leading supermarket chain set up by RPG; the Rahejas Rs1.8bn Shoppers Stop - a multi-brand departmental outlet and the Crossroads Mall set up by the Piramals. While

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many of these initiatives were initially driven by the need to use existing real estate, they are beginning to assume the contours of a serious business today. Fuel retailers, notably BPCL and HPCL are also expanding their presence from fuel retail to grocery and convenience stores. Suitability of location, optimal utilization of real estate, 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. Also, existing family owned businesses are expanding their businesses. The more successful of them are the Nilgiris - a Bangalore base food retailer, Viveks - a 40-year old Chennai based chain selling consumer durables and Narulas - the food chain in North India. Interestingly, manufacturers are also looking for forward integration and are building chains around brands. Brands in apparel, footwear and durables have driven the growth of specialty chains and upgraded existing multi-brand outlet. 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. With Indian GDP expected to grow at 7-8 % in the next coming years, the retail market is expected to touch US $860 billion by 2018. In recent years, this sector has witnessed a lot of interest from both domestic and global players, who have committed investments worth US $30 billion, which will lead to increase in the share of modern retail from the current 4.5% to almost 25% of the total retail market by 2018.

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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, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the

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Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics.

Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of Indias largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the countrys GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry.

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

Although the retail sector in India highly fragmented and consists predominantly of small, independent, owner-managed shops, it happens to be the country's second largest employer after agriculture. The country is currently witnessing a boom in retailing, thanks mainly on account of an increase in the disposable incomes of middle and upper-middle class households. More and more corporate houses, including large real estate companies, are now entering the retail business directly or indirectly. One sign of the modernization of Indian retailing is the rapid growth in the number of specialty malls and theme malls. The Piramals, Tatas, Rahejas, ITC, S. Kumar's, RPG Enterprises, Aerens, Omaxe and mega retailers like Crosswords, Shopper's Stop and Pantaloons along with other foreign single brand outlets have taken the leading organized retailing.

Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These
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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 - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores.

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EMERGENCY OF SPECIALITY RETAILING:

Though organised retailing is still at a nascent stage - accounting for only around two per cent of the $180 billion retail market in India - it is likely to touch 15 per cent by the end of this decade. Four product categories have led the organised retailing wave: foods, apparel, lifestyle products, consumer durables and electronics. In recent times, several theme malls such as Gold Souk (jewellery malls), Wedding Mall, Electronic Mall, Auto Mall, etc catering to specific needs and occasions have been completed or announced. Many top developers are now toying with the idea of developing specialty malls. Specialty malls are already a success in the West, whereas the concept is in its infancy in India. One could venture so far as to say specialty and theme based retailing will drive the growth of organized retailing in India.

ORGAINZED RETAILING

Organized retailing got a leg up during 2004 with the opening of new format stores, rapid growth of existing players, start-up of new-generation shopping malls, the Government's intention of allowing a certain level of foreign direct investment in retail and the formation of a retailers' association. With consumer sentiment positive during most of 2004, it led to substantial spending across a number of categories such as consumer durables, clothing and lifestyle, automobiles and telecom products. At the beginning of this decade, organised retailing
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accounted for a mere $2.9 billion in India. This is only 1.25 per cent of the estimated total retail market. This share has already grown to 2 per cent. Growth projections for retail business vary widely. Some studies estimate that by 2015, the share of organised retail in the retail pie will jump three times to reach 15-16 per cent.

Retail in India is the largest industry accounting for over 13% of the country GDP and around 10% of the employment. Retail industry in India is at the cross road. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. The future is promising the market is growing government policies are becoming more favorable and emerging technology and facilitating operations.

BENEFITS OF RETAILING
Retailers play a major role in the transfer of goods and services from the manufactures to the end users. In this process retailer delivers many benefits to customers, manufactures, wholesalers, and the economy.

Benefits to customers:

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Retailers act as a buying agent for consumers. They perform various business activities that increase the value of the goods and the service they sell to the end users. As buying agents a retailer performs various activities to satisfy the end consumers. 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, which could be reinvested in production. Thus retailers play major role in smoothing out the variation between the production and sales of the manufactures product.

Benefits to the economy: The retailing business is the largest privet industry in the world with turnover of US $6.6 trillion. Retailing plays a crucial role in the management of world economy and retailers constitute a tenth of the fortune 500 companies. In INDIA retailing accounts for over 10% GDP and around 8% of the employment only next to the agriculture industry.
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FUTURE GROUP

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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 countrys 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 groups 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 groups 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.
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The groups 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 Talwalkars, Blue Foods and Liberty Shoes. Future Groups 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.

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CORE VALUES

Indian ness: confidence in ourselves. Leadership: to be a leader, both in thought and business. Respect & Humility: to respect every individual and be humble in our conduct. Introspection: leading to purposeful thinking. Openness: to be open and receptive to new ideas, knowledge and information. Valuing and Nurturing Relationships: to build long-term relationships. Simplicity & Positivity: Simplicity and Positivity in our thought, business Action. Adaptability: to be flexible and adaptable, to meet challenges. Flow: to respect and understand the universal laws of nature.

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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. 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.Apparel, Footwear, Toys, Household Appliances and more. The ambience and customer care adds on to the shopping experience. The first set of Big bazaar store open in 2001 in Kolkata, Hyderabad and Bangalore. The headquartered in Mumbai the company operates over 12 million square feet of

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retail space as over one thousand stores across 71 cities in India and employees over 35,000 people. Big Bazaar comes under the Pantaloon Retail India Limited (PRIL). PRIL was early to realize the potential of the huge middle-class population in India. We started the operations with a trouser brand, Pantaloon. In the initial stages we had small format outlets branded Pantaloon Shopee, which were franchise operations realizing the problems associated with franchise model, we decided to have our own retail outlets. They launched the own retail store, Pantaloons. In 1997, they launched Big- Bazaar a hypermarket with over 1, 70,000 products as the first offering in value retailing segment. They have introduced the concept of seamless malls in India through the new format Central. We have wide network of Pantaloons stores spread across the country. Hence, apart from retailing lifestyle products, it ventured into value retailing by launching the hypermarket chain. Big Bazaar is a chain that stocks all home need products under one roof; spread over 30,000 square feet of land, across different cities in India. It has been positioned as Is se sasta aur acha kahin nahi, (Nothing cheaper and better anywhere) indicating the value of stores. Big Bazaar stocks over 200,000 products that include apparel, food products, home appliances and cosmetics. Products are cheaper than the market price by as much as 5 to 60%. Apparels are cheaper by 25 to 60%while the price difference on the other products varies between 5 to 20%. On Oct. 12, 2001, we launched Big-Bazaar as offering in the value retailing segment. By removing inefficiencies from the distribution chain we are able to unleash attractive savings, which are passed on to the consumer. Big-Bazaar is Indias first hypermarket in the
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discount store format. Big-Bazaar provides more than 2,00,000 items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationary, electronics & white goods which are sold at a discount to the maximum retail price. Price is the principal value proposition at these stores. A big driver of the Big Bazaar is the product variety. This is achieved by selling wide range of products & through the Shop-in-Shop format. As a result, a typical Big- Bazaar comprises shops that stocks medicines, optical accessories, camera rolls, bakery products, dry fruits, crockery, glassware, health & beauty products, ladies accessories, electronics infant necessities, watches, clocks, computer accessories, food & beverages, stationary, readymade garments, household appliances, home furnishings, baggage We believe this is a win-win situation as the customer is assured of product availability, the shop owner can benefit of the in structure & we enjoy assured income without needing to stock inventory. Also the shop-in-shop offering is able to increase the customer traffic in to the stores. 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. The number of Big-Bazaar stores has increased from 4 in 2002 to 21 Oct 24, 2005. They have also launched private label initiative in Big-Bazaar. Understanding of the apparel industrial, decades of experience& a vertically, integrated structure provides with more compelling reasons to expand the number of private labels. We have launched a full range of accessories to supplement the apparel business including imitation jewellery, sunglasses, watches, mobile phones etc Analysts attribute the success of PRIL to cheaper sourcing of products and lower distribution cost. Pantaloons sourced its products through Consolidators. There was a consolidator for each product category. These consolidators were responsible for procuring quality goods at the
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cheapest possible price, and were paid commissions on their sale at the store. The consolidator directly dealt with manufacturers, and as a result the distribution cost could be slashed as no intermediates were involved. In addition to discounts on products through the year, Big Bazaar also held events such as Kitchen Mela, Trouser Mela, etc. to attract customers.

LAY OUT OF BIG BAZAAR OUTLET: HELP DESK KIDS ACCESSORIES JACKETS BABA SUITS LADIES TOPS TRIAL ROOM PILLARS USED FOR DISPLAYING INFORMATION (SIZE CHART, SECTION DESCRIPTION) WOOLEN CLOTHS FOR KIDS
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WINTER WEAR KIDS CASUAL WEAR KIDS JEANS AND SHORTS INFANT SHIRTS AND T-SHIRTS MEN ACCESSORIES SUNGLASSES, 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, CARPETS) MEN FORMAL SHIRTS MEN TROUSERS
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MEN SUITS AND BLAZERS MEN FABRICS MEN ETHINICS

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BOARD OF DIRECTORS

Mr. Kishore Biyani, Managing Director Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group Chief Executive Officer of Future Group. Mr. Gopikishan Biyani, Wholetime Director Gopikishan Biyani, is a commerce graduate and has more than twenty years of experience in the textile business. Mr. Rakesh Biyani, Wholetime Director Rakesh Biyani, is a commerce graduate and has been actively involved in category management; retail stores operations, IT and exports. He has been instrumental in the implementation of the various new retail formats. Mr. Ved Prakash Arya, Director Ved Prakash Arya, is an engineer by training and is a graduate of the Indian Institute of Management, Ahmedabad. Prior to joining Pantaloon Retail, he was the CEO of Globus.
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Mr. Shailesh Haribhakti, Independent Director Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a Certified Internal Auditor. He is the Deputy Managing Partner of Haribhakti & Co., Chartered Accountants and past president of Indian merchant Chambers. He is on the Board of several Public Limited Companies, including Indian Petrochemicals Corporation Ltd., Ambuja Cement Eastern Ltd. etc. He is on the Board of Company since June 1, 1999. Mr. S Doreswamy, Independent Director S. Doreswamy, 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. Dr. D O Koshy, Independent Director D. O. Koshy, holds a doctorate from IIT, Delhi and is the Director of National Institute of Design (NID), Ahmedabad. 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, Chennai and Bangalore. He is a renowned consultant specializing in international marketing and apparel retail management. Ms. Anju Poddar, Independent Director Anju Poddar, holds a Bachelor of Engineering from University of Oklahoma and is a Director, NIFT, Hyderabad chapter. She also serves on the board of Maharishi Commerce Ltd and Samay Books Ltd. Ms. Bala Deshpande, Independent Director
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Bala Deshpande, is Independent Director, Pantaloon Retail (India) Ltd. and also serves on the boards of Deccan Aviation, Nagarjuna Construction, Welspun India and Indus League Clothing Ltd. Mr. Anil Harish, Independent Director Anil Harish, is the partner of DM Harish & Co. Associates & Solicitors and an LLM from University of Miami. He also serves on the board of Mahindra Gesco, Unitech, IndusInd Bank and Hinduja TMT.

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ORGANIZATIONAL CHART

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MAJOR COMPETITORS

The low-intensity entry of the diversified Mahindra Group into retail is unique because it plans to focus on lifestyle products. The Mahindra group is the fourth large Indian business group to enter the business of retail after Reliance Industries Ltd, the Aditya Birla Group, and Bharti Enterprises Ltd. The other three groups are focusing either on perishables and groceries, or a range of products, or both. RPG Retail-Formats: Music World, Books & Beyond, Spencers Hyper, Spencers Super, Daily & Fresh Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc. The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark, and Titan Industries with World of Titans showrooms, Tanishq outlets, Chroma. K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, In orbit Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores. Pyramid Retail-Formats: Pyramid Megastore, TruMart Nilgiris-Formats: Nilgiri's supermarket chain
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Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain. 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

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PROJECT FINDINGS SUCCESS OF BIG BAZAAR THE CULTURE OF UNORGANIZED 7 Ps OF BIG BAZAAR
Big Bazaar has received great success on its own steam and can be called our own home grown Indias Wal-mart, even though the comparison is out-of-place and unnecessary. 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. Some of the reasons are:

1) Big Bazaar has given freedom of choice to those who did not have it in their life

Big Bazaars founder Kishore Biyani has popularized the very logical categorization of India in 3 divisions. India-1 is the Upper middle class, about 14% of the population that is the actual consuming class. Serving to this India-1 is India-2, forming about 55% of the countrys population. These are drivers, peons, cleaners, maid servants etc. etc. who have very meager salaries and live a hand-to-mouth existence. The third part is the balance 31% of India-3, which is struggling for the existence. The Kirana shops which sell goods, do not offer the choice, ambience, service and of course the discounts Big Bazaar offers to customers. Big Bazaar gave
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choice. A freedom to choose. It offers a very wide range of goods required for daily needs. Customers can have a look, touch and feel them, compare and then decide to buy. With the plethora of FMCG items occupying the shelves of stores, such choice is really convenient and facilitating the buyers. This choice is one very important reason for Big Bazaars success.

2) Big Bazaar connects with the masses effectively

The communication of brand Big Bazaar is sharply focused and to-the-point. Big Bazaar talks in local language. Observe Big Bazaars communication.

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. Today also, we observe any of the advertisements of Big Bazaar competitors. Their tag lines are still in English. This Angrez attitude does not connect with Indians. Big Bazaar has understood it clearly and others have not
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yet woken up to this simple fact, giving Big Bazaar a clear, distinctive position in customers mind. Big Bazaar is perceived as a store which knows India and Indians well. Its communication has been successful in achieving this objective.

1) Big Bazaar has understood its target customer very well

If you go to a super store in any mall, we may find some very smart boys and girls greeting us. This may be good for some, but people like me sometimes get frightened by these fine and smart people, because they are so much better looking than me. They speak so much better than me. They are dressed much well than me. I get put off by all this and hence avoiding such stores who have very smart people greeting me. At Big Bazaar, the staff is helpful, but not overtly smart. The customers dont get frightened by their style. This is very practical. The customer coming to Big Bazaar is of the middle class, If they are greeted by people smarter than them, they feel uncomfortable. So, Big Bazaar has ensured that customers are not made to feel small by overbearing staff members. This is one very smart strategy of Big Bazaar and it reflects its deep understanding of the customer psyche.

2) Big Bazaar has understood changes reshaping India very well

With increasing urbanization, more and more people are migrating to cities from villages. In villages, there are no big stores, but in nearby towns there are weekly mandi e.g. Somwaari Bazaar, Budhwaaar Bazaar, Ravivaar Bazaar etc. In such mandi set up, one gets to look, see,
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touch and feel all the ware that is for sale. This is what the village customers are habituated to do. When they come to cities, they had to buy from small kirana shops, where the goods were not displayed freely. They had to ask for what they want and get away from there. Big Bazaar recreates that mandi environment for them. It gives them the same open display of all that is available, and that too, in elegant, clean, air conditioned ambiance with helpful staff to support the customer.. And I think, this is profoundly important from a customers point of view. The current demographic shifts happening in India are understood very well by Big Bazaar and are implemented profitably. The mythical 50 Crore Indian middle class is a part of many smart projections of world leader retail giants willing to enter India. But, Kishore Biyani and Big Bazaar have succeeded in getting to the true understanding of Indian middle class. This a very important learning lesson for all those who wish to succeed in retail in India.

3) Various Product offerings:

Big Bazaar offers a wide range of products which range from apparels, food, farm products, furniture, child care, toys, etc of various brands like Levis, Allen Solly, Pepsi, Coca- Cola, HUL, ITC, P&G, LG, Samsung, Nokia, HP and around more than 500 brands.

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PRICING TACTICS
The pricing objective at Big Bazaar is to get Maximum Market Share. 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, waiting for discount promotions, or comparison shopping. Promotional Pricing:

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Big Bazaar offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is also used to attract customers. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja). Differentiated Pricing: Differentiated pricing i.e. difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which is aggressively used by Big Bazaar. e.g. Wednesday Bazaar Bundling: It refers to selling combo-packs and offering discount to customers. The combo-packs add value to customer and lead to increased sales. Big Bazaar lays a lot of importance on bundling. e.g. 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 40,00045,000 sq ft, the Express format over 15,000-20,000 sq ft and the Super Centers set up over 1 lakh sq ft. Currently Big Bazaar operates in over 34 cities and towns across India with 116 stores. Apart from the Metros these stores are also doing well in the tier II cities. These stores

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are normally located in high traffic areas. Big Bazaar aims at starting stores in developing areas to take an early advantage before the real estate value booms. Mr. Biyani is planning to invest around Rs 350 crore over the next one year expansion of Big Bazaar. In order to gain a competitive advantage Big Bazaar has also launched a website www.futurebazaar.com, which helps customers to orders products online which will be delivered to their doorstep. This helps in saving a lot of time of its customers.

PROMOTION
The various promotion schemes used at Big Bazaar include: Saal ke sabse saste 3 din
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Hafte ka sabse sasta din Wednesday bazaar Exchange Offers Junk swap offer Future card(3% discount) Shakti card Advertisement (print ad, TV ad, radio) Brand endorsement by M.S Dhoni and Asin Big Bazaar has come up with 3 catchy lines written on hoardings taking on biggies like Westside, Shoppers stop and Lifestyle. They are:

Keep West- aSide. Make a smart choice! Shoppers! Stop. Make a smart choice! Change your Lifestyle. Make a smart choice!

Is se sasta aur acha kahin nahin

Big bazaar is the companys foray into the world of hypermarket discount stores, the first of its kind in India. Price and the wide array of products are the USPs in Big Bazaar. 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 high quality of service, good ambience, implicit guarantees and continuous discount programs have helped in changing the face of the Indian retailing industry. A leading foreign broking house compared the rush at Big Bazaar to that of a local suburban train. What's in store for you at Big Bazaar? 1, 70,000 products at 6 to 60 % discount.

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At Big Bazaar, you will get a wide range of products at 6 60 % lower than the corresponding market price, coupled with an international shopping experience. FOOD BAZAAR: WHOLE SALE PRICES:

Food Bazaars 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, Range and Price associated with large format stores and also the comfort to See, Touch and Feel the products. The company has recently launched an aggressive private label programme with its own brands of tea, salt, spices, pulses, jams, ketchups etc. With unbeatable prices and vast variety (there are 42 varieties of rice on sale), Food Bazaar has proved to be a hit with customers all over the country.
"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 represents the companys entry into food retail and is targeted across all classes of population. Food Bazaar replicates a local mandi, to provide the much important touch & feel factor which Indian housewives are used to in the local bazaar. Food Bazaar has over 50,000 stock keeping units which cover grocery, FMCG products, milk products, juices, tea, sugar, pulses, masalas, rice wheat etc, besides fruits and vegetables. All products are sold below MRP and discounts range between 2% to 20%. Fruits and vegetables are sold at prices comparable to wholesale prices.

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PEOPLE
Well trained staff at stores to help people with their purchases Employ close to 10,000 people and employ around 500 more per month. Well-dressed staff improves the overall appearance of store. 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, makes for a customer-friendly atmosphere.

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PROCESS
Big Bazaar places a lot of importance on the process right from the purchase to the delivery of goods. When customers enter the stores they can add the products they which to purchase in their trolley from the racks. There are multiple counters where bill can be generated for purchases made. Big Bazaar also provides delivery of products over purchases of Rs. 1000.

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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
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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, its price and offers. Big Bazaar stores are normally U shaped and well planned & designed.

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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. Price is an important vehicle for capturing customers from the rival product's consumer base. It also becomes an important source for penetration of new segments. Big Bazaar targeted exactly this. A consistent and sustained marketing on price inevitably generates expressions from consumers like, "I think they are the ones who offer maximum value for money ", or like "I think they will continue to be priced lower than others." While at an initial phase, there is a bit of skepticism over the quality of the product owing to the lower price of the product, consistently marketing it as a discount brand and delivering value to the consumer - leads to the phenomenon of "Price leadership".

Big bazaar is based on 3-C theory of Kishore Biyani. The 3-C determines change, confidence and consumption, and according to this theory, change and confidence is leading to rise in consumption.They divided Indian customers into 3 categories:

India one:
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Consuming class, constitutes only 14% of Indian population. Upper middle class and most of the customers have substantial disposable income. Initial focus of big bazaar

India two: Serving class which includes people like drivers, house-hold helps, office peons, etc For every India One there are at least India Two and have 55% of Indian population.

India three: Struggling class, remaining population of India. Cannot afford to inspire for better living. Need cannot be addressed by current business model. The potential customers of big bazaar are India One and India Two.

Let us consider a simple example. Let A be the market leader and B be the new consistent discount player. Over a period of time consumers are bound to shift to B, because B offers the same product at a much lower rate- while A does retain its initial advantages of economies of scale and scope, it is bound to follow B at some point of time by lowering its prices in order to

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retain market share. But how does B deliver its product at a consistent discount over others? This is what Big Bazaar consistently does.

The very initial strategy of any discount player is to differentiate a product into two distinct segments: necessary services and peripheral (or additional ) services. 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. For example, 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. Unlike other players who focused on the quality of service offered to consumers, Air Deccan just focused on the need for flying: No free meals, No great support staff and little in-flight support. 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. Such a strategy quickly led to Air Deccan emerging as the pioneer of low cost flying in the Indian skies.( 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
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Offer discount and act on the lines of cost leadership

The question of a perceived lower quality owing to discount is important here. Often consumers tend to believe that a higher quality product is priced higher. The discount strategy product does not claim to be a better product than the high priced product, as it is stripped of most of the peripheral services that the high priced product offers. But it still succeeds because it concentrates just on the services that are needed and hence due to its narrow approach, it creates an increased focus on those parameters, which have been deemed important to the masses, allowing for an improved service in those areas. A clear example in this regard can be the example of Big Bazaar, the Indian discount retail chain. When it first started the concept of discount retailing in India, it was perceived to be supplying defective products. 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. How has that been possible? The answer is simple- it focused on its priority: Delivering at the lowest price to the end consumer.

If we tend to compare graphically the strategy of traditional vs discount players, it will look something like this:

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The traditional players in the market normally tend to increase perceived performance with an increase in price, whereas for a discount player the focus is on increasing performance with no increase in price. 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, how can it be a market leader? The discount product might not be better in the strictest sense of the term, but it is undoubtedly better or equal to traditional products on specific key product or service features. That's the secret to its success: Value for money! As long as it continues to do so, it will remain a force to reckon with in the competitive market. Big Bazaar works on these lines of principles. Saving is the key to the Indian middle class consumer. The
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store, which would be created, had to offer value to the consumer. Keeping this in mind, the concept of Big bazaar was created. In India, when a customer needs something for the home, a typical thought is to seek it from the bazaar. A bazaar is a place where a complete range of products is always available to the consumer. This is true across India. As the store would offer a large mix of products at a discounted price, the name Big bazaar was finalized. The idea was to re-create a complete 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.

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High Service

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Low Service

Low Price

High

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SWOT ANALYSIS

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END NOTES
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References: Bigbazaar.co.in Organizedretail.co.in Retail seminar. In Literature review on Big Bazaar.com Retailing.co.in Wikipedia Google pictures

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