Big Bazaar

{ Team Name: Salesman Of the Year

Gajendra Sisodia Shouvik Das Tejas Deshpande Viral Patel Yagnesh Desai Chiranjeev Dhar Mohit Sangwan

Success Story-PRIL (Pantaloons)

Launched in 1987 as mens apparel manufacturer. By 1990s, company launched The Pantaloon Shoppe In 1997, PRIL introduced Pantaloons, 1st store in Kolkata. Major advantages:
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Unique understanding of the Indian organized retail market Derived and implemented strategies from west Experimented with as many retail formats, product-mixes and brands as was possible in order to gain maximum knowledge about the uncertain Indian mindset. Retail Experiment: experimented with every retail format, introduced number of private brands. Right JV at the right time: Key JVs with popular names like Staples, Starbucks. Versatile Retailing: Consumer see it as exclusive brand retailer, discount retailer and specialty retailer. Strengthening Supply Chain: Robust supply chain works as its backbone.

What did Pantaloons do right?

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About Big Bazar

About Big Bazaar Out let Hyper mart Chain of development store in India More than 100 outlets Located in India

Parent group
Owner Founded

Future group
Kishore Biyani (CEO) 2001

Head quarter
Industry website Tag line

Jogeswari , Mumbai
Retail www.bigbazar.com Is se sasta aur achha kahin nahi.

Mission And Vision

VISION Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner. MISSION We 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.

Positioning And Establishment

Customers Segmentation Big Bazaar targets higher and upper middle class customers. The large and growing young working population is a preferred customer segment. Big Bazaar specifically targets working women and home makers who are the primary decision makers.

Organization Value and Customer Value

*High organization value *Low customer value

*High organization value *High customer value

*Low organization value *Low customer value

*Low organization
value

*Low customer value

Positioning
High service

Low price

High price

low service

What is Retailing

The term Retailing refers to any activity that involves a sale to an individual customer.
Retailing is the interface between the producer and the individual consumer buying for personal consumption.

RETAIL

ORGANISED

UNORGANISED

AT Kearney report 2012

As per the AT Kearney GRDI 2012, India is ranked 5th thus falling 1 rank compared to 2011 It has been China which has taken a giant leap of 3 ranks and is placed 3rd in 2012 While China scores 53.4 in terms of market attractiveness, Indias low score of 31 on this parameter has pulled it down Both India and China are now in the maturing stage in the GRDI Window of-opportunity analysis India remains high potential market with accelerated retail growth of 15-20% expected over next 5 years Strong macro-economic conditions, higher disposable income and rapid urbanization a catalyst for India Grocery remains Indias largest source of retail sales

AC Nielsen report 2012 First-time modern trade shoppers and urban Indias poorest households will add around $3 billion (around Rs.16,710 crore) to the sales of the consumer packaged goods industry by 2015. The first-time modern trade shoppers will triple their spend on consumer packaged products from the current $280 million to $1 billion in three years. Nielsen report assumes significance as 10% of overall sales at Pantaloon Retail comes from first-time shoppers. Due to large discounts offered by Big Bazaar, high number of consumers from low-income groups shop during the biannual shopping fests and are first-time shoppers

Porters 5 Forces Analysis : Indian Retail

Threat of Substitutes (Local Kirana Stores, open air markets and retailers) Convenient proximity Tradition of credit Perception of low prices Threat of new entrants (Walmart, Costco, K-Mart, Tesco, Ikea) FDI consideration Strong cash flows Modern supply chain Rivalry among competitors (Reliance retail, Aditya Birla Group, Spencers, Mom n Pop stores) Low switching cost Price elasticity of demand Buyer Power Low switching cost Price sensitive Demand seasonality Customer Preferences and options

Bargaining Power of Supplier (Local suppliers, big companies like HUL, home grown brands) Efficient Flexible

Size of Indian Retail

Size Estimated size of retail in India (in $bn) Share of organized retail (%) in India 2008 353 7 2010 416 12 Percentage Change 18 71

Size of organized retail in India (in Rs)

78,300 Cr

2,30,000 Cr

194

Source: http://www.indiaretailing.com/india-retail-report.asp

Traditional Vs. Contemporary Retailing

Traditional Retailing Highly fragmented retail sector Kirana stores employing fewer than 4 people Local retailers selling from stalls and handicrafts Contemporary Retailing Low fragmented market Convenience stores employing more than 10 people Organized retailers selling from hypermarkets, supermarkets and discount retailers

Proximity to consumers

Well defined locality but lacks proximity to consumers

Consumer perception of low prices Consumer perception of relatively and long-standing tradition of offering high prices, better ambience, dcor, credit display, facilities, product packaging and services. No formal scorecard to measure manufacturers Have a formal scorecard to measure manufacturers like shelf availability, inventory levels etc.

Current trends in FDI (2012)

Indian govt. has allowed FDI in retail up to a level of 51% Twofold impact

Indian Retail Industry

2000 1500 1000 500 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 $661 $760 500 575 $1,530 $1,330 $1,157 $1,006 $875

New supply chains & logistical capabilities - drive significant improvements in infrastructure needed to source, store and deliver products Increased domestic competition better in-house quality products & increased competition

Retail Industry

The current Indian retail industry is poised at $500 Billion Expected to reach $1.3 trillion by 2020 with a CAGR of 40% Organized Retail contributes to only 7% ($35 billion) whereas 93% ($465 Billion) is in unorganized retail

Organized Retail

Unorganized Retail

Challenges in Retail

Taxation laws varies from State to State Tax laws favours small establishments Multi octroi / entry tax and other taxation for movement of goods Problems in supply chain and logistics Very high real estate cost High electricity cost Limited availability of land in prime locations

Opportunities in Retail

Reduce wastage Improve tax revenues for ex-chequerer Bring efficiency Increasing consumption to boost growth Provide convenient shopping experience for customers at affordable price

Pentagon and Triangle of Retail

Pentagon
Price Place Product Value Communication

Triangle of Retail
Customer Supplier Logistics

New Features : Big Bazaar 2012

Future Bazaar.com

Online Sales Tele-booking Service Home Delivery

Product & Brand Diversification High Technology Items Bulk Orders New Payment Options Cash On Delivery American Express Credit Card EMI Loyalty Program Redeption Points scheme E-Gift Vouchers

Promotions : Big Bazaar 2012

Possible Growth Strategies

Redefine Channels Create New Channels Product Availability Brand Communication Increased Brand Experience

Focus on Current Products

Vertical Integration

Acquisition of Distributors Warehouse Development Agri Farmers Tier II Cities SAMs Club Model Alliances with Existing Vendors / Retailers Investment in SCM

Exclusivity

Increased Penetration

Possible Growth Strategies

Focus on New Products

Brand Extension Home Furnishing Technology Food Court

Increase Brand Experience

Mela Theme Game Zone

OOH Unique Ad Strategy

Increase Brand Communication

Recommendations
As the threat of new competitors due to the FDI rule, we would suggest to go for the following steps Focus on Existing Product Lines Food Category (70% of Sales) Strengthen Supply Chain Target Tier II Cities Warehousing ( SAMs Club) Model Online Purchase Increase Brand Experience Mela Theme Game Zone

SCM Explained

Apply Cross Docking Techniques

Reduced Cost Increased Efficiency Hub & Spoke Model Electronic Data Interface Logistic software Integration b/w

Vendors / Suppliers Customers (Increase Customer & Vendor Intimacy)

Thank You