INDIAN RETAIL INDUSTRY

1.INTRODUCTION TO THE INDIAN RETAIL INDUSTRY

The India Retail Industry is the largest among all the industries, accounting for over 10 per cent
of the country’s GDP and around 8 per cent of the employment. The Retail Industry in India has
come forth as one of the most dynamic and fast paced industries with several players entering the
market. But all of them have not yet tasted success because of the heavy initial investments that
are required to break even with other companies and compete with them. The India Retail
Industry is gradually inching its way towards becoming the next boom industry.
The total concept and idea of shopping has undergone an attention drawing change in
terms of format and consumer buying behavior, ushering in a revolution in shopping in India.
Modern retailing has entered into the Retail market in India as is observed in the form of bustling
shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment
and food all under one roof.
A large young working population with medium age of 24 years, nuclear families in urban
areas, along with increasing working women population and emerging opportunities in the
services sector are going to be the key factors in the growth of the organized Retail sector in
India. The growth pattern in organized retailing and in the consumption made by the Indian
population will follow a rising graph helping the newer businessmen to enter the India Retail
Industry.
In India the vast middle class and its almost untapped retail industry are the key attractive
forces for global retail giants wanting to enter into newer markets, which in turn will help the
India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually.
Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in
India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$
16.7 billion business, growing at over 20 per cent per year. The future of the India Retail
Industry looks promising with the growing of the market, with the government policies
becoming more favorable and the emerging technologies facilitating operations.

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2.HISTORY OF INDIAN RETAIL INDUSTRY
SCENARIO OF RETAILING IN INDIA
Retailing is the most active and attractive sector of last decade. While the retailing industry itself
has been present since ages in our country, it is only the recent past that it has witnessed so much
dynamism. The emergence of retailing in India has more to do with the increased purchasing
power of buyers, especially post-liberalization, increase in product variety, and increase in
economies of scale, with the aid of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales are at the highest
point in history and new technologies are improving retail productivity. though there are many
opportunities to start a  new retail business, retailers are facing numerous challenges.
PRESENT INDIAN SCENARIO
 Unorganized market: Rs. 583,000 crores.
 Organized market: Rs.5, 000 crores.
 5X growth in organized retailing between 2000-2005.
 Over 4,000 new modern Outlets in the last 3 years.
 Over 5,000,000 sq. ft. of mall space under development.
 The top 3 modern retailers control over 750,000 sq. ft. of retail space.
 Over 400,000 shoppers walk through their doors every week
 Growth in organized retailing on par with expectations and projections of the last 5
Years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2005.

Evolution of Indian Retail

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MAJOR PLAYERS

3.INDUSTRY STRUCTURE

 The Indian Retail sector is highly fragmented: mostly owner-run ‘Mom and Pop’ outlets.

 Over 12 million retail outlets _ Average outlet size < 500 sq.ft.

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  There are a few medium sized Indian retail chains like Pantaloon, Shoppers’ Stop,
Foodworld (RPG Group) and Westside (Tata Group) – all growing rapidly.

 Mainly in the apparel and food & grocery segments

 Dairy Farm, Metro, Shoprite and Marks & Spencer are the only major international.

 retail chains in India: Each has a marginal presence through either franchisee or holesale
formats

The retail industry continued in India in the form of Kiranas till 1980. Soon, following
the modernisation of the retail sector in India, many companies started pouring in the retail
industry in India like Bombay Dyeing, Grasim etc. As has been mentioned earlier the retail
sector in India can be widely split into the organised and the unorganized sector. The
unorganized sector is predominant. We may discuss in detail the different divisions of the retail
sector in India.

Unorganized Retail Sector

The unorganized retail sector basically includes the local kiranas, hand cart, the vendors on the
pavement etc. This sector constitutes about 98% of the total retail trade. But Foreign Direct
Investment in the retail sector is expected to shrink the employment in the unorganized sector
and expand that in the organized one.

Organised Retail Sector

In the organised sector trading is undertaken by the licensed retailers who have registered
themselves to sales as well as income tax. The organised retail sector have in their ambit,
corporate backed hypermarkets and retail chains. The private large business enterprises are also
included under the organised retail category.

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4.MARKET SIZE
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 Retail is India's largest industry, accounting for over 10 per cent of the country's GDP
and around eight per cent of the employment. Retail industry in India is at the crossroads. It has
emerged as one of the most dynamic and fast paced industries with several players entering the
market. But because of the heavy initial investments required, break even is difficult to achieve
and many of these players have not tasted success so far. However, the future is promising; the
market is growing, government policies are becoming more favorable and emerging technologies
are facilitating operations.

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 centres, multi-storeyed malls and huge complexes offer shopping,

6
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. A large young working population with median age of 24 years,
nuclear families in urban areas, along with increasing working-women population and emerging
opportunities in the services sector are going to be the key growth drivers of the organized retail
sector in India.

Some Key Facts:

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- Retail is India's largest industry, accounting for over 10 per cent of the country's GDP and
around eight per cent of the employment

- The market size of Indian retail industry is about US $312 billion

- Organised retailing comprises only 2.8 per cent of the total retailing market and is estimated at
around US$ 8.7 billion

- The organised retail sector is expected to grow to US $ 70 billion by 2010.

Future outlook

 Retail sector revenues pegged at US$ 460.6 billion by 2010-11.

 Organised retail projected to grow to US$ 43.8 billion • Modern retail is expected to
adapt and imbibe from the traditional formats.

 Unorganised formats converging from organised formats, in the form of mushrooming

village malls.

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5.DEMAND AND SUPPLY OF THE PRODUCT

The role of supply chain in Indian organized retail is very significant for on it depends the
growth of this sector. The Indian Supply Chain Council have been formed to explore the
challenges that a retailer faces and to find possible solutions for India.

The role of supply chain in the organized retail sector in India should be a shelf- centric
partnership between the retailer and the manufacture for this will create supply chains that are
loss free. This will also give rise to top and bottom line growth. In the organized retail sector in
India the presence of fresh produce (vegetables and fruits) is very small. This is so for the nature
of supply chain is very fragmented. This shows the important role of supply chain in the
organized retail sector in India.

In the organized retail market in India, the role of supply chain is very important for the
Indian customer demands at affordable prices a variety of product mix. It is the supply chain that
ensures to the customer in all the various offerings that a company decides for its customers, be it
cost, service, or the quickness in responding to ever changing tastes of the customer.

Supply chain and retail: The means to the end

A retail revolution is happening in the country. For global giants looking at newer
markets, India presents exciting opportunities on account of its vast middle-class and a virtually
untapped retail industry.

The Indian retail sector has seen unprecedented growth in the last few years. The KPMG
report, `Consumer Markets in India: the next big thing has predicted that the organized retail
sector is expected to grow at rate higher than GDP growth in the next five years. The AT
Kearney's 2006 Global Retail Development Index positions India as a leading destination for
retail investment.

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6.GROWTH RATE

The Indian retail industry today is the 5th largest retail destination and the second most
attractive market for investment in the globe after Veitnam as reported by AT Kearney's
seventh annual Global Retail Development Index (GRDI), in 2008.The growing popularity of the
Indian retail sector has resulted in a growing awareness about brands and quality products. As a
whole Indian retail sector has made life convenient, easy, quick and affordable. Indian
retail sector, especially organized retail is growing rapidly, with the customer spending growing in
an unpredicted manner. It is undergoing a metamorphosis. Till 1980 the retail industry
continued in the form of kiranas that is unorganized retailing. Later in 1990s Branded retail outlets
like Food world, Nilgris and local retail outlets like Trinetra super market, Apna Bazaar, came into
existence.

Graph Total Share of Retail Sector in India

The big multinational retailers are slowly entering India in the form of direct entrance eg: -
Nike, Reebok, Metro etc or Joint Ventures e.g: Bharti with Wal-Mart and Tata‘s with Tesco.
2008 onwards the retail sector realized the significance of technology and understanding
the opportunities the retail sector had to offer efforts have been made to leverage traditional
formats. It is estimated that 2011 will see a remarkable growth in retail sector in terms of
investments to optimally benefit from the unexplored retail market.

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7.HRD practices in this industry
Apparels: Pantaloon India: Here is a retail giant which hires at least 250 MBAs for
operations and merchandising profiles. The candidates go through an induction period and a
short training thereon. Individuals are allotted projects for the next five months under the
supervision of project guides.

Indian Software Industry: The challenge for HR professionals in software industry is

sheer shortage of high intellectual human capital both in numbers and skills. Recruitment of
world class workforce and their retention is a serious challenge posed in HR industry. The
yawning gap between the demand and supply of professionals has increased the cost of
delivering the technology. The incentive compensation is based on performance keeping the long
term organizational objectives in mind. Optimized compensation packages are offered as a
motivator for retention of manpower.

Food and Grocery: It is estimated that the food and grocery market in India is an
astounding $236 billion, and it is the sixth largest grocery market in the world today. No doubt
that human resources are an important asset in this food and grocery retail industry. Many top
companies have made HR a strategic partner in their operations. One famous example is Nestle,
the global giant in consumer packaged goods. Nestle has a strong internally developed employee
backing which gives a major push to the company's lead position in the retail industry.

Attrition Rates and Retention of Personnel:

There seems to be a high level of attrition in the retail sector which is almost 40% according to a
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recent study. Front end jobs are facing an attrition rate as high as even 80%.
Under the present circumstances, retention and motivation of personnel has become the
major concern of HR. A congenial working atmosphere, support learning and training facilities, a
highly competitive pay structure are some of the effective retention practices followed by the
retail sector.
While money is the main attraction for freshers and starters, career satisfaction is the
main reason with experienced personals. Assigning the "right project to the right person" is the
organizational motto these days with companies setting up Manpower Allocation Cells (MAC) to
carry out this agenda.
Looking at the current scenario, it could be said that there is an acute shortage of middle
level management professionals in the Indian Retail Industry. The current trend is to hire from a
smaller organization tempting the incumbent with a better pay package. It is imperative that
suitable talent be hired in various areas such as technology, supply chain, logistics, product
development and marketing in order to stay abreast of the hectic race for success among MNCs.
The call is for HR practitioners to play a more proactive and prominent role in order to
retain the high tech skilled employees who are constantly looking for greater gains and prospects
in their work. This is the real HR challenge to retain the "knowledge workers" and
"knowledgeable workers" by introducing new processes and procedures and still ride high in
implementing organizational effectiveness.

8.EMPLOYMENT GENERATION IN RETAIL INDUSTRY

The increase in the organised retail has also led to a growth in employment generation in the
country. By employing a large number of skilled professionals in this sector, organised retail has
provided ample employment opportunities across India. While organised retailers are the biggest
providers of both direct and indirect employment, the unorganised retail sector has continued to
be the chief provider of work particularly to the semi-urban and rural population.
Another noticeable trend seen in recent times is the entry of international retail players in
India. According to industry analysts, this will force the domestic retail segment to match up to
international standards to retain their market share and adopt better management practices. It
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would also bridge the gap between demand and supply of professionals in the retail market,
thereby generating employment for a large section of the Indian population.
Although organised retail has paved new paths for growth in India, a section of the
unorganised retail segment feels that its business has been hit hard by the advent of some of the
big players in the industry. In order to survive in today’s competitive market, traditional retailers
need to upgrade themselves continuously and reinvent their business model. They opine that
their flexibility in certain areas such as credit sales, consumer goodwill, ability to sell loose
items, convenient timings, ability to bargain and provision for home delivery have helped them
attract more buyers.
With a majority of retailers keen to continue in this line of business and involve their
next generation in the operations, the industry prospects seem bright. Expectedly, even the small
and medium sized retailers are likely to gain from the growth in the organised retail in India.

9.Contribution of Indian Retail Industry to Indian Economy

What, How and For WhomThe presence of retail sector in India has been in limelight for
the last few years. Its significance has been undoubted. Policymakers are quite optimistic that the
evolution and steady maturation of organized retailing will take the economy to new highs.
Besides, it will also help strengthen the linkages between the different sectors so as to break the
vicious circle of poverty and ensure a bright future for the next generation. The benefit of
retailing to general public includes growing awareness and brand consciousness.

Indian Retail: Past Vs Present

The retail industry employs a huge share of the total workforce in India. It is the second largest
employer after India. Presently 7 percent of the total labor force is employed in the retail sector.
According to available data it is also the largest employer in the services sector and maximum
growth in the non-agricultural sector has been witnessed by retail trade. According to market
analysts 300 new malls, 1,500 supermarkets and 325 departmental stores are going to come up in
India in the next few days. The shopping revolution that has led to this retail boom is going to
continue and this is a good news for the government as well as those who wish to work in the
organized sector.

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 It is widely accepted that the retail industry has undergone a drastic change in last five
years and there is yet more to come. Let us compare the image of Indian retailing in 2004-05 to
that of its status in 2007-08 in the following table:

Magnification of the Indian Retail Industry

Yardstick Situation in 04-05 Situation in 07-08

Value of retail sales Rs. 10,20,000 crore Rs 12,00,000 crore

Annual growth rate 5%

5.7%

Value of organized market Rs 35,000 crore Rs 55,000 crore

Share of organized market 3.4% 4.6%

in the sector
Forecasts (after 5 years) Over Rs. 1,00,000 crore Rs. 2,00,000 crore
about size of organized retail
market about growth rate Around 30%
Forecasts Around 40%
of organized retail market

The above table clearly shows that the retail market as well as the mindset required for it
has experienced a thorough revisal in the last three years. This is just the beginning and Indians
are sanguine that the sector will see rosy days in the future. This confidence has helped India
acquire the No.1 position among 30 most attractive retailing destinations in the world according
to the Global Retail Development Index of 2005 (by AT Kearney, India). Among emerging
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markets, India holds the second position after China in the list of most favored retail destinations.

10.PERFORMANCE OF THIS INDUSTRY

“The India Retail Report 2009 is a well researched and professionally presented
document that brings forth several opportunities that could benefit the Indian consumers. I look
forward to the Indian retail sector continuing on its developmental growth path and spreading its
benefit to all.”
–Kamal Nath, India’s minister for Commerce & Industry.
Internationally India‘s retail sector ranks fifth, growth wise. It is one of the most attractive
sectors for investment and in fact is one of the reasons for India to recover from recession so
quickly. At a time when the entire world was bit by the recession bug India still put up a decent
performance by maintaining a GDP of 7-8 % and the Indian retail industry too has proven to
have a powerful grip on the Indian economy. If one analyses the performance of the retail sector
for this year, i.e. 2009, one can say that the efforts have been commendable and the results quite
visible.
The rising economic growth rate of 8-9 percent and an increase in the average salaries by
about 15 % has increased the rate of consumption. Hence this increase in consumption is
followed by increase in demand of commodities and ultimately an increase in productivity, and
that’s how the entire cycle works. Luckily for the Indian retail market, people are less sceptical
in investing huge sums of money, or experimenting.
A Study has found out that the share of retail trade in India's gross domestic product (GDP)
was around 8-10 %, in 2007. But with exceptional development in the organized retail segment,
the share has risen to 12 per cent for the year 2009.
As the competition is getting tougher and everyone wants a piece of the BIG profit pie,
new companies are joining the Indian retail brigade, and hence existing players have also looked
into their expansion policies quite seriously and are looking at innovative plans of branding and

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marketing and also opening a variety of stores at all kinds of places, be it urban or rural. For
example, DLF Limited, the famous company in Indian real estate business has decided to
establish 500 luxury lifestyle stores throughout India in a span of 5 years while Tata Sons are
doing their bit by expanding their business activities with 100 new Croma stores under their
retail head Infiniti retail within a period of 3 years.

11.PROBLEMS OF INDIAN RETAIL INDUSTRY

 The industry is facing a severe shortage of talented professionals, especially at the
middle- management level.
 Most Indian retail players are under serious pressure to make their supply chains
more efficient in order to deliver the levels of quality and service that consumers are
demanding. Long intermediation chains would increase the costs by 15%.
 Lack of adequate infrastructure with respect to roads, electricity, cold chains and
ports has further led to the impediment of a pan-India network of suppliers. Due to
these constraints, retail chains have to resort to multiple vendors for their
requirements, thereby, raising costs and prices.
 The available talent pool does not back retail sector as the sector has only recently
emerged from its nascent phase. Further, retailing is yet to become a preferred career
option for most of India's educated class that has chosen sectors like IT, BPO and
financial services.
 Even though the government is attempting to implement a uniform value-added tax
across states, the system is currently plagued with differential tax rates for various
states leading to increased costs and complexities in establishing an effective
distribution network.
 Stringent labor laws govern the number of hours worked and minimum wages to be
paid leading to limited flexibility of operations and employment of part-time
employees. Further, multiple clearances are required by the same company for
opening new outlets adding to the costs incurred and time taken to expand presence in
the country.
 The retail sector does not have 'industry' status yet making it difficult for retailers to
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 raise finance from banks to fund their expansion plans.
 Non- availability of government land and zonal restrictions has made it difficult to
find a good real estate in terms of location and size. Also lack of clear ownership
titles and high stamp duty has resulted in disorganized nature of transactions.

CHAPTER-2
SELECTED COMPANIES
1. BIG BAZAAR
2. VISHAL MEGA MART
3. LIFESTYLE

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1.BIG BAZAAR

About Big Bazaar

TAG LINE

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  Is se sasta aur achha kahi nahi
 Sabse sasta din or maha saving day.
 Maha sasta din (26 Republic day).

ABOUT THE COMPANY

COMPANY PROFILE

Big bazaar
‘Isse Sasta Aur Acha Kahin Nahin’ is the hypermarket discount store initiative of the company
(Pantaloon) commissioned to address the discount & bargain-hunting tendency of the Indian
shopper.

Firstly Big Bazaar was set up across 50,000 Sq. ft. in Kolkatta. Driven by the resounding
success of the concept, four Big Bazaars were rolled out across 2,00,000 Sq. ft. in Hyderabad,
Bangalore, & Mumbai. These include Men’s, Ladies, children apparel, utensils, kitchenware,
stationery, luggage, toys, optical products, a photo studio & an STD booth among others. Big
Bazaar has more than 50 sales offers across its countries at any time &these discounts range from
6 to 60%.

The magic of the concept is reflected in the footfall. Big Bazaar attracts more than
5,00,000 shoppers every month. More importantly, it has emerged as the first organized store to
reach out to a broad customer spectrum-from a village to a wealthy businessman.

At Big Bazaar, price was the principal value proposition at these stores. The store sold a
variety of products 5 to 60% lower than the corresponding market price. Schemes of Big bazaar
are very popular like ‘buy two get one free’. Also positioning & product availability in Big
Bazaar gained a higher share of the customer’s shopping basket.

PARTICULARS

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Big Bazaar is the biggest revenue and profit generator for Pantaloon. The company announced
revenues of Rs3,236 crore for the fiscal year ended June 2007 with a net profit of Rs120 crore.
Pantaloon begins its fiscal year in July. Edelweiss Securities Ltd expects Pantaloon’s revenue to
jump to Rs5,755 crore in the fiscal year to June this year. The Mumbai-based brokerage firm
expects Pantaloon to achieve a significant jump in its profit as well. The company is expected to
announce its annual results in September.

Pantaloon expects Big Bazaar and its existing Food Bazaar supermarkets chain to clock
$1 billion (Rs4,250 crore) of revenue for the fiscal year that just ended. It projects the revenue to
go up to $1.5 billion next year and to almost $4 billion in four years if the division maintains its
current growth pace, Biyani had said earlier this year. The company is also planning to spin off
Big Bazaar and take it public.

“It’s a good strategy. If you were to spin off that brand which is across multiple formats,
it would be valued higher. Therefore, you can unlock greater value throughout the group,” said
Jayant Kochar, managing director of retail consultancy firm Go Fish Retail Solutions.
BIG BAZAAR PRODUCT MIX

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BIG BAZAAR LIFE CYCLE

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SWOT Analysis of big bazaar
Strengths
 Better understanding of customers helping the company to serve them better.
 Vast range of products under one roof helping in attracting customer and their family to
shop together and enjoy the experience.
 Benefit of early entry into the retail industry.
 Diversified business operating all over India in various retail formats.
 Ability to get products from customers at discounted price due to the scale of business.
Weaknesses
 High cost of operation due to large fixed costs.
 Very thin margin.
 High attrition rate of employees.

Opportunities
 Lot of potential in the rural market.
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  Can enter into production of various products due to its indepth understanding of
customers’ tastes and preferences.
 Can expand the business in smaller cities as there is a lot of opportunity.
Threats
 High business risk involved.
 Lot of competitors coming up to tap the market potential.
 Margin of business reducing all the time.
Comparison of Big bazaar with others Organized retailers based on following points

60

55

50

45

40 Big bazaarO. Org. Retails

Column1
35

30
ice ice ty
ali
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e ce
pr erv ar ie u ien ie i en
s v q en er b
nv exp am
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o pi
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STRUCTURE

24
ACHIEVEMENTS

Most Admired Retailer of the year: Hypermarket –Big Bazaar-2009

 Indian Retail Forum Award s 2008.

 The INDIASTAR Award 2008.
 Retail Asia Pacific 500 Top Awards 2008.
 Coca-Cola Golden Spoon Awards 2008.
 The Reid & Taylor Awards For Retail Excellence 2008.
 Platinum Trusted Brand Award Images Retail Award 2005,06.
 30 crore Rs. sale in a day.

Types of Customer:
In the Indian Retail Scenario Big Bazaar has a great success to create a revaluation. Basically
they have differentiated their customers on the basis of needs of customers rather than their
income level. Later on we will analyze these aspects. Here we are analyzing which income level
of customers are generally tend to purchase the products in Big Bazaar department wise:

25
From the above details its found that the in the Garment section they are targeting the middle and
average level of customers. They are not promoting any major brands and they have their own
brand towards the major brands in garments industry. Flow of high level of customers in music
section is better than the others departments. Generally upper medium and medium class and
also a good percentage of average income level customer visits their all departments.

Flow of customers in different departments:

Here we have analyzed the flow of customers per day basis. For this reason we have studied
customer flows on an average of high customer flow days.

With the study of customer flow in Big Bazaar on an average of high customer flow day we
came to know that it’s basically lies between 2000-2500 customers per day. Here we are taking
the customers who are generating revenues for these departments.
From the above figures its executed that flow of customer in garment departments is relatively
higher than the others departments. One significant difference is noted from the others retail is
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that they have placed their music department at the front of cash counters and introduced low
range of music cds’ and game dvd’s for the all category customers which increased customer the
flow in the music department.

Revenue generated by the different departments:

To find out the profitability drivers we have compared the revenue generated by different
departments on the basis of 2004-05 to 2008- 09. For this study we have considered average
revenue of a high customer flow day by the all income level customers.

From the above study its revealed that at the time of inception of the organised retail in India in
the year of 2004-05, only the high grade and upper medium grade income level customers were
tends to go to the retails. So the maximum portion of revenues generated from these two groups
only in the year of 2004-05.
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 The change in revenue of garment department and in gifts department from the year
2004-05 to 2008-09 is significant because Big Bazaar is shifted products towards the own
manufactured brands and they became successful to establish their own brands in the garment
retail industry. A measurable changes found in the cards department is that the revenues as well
as the stock is decreasing day by day because of changing customer preferences towards
information technology enabled services like SMS, MMS & E-mails.

PRACTICES
The HR department of Big Bazaar is very dynamic. Employees are the biggest strength and asset
of any organization and the HR dept realises this very well.
This is very evident from the way the HR department handles all its employees. They
take utmost care to select, train, motivate and retain all the employees. They have continuous
developmental programmes for all the employees. Currently Big Bazaar Banashankri is
employing 220 full time and 60 part time employees. There are two shifts for the employees. The
first shift employees arrive at 10AM in the morning and leave at 7.30 in the evening, while the
second shift employees report at 12.30 in the afternoon and leave at the time of Store closing
(10pm).
For any hr activity one of the major activity is recruitment of the employee. the following are the
main sources through which big bazaar recruit it employees.

POLICIES

1. Price promotions
Price promotions are also commonly known as " price discounting". These can be done in two
ways:
 A discount to the normal selling price of a product, or
 More of the product at the normal price.
Price promotions however can also have a negative effect by spoiling the brand reputaItion or
just a temporary sales boost (during the discounts) followed by a lull when the discount would be
called off.
2. Coupons
Coupons are another, very versatile, way of offering a discount. Consider the
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following examples of the use of coupons:
 On a pack to encourage repeat purchase
 In coupon books sent out in newspapers allowing customers to redeem the coupon at a
retailer
 On the back of till receipts
The key objective with a coupon promotion is to maximize the redemption rate – this is the
proportion of customers actually using the coupon.
It must be ensured when a company uses coupons that the retailers must hold sufficient stock to
avoid customer disappointment. Use of coupon promotions is often best for new products or
perhaps to encourage sales of existing products that are slowing down.
3. Gift with purchase
The "gift with purchase" is a very common promotional technique. In this scheme, the customer
gets something extra along with the normal good purchased. It works best for:
 Subscription-based products (e.g. magazines)
 Consumer luxuries (e.g. perfumes)
4. Competitions and prizes
This is an important tool to increase brand awareness amongst the target consumer. It can be
used to boost up sales for temporary period and ensure usage amongst first time users.

PROBLEMS

 High cost of operation due to large fixed costs.

 Falling revenue per square feet.
 High attribution rate of employee.
 Customer retention is less.
 Opening up of other discounted stores like Vishal mega mart.
 Convenience of customers to nearby kirana stores.
 Availability of products in other retail outlets.
 High business risk involved.

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 CHAPTER-3
 COMPARATIVE ANALYSIS
 OVERVIEW
 FACTS AND FINDIANGS
 SUGGESSIONS

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COMPARITIVE ANALYSIS OF THE STORES
On the basis of customer flows:
We have considered the average of the high customer flow days.

Vishal Mega Mart: From the study its revealed that the average customer flow is medium grade
income level customers and average grade income level customers.
Life Style: The customer flows in this store is basically refers to the high and upper medium
income level customers.
Big Bazaar: They are focusing on the all income level customers but it depends on the
departments wise also.

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On the basis of stock value:

Garments Department:
The value of stock depends on the season. At the time of winter season it increases upto 2 to
3times than the other seasons as the price of winter garments is relatively higher than springs-
summer collection.

Vishal Mega Mart: The product in the garment section isn’t exclusive and meant for the
medium to average grade income level customers. Also they aren’t focusing on major brands in
the garment industry. All the products are unbranded and semi branded and don’t attracts the
high grade level income groups. However brand consciousness not present but the stock volume
is able to met customer satisfaction.

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Life Style: All the major brand players are maintaining their stocks in garments section as their
main focus is on the Apparel products. Product ranges is very high and meant for the high class
consumers. A high brand consciousness helping them to generate a remarkable revenue with a
high stock turn over ratio and smiling face of customers.
Big Bazaar: They have their own brands in the garments department with a reasonable price for
the upper medium, medium and average class income groups. Though brand conscious people
will think at the time purchasing but customer are satisfied with the stock and as well as quality
related to price.
Gifts Department:

Vishal Mega Mart: They are not focusing on the gifts stock for the result customer flow and
revenue from this section is very low and no point is gaining for the customer satisfactory level.
Life Style: A very large investment in the gifts section is found at the time of study. They are
basically emphasizing on introduction of personal grooming products and home furnishing
products in the gifts section. This department is solely for the upper class consumers and
customer satisfactory level is remarkable.
Big Bazaar: A wider range of products is found in gifts section for the all income level people.
Though the variety in the product categories is high but the volume of stock in the same product
is low. However customers are happy with the large number of collection of gifts items.

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Cards Department:

Vishal Mega Mart: Stock in this department is taken care as relatively low and it’s considered
as a seasonal business.
Big Bazaar: Stock in this department is taken care as relatively low and it’s considered as a
seasonal business.
Music Department:

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Vishal Mega Mart: Music department is consisting of music, movies and games cd-dvd’s. The
stock of game cd-dvd’s is higher than the others and price range is relatively not for the medium
and average income groups though they are focusing on this income group only and a result they
failed to satisfy their customer needs.
Big Bazaar: Their music department is also consisting of music, movies and games cd-dvd’s
and they have maintained a good balance between the stock level in all the categories. And also a
remarkable change is noted that they selling very low range products within this copyright
product categories. They customer satisfaction level is high with the fulfillment of their needs.

On the basis of revenue:

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IN 2004-05:
At the time of sunrise of organised retail industry in India, the scenario was not been like present
days. At that time it was a very new concept of marketing for the Indian consumers. Only the
high class level and a few upper medium class income group customers were visiting to those
retail markets. The perception of middle and lower class peoples was that these stores had over-
valued their products and to some extent it was right als

IN 2008-09:
Now a days shopping in the retail stores is a very common things. Peoples are habituated to go
into the retails in the weekends. Day by day the organised retailers are becoming stronger to
attract customers. Hyper- markets like Vishal mega mart, Big Bazaar, Home town have the stock
to fulfill all the needs of customers from alpine to elephant.

On the basis of Revenue per customer:

For the study of revenue per customer, we have taken the contribution of total customer flow on
the total revenue of the stores on an average of high customer flow days.

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Vishal Mega Mart: Though the revenue per customer of the Vishal mega Mart increased from
2004-05 to 2008-09 but the revenue per customer is significantly low than others. As their main
customer base is medium and average income group customers and also customer flow is low so
it generates significantly low revenue per customer.

Life Style: The customer flows in this store is basically refers to the high and upper medium
income level customers and though their customer flow is lower but their return on investment is
high so it helps to earn a high income per customer.

Big Bazaar: They are focusing on the all income level customers with a high customer flows per
day and have a base of brand consciousness amongst the customer which’s helping them to
increase their revenue per customer. Also there is a major contribution of the others departments
like grocery and vegetables department towards the per customer revenue.

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FACTS AND FINDINGS
VISHAL MEGA MART
From the above analysis its found that the average customers in the all departments are the
Middle Grade income level customers as Vishal is mainly focusing in this segment of customers.
Garment Department
Overview:
Product lines and the quality of the products in the Garment Section are basically for the medium
and average grade income level people and price range in this section is averagely lies between
Rs.250 to 600.
Findings:
In the garment section we have found that products categories are not focusing the high grade
income level customers as the brand consciousness not presents in the floors. The high grade
income level people are very conscious about the brand that they are using. Basically they are
very conscious about the brand rather than the quality which isn’t present in this department.
Suggestions:
Vishal is strategically targeting the middle class customer but there is also a rash of high grade
income level customers in their stores. They should focus on this aspect that they can turn this
mob into potential customer by introducing a various range of high class products in the garment
department.

Gifts Department
Overview:
Product lines and the quality of the products in the Gifts Section are basically for the high and
medium grade income level people and price range in this section is averagely lies between
Rs.500 to 800.
Findings:
In the gifts section we have found that stock of gift items is very low and also products
categories are not focusing to low grade income level customers and the gifts department is
referred to high class products.

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Suggestions:
They should focus on this aspect by introducing more stocks and also a lower price range
products in the gifts section so that they can also generate revenue from lower grade income
level customers.

Music Department
Overview:
Music section consist of Music CD’s, Game CD & DVD’s and also Movie DVD’s. Product lines
and the quality of the products in the Music Section are basically for the high and medium grade
income level people and price range in this section is averagely lies between Rs.150 to 500.
Findings:
In the Music section we have found that they are mainly focusing on the Game CD’s and DVD’s
and also the price range is also high. Again the collection of game cd and dvd’s is considerable
but in the case of Indian Music CD’s the stock level is not also upto the customer’s satisfactory
level.
Suggestions:
Vishal should concentrate on that the music industry is passing through a high competitive
market with piracy world so the price range should be such as the customer feel free to buy
original cd’s. Another point is that there should be a balance between the stock of their product
lines in the music department.

Cards Department
Overview:
In the Indian scenario cards are not very popular and a seasonal business according to the floor
managers and management of the store. Also the demand is decreasing day by day with the
increase of ITES.
Findings:
In Vishal’s prospect we have found that it’s a seasonal business and they only give an
emphasized focus at the time of Christmas Day and New Year. Also the high grade income level

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people tends to go specialized cards stores so only a few numbers of middle and average income
level customers who come to others departments sometimes seek for the cards.
Suggestions:
Though the demand of cards decreasing day by day but there are also some others events rather
than the 25th & and 31st eve. So a step can be taken by introducing low range of cards attached
with the gifts section to greet the wishes all the time.

BIG BAZAAR

From the above analysis its found that the average customers in the all departments are the all
income level people in Big Bazaar. Meanwhile their main customer base is upper middle, middle
and average level income level customers.

Garment Department
Overview:
In Garment department the products are mainly their own brands an price ranges lies between
Rs.99 to Rs.800 averagely which is very reasonable for the middle class, average and also low
level income group peoples. The stock in this section is fair to satisfy its customer needs and
attracts window shoppers to become a potential customer.
Findings:
The main facts that we have found in the garment section is that Big Bazaar mainly focusing on
the low range of products with their own brands. All the times they are giving special discounts
on all the garments products. They have adopted tricks like “Buy 2 get 3”, Buy 3 get 5” which
looks like as if you buy 2 will get more 3 but the actual fact is that if you buy 2 products will get
1 free as total you will get 3. It’s a very strategic and attractive offer specially adopted by Big
Bazaar. They have also a section named ‘LOOT MART’ in the garments department. In this
section they are selling the branded high-class garments at a high discount rate of 50 to 60
percent.
Suggestions:
After discussing all the profit factors it can be suggest that as they have a good high income level
customer flow in the others departments like in the furniture and grocery department they can

40
introduce a wider range of branded products in the garment section as this income is conscious
about the brand that they are using.
Gifts Department
Overview:
Gifts department is consisting of various product categories from home furnishing products to
personal using products. According to Big Bazaar now a days no one can define which section
should be referred as a gifts section. Customer preference is changing day by day with the
increased product categories.
Findings:
In Big Bazaar we have found that they are also referring home furnishing products, personal care
and low range electronic products as gift products and basically it depends on the customers need
and choice. The whole gift section is able to satisfy the all level of income groups as they have a
large collection of product categories but with a limited stock of same products. A noted strategy
is taken in the gifts department is that they are selling a large varieties of products with a limited
stock which helps them to implement a good stock turn over ratio and generating good revenue
from this department.
Suggestions:
Big Bazaar can focus on the stocks of the gifts though the stock of varieties is remarkable but
within the same category the stock is not appreciatable.
Music Department
Overview:
Music section consist of Music CD’s, Game CD & DVD’s and also Movie DVD’s.
Findings:
Big Bazaar has introduced very low range cd & dvd’s like ‘Moserbaer’ music and movie cd-
dvd’s and price range lies in between Rs.30 to 100. Basically they are gaining a competitive
business at the age of piracy products in this industry. Also they have a very good collection in
games cd-dvd category at a low price range of Rs.100 to 200 whereas if anyone go to the open
market the average price range is Rs.300 to 400 for the copyright product.

Suggestions:
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In the music its found that the collection of movie cd’s and educational cd’s is low than the
music and games cds. They are emphasizing on the low price mp3 and game cds where as there
is also a demand for educational and movies cd-dvd’s.
Cards Department
Overview:
In the Indian scenario cards are not very popular and a seasonal business according to the floor
managers and management of the store. Also the demand is decreasing day by day with the
increase of information technology enable services.
Findings:
We have found that it’s a seasonal business and they only give focus at the time of Christmas
Day and New Year. Also the high grade income level people tends to go specialized cards stores
so only a few numbers of middle and average income level customers who come to others
departments sometimes seek for the cards.
Suggestions:
Though the demand of cards decreasing day by day but there are also some others events rather
than the 25th & and 31st eve. So a step can be taken by introducing low range of cards attached
with the gifts section to greet the wishes all the time.

LIFE STYLE

FACTS AND FINDINGS

From the above analysis its found that the average customers in the all departments are basically
high grade income level customers. All the products ranges in the both departments significantly
refers to premium customers.
Garment Department
Overview:
In Garment department the products are mainly the major international readymade brands and
price ranges lies between Rs.800 to Rs.2000 averagely which is meant for a few Indians
customers.

Findings:

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The products exclusively for a certain income level customers. Maximum products are
unreachable for the medium and average income level peoples. Whatever the stock is quite
efficient to satisfy their potential customers.
Suggestions:
They are focusing a very few Indian customers and the most of the Indian consumers can’t afford
this price ranges. So if they want to increase their market share in the Indian retail Industry they
should introduce such product ranges also which can be affordable for the medium level income
groups and the main customer in the retail industry lies within it.

Gifts Department
Overview:
Gifts department is consisting of various product categories from home furnishing products to
personal grooming products.
Findings:
In the Lifestyle we have found a wider range of glass made and metal products which are
exclusive and also the quality isn’t upto the price levels. Whatever, the stock is sufficient to
satisfy its customers but the price range is found very high as a gift product in this department.
Suggestions:
Again the Indian retail industry is targeting the medium level income group people as its
increasing day by day but the products in the Lifestyle store is meant only for the high class
consumers which is very low in population in India. Also an important point is noted that though
the volume is sufficient but the varieties in product categories as a gift isn’t sufficient.

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 BIBLIOGRAPHY
REFERENCES

Websites:

 www.google.co.in

 www.mofi.nic.in

 www.fbmi.in

 www.economictimes.com

 www.yahoo.com

 www.scribd.com

 www.slideshare.com

 www.articlebase.com

Books:

 Indian retail reports written by Shalini Bahadur.

 HR in Indian Retail written by Ramadevi Srinivasan.

Magazines:

 TIMES OF ECONOMICS
 BUSINESS WORLD
 4’P S

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