own brands

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A STUDY ON CUSTOMER PERCEPTION ABOUT THE

OWN BRANDS

With Special Reference to

BIG BAZAAR,ERNAKULAM

Project ReportSubmitted by

ARUN DEV.S

(Reg. No.1025)

In partial fulfillment of requirement for the award of

POST GRADUATE DIPLOMA IN MANAGEMENT

to

Bhavans Royal Institute of Management(Approved by All India Council for Technical Education ,New Delhi)

THIRUVANKULAM

KOCHI- 682305

2009-2011

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A STUDY ON CUSTOMER PERCEPTION ABOUT THE

OWN BRANDS

With Special Reference to

BIG BAZAAR,ERNAKULAM

Project Report

Submitted by

ARUN DEV.S

(Reg. No.1025)

Under the guidance of

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CHAPTER -1

INTRODUCTION

OWNBRA

NDS

The terms own brands acknowledge the power of the retailer. Own brands are articulated and

developed in a way that they not only fit with the brand promise of the retail store, but if

effective, they also give consumer drivers a key point of departure to enhance and celebrate the

overall retail brand proposition so as to keep consumers coming back for more. compared to that

of national brand.

The changing consumer tastes and the need to fill a gap in the product offering are the key

reasons for retailers to opt for offering a private label. This gap may be due to the non-

availability of a particular product / category. The retailer may also seek to create a competitive

advantage in his domain by aiming to offer a product that is unique and thus, also build in on

customer loyalty. Offering a product or arrange within a product, which gives the customer

newer reasons to visit the store every month or week, is something that every retailer would

aspire for. Private labels also allow the retailer to build a brand which is associated with the store

and therefore with an experience. The most significant advantage that a private label allows a

retailer is that of earning a level of margin which may be higher than what is offered on other

brands that he chooses to retail. Private labels also allow the retailer to build a brand which is

associated with the store and therefore with an experience. A private label basically involves the

retailer doing the designing, merchandising sourcing and distribution. Thus, his costs are under

his control and spread across a limited range of activities. Promotion are mainly done in store

and thus, hiscost of goods sold is much lower.A own brand is more than a product with the name

of the retailer / store it needs to be seen by the need consumer as a different product. There must

be clear perception that it is produced by this store. own brands or store brands exist in a wide

variety of industries, from apparel to food to health and beauty aids. A common sight in many

retail stores in India and abroad is the presence of the retailers own brand often sharing shelf

space with major national brands. When a retailer decides to sell products or a line of

merchandise owned, controlled and sold by the retailer in his stores / chain of stores, he is said to

be selling Own brand or Private Label merchandise. the retailer may also vary the offerings of

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the private label across geographical boundaries on the basis of the variation in consumer

preferences or to seek a competitive advantage in a new geographical region

Statement of the problem

It is a Study on the customer perception about the own brands of big bazaar. The result is mainly

based on the questionnaire survey

Objective of study

1. to find out customers perception about own brands2. to find out the factors that are affecting the own brand sales3. to find out the methods to improve the own brand sales

scope of the study

The study will be beneficial for big bazaar to identify the perception of customers about their

own brands .The performance of their own brands and shortfalls of own brands(if any)

andmeasures to be followed to improve the performance of own brands

The study will also help all retailors to selling their own brands

Research methodology

Descriptive research will be used for the study and the various factors affecting the customer

perception about the of own brands to be analyzed

Research design

Descriptive research is the type of research design in this project

Research approach

Primary data analysis is mainly used to collect information

Source of data

Primary source :

The primary source of data collection is through questionnaire

Secondary source :

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The secondary source of data collection is through internets and magazines

Sampling plan

Research period

Two months starting from march 7th to may 6th 2011

Limitations of the study

y The major limitation of the study is that the area of study is limited.y As the sample size is small, the accuracy is less.y The data provided by the respondents may or may not be correct and accurate.y Some of the respondents may or may not be ready to express their opiniony In depth study is not possible because the time limit is the main constraint

Chapter scheme

This report is presented in six chapters. the first chapter introduce the study by highlighting the

need for the study, the study objectives, methodology and scheme of reporting. The second

chapter on industry profile discuss about the International scenario, then about the national and

state scenario.Third chapter describes profile of Big Bazar.The fourth chapter describes the

literature review.The fifth chapter is about the data analysis and interpretation. The last chapter is

on findings ,suggestions and conclusion.

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CHAPTER -2 INDUSTRY PROFILE

2.1 INTERNATIONAL SCENARIO OF RETAIL INDUSTRYRetailing has played a major role in increasing productivity across a wide range of

consumer goods and services the world over. In the developed countries, retail industry has

transformed into a full-fledged industry where more than three-fourths of the total retail trade is

done by the organized sector. Though India boasts of an emerging retail market with top

international retailers like Wal-Mart and Carrefour keen to establish their presence, it does not

figure on the list of top 10 most preferred global retail markets. Out of the BRIC (Brazil, Russia,

India and China) countries, China and Russia are in the top 10 list .But in terms of investment in

emerging markets, India tops the list according to a report of AT Kearney

Following are the characteristics of global retail industry:

1.The global rated retail universe is very diverse, covering a large number of segments

2.Global retail industry exhibits very diverse operational and financial dynamics

3.Of the global retail industry, 38% of publicly-rated retailers is investment grade and 62% is

speculative trade

Organized retailing in most economies typically passes through four distinct phases in its

evolution cycle. In the first phase, new entrants create awareness of modern formats and raise

consumer expectations. In the second phase consumers demand modern formats as the markets

develop thereby leading to a strong growth. As with the life cycle of any industry, the high rate

of growth would lead to a stage of mature market wherein all the players would strengthen

their positions. This will be followed by the final phase where the market would reach a

saturation point, the growth would be limited and for sustainable growth, retailers would explore

new markets as well as evaluate inorganic opportunities

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In 2010, retail turnover in the USA amounted to 3.9 trillion USD (2.9 trillion EUR), whereas this

figure was 3.7 trillion (2.7 trillion EUR) in the previous year. This equals an increase of 5 %.

Consumer spending is seen to gather momentum again after the end of the crisis and the retail

sector is expanding its product range. In 2010, the German retail sector experienced a recovery

from the crisis, generating a total turnover of more than 400 billion EUR and traditional

department stores saw a comeback. In France retail revenue totalled almost 400 billion EUR in

2009, remaining stable despite declining purchasing power.In China retail revenue continued to

increase in 2010, totalling 15.4 trillion RMB (1.7 trillion EUR). A growing number of

hypermarkets have been seen to crop up across the entire country, a trend that is expected to take

hold in all of Asia over the next few years. In India revenue generated from organized retail is

continuously increasing and reached as much as 290 billion USD (219 billion EUR) in 2010.

According to experts the Indian retail sector will be fully liberalized in the future.Retail sales in

the UK accounted for more than EUR 320 billion in 2009, and for the next years, non-store

retailing is expected to drive future growth of the sector. Furthermore, it is predicted that online

retail in the UK will continue to increase by more than +50% until 2014.

Different Retail formats across the world

Across the world retailer is involved in more than one format to operate in different

circumstances to cater to its consumers. Different types of retail formats across the world are:

Mom-and-Pop

Represent the small, individually owned and operated retail outlet. In many cases these are

family-run businesses catering to the local community.

MassDiscounters

- These retailers can be either general or specialty merchandisers but either way, their main focus

is on offering discount pricing. Compared to department stores, mass discounters offer fewer

services and lower quality products.

WarehouseStores

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This is a form of mass discounter that often provides even lower prices than traditional mass

discounters. In addition, they often require buyers to make purchases in quantities that are greater

than what can be purchased at mass discount stores. These retail outlets provide few services,

and product selection can be limited. Furthermore, the retail design and layout is, as the name

suggests, warehouse styled, with consumers often selecting products off the ground from the

shipping package. Some forms of warehouse stores, called warehouse clubs, require customers to

purchase memberships in order to gain access to the outlet.

Category Killers

Many major retail chains have taken what were previously very narrowly focused, small

specialty store concepts and have expanded them to create large specialty stores. These so-called

category killers have been found in such specialty areas as electronics

(e.g.Best Buy), office supplies (e.g. Staples) and sporting goods (e.g. Sport Authority).

DepartmentStores

These retailers are general merchandisers offering mid-to-high qualityproducts and strong level

of services, though in most cases these retailers would not fall into thefull-service category.

While department stores are classified as general merchandisers, somecarry a more selective

product line. For instance, while Sears carries a wide range of productsfrom hardware to

cosmetics, Nordstroms focuses its products on clothing and personal careproducts.

Boutique

This retail format is best represented by a small store carrying specialised and oftenhigh-end

merchandise. In many cases a boutique is a full-service retailer following a full-pricingstrategy.

It is individually managed and specialised retail format.

Catalogue Retailers

Retailers such as Lands End and LL Bean have built their business byhaving customers place

orders after seeing products that appear in a mailed catalogue. Orders arethen delivered by a

third-party shipper.

E-tailers

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Possibly the most publicised retail model to evolve in the last 50 years is the retailer that

principally sells via the Internet. There are thousands of online-only retail sellers of

whichAmazon.com is the most famous. These retailers offer shopping convenience including

beingopen for business all day, every day. Electronic retailers or e-tailers also have the ability to

offer a wide selection of product since all they really need in order to attract orders is a picture

anddescription of the product. That is, they may not need to have the product on-hand the

wayphysical stores do. Instead an e-tailer can wait until an order is received from his customer

before placing the order with the suppliers. This cuts down significantly on the cost

of maintaining products in-stock.

Franchise

A franchise is a form of contractual channel in which one party, the franchisor,controls the

business activities of another party, the franchisee. Under these arrangements, aneligible

franchisee agrees to pay for the right to use the franchisors business methods and

other important business aspects, such as the franchise name. For instance, McDonalds is a well-

known franchisor that allows individuals to use theMcDonalds name and methods to deliver food

to consumers. Payment is usually in the form of aone-time, upfront franchise fee and also on-

going percentage of revenue. While the cost to thefranchisee may be quite high, this form of

retailing offers several advantages including:

1.Allowing the franchisee to open a retail outlet that may already be known to localcustomers,

and

2.Being trained in operating the business which may allow the franchisee to be successfulmuch

faster than if they attempted to start a business on their own.

Convenience

As the name implies these general merchandise retailers cater to offeringcustomers an easy

purchase experience. Convenience is offered in many ways including througheasily accessible

store locations, small store size that allows for quick shopping, and fastcheckout. The product

selection offered by theseretailers is very limited and pricing can be high

Retail has played a major role world over in increasing productivity across a wide range of

consumer goods and services .The impact can be best seen in countries like U.S.A., U.K.

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,Mexico, Thailand and more recently China. Economies of countries like Singapore ,Malaysia,

Hong Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector. Retail is the

second-largest industry in the United States both in number of establishments and number of

employees. It is also one of the largest worldwide. The retail industry employs more than 22

million Americans and generates more than $3 trillion in retail sale annually. Retailing is a U.S.

$7 trillion sector .Wal-Mart is the worlds largest retailer. Already the worlds largest employer

with over1million associates, Wal-Mart displaced oil giant Exxon Mobil as the worlds largest

company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has become the most

successful retail brand in the world due its ability to leverage size, market clout, and efficiency to

create market dominance. Wal-Mart heads Fortune magazine list of top 500 companies in the

world. Forbes Annual List of Billionaires has the largest number (45/497) from the retail

business.

The global Retail scenario: The US$ 9 trillion Retail industry is one of the worlds largest

industries and still growing. 47 of the Global Fortune 500 companies & 25 of Asias Top 200

companies are retailers. Even as the developing countries are making rapid strides in this

industry, organized Retail is currently dominated by the developed countries with the USA, EU

& Japan constituting 80% of world. Retail is a significant contributor to the overall economic

activity the world over: the total Retail share in the World GDP is 27% while in the USA it

accounts for 22% of the GDP. The share of organized Retail in the developing markets ranges

between 20% to 55%. Traditionally, local players tend to dominate in their home markets. Wal-

Mart, the worlds leading retailer, has about 8% of the US$ 2,350 billion market in the USA.

Similarly, Tesco has a market share of about 13% in the US$ 406 billion UK market. The main

value propositions that most large retailers use a are a combination of low price, all-under-one-

roof convenience and neighborhood availability. India has emerged as the most attractive

retail market three years in a row. The Indian Retail industry is a US$ 270 billion industry and is

growing at over 13% per annum. Only about 4.6%(US$12.42 billion) of the industry is

organized. If this share increases to 10% by 2011, the size of organized retailing could touch

US$ 55 billion a CAGR of over 35%. At the Centre of Indias booming economy are the top

six cities of Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad representing 6% of the

population yet contributing 14% of the GDP. Also notable is the fact that 85% of Indias urban

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Retail market is concentrated in the countrys eight large cities. Retail Business is a global

business. Retail business grew between 25% - 30% percent in India and 13 percent in fast

growing economies China and Russia. Global retail industry has been expanding to new markets

for a few years now .Retail stores constitute 20% of US GDP& is the 3 rd. largest employer

segment in USA. China on the other hand has attracted several global retailers in recent times.

Retail sector employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour

have already entered the Chinese market. In the year 2003, Wal-Mart & Carrefour had sales of

US$70.4Crore&US$160Crorerespectively.

The global retail industry has traveled a long way from a small beginning to an industry where

the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone accounts for

30 % of the worldwide demand. Retail turnover in the EU is approximately Euros 2,00,000 Crore

and the sector average growth is showing an upward pattern. The Asian economies (excluding

Japan) are expected to grow at 6% consistently till 2005-06.

On the global Retail stage, little has remained same over the last decade. One of the few

similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still

holds that distinction. Other than Wal-Mart's dominance, there's a little about today's

environment that looks like the mid-1990s. The global economy has changed, consumer demandhas shifted & retailers' operating systems today are infused with far more technology than was

the case six years ago.

Given below a list of World's top 15 retailers:

DT

Rank

04

Country of

Origin

Company

name

Formats 2010 retail sales

(US $ Crore)

1 US Wal-Mart Discount,

Hypermarket,

Supermarket,

35,632.9

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Superstore,

Warehouse

2 France Carrefour Discount,

Hypermarket,

Supermarket,

Specialty,

Convenience,

Cash & Carry

9,979.6

3 US Home Depot DIY 8481.6

4 Germany Metro Hypermarket,

Superstore,

Specialty,

Convenience,

Cash & Carry,

Departmental,

DIY, Food

Service

7,050.3

5 US Kroger Discount,

Convenience,

Supermarket,

Super center,

Warehouse,

Specialty

6,379.1

6 UK Tesco Department,

Hypermarket,

Supermarket,Superstore,

Convenience

9,153.5

7 US Target Department,

Discount,

7,678.1

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Super center

8 Netherlands Ahold Discount,

Hypermarket,

Supermarket,

Specialty,

Convenience,

Cash & Carry,

Drug

6,458.4

9 US Costco Warehouse 5,169.3

10 Germany Aldi

Einkauf

Discount,

Supermarket

5,006.0 e

11 Germany Rewe Hypermarket,

Superstore,

Super market,

Specialty,

Convenience,

Cash & Carry,

Departmental,

DIY, Food

Service,

Discount,

Drug

4,893.1e

12 France Intermarche Superstore,

Super market,

Specialty,

Convenience,Cash & Carry,

DIY, Food

Service,

Discount

4,747.2e

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13 US Sears Department,

mail order,

Specialty

4,637.2

14 US Safeway,

Inc.

Supermarket 5,555.3

15 US Albertsons Convenience,

Drug,

Supermarket

5,543.6

e= estimate.

2.2 NATIONAL SCENARIO OF RETAIL INDUSTRY

India is the 4th largest economy in the world in Purchasing Power Parity (PPP) terms after USA,

China and Japan. In 2003,India became the second fastest growing economy in the world

with a growth rate of 8.2%.The economy is expected to grow at7-8% per annum for the next 5

years. However the average income of an Indian evaluated on the basis of GDP per capita is

$620 (Rs27900). On this measure India figures a lowly 127 in a committee of 177 nations in the

Human Development Report(HDR) 2005 produced by United Nations Development Program

(UNDP).On the other extreme, India has one of the highest savings rate in the world with Rest

29 of every Rs 100 of its national income being saved. These extremities leaves a lot of

opportunity for marketers, both Indian and international. One of the key growth factors has been

the shift to service sector which accounts for50% of the total GDP. Led by services such as

IT,telecommunication, healthcare and retailing, the services sector is likely to play an even more

important role in the Indian economy. Retailing in India is one of the significant contributors to

the India economy and accounts for 35% of the GDP. India has a large number of retail

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enterprises. With close to 12 million retail outlets India has one of the highest retail densities in

the world, but only 4% being larger than 500 sq ft in size. In terms of the structure, the industry

is fragmented and predominantly consists of independent, owner-managed shops. The retail

businesses include a variety of traditional retail formats, such as "kirana" stores which stock

basic household necessities (including food products), street markets-regular markets held at

fixed Centre retailing food and general merchandise items, street vendors-mobile retailers

essentially selling perishable food items-fruits, vegetables etc. and small non specialized

retailers.

India has a large number of retail enterprises. With close to 12 million retail outlets India has one

of the highest retail densities in the world. In terms of the structure, the industry is fragmented

and predominantly consists of independent, owner managed shops.

In India, the retail sector is the second largest employer after agriculture. The retail industry in

India is estimated to employ about 10% of the total labor force. The retail industry in India is

enjoying boom time and job opportunities in retailing have been increasing. In fact, retailing has

emerged as a new stream of management curriculum, providing new areas of employment. The

retailing sector in India is highly fragmented and predominantly consists of small independent,

owner-managed shops. Given the size, and the geographical, cultural and socio-economic

diversity of India, there is no role model for Indian suppliers and retailers to adapt or expand in

the Indian context

The retail industry in India is witnessing a high level of organized business activity CRM, supply

chain management, visual merchandising & customer loyalty programs are now buzzwords in

the industry. Nowhere is this transformation more evident than in the organized retail segment

for apparel and lifestyle products which is grow at more than 25% to reach Rs18,10,000 cores

by 2011.

Retailing in India has witnessed a huge growth in the recent years. Retailing in India is gradually

inching its way towards becoming the next boom. The Indian retail industry is largest among all

the industries in India, According to the India Retail Report 2009 compiled by research group

Images F&R Research rising economic growth will fuel the growth of industry and it will

touch Rs. 18,10,000 cores by 2010.

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India has emerged as the most attractive retail market three years in a row. The Indian Retail

industry is a US$ 270 billion industry and is growing at over 13% per annum. Only about

4.6%(US$12.42 billion) of the industry is organized. If this share increases to 10% by 2011, the

size of organized retailing could touch US$ 55 billion a CAGR of over 35%.

Retailing in India is the largest employer after agriculture. It employs almost 7% of the total

work force in India and has a contribution of 14% to the national GDP. In the year 2004 , the size

of Indian organized retail industry was Rs 28000 Crore, which was only 3% of the total retailing

market. Organized retailing is projected to grow at the rate of 25%-30% p.a. and is estimated to

reach an astounding Rs18,10,000 Crore by 2010. The contribution of organized retail is

expected to rise from 3% to 9% by the end of the decade. The projection for the year 2005 is Rs

35000 Crore.

The retail industry in INDIA has changed its face and approach. Sales people working in this

industry play major role in handling the customers effectively. This study is done to evaluate the

training system used by the retail industry in INDIA and also to understand training aspects

which keeps the sales force of retain industry fit and ready to face any kind of challenges,

particularly due to increasing domestic and international competition.

Retailing is one of the biggest sectors and it is witnessing a revolution in India. The new entrantin retailing in India signifies the beginning of retail revolution. The Windows of Opportunity

shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006.

India shows a retail market of US$330 billion that is expected to grow 10% a year, with modern

retailing just beginning.

India is a country having one of the most unorganized retail markets. Traditionally it is a

familys livelihood, with their shop in the front and house at the back, while they run the retail

business. More than 99% retailers function in less than 500 square feet of shopping space. The

Indian retail sector is estimated at around Rs 900,000 crore, of which the organized sector

accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the

waiting for the consumer-savvy organized retailer. Purchasing power of Indian urban consumer

is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches,

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Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely

accepted by the urban Indian consumer. Indian retailers need to take advantage of this growth

and aim to grow, diversify and introduce new formats and have to pay more attention to the

brand building process. The emphasis here is on retail as a brand rather than retailers selling

brands. The focus should be on branding the retail business itself. In their preparation to face

fierce competitive pressure, Indian retailers must come to recognize the value of building their

own stores as brands to reinforce their marketing positioning, to communicate quality as well as

value for money. Sustainable competitive advantage will be dependent on translating core values

combining products, image and reputation into a coherent retail brand strategy. There is no doubt

that the Indian retail scene is booming.

The Indian retail industry is the fifth largest in the world. Comprising of organized andunorganized sectors, India retail industry is one of the fastest growing industries in India,

especially over the last few years. Though initially, the retail industry in India was mostly

unorganized, however with the change of tastes and preferences of the consumers, the industry is

getting more popular these days and getting organized as well. With growing market

demand.According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney,

India retail industry is the most promising emerging market for investment. In 2007, the retail

trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In

2011, it rose to 22%.According to a report by North bride Capita, the India retail industry is

expected to grow to US$ 700 billion by 2010. By the same time, the organized sector will be

20% of the total market share. It can be mentioned here that, the share of organized sector in

2007 was 7.5% of the total retail marketIndia has been ranked as the third most attractive nation

for retail investment among 30 emerging markets by the US-based global management

consulting firm, A T Kearney in its 9th annual Global Retail Development Index (GRDI) 2010.

Indian retail industry is the largest industry in India, contributing to over 13% of the country's

GDP. Organized retail industry in India is expected to rise 35% yearly being driven by strong

income growth, changing lifestyles, and favorable demographic patterns .It is expected that by

2011-12 modern retail industry in India will be worth US$ 590 billion .It has further been

predicted that the retailing industry in India will amount to US$ 833 billion by 2013 and US$ 1.3

trillion by 2018. Shopping in India has witnessed a revolution with the change in the consumer

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buying behavior and the whole format of shopping also altering. Industry of retail in India which

has become modern can be seen from the fact that there are huge shopping centers, malls and

sprawling complexes which offer food, shopping, and entertainment all under the same roof.

Indian retail industry is expanding itself most aggressively; as a result a great demand for real

estate is being created. Indian retailers preferred means of expansion is to expand to other

regions and to increase the number of their outlets in a city.

In the Indian retailing industry, food is the most dominating sector and is growing ata rate of 9%

annually. The branded food industry is trying to enter the India retail industry and convert Indian

consumers to branded food. Since at present 60% of the Indian grocery basket consists of non-

branded items. Indian retail industry is progressing well and for this to continue retailers as well

as the Indian government will have to make a combined effort. Indian retailing industry has seen

phenomenal growth in the last five years. Organized retailing has finally emerged from the

shadows of unorganized retailing and is contributing significantly to the growth of Indian retail

sector. The India Retail Sector Analysis report helps clients to analyze the opportunities and

factors critical to the success of retail industryin India.

Indian retail industry is going through a transition phase. Most of the retailing in our country is

still in the unorganized sector. The spread out of the retails in US and India shows a wide gap

between the two countries. Though retailing in India is undergoing an exponential growth, the

road ahead is full of challenges

Traditional Retail Scene in India

India is the country having the most unorganized retail market. Traditionally the retail business is

run by Mom & Pop having Shop in the front & house at the back. More than 99% retailers

function in less than 500Sq.Ft of area. All the merchandise was purchased as per the test & vim

and fancies of the proprietor also the pricing was done on ad hock basis or by seeing at the face

of customer. Generally the accounts of trading & home are not maintained separately. Profits

were accumulated in slow moving & non-moving stocks which were to become redundant or

consumed in-house. Thus profits were vanished without their knowledge. The Manufactures

were to distribute goods through C&F(Carry and Forward) agents to Distributors &Wholesalers.

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Retailers happen to source the merchandise from Wholesalers & reach to end-users. The

merchandise price used to get inflated to a great extent till it reaches from Manufacturer to End-

user. Selling prices were largely not controlled by Manufacturers. Branding was not an issue for

majority of customers. More than 99% customers are price sensitive & not quality or Brand

Sensitive at the same time they are Brand conscious also. Weekly Bazaar in many small towns

was held & almost all the commodities were on the scene including livestock. Bargaining was

the unwritten law of market. Educational qualification level of these retailers was always low.

Hence market was controlled by handful of distributors &/or Wholesalers. Virtually there was

only one format of retailing & that was mass retail. Retailer to consumer ratio was very low, for

all the categories without exception. Varity in terms of quality, Styles were on regional basis,

community based &truly very low range was available at any given single place. Almost all the

purchases / (buying) by mass population was need oriented & next turn may be on festivals,

Marriages, Birthdays & some specific occasions. Impulsive buying or consumption is restricted

to food or vegetables etc. Having extra pair of trousers or Shirts or Casuals & Formals & leisure

wear& sports wear & different pair of shoes for occasions is till date is a luxury for majority

population except for those living in Metros.

Purchasing power of India urban consumer is very low and that of Branded merchandise in

categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food, Jewellery, are slowly

seeping into the lifeline of Indian City folks. However electronic & electrical home appliances

do hold appropriate image into the minds of consumers. Brand name does matter in these white

goods categories. In the coming times also majority of organized retailers will find it difficult to

keep balance with rest of the unbranded retail market which is very huge. Retailing consists of

those business activities involved in the sale of goods and services to consumers for their

personal, family, or household use. Retailing comprises of four elements customer orientation,

coordinated effort, value-driven, and goal orientation.

Major Retailers in India

Pantaloons:

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Pantaloons is one of the biggest retailers in India with more than 450 stores across the country.

Headquartered in Mumbai, it has more than 5 million sq. ft. retail space located across the

country. It's growing at an enviable pace and is expected to reach 30 million sq. ft. by the year

2010. In 2001, Pantaloons launched country's first hypermarket Big Bazaar. It has the

following retail segments:

y Food & Grocery: Big Bazaar, Food Bazaary Home Solutions: Hometown, Furniture Bazaar, Collection-iy Consumer Electronics: e-zoney Shoes: Shoe Factoryy

Books, Music & Gifts: Depoty Health & Beauty Care: Star, Sitaray E-tailing: Futurebazaar.comy Entertainment: Bowling Co.

Tata Group

Tata group is another major player in Indian retail industry with its subsidiary Trent,

which operates Westside and Star India Bazaar. Established in 1998, it also acquired the

largest book and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft

retailspaceacross the country.

RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it came into

food & grocery retailing in 1996 with its retail Food world stores. Later it also opened the

pharmacy and beauty care outlets Health & Glow.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance

Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting

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its sales to reach Rs. 90,000 crores by 2010.

AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis

Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in

other segments of retail. It will invest Rs. 8000-9000 corers by 2010.

Retail formats in India

Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of

categories.

y Mom-and-pop stores: they are family owned business catering to small sections; they areindividually handled retail outlets and have a personal touch.

y Departmental stores: are general retail merchandisers offering quality products andservices.

y Convenience stores: are located in residential areas with slightly higher prices goods dueto the convenience offered.

y Shopping malls: the biggest form of retail in India, malls offers customers a mix of alltypes of products and services including entertainment and food under a single roof.

y E-trailers: are retailers providing online buying and selling of products and services.y Discount stores: these are factory outlets that give discount on the MRP.y Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other

small items can be bought via vending machine.

y Category killers: small specialty stores that offer a variety of categories. They are knownas category killers as they focus on specific categories, such as electronics and sporting

goods. This is also known as Multi Brand Outlets or MBO's.

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y Specialty stores: are retail chains dealing in specific categories and provide deepassortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of

examples.

Challenges facing Indian retail industry

y The tax structure in India favors small retail businessy Lack of adequate infrastructure facilitiesy High cost of real estatey Dissimilarity in consumer groupsy Restrictions in Foreign Direct Investmenty Shortage of retail study optionsy Shortage of trained manpowery Low retail management skill

The Future

The retail industry in India is currently growing at a great pace and is expected to go up to US$

833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a

CAGR of 10%. As the country has got a high growth rates, the consumer spending has also goneup and is also expected to go up further in the future. In the last four year, the consumer spending

in India climbed up to 75%. As a result, the India retail industry is expected to grow further in

the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of

40%.

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Retail companies in India

Top 10 companies in Indian retail industry are the following:

y Shopper's stopy West side(Trent)y Pantaloon (Big Bazzar)y Life styley RPG retail( foodworld,musicworld )y Crosswordy Wills Lifestyley Globusy Piramals (pyramid crosswords)y Ebony Retail Holdings ltd

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ORGAINSED RETAILING IN INDIA

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, organized retailing 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 2007, the share of organized retail in the retail pie will jump three times to reach

5-6 per cent.

Retail in India largest industry accounting for over 10% of the country GDP and around 8% 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 player entering the market. The future is

promising the market is growing government policies are becoming more favorable and

emerging technology and facilitating operations.

Some key facts retail in India largest industry accounting for over 10% of the country

GDP and around 8% of the employment.The market size of Indian retail industry is about US $

312 billion. Organized retail penetration, which was expected to touch 16 percent by 2012 from

the current 5 percent, is likely to trace 10.4 percent only Organized retail in India has the

potential to add over Rs. 2,000 billion (US$45 billion)business by the Year 2010 generating

employment for some 2.5 million people in various retail operations and over 10 million

additional workforce in retail support activities including contract production & processing,

supply chain & logistics, retail real estate development & management etc. It is estimated that it

will cross the $650-billion mark by 2011, with an already estimated investment of around $421

billion slated for the next four years

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The growth factors in India organized sector are various but it is mainly due to the fact that

India's economy is booming. Also, the rise in the working population which is young, pay-

packets which are hefty, more nuclear families in urban areas, rise in the number of women

working, more disposable income and customer aspiration, western influences and growth in

expenditure for luxury items. All these are the factors for the growth in Indian organized retail

sector. According to the Icrier report, the retail business in India is estimated to grow at 13%

from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is

expected to grow at about 10% per annum with sales expected to rise from $ 309 billion in 2006-

07 to $ 496 billion in 2011-12. With over 1,000 hypermarkets and 3,000 supermarkets projected

to come up by 2011, India will need additional retail space of 700,000,000 sq.ft. (65,000,000 m2)

as compared to today. Current projections on construction point to a supply of just 200,000,000

sq.ft. (19,000,000 m2), leaving a gap of500,000,000sq.ft. (46,000,000 m2) that needs to be filled,

at a cost of US$1518 billion. Many Indian companies have entered the retail industry in India

and this is also a factor in the growth of Indian organized retail sector. Reliance Industries

Limited is planning to invest US$ 6 billion in the organized retail sector in I India by opening

1500 supermarkets and 1000 hypermarkets. Bharti Telecoms is planning a joint venture worth

750 million with Tesco a global retail giant. Pantaloons are planning to invest US$ 1 billion in

order to increase its retail space to 30 million square feet. Such huge investment is also a factor

in the growth of the organized retail sector in India. The world's largest retailer by sales, Wal-

Mart Stores Inc. and Sunil Mittal's Bharti Enterprises have entered into a joint venture agreement

and they are planning to open 10 to 15 cash-and-carry facilities over seven years, Carrefour the

worlds second largest retailer by sales, is planning to setup two business entities in the country

one for its cash and- carry business and the other a master franchisee which will lend its banner,

technical services and know how to an Indian company for direct-to-consumer retail. The

worlds fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its warehouse

club model is also interested in coming to India and waiting for the right opportunity. Tesco

Plc.,plans to set up shop in India with a wholesale cash-and-carry business and will help Indian

conglomerate Tata group to grow its hypermarket business. The factors for growth in Indian

organized retail sector are many and thats the reason behind its massive growth, but for this to

continue both the Indian retailers and the government will have to work together. Organized

retailing in most economies typically passes through four distinct phases in its evolution cycle.

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In the first phase, new entrants create awareness of modern formats and raise consumer

expectations. In the second phase consumers demand modern formats as the markets develop

thereby leading to a strong growth. As with the life cycle of any industry, the high rate of growth

would lead to a stage of mature market wherein all the players would strengthen their positions.

This will be followed by the final phase where the market would reach a saturation point, the

growth would be limited and for sustainable growth, retailers would explore new markets as well

as evaluate inorganic opportunities

UNORGAINSED RETAILING IN INDIA

Unorganized retailing, on the other hand, represents 97 per cent of the total retail market is

mainly characterized by typically small retailers, traditional formats of low-cost retailing, more

prone to tax evasion and lack of labor law supervision. The local Karana shops, owner manned

general stores, pan/bedshops, convenience stores, hand cart and pavement vendors, etc. Food

retail trade is a very large segment of the total economic activity of our country and due to its

vast employment potential; it deserves very special focused attention. Efficiency enhancements

and increase in the food retail sales activity would have a cascading effect on employment and

economic activity in the rural areas for the marginalized workers. India is one of the largest

unorganized retail markets in the world and more than 96 per cent of the retailers work in less

than 500 sq.ft. of area.

The unorganized retail sector in India has been the traditional employer to a large number of

people across the country. A retail outlet in an unorganized sector feeds a household of six to

seven members."A retail outlet in the unorganized sector takes care of minimum 10 persons. It is

the lifeline of scores of people in semi-urban and urban India.CAIT has decided to begin at least

500 retail schools to train retailers in the unorganized sector to meet challenges emanating from

the entry of big players into the retail sector. According to Khandelwal, India has nearly 50million traditional or unorganized retailers, who need to be adequately trained to face the

onslaught from the major retail players

Scope of the Indian Retail Market :

The scope of the Indian retail market is immense for this sector is poised for thehighest growth in

the next 5 years. The Indian retail industry contributes 13% of the countrys GDP in the Indian

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retail market the scope for growth can be seen from the fact that it is expected to rise to US$ 590

billion in 2011-12 from US$ 309 billion in 2006-07.

The organized retailing sector in India was only 7% in 2008 and is expected to riseto 25-30% by

the year 2016. There are under construction at present around 325departmental stores, 300 new

malls, and 1500 supermarkets. This proves that there is atremendous scope for growth in the

Indian retail market. The growth of scope in the Indian retail market is mainly due to the change

in the consumers behavior. For the newgeneration have preference towards luxury commodities

which have been due to the strongincrease in income, changing lifestyle and demographic

patterns which are favorable. Thescope of the Indian retail market has been seen by many retail

giants and thats the reasonthat many new players are entering the India retail industry.

ORGANIZATIONAL CHART OF BIG BAZAAR

Store manager

Assistant store

mana er

Department

Manager

Assistant department

Manger

Team

leader

Security

House keeping

MarketingTeam

member

Human

resource

managerVisual

merchandising

Assistant Visual

merchandising

Administration

Maintenance

Information Sales

manage

Cashie

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2.3 SCENARIO OF THE STATE IN WHICH THE PROJECT IS DONE

Retailing in Kerala is a subject too subtle and relevant; as Kerala is know of more as a consumer

state rather than a producer state. The introduction of Margin Free Markets have turned out to be

grand success resulting in it becoming one of the largest retail chains in the country.

Margin Free Markets

Margin Free Markets is the largest retail chain in the state of Kerala and one of the leading retail

chains in India. The first outlet of this chain started functioning on 26th January 1994 at

Thiruvananthapuram. There are currently more than 275 franchisees of Margin Free Markets

spread all over south India. The outlets are franchises and are not actually owned by the chain.

The Consumer Protection & Guidance Society currently control margin free markets, which is a

registered charitable institution that started functioning in 1993. The consumers are assured of

quality, quantity and the fair price of the goods sold through the Margin Free Markets. Any

retailer can upgrade his shop into a Margin Free outlet, by sending in an application to this

society. If his application is accepted, he has to make the necessary investment required. These

shops deal in the entire gamut of goods required by a home for its monthly consumption, viz.,

grocery, food and non-food FMCG items, fruits and vegetables, consumer goods & household

articles. Margin Free outlets are typical discount stores, offering one-stop-shop convenience andself-service facility at significant discount to its customers. Most of these customers, in time turn

out to be its permanent customers, by taking discount cards, which permit them to obtain larger

discounts than the non-card holders. The necessity to offer protection against the rising prices

gave birth to the idea of 'Margin Free Markets'. An enthusiastic entrepreneur named Mr. N.

RaviKumar conceived the idea. The idea turned out to be an instant success in Kerala especially

because Kerala is more of 'consumer' state than a 'producing' state.

Kerala depends on her neighbouring states for her consumer needs. Due to the large number of

intermediaries involved and the transportation costs, the prices are high and there is a wide

fluctuation in prices of groceries, fruits and vegetables. Groceries and FMCG goods are brought

directly from the production units of the neighboring states. In the process of direct purchase

from farmers and manufactures, the intermediaries are removed and a part of the margin or

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'profits' earned is disbursed among the consumers. The distribution to the different outlets under

the chain is taken as a collective responsibility and is done with the objective to reduce the total

transportation costs.

The baseline of the chain of supermarkets run by the society is `making consumer the king'. "The

wide acceptance gained by this concept over a very short span of time speaks for itself," says R.

Gopakumar, the founder-president and one of the key members of the Society. And when one

juxtaposes the fact that the people of Kerala are one of the most price and quality conscious

consumers in the country, the larger impact of this movement dawns upon us. From a solitary

shop in downtown Thiruvananthapuram, the society has grown into a full-fledged retail

supermarket chain with a presence all over Kerala.

"While thousandsofretailers andstockistsslugitoutin the market place tolure the consumer

back through lower prices, one thing is clearfor the moment in Kerala. The consumer will

definitelyhave the lastlaugh!" www.indiainfoline.com June 30, 2000.

Though the landscape of Retailing in Kerala has changed to a very large extend it still holds true,

to a large extend even today.

FoodWorld

Food World is one of the biggest retail chains in India. The RPG group opened the first Food

World outlet on May 9 1996 at Chennai, which was a 2400 square feet store. It is the only

national chain, having Foreign Direct Investment to the extent of 49% that is permitted in India.

Now Food World, operates as a 51:49 joint venture with Dairy Farm International of the Jardine

Matheson Group, a US $ 4.5 billion retail giant operating in the Asia-Pacific markets with the

requisite experience.

Food World has decided to concentrate more on Food World has decided to concentrate more on

local areas rather than to go for a nationwide presence in its expansion plans at the beginning.

South India was chosen, with focus on Bangalore and Chennai and later in Hyderabad. They

identified areas within the city with more than 4000 households in a 2-kilometer radius with an

average monthly income more than Rs. 4000. The important variables considered while setting

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up an outlet are choosing the right location, sourcing the merchandise and recruiting a trained

workforce. A typical store is between 3000-3500 sq. ft. in size and carries about 5500 items.

Food world handles on average 600 customers per day per store, which translates to 1.5 million

transactions per month. It is estimated that the chain serves more than three lakh families.

Ms. Mala Morris, Manager-Marketing of Food Worldsays that as on 1st November 2003, Food

World has 89 outlets spread across Tamil Nadu, Karnataka, Andhra Pradesh, Kerala and

Maharashtra (Pune). Speaking on the product portfolio, she said that, "Our strategy is to provide

all the monthly household requirements under one roof. Our product Portfolio includes grocery

of all kinds, fresh foods viz., fruits and vegetables in fresh/chilled/frozen form, food that can be

directly consumed, food and non-food FMCG products, general merchandise required in homes

like buckets, cups, shelves etc. Indian Made Foreign.

Liquor is also sold at certain outlets." Speaking on the pricing strategy followed, she said, "We

follow the strategy to sell around 100-120 items at any point of time at below Maximum Retail

Price (MRP) rates. These are generally the key necessary items or the items for which the

customer attaches more value. In addition there are also lots of schemes and offers to attract and

retain customers." "For procurement we follow a strategy of 'Hub and Spoke". The purchasing

for each state is done collectively to reduce costs. The distribution to each outlet is done by Food

World in such a way as to reduce the total handling costs."

To source its daily requirement of fruits and vegetables, Food World participates in the early

morning auctions at the major wholesale markets and has a set of suppliers who then grade,

clean, pack and label the products in time for early morning dispatch to the stores. At peak

season, the Fruit & Vegetable shelf in a Food World store stocks around 125 items; making it the

widest range available under one roof in this category.

Food World's share of the organized retail market in the cities in which it operates is 62%,

clearly a dominant share. The firm expects the number of Food World stores to increase to 125

by the end of 2005. A smaller version, Food World Express is also planned to be launched in

future.

Supply Co

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The Kerala State Civil Supplies Corporation (Supplyco), is a statutory body established in 1974.

It procures rice, wheat products, sugar, pulses, vegetables and a range of consumer goods

independently from the open market and distributes them through a network of 663 retail outlets

called Maveli Stores, 11 supermarkets in district headquarters and 21 mobile Maveli vans

operating on designated routes.

The Government decides the price of articles sold by Supplyco through these shops, and has used

it as a highly effective mechanism, cutting out middlemen and controlling prices in the open

market. Its effects on the market are most evident during the festival seasons.

It is a festival that remembers the golden reign of the legendary King Mahabali, during whose

reign Kerala is believed to have prospered. Significantly, the Kerala State Civil Supplies

Corporation (Supplyco), through its Maveli chain of retail stores, has contributed to bringing

back those golden days by assuring fair price, quality products and insulation against evil trade

practices. Maveli offered a new experience to Keralites, which helped it and Supplyco become

household names in no time. Quality products and subsidised pricing are the twin advantages

that Supplyco extends to the consumer.

E tendering, introduced by the Corporation, enables participation of more tenders from anywhere

in the world, thereby increasing competition. This ensures the entry of genuine suppliers fromthe production centres of other States. The introduction of a payment system at the receiving

depot itself also enables spot payment to suppliers. The supplier will get ready payment on the

same day as delivery of goods through a demand draft couriered to them. This reduces

unnecessary delay and complexity in payment procedure, which again results in the reduction of

purchase cost.

The Kerala State Civil Supplies Corporation (Supplyco) has introduced the privilege card facility

in Supplyco supermarkets and Labham fair-price shops from the first week of April 2005.An

official spokesman said the card would be given free of cost to those who make purchases for Rs.

500 and above. Others would have to pay Rs 5 for the card. The cardholders will get a discount

of 2 per cent for every purchase made

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At the present scenario of Kerala the players like spencers, reliance ,more ,big bazaar are

dominate the Kerala retail market . The future of Retailing in Kerala looks bright, with the

proposed entry of majors like Hasbro Clothing Pvt Ltd (Genesis and Basics) and many others.

The government of India is already thinking of allowing FDI of upto 76% in the grocery and

food segment of the retail chains. According to governmental Estimates, retailing is growing at a

rate of 5.7% at the national level, even though the organised retail sector is just 3% of the total

industry

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CHAPTER -3 COMPANY PROFILE

Future Group

Future Group is the countrys leading business group that caters to the entire Indian consumption

space. It operates through six verticals: Future Retail (encompassing all lines of retail business),

Future Capital (financial products and services), Future Brands (all brands owned or managed by

group companies), Future Space (management of retail real estate), Future Logistics

(management of supply chain and distribution) and Future Media (development and management

of retail media spaces).

The groups flagship company, Pantaloons Retail (India) Limited operates over 5 million square

feet through 400 stores in 40 cities. Some of its leading retail formats include, Pantaloons, Big

Bazaar, Central, Food Bazaar, Home Town, EZone, Depot, Health & Beauty Malls and online

retail format, futurebazaar.com.

Future Group companies include, Indus League Clothing, that owns and retails brands like

Indigo Nation and Scullers and Galaxy Entertainment that 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.

The groups joint venture partners include Italian insurance major, Generali, French retailer

ETAM group, US-based stationary products retailer, Staples and UK-based Lee Cooper and

India-based Talwalkars, Blue Foods and Liberty Shoes.Future group, led its founder & group

CEO Mr. Kishore Biyani is one of Indialeading business house with multiple business spanning

across the consumptionspace. While retail firm the core business activity of future group, group

subsidiariesare present in consumer finance, capital, insurance, brand development

&entertainment. The first set of Big bazaar store open in 2001 in Kolkata, Hyderabadand

Bangalore.

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Future Groups vision is to, deliver Everything, Everywhere, Every time 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.

Future Group Manifesto

Future the word which signifies optimism, growth, achievement, strength, beauty ,rewards

and perfection. Future encourages us to explore areas yet unexplored, write rules yet unwritten;

create new opportunities and new successes. To strive for a glorious future brings to us our

strength, our ability to learn, unlearn and re-learn, our ability to evolve. We, in Future Group,

will not wait for the Future to unfold itself but create future scenarios in the consumer spaceand

facilitate consumption because consumption is development .There by, we will effect socio-

economic development for our customers, employees, shareholders, associates and partners. Our

customers will not just get what they need, but also get them where, howand whenthey need. We

will not just post satisfactory results, we will write success stories. We will not just operate

efficiently in the Indian economy, we will evolveit. We will not just spot trends, we will set

trendsby marrying our understanding of the Indian consumer to their needs of tomorrow.

It is this understanding that has helped us succeed. And it is this that will help us succeed in the

Future. We shall keep relearning. And in this process, do just one thing.

BIG BAZAAR

Kishore Biyani led the companys foray into organized retail with the opening up of the Big

Bazaar in the year 2001.It is a unit of Pantaloons Retail (India) Ltd and caters to the Great Indian

Middle Class. It was started as a hypermarket format head quartered in Jogeshwari, Mumbai with

approx. 50,000 sift of space. Its values and missions are to be the best in Value Retailing by

providing the cheapest prices and hence go the tag-line

Is se sasta aur achcha kahin nahin

It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the

city. Usually the items are clubbed together for offers as on the lines of Wal-Mart and Carrefour,

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offer weekend discounts and works on the same economy model as Wal-Mart and has

considerable success in many Indian cities and small towns.

It currently operates out of more than 150 stores and top 25 stores register a cumulative footfall

of 30lakh a month on an average. There is always a first mover advantage in an upcoming

sector. In India, that advantage goes to Big Bazaar. It has brought about many changes in the

buying habits of people. It has created formats which provide all items under one roof at low

rates, or so it claims.Also, with the ever increasing array of private labels, it has opened the doors

into the world of fashion and general merchandise including Home furnishings, utensils,

crockery, cutlery, sports goods and much more at prices that will surprise you. First Food Bazaar

format was added as Shop-In-Shop within Big Bazaar in the year 2002.Big Bazaar and Food

Bazaar blend the look, feel and touch of Indian Bazaar with modern retail concepts of choice,

convenience and quality. And this is just the beginning. Big Bazaar plans to add much more to

complete your shopping experience.

Rewrite Rules. Retain Values.

Group Vision

Future Group shall deliver Everything, Everywhere, Every time

for Every Indian Consumer in the most profitable manner.

Group 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.

We will be the trendsetters in evolving delivery formats, creating retail realty, making

consumption affordable for all customer segments for classes and for masses.

We shall infuse Indian brands with confidence and renewed ambition.

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We shall be efficient, cost- conscious and committed to quality in whatever we do. Weshall

ensure that our positive attitude, sincerity, humility and united determination shallbe the driving

force to make us successful.

Core Values

Indianness:

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 and action.

Adaptability:

To be flexible and adaptable, to meet challenges.

Flow:

To respect and understand the universal laws of nature

BOARDOFDIRECTORS

Mr. Kishore Biyani, Managing Director

Kishore Biyani is the Managing Director of Pantaloons Retail (India) Limited and the

Group Chief Executive Officer of Future Group.

Mr. Gopikishan Biyani,Whole time Director

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Gopikishan Biyani, is a commerce graduate and has more than twenty years of

experience in the textile business.

Mr. Rakesh Biyani, Whole time 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 Pantaloons Retail, he was the CEO of

Globus.

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.SDoreswamy, 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.DOKoshy, 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 centers

in Delhi, Chennai and Bangalore. He is a renowned consultant specializing in

international marketing and apparel retail management.

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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

Bala Deshpande, is Independent Director, Pantaloons Retail (India) Ltd. and also

serves on the boards of Deccan Aviation, Nagarjuna Construction, Wels pun 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,

Major Milestones

1987 Company incorporated as Manz Wear Private Limited. Launch of

Pantaloons trouser, Indias first formal trouser brand.

1991 Launch of BARE, the Indian jeans brand.

1992 Initial public offer (IPO) was made in the month of May.

1994 The Pantaloons Shoppe exclusive menswear store in franchisee format

launched across the nation. The company starts the distribution of branded

garments through multi-brand retail outlets across the nation.

1995 John Miller Formal shirt brand launched.

1997 Pantaloons Indias family store launched in Kolkata.

2001 Big Bazaar, Is se sasta aur accha kahi nahin - Indias first

hypermarket chain launched.

2002 Food Bazaar, the supermarket chain is launched.

2004 Central Shop, Eat, Celebrate in the Heart of Our City - Indias first

seamless mall is launched in Bangalore.

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2005 Fashion Station - the popular fashion chain is launched

2006 Future Capital Holdings, the companys financial arm launches realestate funds

Kshitijand Horizon and private equity fund In division. Plansforays into insurance and consumer

credit. Multiple retail formats includingCollection i, Furniture Bazaar, Shoe Factory, EZone,

Depotand futurebazaar.com are launched across the nation. Group enters into joint

venture agreements with ETAM Group and Generali.

2007- future group cross $1 billion mark.

2008- future group holding becomes the second group company to make a

successful initial public offering in the Indian capital market

2009 CNBC Award Consumer Awards 2009, Images Fashion Forum 2009, Coca-Cola

Golden Spoon Awards 2009

3.2 FUTURE PLANSOFFUTURE GROUP

Future Group plans 60-odd Big Bazaar stores by 2012 Future Group to launch Big Bazaar Clubs by 2011 Future group plan to set up 8stores in ANDHRA PRADESH by the end of 2011 Future group plans for seven more Big Bazaar Northern region Future Group plans to roll out around 60 new Big Bazaar hypermarkets over the next 18

months

Future Group shelves plan to spin off Big Bazaar Future Group to open 10 Big Bazaar outlets in south next 12 months The Future Group is planning to split off its retail chain Big Bazaar, into a separate

company.

FUT

URE PLANS

OF

BIG BAZAAR

Big Bazaar reveals its plan to setup 300 retail stores by 2010-11 Big Bazaar outlets offer insurance from Future Generali India Insurance Company Big Bazaar to expand in eastern India , to open 18 new stores by October 2011 Big Bazaar outlets to come up in Rourkela, Sambalpur in orissa

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Big Bazaar plans 48 more stores in by 20 Maharashtra10-11 Big Bazaar chain to get bigger in eastern region

3.3FINANCIAL PERFORMSOFTHE COMPANY

Balance sheet as on 30/6/2008 30/6/2009 30/6/2010

Source of fundsEquity share capital 31.86 38.06 41.23

Share capital (pending) _ _

Share application money _ _ _

Warrant application money 63.26 22.28 122.88

Reserves &surplus 1751.5 2211.48 2527.48

Share holders fund 1846.62 2272.42 2756.25

Secured loans 1991.77 2525.53 1236.03

Unsecured loans 200.01 324.86 150.19

Total loans 2191.78 2850.39 1386.22

Deferred tax liability 67.84 116.1 72.43

Total liabilities 4106.24 5238.91 4214.9

Application of funds

Gross Block 1368.76 1876.45 1417.04

Depreciation 170.59 307.69 294.89

Net Block 1198.17 1568.76 1122.15

Capital WIP 330.64 345.23 59.68

NB+CWIP 1528.81 1913.99 1181.83

Investment 586.52 954.03 2002.91

Current Assets

Inventories 1429.84 1787.84 1270.67

Debtors 113.16 177.25 123.57

Cash&bank balance 121.1 109.34 100.54

Loans &advances 962.32 1202.56 421.68

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* Acquires land before the real estate boom

* Always at approachable destinations

* Online trading facility

* Avg area of 10,000 to 15,000 sq.ft.

4) Promotion

It uses strategies like:

* Brand endorsement by famous personalities (M.S.Dhoni, Asin)

* Weekend discounts

* Saalkesabsesaste 3 din

* Exchange offers

* Advertising (T.V. ads, radio

MARKETING STRATEGYOF BIG BAZAAR

TARGET AUDIENCE:

* Big Bazaar targets higher and upper middle class customers.

* The large and growing young working population is a preferred customer segment.

* Targets specifically working women and home makers who are the primary decision makers.

BIG BAZAAR-USP:

* Low price as compared to other places.

* Schemes like Buy 1 gets 1 free, 20% discount etc

* 1 Billion Population.

* Availability of Liquid Cash/Disposable Income among Young Generation.

* Affordable man power

* Craze, Passion among Mr. Customer (Consumer)

* Different products under one roof.

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STRATEGIES:

* To minimize Retailing cost

* Operating: Fewer staff on the floor-one person for every 500 sq. ft.

* Minimize the Furniture cost

* Saving Shelf Space

* Way to deal unsold stock off

* Todays Price:Everyday a chosen product is being sold at

CHAPTER -4

LITERATURE REVIEW

Own Brand products are of increasing importance in many retail categories. While own brand

products are designed by the manufacturer and sold by the retailer, the positioning of own brand

products is under the complete control of the retailer. We consider a scenario where products

differ on a performance quality dimension and we analyze how retailermanufacturer

interactions in product positioning are affected by the introduction of own brand product.

Specifically, we consider a national-brand manufacturer who determines the quality of its

product as well the product's wholesale price charged to the retailer. Given the national-brand

quality and wholesale price, the retailer then decides the quality level of its own brand and sets

the retail prices for both products. We find that a manufacturer can derive substantial benefits

from considering a retailer's own brand introduction when determining the national brand's

quality and wholesale price. If the retailer has a significant cost disadvantage in producing high-

quality products, the manufacturer does not need to adjust the quality of the national-brand

product, but he should offer a wholesale price discount to ensure its distribution through the

retailer. If the retailer is competitive in providing products of high-quality, the manufacturer

should reduce this wholesale price discount and increase the national-brand quality to mitigate

competition. Interestingly, we find the retailer has incentive to announce own brand introduction

to induce the manufacturer's consideration of these plans in determining the national-brand

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product quality and wholesale price. ( 2010 Wiley Periodicals, Inc. Naval Research Logistics,

2010)

A Own brand can be defined as a brand name owned by a retailer or wholesaler for a line or a

variety of items under controlled or exclusive distribution(Euromonitor,1998).A own brand is

characterized by being a product produced ,improved, processed, packed or distributed

exclusively by the organization that has the brand control( A C Nielson,2002).It can carry the

companys name or use other brands not associated to the companys name .still due to these

characteristics and their appeals, the market for own brand has grown in last few years ( A C

Nielson,2004 ).Retailers own brands are also referred to as own labels , store brands, or

distributor-owned brands ( Nirmalya kumar& Jan-Benedict E.M.Steenkamp,2007)

Own brands also known as store brands, refers to those brands that are owned by, and sold

through ,specific chain of stores .These products are typically manufactured by a third party

under license. The own brand revolution was first observed in Europe and Canada

(Justine,2009). own brands are the only brand for which the retailer must take on all

responsibility from development, sourcing ,and warehousing to merchandising and marketing

.Unlike decisions retailers take about national brands, which in large measure are driven by the

manufacturers actions, the retailer plays a more determinant role in the success or failure of its

own label(Dhar,1997) Marketing Mix decision play a role in Own brand growth( Hoch,

Montgomery and Park.2002) (Sethuraman 2000) found that perceived quality differential

between national and private label play a dominant role in a consumers decision to consider

purchasing a own brand .Own brand products can offer same or even better quality than national

brands, but at a lower price ( Kristof De Wulf 2005) Originally , manufacturer brands dwarfed

retailers brand in size and ,through extensive marketing ,led sales by suggesting their brands

were synonymous with trust, quality and affluence (Nirmalya,2007) .According to ( Kim and

Parker 1999)it is difficult to measure the success of Own brands advertising .(Berry 2000)adds

that brands such as own brands which fall under the umbrella image of a company, are

essentially promoted in conjunction with all company promotions.(Kumar and

Steenkamp,2007)note that over use of promotions by manufacturer brands may conditions

consumers to become price sensitive and this may, eventually, result in a trade down to own

brand item .therefore deal seekers become regular purchasers of own brands over time(Meyer

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and Gertsman 2005) argue that differences in packaging between own brands and manufacturer

brands have been reduced over time.

With the increasing importance of brands and branding issues for enterprise, retailers have begun

to develop their own branded products just like the manufactures brands or national brands were

created, financed and owned by manufacturers .the brands that wholesale dealers or retailers own

are called Own brands (Lamb 1992) the most important characteristics of these brands is that

they are presented for sale only in the store of the retailer who owns a brand.(Dick,1997).with

the own brands, the retailer is responsible for the activities like developing the brand, obtaining a

financial source and storing and marketing the product. while the manufacturer are responsible

for the success of their national branded products, retailers play a great role in the success or

failure of their own branded products (Dhar,Hoch,1997).own brands have changed the nature of

retailing and pushed distributers into a manufacturing role through backward integration

(Tamilia,2000)

Own Brands In Food & Grocery Retail In India

Organized Food &Grocery retail has grown across the country in recent years due to entry of

corporate houses such as Reliance, Future Group, Aditya Birla Group, RPG group, Vishal Mega

Mart , TATA, and ITC .Overs the years, these retailers introduced their own brands across the

category, Own brands is still at a nascent stage in India compared to developed countries

However, especially in the last two years ,phenomenal growth of own brands is visible across

product categories ,Own brands follow budget and copycat types .premier own brands in fantasy

category is still in offering

Own brands growth in F&G retail varies as per product category.own brands in personal

care,home care,snacks and confectionary, cereals and packaged grocery categories is growing

.Retailers have developed products in these fast moving categories .Strategic thrust on branding

,pricing and promotion of own brand is done. Own brands visibility inside the store and shelf

space occupation,has become prominent.Attractive pricing and promotion schemes like25% free,

buy 2 get 1 free,product bundling force customers to pay a close attention .Look -a-like

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packaging,special pricing and promotion impact consumers buying decision process.own brands

are slowly occupying a part of the customers shopping basket.

The spread and wide range of Own brands across categories shows its growth in indian

retail.private brands have posed tough competition for national level brands in each category of

Home care,Personal care,Dairy products ,Cereals and Packaged foods.customers buying decision

has became bit difficult with this wider assortment of National and Own brands

Retailer Own brands Merchandise

Reliance fresh Sudz Washing powder,

detergent soap

Scrubz Dish wash bar

Externia Hand wash, liquid soap

Mopz Floor cleaner

Reliance glow CFL lamps

Reliance select and reliance

value

Salt, sugar, pulses,

Atta and dals

spencers Smart choice Cookie, juice,

Liquidwash,paperrolls

,scrubbersRight value grocery Sugar,poha,dals,pulses

Vishal mega mart v.clean,v.mate,v.fresh Liquidsoap, detergents,

floorcleaner,washing powder

more Feasters Noodels,soups,chips

110% Toiletcleaner,surface cleaner

Pestex Pest control

Enriche Soap, hairoil,

shaving cream, gel

Food bazaar Fresh &pure Dairyproducts-butter,

ghee, dhai

Food bazaar Sugar, tea, cereals

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own brands

Documents