CONTENTS

1. INDUSTRY PROFILE

1.1 Indian retail evolution

1.2 Scenario of Retail industry
1.3 Recent trends
1.4 Organised retails in India
1.5 Challenges facing the Indian retail industry

2. COMPANY PROFILE

2.1 Big bazaar overview

2.2 Future group
2.3 Major milestones
2.4 Awards and accolades

3. HUMAN RESOURCE INITIATIVES

3.1 Organsation structure

3.2 HR initiatives
3.3 Training
3.4 SWOT analysis

4. MARKETING PRACTICES AND STRATERGIES

4.1 Marketing initiatives

4.2 Positioning Stratergies
4.3 4ps of marketing

5. FINANCIAL PERFORMANCE
 5.1 3year balance sheets
5.2 Ratios

COMPANY ANALYSIS REPORT IN A PUBLIC COMPANY

(WITH SPECIAL REFERENCE TO TITAN)

A project report submitted

In partial fulfillment of the requirements
For the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by
Ms. M. SUNITHA
Under the guidance of
DR. D. MASTHAN
HOD, MBA

Department of Management Studies

Gokaraju Rangaraju Institute of Engineering and Technology

DEPARTMENT OF MASTER OF BUSINESS MANAGEMENT

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY

HYDERABAD – 500 085

2007 – 2008
 DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE

This is to certify that, the project work entitled “COMPANY ANALYSIS REPORT

IN A PUBLIC COMPANY WITH SPECIAL REFERENCE TO BIG BAZAR,

submitted to the Department of Management Studies, JNTU, in partial

fulfillment for the award of the degree Master of Business Administration, is a

bonafide work carried out by Ms. M. Sunitha under my guidance and

supervision.

Signature of the project guide.

 INDUSTRY PROFILE- RETAIL
INDUSTRY
INDIAN RETAIL EVOLUTION:

David Gilbert has defined retail as “any business that directs its marketing
efforts towards satisfying the final consumer based up on the organization of
selling goods and services as a means of distribution.

The word “retail” is derived from the French word “retaillier” which implies
“to cut again” or “to break bulk”. This can be applied to the functions carried
out by retailers which include assembling, sorting, standardizing, storing,
selling, providing credit facilities, packing; etc.Thus retailing is asset of
business activities which adds value to the products and services sold to the
consumers for their personal or family use.

Early retailing in India is can be traced back to the weekly haats or gatherings
at the market place where vendors used to put their offerings on sale. The
markets also saw the emergence of local mom and pop stores that are the
common kirana stores selling multiple goods with convenient
availability .Kirana stores have traditionally dominated the Indian retail
market for a long time .Bulk of the retail stores in India are small family run
businesses utilizing predominantly the house hold labor.

The inherent advantages of the un- organized retail sector include low cost
structure, negligible real estate cost, economic labor costs, low tax liabilities
and familiarity with shop loyal customers.
 Organized retail began to make its mark in India in the 1970s when shops like
Raymonds, Nallis and Bata were in the market through their exclusive stores or
franchisees .The early 1980s witnessed the emergence of organized retail stores
such as “Akbarallys” in Mumbai and “Spencers”in chennai.

These stores later evolved in to multi chain outlets and were the first to establish the
concept of organized retail in India.

During the 1990s ,the wave of liberalization , privatization and globalization

ushered in new retailing formats , modern techniques and exclusive retail
outlets like Shoppers Stop (1991),Pantaloon (1997) and others .Further
transformation was witnessed during the early years of the 21 st century , with
the opening of numerous super markets ,department stores ,chain stores and
malls across the country and the emergence of hyper markets and big
discount stores.
 SCENARIO OF RETAILING INDUSTRY

Retailing, the biggest private sector industry in the world ,is one of the prime
movers of an economy .One of the significant drivers for formal real estate and
urban development ,it accounts for 10% of the Gross Domestic Product (GDP)
of the most developed countries. Globally, retailing is big business –worth a
staggering of $6.6tn according to recent report submitted by McKinsey & Co.-
and much of it is accounted for by organized retailing.

INDUSTRY EVOLUTION

 Traditionally retailing in India can be traced to

 The emergence of the neighborhood ‘Kirana’ stores catering to the
convenience of the consumers
 Era of government support for rural retail: Indigenous franchise model of
store chains run by Khadi & Village Industries Commission
 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's
and Grasim first saw the emergence of retail chains
 Later Titan successfully created an organized retailing concept and established
a series of showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a shift from
Manufactures to Pure Retailers.
 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and
Music World in music; Crossword and Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers
 Mainly in urban areas, with facilities like car parking
 Targeted to provide a complete destination experience for all segments of
society
  Emergence of hyper and super markets trying to provide customer with 3 V’s
- Value, Variety and Volume
 Expanding target consumer segment: The Sachet revolution - example of
reaching to the bottom of the pyramid.

At year end of 2000 the size of the Indian organized retail industry is estimated at Rs.
13,000 crore

RECENT TRENDS

 Retailing in India is witnessing a huge revamping exercise as can be seen in

the graph
 India is rated the fifth most attractive emerging retail market: a potential
goldmine.
 Estimated to be US$ 200 billion, of which organized retailing (i.e. modern
trade) makes up 3 percent or US$ 6.4 billion
 As per a report by KPMG the annual growth of department stores is estimated
at 24%
 Ranked second in a Global Retail Development Index of 30 developing
countries drawn up by AT Kearney.
 Multiple drivers leading to a consumption boom:


 Favorable demographics
 Growth in income
 Increasing population of women
 Raising aspirations: Value added goods sales

 Food and apparel retailing key drivers of growth

 Organized retailing in India has been largely an urban
 Phenomenon with affluent classes and growing number of double-income
households.
 More successful in cities in the south and west of India. Reasons range from
differences in consumer buying behavior to cost of real estate and taxation
laws.
 Rural markets emerging as a huge opportunity for retailers reflected in the
share of the rural market across most categories of consumption

 ITC is experimenting with retailing through its e-Choupal and Choupal

Sagar – rural hypermarkets.
  HLL is using its Project Shakti initiative – leveraging women self-help
groups – to explore the rural market.
 Mahamaza is leveraging technology and network marketing concepts
to act as an aggregator and serve the rural markets.

 IT is a tool that has been used by retailers ranging from Amazon.com to eBay
to radically change buying behavior across the globe.
 ‘E-tailing’ slowly making its presence felt.

Organized Retail in India

The recent years have witnessed rapid transformation and vigorous profits in
Indian retail stores across various categories. This can be contemplated as a
result of the changing attitude of Indian consumers and their overwhelming
acceptance to modern retail formats. Asian markets witness a shift in trend
from traditional retailing to organized retailing driven by the liberalizations
on Foreign Direct Investments. For example, in China there was a drastic
structural development after FDI was permitted in retailing. India has entered
a stage of positive economic development which requires liberalization of the
retail market to gain a significant enhancement.

Domestic consumption market in India is estimated to grow approximately 7

to 8% with retail accounting for 60% of the overall segment. Of this 60%,
organized retail is just 5% which is comparatively lesser than other countries
with emerging economies. In developed countries organized retailing is the
established way of selling consumer products. Despite the low percentage,
Indian textile industry has grown noticeably in organized retailing of textile
products. The negative phase in exports may have compelled the Indian
textile retailers to explore the opportunities in the domestic market
substantially causing the outstanding growth in the concerned segment. These
indications give a positive notion that organized retailing has arrived in the
 Indian market and is here to stay. It is expected to grow 25-30 per cent
annually and would triple in size from Rs35,000 crore in 2004-05 to Rs109,000
crore ($24 billion) by 2010.

India is on the radar screen in the retail world and global retailers and at their
wings seeking entry into the Indian retail market. The market is growing at a
steady rate of 11-12 percent and accounts for around 10 percent of the
country’s GDP. The inherent attractiveness of this segment lures retail giants
and investments are likely to sky rocket with an estimate of Rs 20-25 billion in
the next 2-3 years, and over Rs 200 billion by end of 2010. Indian retail market
is considered to be the second largest in the world in terms of growth
potential.

A vast majority of India's young population favors branded garments. With

the influence of visual media, urban consumer trends have spread across the
rural areas also. The shopping spree of the young Indians for clothing,
favorable income demographics, increasing population of young people
joining the workforce with considerably higher disposable income, has
unleashed new possibilities for retail growth even in the rural areas. Thus,
85% of the retail boom which was focused only in the metros has started to
infiltrate towards smaller cities and towns. Tier-II cities are already receiving
focused attention of retailers and the other smaller towns and even villages
are likely to join in the coming years. This is a positive trend, and the
contribution of these tier-II cities to total organized retailing sales is expected
to grow to 20-25%.

Challenges facing the Organized Retail Industry

 Despite the rosy hopes, some facts have to be considered to positively initiate
the retail momentum and ensure its sustained growth. The major constraint of
the organized retail market in India is the competition from the un-organized
sector. Traditional retailing has been deep rooted in India for the past few
centuries and enjoys the benefits of low cost structure, mostly owner-
operated, therein resulting in less labor costs and little or no taxes to pay.
Consumer familiarity with the traditional formats for generations is the
greatest advantage to the un-organized sector. On the contrary, organized
sector have big expenses like higher labor costs, social security to employees,
bigger premises, and taxes to meet.

Availability and cost of retail space is one major area where Government
intervention is necessary. Liberalizing policy guidelines for FDI needs focus as
well. Proper training facilities for meeting the increasing requirements of
workers in the sector would need the attention of both Government and the
industry. Competition for experienced personnel would lead to belligerence
between retailers and higher rates of attrition, especially during the phase of
accelerated growth of the retail industry. The process of avoiding middlemen
and providing increased income to farmers through direct procurement by
retail chains need the attention of policy makers. Taking care of supply chain
management, mass procurement arrangements and inventory management
are areas that need the focus of entrepreneurs.

India is now on the radar of global retailers. Accelerated development of

retailing industry in the country and building brand value of domestic
products is essential not only for marketing our consumer products more
efficiently, but also for the development of our own retailing industry.

 The prospects are very encouraging. The first steps towards sophisticated
retailing are being taken, and "Crossroads" is the best example of this
 awakening. More such malls have been planned in the other big cities of
India.

 An FDI Confidence Index survey done by AT Kearney, retail industry is one

of the most attractive sectors for FDI (foreign direct investment) in India and
foreign retail chains would make an impact circa 2003

 Even though India has well over 5 million retail outlets of all sizes and styles
(or non-styles), the country sorely lacks anything that can resemble a
retailing industry in the modern sense of the term. This presents
international retailing specialists with a great opportunity.

 It was only in the year 2000 that the global management consultancy AT
Kearney put a figure to it: Rs. 400,000 crore (1 crore = 10 million) which will
increase to Rs. 800,000 crore by the year 2005 – an annual increase of 20 per
cent.

 Retailing in India is thoroughly unorganized. There is no supply chain

management perspective. According to a survey b y AT Kearney, an
overwhelming proportion of the Rs. 400,000 crore retail market is
UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is
organized.

 As much as 96 per cent of the 5 million-plus outlets are smaller than 500
square feet in area. This means that India per capita retailing space is about 2
square feet (compared to 16 square feet in the United States). India's per
capita retailing space is thus the lowest in the world (source: KSA Technopak
(I) Pvt Ltd, the India operation of the US-based Kurt Salmon Associates).

 Just over 8 per cent of India's population is engaged in retailing (compared

to 20 per cent in the United States). There is no data on this sector's
contribution to the GDP.

 From a size of only Rs.20,000 crore, the ORGANISED retail industry will
grow to Rs. 160,000 crore by 2005. The TOTAL retail market, however, as
indicated above will grow 20 per cent annually from Rs. 400,000 crore in 2000
to Rs. 800,000 crore by 2005 (source: survey by AT Kearney)

 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 first challenge facing the organised retail industry in India is:
competition from the unorganised sector. Traditional retailing has
 established in India for some centuries. It is a low cost structure, mostly
owner-operated, has negligible real estate and labour costs and little or no
taxes to pay. Consumer familiarity that runs from generation to generation is
one big advantage for the traditional retailing sector.

 In contrast, players in the organised sector have big expenses to meet, and
yet have to keep prices low enough to be able to compete with the traditional
sector. High costs for the organised sector arises from: higher labour costs,
social security to employees, high quality real estate, much bigger premises,
comfort facilities such as air-conditioning, back-up power supply, taxes etc.
Organised retailing also has to cope with the middle class psychology that
the bigger and brighter a sales outlet is, the more expensive it will be.

 The above should not be seen as a gloomy foreboding from global retail
operators. International retail majors such as Benetton, Dairy Farm and Levis
have already entered the market. Lifestyles in India are changing and the
concept of "value for money" is picking up.

 India's first true shopping mall – complete with food courts, recreation
facilities and large car parking space – was inaugurated as lately as in 1999 in
Mumbai. (this mall is called "Crossroads").

 Local companies and local-foreign joint ventures are expected to more

advantageously positioned than the purely foreign ones in the fledgling
organised India's retailing industry.

These drawbacks present opportunity to international and/or professionally

managed Indian corporations to pioneer a modern retailing industry in India and
benefit from it.

COMPANY PROFILE:
Big Bazaar
History: Pantaloon began as a textile and fabrics manufacturer in 1987 .It entered
the retail business in 1997 with the opening of the first Pantaloon Retail store in
Kolkota .Its promoter Kishore Biyani has kept on modifying his business model at
each stage of the industries development by demonstrating an uncanny instinct for
coming out with alternative formats .

According to him, “There isn’t a single formula for success in India’s retail market ”
and “The businesses that succeed are those with the biggest ideas and the right tools
to execute them .” Currently, Biyanis Future group commands a retail empire
comprising 55 Pantaloon Retail stores , 51 Big Bazaars (hyper market discount stores)
and 77Food Bazaars (food &Grocery outlets).In addition it operates “Central” mall in
some cities which provides various facilities like restaurants, shopping
arcades ,toys ,books and life cycle products all under one roof .

Pantaloon Retail using IT as a strategic tool to grow its businesses .Biyani

has announced plans to roll out 225 Big Bazaar stores and hundreds of other outlets
in other formats by 2011. Pantaloon has used geographical expansion through new
outlets and effective consumer promotions as a strategic tool for its growth.
Pantaloon Retail is undertaking expansion plans in to all possible formats of retail
across categories and segments. Approximately 30 million sq.ft by FY10.Turnover
expected to touch Rs30, 0000 cr($6.67 bn) by FY10-11

Type Subsidiary of Pantaloon Group

Founded 2001
Headquarters Jogeshwari, Mumbai, India
Industry Retail
Products Department store, Grocery store
Owner Kishore Biyani
Parent Pantaloon Group
Slogan Is se sasta aur accha kahin nahin
Website http://www.pantaloon.com/bigbazaar.htm

Big Bazaar
Big Bazaar, is the chain of retail stores of the big banner Pantaloon Retail
(India Ltd., which in turn is a segment of the Kishore Biyani, regulated
Future Group of Companies. Moreover the customer friendly ambiance and
the organized retailing of products also makes Big Bazaar one of the successful
retail companies in India.

Big Bazaar : Overview

Big Bazar, a part of the Pantaloon Group, is a hypermarket offering a huge array of
goods of good quality for all at affordable prices. Big Bazar with over 50 outlets in
different parts of India, is present in both the metro cities as well as in the small
towns. Big Bazar has no doubt made a big name in the retail industry of india,
moreover shopping here is further made a memorable experience with the varied
rates of discounts on products as well as discount vouchers available in a variety
of amounts, like INR 2000, INR 3000, INR 4000, INR 5000 and INR 10000 on all Big
Bazar products and accessories.

The variety of product range in Big Bazaar:

This large format store comprise of almost everything required by people from
different income groups. It varies from clothing and accessories for all genders like
men, women and children, playthings, stationary and toys, footwear, plastics,
home utility products,cosmetics, crockery,home textiles, luggage gift items, other
novelties, and also food products and grocery. The added advantage for the
customers shopping in Big Bazar is that there are all time discounts and
promotional offers going on in the Big Bazar on its salable products.

The significant features of Big Bazaar:

Shopping in the Big Bazaar is a great experience as one can find almost everything
under the same roof. It has different features which caters all the needs of the
shoppers. Some of the significant features of Big Bazaar are:
 The Food Bazaar or the grocery store with the department selling fruits and
vegetables
 There is a zone specially meant for the amusement of the kids
 Furniture Bazaar or a large section dealing with furniture
 Electronics Bazaar or the section concerned with electronic goods and
cellular phones
 FutureBazaar.com or the online shopping portal which makes shopping
easier as one can shop many products of Big Bazaar at the same price from
home
 Well regulated customer care telecalling services

Shop front of a Big Bazaar at the Bharth Mall

in Mangalore

Big Bazaar is a chain of department stores in India, currently with 75 outlets. It is

owned by the Pantaloon Retail India Ltd, Future Group. It works on the same
economy model as Wal-Mart and has considerable success in many Indian cities
and small towns. The idea was pioneered by entrepreneur Kishore Biyani, the
CEO of Future Group. Currently Big Bazaar stores are located only in India. It is
the biggest and the fastest growing chain of department store and aims at being
350 stores by the end of year 2010.

.
KISHORE BIYANI

Meet the King Of Retail - Mr. Kishore Biyani

Pantaloon Retail is the flagship enterprise of the Future Group, which is
positioned to cater to the entire Indian consumption space. The Future Group
operates through six verticals: Future Retail (encompassing all retail businesses),
Future Capital (financial products and services), Future Brands (management of
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 company operates their chain of super markets under the brand names of
 Big Bazaar - Discount stores
 E-Care - Customer Service Support
 E-ZONE - Consumer Durables
 Food Bazaar - Exclusive food market
 Central - Hypermarket
 Pantaloons - Fashion apparels

Three special zones in E Zone the Liberation Zone offers personal

products like products such as Plasma / LCD, Flat TV's, Home Theatre systems,
DVD players, and Stereo systems are displayed in the Experience Zone. And in the
Home Zone segment, one gets to pick electronic goods of his or her choice
including Refrigerators, Air Conditioners, washing machines and Microwave
ovens among other kitchen related appliances.

E-Care - the special post-purchase customer service support the service and
support at EZone will be unparalleled with the special 'E-Care' customer support
centre. E-Care is a special, dedicated support system designed to offer the best
customer service after computers, laptops, handy cams, MP 3 players and mobile
phones. Where the Purchase of any product at EZone.

Pantaloon Retail (India) Limited, is India’s leading retailer that operates

multiple retail formats in both the value and lifestyle segment of the Indian
consumer market. Headquartered in Mumbai (Bombay), the company operates
over 7 million square feet of retail space, has over 1000 stores across 51 cities in
India and employs over 25,000 people.

The company’s leading formats include Pantaloons, a chain of fashion

outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a
supermarket chain, blends the look, touch and feel of Indian bazaars with aspects
of modern retail like choice, convenience and quality and Central, a chain of
seamless destination malls. Some of its other formats include, Depot, Shoe Factory,
Brand Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and
Sitara. The company also operates an online portal, futurebazaar.com.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home

Town, a large-format home solutions store, Collection i, selling home furniture
products and E-Zone focused on catering to the consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year 2007
by the US-based National Retail Federation (NRF) and the Emerging Market
Retailer of the Year 2007 at the World Retail Congress held in Barcelona.
 Pantaloon Retail is the flagship company of Future Group, a business group
catering to the entire Indian consumption space.

Future Group
Future Group is one of the country’s leading business groups present in
retail, asset management, consumer finance, insurance, retail media, retail spaces
and logistics. The group’s flagship company, Pantaloon Retail (India) Limited
operates over 7 million square feet of retail space, has over 1000 stores across 53
cities in India and employs over 25,000 people. Some of its leading retail formats
include, Pantaloons, Big Bazaar, Central, Food Bazaar, Home Town, eZone, Depot,
Future Money and online retail format, futurebazaar.com.

Future Group companies includes, Future Capital Holdings, Future Generali India
Indus League Clothing and Galaxy Entertainment that manages Sports Bar, Brew
Bar and Bowling Co. Future Capital Holdings, the group’s financial arm, focuses
on asset management and consumer credit. It manages assets worth over $1 billion
that are being invested in developing retail real estate and consumer-related
brands and hotels.

The group’s joint venture partners include Italian insurance major, Generali,
French retailer ETAM group, US-based stationary products retailer, Staples Inc
and UK-based Lee Cooper and India-based Talwalkar’s, Blue Foods and Liberty
Shoes.
Future Group’s vision is to, “deliver Everything, Everywhere, Everytime to Every
Indian Consumer in the most profitable manner.” The group considers ‘Indian-
ness’ as a core value and its corporate credo is - Rewrite rules, Retain values.

Group Websites:
 futurebazaar.com
 futuregroup.in
 kshitijfund.com

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_space and facilitate consumption because
consumption is development. Thereby, 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, how and
when they 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 evolve it. We
will not just spot trends; we will set trends by 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.

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.

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

We shall ensure that our positive attitude, sincerity, humility and united
determination shall be 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.

Major Milestones
1987 Company incorporated as Manz Wear Private Limited. Launch of
Pantaloons trouser, India’s 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 Pantaloon 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 – India’s family store launched in Kolkata.
2001 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket
chain launched.
2002 Food Bazaar, the supermarket chain is launched.
2004 Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ - India’s first seamless
mall is launched in Bangalore.
2005 Fashion Station - the popular fashion chain is launched

aLL – ‘a little larger’ - exclusive stores for plus-size individuals is

launched
2006 Future Capital Holdings, the company’s financial arm launches real
estate funds Kshitij and Horizon and private equity fund Indivision.
Plans forays into insurance and consumer credit.

Multiple retail formats including Collection i, Furniture Bazaar, Shoe

Factory, EZone, Depot and futurebazaar.com are launched across the
nation.

Group enters into joint venture agreements with ETAM Group and
Generali.

2008

The Reid & Taylor Awards for Retail Excellence 2008

 Retail Leadership Award: Kishore Biyani

 Retail Best Employer of the Year: Future Group
 Retailer of The Year: Home Products and Office Improvements:
HomeTown

The Reid & Taylor Awards for Retail Excellence are an important
feature of the Asia Retail Congress - Asia’s single most
important global platform to promote world-class retail practices - and
are aimed at honouring the best, in Asian Retail scenario. India played
 host to Asia Retail Congress 2008.

2007

Images Retail Awards

Most Admired Retail Face of the Year: Kishore Biyani

Most admired retailer of the year: Large format, multi product store:
Big Bazaar

Most admired retailer of the year: Food and Grocery: Food Bazaar

Most admired retailer of the year: Home & office improvement:

HomeTown

Most admired Retail Company of the year: Pantaloon Retail (India) Ltd.

 Images Retail Forum followed strict international benchmarks in

deciding the top honours for Images Retail Awards ’07, with IRIS as
knowledge partner and global consulting firm AT Kearney as the
Process Approver.

National Retail Federation Awards

International Retailer for the Year 2007 – Pantaloon Retail (India) Ltd

 The National Retail Federation is the world’s largest retail trade

association with over 1.4 million members in the US and across
the world. Some of the past winners of the award include Metro AG
(Germany), Carrefour (France), Zara (Spain), Boticario (Brazil) and
Ito Yokado (Japan). The award was presented at the Retail’s Big
Show held in January 2007 in New York.

World Retail Congress Awards

Emerging Market Retailer of the Year 2007 – Pantaloon Retail (India)
Ltd

 The inaugural World Retail Congress held in Barcelona, Spain in

March 2007 attracted over one thousand retail professionals from
over sixty countries. The awards were decided by a multinational
Grand Jury. Winners in other categories included Inditex, Mall of
 Emirates, Marks & Spencer and IKEA.

Hewitt Best Employers 2007

Best Employers in India (Rank 14th) – Pantaloon Retail (India) Ltd

 Leading human resources consultancy, Hewitt Associates conducts

an annual survey of the best employers in India, as part of its global
initiative. It is based on CEO interview, People Practices Inventory
and Employee Opinion Surveys. Pantaloon Retail became the only
retailer to feature among the twenty-five best employers in India.

PC World Indian Website Awards

Best Indian Website in the Shopping Category - Futurebazaar.com

 PC World, a leading consumer technology magazine selected the best

Indian websites in various categories based on use of technology for
delivering solutions, information being presented in an intuitive and
concise manner and overall experience aided by design.

Reader’s Digest Trusted Brands Platinum Awards

Trusted Brands Platinum Award (Supermarket Category) – Big
Bazaar

 The Reader’s Digest awards are based on surveys done among

consumers by independent research agency, Nielsen Media
Research. This is the second consecutive time Big Bazaar has won
this award.

2006

Retail Asia Pacific Top 500 Awards

Asia Pacific Best of the Best Retailers – Pantaloon Retail (India) Ltd
Best Retailer in India – Pantaloon Retail (India) Ltd

 The Retail Asia publication in association with Euro Monitor and

KPMG honors the best retailers in 14 countries across the Asia Pacific
region. The awards were presented in Singapore in October, 2006.
Asia money Awards
Best Managed Company in India (Mid-cap) – Pantaloon retail (India)
Ltd.

 The Asia money publication conducts a poll among fund manages

and investors and does a quantitative analysis of financial
performance to select best managed companies in Asian countries.

Ernst & Young Entrepreneur of the Year Award

Ernst & Young Entrepreneur of the Year (Services) – Kishore Biyani

 Considered to be one of the most prestigious business awards in

India, a jury comprising leading names in Indian business selected
the winners based on courage, creativity, passion, endurance and
vision.

CNBC Indian Business Leaders Awards

The First Generation Entrepreneur of the Year – Kishore Biyani

 Organized by CNBC-TV18, the twelve awardees in various

categories are decided by a high profile jury, along with research
partners - The University of Chicago Graduate School of Business,
Development Dimensions International (DDI) and AC Neilson ORG
MARG.
 Lakshmipat Singhania – IIM Lucknow National Leadership Awards
Young Business Leader – Kishore Biyani

The award recognizes and honors individuals who have contributed

consistently to the betterment of our country through their pursuit of
excellence. The awards were presented in New Delhi by the Prime
Minister Dr. Manmohan Singh in December, 2006.

Images Retail Awards

Best Value Retail Store – Big Bazaar
Best Retail Destination – Big Bazaar
Best Food & Grocery Store – Food Bazaar
Retail Face of the Year – Kishore Biyani

 The Images Retail Awards are decided through a nationwide

consumer & industry poll and nominations followed by performance
assessment by team of analysts and jury.

Readers’ Digest Awards

Platinum Trusted Brand Award - Big Bazaar
  The Reader’s Digest awards are based on surveys done among
consumers by independent research agency, Nielsen Media
Research.

CNBC Awaaz Consumer Awards

Most Preferred Large Food & Grocery Supermarket – Big Bazaar

 Conducted in association with AC Nielsen-ORG Marg across 21

major cities, nearly 10,000 consumers were asked to choose their
most preferred brands.

Reid & Taylor Awards for Retail Excellence

Retail Entrepreneur of the Year – Kishore Biyani
 HUMAN RESOURCES
INITIATIVES:

 ORGANISATION STRUCTURE:
Mr. Kishore Biyani, Managing Director

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

and the Group Chief Executive Officer of Future Group.

 Mr. Gopikishan Biyani, Wholetime Director

 Mr. Rakesh Biyani, Wholetime Director
 Mr. Ved Prakash Arya, Director
 Mr. Shailesh Haribhakti, Independent Director
 Mr. S Doreswamy, Independent Director
  Dr. D O Koshy, Independent Director
 Ms. Anju Poddar, Independent Director
 Ms. Bala Deshpande, Independent Director
 Mr. Anil Harish, Independent Director
 Rakesh Biyani
CEO - Retail

Board of Pantaloon Retail (India) Ltd.

 Anshuman Singh

CEO - Value Fashion

 Arvind Chaudhary

CEO - Food Business

 Damodar Mall

CEO - Incubation & Innovation

 Hans Udeshi

CEO - General Merchandising

 Hemchandra Javeri

CEO - Home Solutions Retail (India) Ltd.

 Kailash Bhatia

CEO - Integrated Merchandising Group

 Madhumati Lele

CEO - Services

 Rajan Malhotra

CEO - Big Bazaar

 Sadashiv Nayak

CEO - Food Bazaar

 Sanjeev Agrawal

CEO - Pantaloons

 Vishnu Prasad

CEO - Central & Brand Factory

 Kruben Moodliar

President- Operations (Value Retailing)

 Mayur Toshniwal

CEO - North Zone

 Chandra Prakash Toshniwal

Chief Financial Officer

 Rajesh Joshi

Head - Operations (West Zone)

 Rohit Malhotra

Head - Operations (South Zone)

 Sandeep Marwaha

Head - Operations (East Zone)

 Sanjay Jog

Head - Human Resources

 Ushir Bhatt
 Executive Board Member

 Atul Takle

Head - Corporate Communications

 Prashant Desai

Head - Group IR & New Ventures (PE)

 Vinay Shroff

Head - Supply Chain Management

 Anand Adukia

Zonal Chief – Gujarat

HUMAN RESOURCE INITIATIVES

Pantaloon Retail believes that one of its sustainable competitive advantages

will continue to be the people who are part of the organization. Being in
service industry, the Company places a lot of focus is placed on attracting,
training, incentivising and retaining
talent. The vision is "To provide an environment that creates happy people
who have a meaningful life and add value to business and society." With
over 18000 employees at an average age of 27 years, the Company prides
itself on being a young and energetic organization, driven through the 'The
Pantaloon People Management System'. This is built on 5 pillars of people
based growth, namely - Culture Building, Performance Management
through
Balanced Scorecard, People Processes, Management Processes and
Leadership Brilliance.

TRAINING:
A competent Learning & Development Team is responsible for training
employees at all the levels across the countr y, focusing on primary and
secondary research into various aspects of retail and assessment of training
needs across Knowledge, Skills & Attitude areas. The emphasis is on
creating product and process knowledge through well defined programs
like Praarambh and Parikrama. For the critical front line staff, the
Company's unique outbound residential training program Gurukool
focuses on integrating the mind, body and soul and brings about
measurable attitudinal and behavioral changes. The program has covered
nearly 4,500 employees. The SMILE initiative for training of new Store
Manager's has been created and disseminated to over 100 store managers
by this team. The year under review has witnessed the organization
focusing on Talent Management and Development. A well-the established
system of competency mapping
and assessment centre deployment is in place, and during the year under
review 25 assessment centres were conducted covering 400 associates across
various levels. The training program are conducted to build the skill level
which are mapped with employee's current as well as potential job role
keeping in mind the current and future business needs. In addition, the
Company has tied up with leading business schools and institutes of higher
learning like Welingkars' Institute of Management Development and
Research, KJ Somaiya Institute of Management Studies and Research,
Chennai Business School, Indira School of Career Studies and Indian
Institute of Social Welfare and Business Management, among others. This
has been done to create a strong bench strength of young and dynamic
future store managers and retail professionals. At the same time, it also
provides internal growth opportunities to existing employees through
various customized and innovative program.

Design Management

We are moving towards an environment wherein speed and imagination

is going to play the critical role in driving business. In such an environment,
organizations need to create an environment that fosters creativity and
innovation. Till now, most management education, systems and processes
have depended on rational analysis, leaving little scope for brining in
disruptive innovation and micro-innovation in day to day operations of
organizations. Design Management as a subject looks at integrating the
rational or analytical side of our brain with the creative side of the brain. It
helps professionals to discover a creative and innovative approach towards
addressing day to day challenges. Design Management has been imbibed as
a successful strategic tool within the Company. Training programs are
imparted on the Design Management concept so that integrating this tool
becomes a part of the Company's DNA. Nearly 1,500 senior management
personnel have undergone this program.

SWOT Analysis

A SWOT analysis of the Indian organized retail industry is presented

below:

Strength:

1. Retailing is a " technology-intensive" industry. It is technology that will

help the organized retailers to score over the unorganized retailers.
Successful organized retailers today work closely with their vendors to
predict consumer demand, shorten lead times, reduce inventory holding
and ultimately save cost. Example: Wal-Mart pioneered the concept of
building competitive advantage through distribution & information
systems in the retailing industry. They introduced two innovative logistics
techniques – cross-docking and EDI (electronic data interchange).

2. On an average a super market stocks up to 5000 SKU's against a few

hundreds stocked with an average unorganized retailer.

Weakness

1. Less Conversion level : Despite high footfalls, the conversion ratio has
been very low in the retail outlets in a mall as compared to the standalone
counter parts. It is seen that actual conversions of footfall into sales for a
mall outlet is approximately 20-25%. On the other hand, a high street store
of retail chain has an average conversion of about 50-60%. As a result, a
stand-alone store has a ROI (return on investment) of 25-30%; in contrast
the retail majors are experiencing a ROI of 8-10%.

2. Customer Loyalty: Retail chains are yet to settle down with the proper
merchandise mix for the mall outlets. Since the stand-alone outlets were
established long time back, so they have stabilized in terms of footfalls &
merchandise mix and thus have a higher customer loyalty base.

Opportunity

1. The Indian middle class is already 30 Crore & is projected to grow to

over 60 Crore by 2010 making India one of the largest consumer
markets of the world. The IMAGES-KSA projections indicate that by 2015,
India will have over 55 Crore people under the age of 20 - reflecting the
enormous opportunities possible in the kids and teens retailing segment.

2. Organized retail is only 3% of the total retailing market in India. It is

estimated to grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by
2010.

3. Percolating down : In India it has been found out that the top 6 cities
contribute for 66% of total organized retailing. While the metros have
already been exploited, the focus has now been shifted towards the tier-II
cities. The 'retail boom', 85% of which has so far been concentrated in the
metros is beginning to percolate down to these smaller cities and towns.
The contribution of these tier-II cities to total organized retailing sales is
expected to grow to 20-25%.

4. Rural Retailing: India's huge rural population has caught the eye of the
retailers looking for new areas of growth. ITC launched India's first rural
mall "Chaupal Saga" offering a diverse range of products from FMCG to
electronic goods to automobiles, attempting to provide farmers a one-stop
destination for all their needs." Hariyali Bazar" is started by DCM Sriram
group which provides farm related inputs & services. The Godrej group has
launched the concept of 'agri-stores' named "Adhaar" which offers
agricultural products such as fertilizers & animal feed along with the
required knowledge for effective use of the same to the farmers. Pepsi on
the other hand is experimenting with the farmers of Punjab for growing the
right quality of tomato for its tomato purees & pastes.

Threat

1. If the unorganized retailers are put together, they are parallel to a large
supermarket with no or little overheads, high degree of flexibility in
merchandise, display, prices and turnover.

2. Shopping Culture: Shopping culture has not developed in India as yet.

Even now malls are just a place to hang around with family and friends and
largely confined to window-shopping.

Conclusion

To conclude, it can be said that though the global retail industry has
reached its maturity, the Indian retail industry is still at its infancy. But with
the huge potentiality existing in the Indian market, it is expected to grow in
leaps and bounds in the near future.

Instead of comparing the total global retail industry with the Indian retail
industry, lets compare Wal-Mart alone with the Indian retail industry & put
forward few interesting facts:

1. Retail Sales of Wal-Mart for the year 2003 was US $ 25,632.9 Crore; higher
than the size of Indian retail industry.

2. The size of any Wal-Mart store is much higher than the size of any
existing shopping mall in India.

3. Wal-Mart has over 4,800 stores, which is unparallel to any of the India's
large format store.

4. New stores opened annually by Wal-Mart are about 420, much higher
than all organized Indian retailers put together.

5. The sales per hour of $2.2 Crore are incomparable to any retailer in the
world.

6. Wal-Mart has around 30,000 suppliers throughout the world and more
than 600,000 SKU's on its web site, a number that cannot be compared.

7. Daily customers are about 1.57 Crore (almost equivalent to Mumbai's

entire population).

8. Time between each Barbie Sale at Wal-Mart is just two seconds (same rate
at which babies are produced in India!)

Overall, it can be said that " Retail Industry" in India will emerge as one of
the best 5 Business sectors in this decade.

SWOT ANALYSIS OF BIG BAZAAR:

 Strength Weakness
 High Brand Equity
 Unable to meet store
 State-of-art infrastructure opening targets - EDLP Falling revenue/sq. ft
 PoP promotions
 General perception
 Variety of stuff under single roof

 Opportunity Threat
 Organized retail (4.15%)
 Competitors
 Evolving consumer
 Government policies preference
 Unorganized retail
MARKETING PRACTICES AND STRATEGIES

BIG BAZAAR
FOR THE GREAT INDIAN MIDDLE CLASS

Marketing Initiatives

Considering the scope and scale of the consumercentric business, the Company aims
to achievedominance in terms of mindshare of every section of consumers. The
objective is to acquire a dominant mindshare among consumers that is similar and
complimentary to the huge shelfspace the Company has for various merchandise and
categories. Being present in various businesses within the consumption space
requires your Company to develop strong marketing teams that can implement
effective communication strategies. These become far more critical in the current
context, wherein we are entering new categories, t argeting new customer segments
and increasing out footprint in new geographies, cities and town. The Indian
environment demands that we communicate our brand message not only at the
national level, but also in multiple languages and build targeted campaign
for each community to cater to. Keeping in mind the criticality of marketing and
communication initiatives, the Company has developed a multi-tier marketing
department that delivers customized solutions to individual formats, zones and also
works at the Company and national level. The Company is also working with some
of the most well known advertising, branding and communication companies and
media houses to effectively implement these initiatives. One of the best evidence of
the strength of its initiatives was the Sabse Sasta Din celebrations at Big Bazaar stores
across the country that attracted millions customers, many of whom were visiting
Big Bazaar for the first time. Through the year, the Big Bazaar team uses multiple
communication channels, languages and messages to build the brand.
The Company's flagship format, Pantaloons went in for an exciting makeover during
the year under review, the highlight being the signing up of style icons Bipasha Basu
& Zayed Khan as its brand
ambassadors. A multi-media approach was used with the celebrities on radio, TV,
print and outdoor campaigns. Complimenting this were other initiatives like
association with Femina Miss India 2007 Pageant and Pantaloons Channel V VJ
Freshers. The Company is also placing a lot of emphasis on creating and developing
brands that cater to Indian aspirations. A subsidiary Company, Futurebrands, led by
Mr. Santosh Desai, formerly CEO of McCann Erickson India is leading this initiative.
The Company plans to invest significantly in its private label portfolio and hopes to
transform each of the brands in categories like fashion, general merchandise, foot
and consumer durables, into national brands. With 150 million annual footfalls being
registered across it stores, the Company has formed a new subsidiary, Future Media,
that is engaged in creating and delivering media properties within the retail
environment. Retail media is a mature media platform in most developed markets
and this subsidiary has already roped in some of the largest media buyers in the
country to advertise on its network. The Company is leveraging this in-house
expertise and resource to further build its own brands.
It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle
Class. It was started as a hypermarket format in Mumbai with approx. 50,000 sqft of
space. Its values and missions are to be the best in Value Retailing by providing the
cheapest prices and hence goes 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 but the level of services offered is also very low. Usually the items
are clubbed together for offers as on the lines of Wal-mart and Carrefour and it also
offers weekend discounts. It currently operates out of 64 stores and top 15 stores
register a cumulative footfall of 27 lakh a month on an average.

The following graph shows the retail life cycle and we can say that Big Bazaar is
currently at the Growth Stage.
 Cash flow
Flows

Maturity

Growth
Decline

Introduction

Time

OBSERVATION:

There were various observations made from the time I entered the store. They can be
summed up as follows:
 Verticals inside the store relates to each category of product
o Food Bazaar
o Depot- books
o M-bazaar
o Electronic Bazaar
o Furniture Bazaar
o Footwear Bazaar
 Trolleys are not easily available, especially on other than ground floor.
 Little attention to cleanliness. Dust on shelves as well as some product items.
 In-house packaging not efficiently done.
 Crowded store interiors. Items are arranged in a cluttered way. Tried to stock
maximum number in limited area.
 Sign boards are not prominent. Lack of direction creates confusion.
 Family crowd is evident. Youth comprises of only around 10% of the crowd.
 Food Bazaar very efficiently managed. It is a bit over-staffed but layout is very
good. Shelf space is used very well to stock products with clear distinction.
 POSITIONING STRATEGY

BIG BAZAAR vs. KIRANA STORES

Both the retail formats can be studied on the basis of the marketing techniques that
are used to attract customers. But first we will compare their standing in the industry
using Porter’s 5 Forces model.

BIG BAZAAR AND 5 FORCES:

RIVAL THREAT OF THREAT OF POWER OF POWER OF

INTENSITY ENTRANTS SUBSTITUTES BUYERS SUPPLIERS

HIGH HIGH LOW HIGH LOW

We can get an idea about how competitive this retail sector is, by looking at the
degree of 5 forces. Threat of substitute is minimal and supplier bargaining power is
also less, but the rest of the forces are deciding factor in the company’s marketing
strategy. They being ‘high’, means degree of competitiveness is also high. Big Bazaar
is involved in bulk purchases so bargaining power of suppliers is low. The retail
chain will not accept very low margins.

KIRANA SHOPS AND 5 FORCES:

 RIVAL THREAT OF THREAT OF POWER OF POWER OF
INTENSITY ENTRANTS SUBSTITUTES BUYERS SUPPLIERS

HIGH HIGH HIGH HIGH HIGH

The intensity of each and every force of Porter’s model is ‘high.’ This means that the
shop owner is struggling with very less control over his own operations and his
strategies are affected by external factors. Again the competitiveness in this market is
very high and market share for each shop is low due to high number of stores. This
gives more bargaining power to both buyers and suppliers. It is a very easy market to
enter, therefore threats of entrants is high too.

4Ps OF MARKETING

Marketing mix is a deciding factor in formulating marketing techniques for the success
of a particular brand, commodity or company. The components of marketing mix are:
 Product
 Price
 Promotion
 Place
The survey which was conducted gives the effect of each and every component of the
4Ps on the consumer’s mind. These components have a huge bearing on the retail battle
between Big Bazaar and Kirana stores.

PRODUCT:

Big Bazaar
Big Bazaar offers the maximum variety for each category of product and this is cited by
the customers as one of the main reasons why they like shopping at the hypermarket.
The product is the same in every store in the city but the brand options are more in Big
Bazaar. Also, the quantity for each product is not limited to large packs only.
Observations also revealed that local brands of popular commodities, like diapers,
sugar, wheat flour garments etc, are very popular in Big Bazaar stores. These products
are never advertised but offer huge margin on sales. In this way lower middle class
customers are targeted well. The commodities sold by the retail chain also includes its
“own products” which get a ready distribution network. The own products of Big
Bazaar include My World fashion magazine which is not available anywhere else. So
costs are low for such products.

Kirana stores
Products at kirana stores are limited. Actually they have very less shelf space. The store
owner does not have many options regarding the range of products that can be sold
because area of the shop is also not very large. There is not much variety in each
product i.e. the brand choice available to customers is low. Kirana stores usually avoid
keeping expensive products which cost more than Rs. 200 and they limit themselves to
cheaper and daily use items.

Conclusion:
 Big Bazaar scores high on the product part of marketing mix.
 Customer has more choices of brand in Big Bazaar rather than kirana store.
 Customers like touching the product and selecting it themselves before buying.
 The customers trust retail chains with quality of the product. They feel food
products of Big Bazaar will have no adulteration. This quality is not assured in a
kirana store.
 Cheap and local brands are heavily stocked in Big Bazaar which make it easier to
attract lower-middle class category of customers.

PRICE:

Big Bazaar
Price is the critical point in a competitive industry. Big Bazaar works on a low cost
model. It considers its discounted price as its USP. There is an average discount of 7-8%
on all items in respect to their MRP. Prices of products are low because it is able to
secure stock directly from the manufacturer. There are huge synergies in terms of bulk
purchasing, central warehousing and transportation. These all factors help the retailer
to keep low prices. Survey indicated that low prices were the biggest factor in
customers’ mind while coming to Big Bazaar. It has never focused on giving great
services, but laid emphasis only on low prices to attract crowd.
Kirana stores
Price is a very biased issue in a kirana store. Interview with some store owners revealed
that general policy regarding prices in a store is to give ready discount to its regular
customers but to charge the MRP from new customers. Departmental stores generally
work on tight margins of 6-7%. Change in prices is directly passed on to the customers.

Conclusion:
 Almost everything has some kind of discount in Big Bazaar.
 It clubs small quantities to make bigger packs and then lower prices which
kirana stores are unable to do.
 It considers price to be the biggest attraction for all customers.
 Consumers accept the fact that they come from faraway places because it is
cheap in Big Bazaar for bulk shopping.
 It is not possible for kirana stores to give hefty discounts on all items.
 Customers feel same price for all customers as a plus point of Big Bazaar as
compared to differential price policy of kirana stores.
 Some customers feel cash discount is fine but bulk offer deals are of no use
because you end up getting more than you want which is a waste.

PROMOTION:

Big Bazaar
Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is
to make people do bulk shopping. After talking to the store manager I found out that
there are 2 types of promotional strategies. One is the holistic advertisement which
promotes the brand and creates awareness among people. It is not targeted at
promoting each store but only creates an image of Big Bazaar as low-cost shopping
option. The store has advertised through TV, road shows and also started reality show-
typed promotional campaign “The Big Bazaar Challenge.” Promotions like “Sabse Sasta
Din” are a very successful strategy to get footfall.
Other type of promotion is the particular store oriented promotion which includes
speaking on the loudspeaker in nearby blocks. Leaflets are given in local newspaper.
There are promotional efforts even inside the store. During the survey, it was noticed
that Buy 2 Get 1 Free type of promotions are very common. Original prices are cut
down and new prices are shown, of which customer takes quick notice. There are
loyalty schemes which reward regular clients. Promotion is also done through co-
branded credit cards with ICICI bank.
Kirana Stores
Kirana stores are involved in almost negligible promotion activity. They rely mainly on
advertisement from the manufacturer of goods to pull in customers. They promote
certain brands by putting names on shelves etc but they do not advertise themselves as
preferred store for local people. One reason can be they work on tight budgets which
have no scope for advertisements. Leaflet promotion maybe done once while
inaugurating new store, but not during the course of existence.

Conclusion:
 Retail chain Big Bazaar cannot survive without promotions on national or
regional level.
 A big ad budget helps it to get large scale of operations.
 Customers accept the fact that advertisement campaign of Big Bazaar did
influence them in their buying behavior.
 Its Buy 2 Get 1 Free strategy influences the customer mindset a lot once they
enter the store.
 Customers feel loyalty card schemes make them come again and again to the
store.
 Promotion of kirana store is a rare event.

PLACE:

Big Bazaar
Place means the location of the business. Big Bazaar has always worked on low-cost
locations. It targets semi-urban population with its placement. Its strategy is to find a
cheap location and it never goes for hot spots in the city. The talk with the manager
revealed that the Teghoria store was opened when it was scarcely populated. Even in
Gurgaon, Big Bazaar chose Sahara Mall instead of Metropolitan or City Centre, which
are more popular than Sahara Mall. It relied on promotional activities to make up for
unattractive locations. The channel of place is company owned stores to have complete
control. Another strategy used by Big Bazaar to overcome location disadvantage is use
of internet. It has launched a merchandise retailing website www.futurebazaar.com
which targets high-end customers ready to use credit cards. Therefore Big Bazaar has
made headway into a potentially high-yielding sector of online trade. Internet as place
has put them in a profitable position because there is minimal expense of maintaining a
website. The promotion of this website is done through advertisement on Google. The
website is put as sponsored link.
Kirana Stores
Kirana stores are always placed in crowded market area which is located in each block
and sector. On talking to the owners, it was found that some stores were inherited by
them from their father, so they had no choice of location. Otherwise it is common
practice to find busy street corners to get maximum customers. Location is important
because buying decision is on impetus during day-to-day life. So the customer goes on
for the nearest store. The store owners are ready to pay more rent for better locations
because their promotion activity is negligible.

Conclusion:
 Location is something which is permanent. So cautious decisions are taken while
selecting place.
 Big Bazaar refrains from high-end locations for its business.
 Some customers travel from far places to the store. So place factor has less
influence on them.
 Semi-urban customers still prefer kirana shops, so location of retail chain should
be near to them because they will not travel too far.
 Kirana shops make sure availability of goods nearest to the residential area.

PROFITABILITY

Profit is the basic motive behind the running of any business. Both retail formats have
their own budgets, future projections and financial limitations. Profitability measures
the efficiency of operations. It also helps us decide the better option amongst the two.
Big Bazaar and local departmental stores work on different scales of operation. The
deciding factor here is investment capability.

Big Bazaar
This retail chain is present in all major cities of the country. And this means there is
huge requirement of capital. The stores generally occupy 30,000 square feet of space on
an average. In the wake of rising real estate prices, “place” component of marketing mix
becomes an increasingly important factor in deciding future strategies. The store
included in the survey revealed that they have average sales of 8 lacs per day. But they
do not disclose their profits for particular store. Big Bazaar is a brand under Pantaloon
Retail (India) Ltd. The net worth of the company is Rs 526.88 crores. This includes all
the investments made by the promoters and subsequent reserves created during the life
of the business. The profit after tax in financial year 2005-06 was 64 crores on revenues
of 1871 crores. This means a net profit ratio of 3.42%. this is very low for a national retail
chain but it highlights the fact that the sector has a huge potential and will generate
more profits once the government policies are in favor of opening up the sector further.
Low profit can be attributed to
 High cost of research required to study each and every region of the country
 The large number of staff needed to manage all the stores
 Burgeoning real estate prices which leads to high rentals
 Huge promotional activities undertaken to ensure enough footfall

Kirana Stores
Kirana stores have only one source of income i.e. margins available on selling FMCG
products. The store owners revealed that in earlier days, they used to enjoy margins of
well over 11% on products from HUL, P&G and Marico. But now the margins have
slipped to around 7%. Another thing to be noticed is that credit period given by
distributors has also come down significantly, though the shop owners refused to give
details on that. Average daily sales of a Salt Lake kirana shop covering 180 square feet
in busy AE block market stands at Rs 6000-7000. Profits made each month are
confidential information which none of the owners wanted to give. But considering the
margins and overhead expenses, they might be making a daily profit of Rs 350.

A NEW BEGINNING

The survey has revealed major distinctions between Big Bazaar and local kirana stores.
A new entrant would like to adopt the best of both formats to sustain in this
competitive environment. We will study the best practices to be followed by an
individual who wants enter the sector. An individual, when starting afresh, will not be
able to gather enough resources to start a whole new retail chain. Therefore we would
study the desired marketing mix of a departmental store to be opened in a market area
of Salt Lake City. The major aim will be to give the Big Bazaar experience in a relatively
small departmental store. The finances can be arranged through family money which
will be invested in the business and subsequent loans from banking institutions.

RECOMMENDATIONS:
PLACE
The new store should have a central location in the market because customers will not
prefer one store over the other. They would simply go the most accessible one.
Proximity of location to places like coaching institutes, offices etc would be an added
advantage. The store should be spread over an area of at least 900 square feet. The store
should be such where customers can roam around and feel the products for themselves.
Survey revealed that many customers consider shopping as time pass, hence they take
their time in selecting items. So there should be enough walking space in between
product racks. Over the counter purchase is not desired anymore. The place should be
well lit and air conditioned. All the products in all sizes should be on display.

PRODUCT
Product variety is a big factor in determining customer response. The owner should not
limit itself to brands of few companies only. The range of items available should suit the
local requirements. There should be a balance between branded goods and local
products. The shelf space should be efficiently utilized to give maximum exposure of
the product to the public. The store should include beauty products in its display
because women are chief buyers in departmental stores. The products should be clearly
categorized as high-end or low-end. The customers should be assured of quality of non-
branded items like loose packs of wheat flour, pulses etc. Diversification of product
type is recommended. It should stock perishable food items, instant eatables, FMCG
goods like toiletries.
PRICE
Price of goods depends on the success of the store over a period of time. Margins are
very tight. It is not possible for the owner to match the prices and discount schemes of
retail chains. The store should start off with inaugural discounts to get attention. These
discounts should be slowly discarded. The owner should recognize high potential
customers and give some relief off the MRP mentioned to gain loyalty. This will help
the store in long term. One way to offer better prices is by having local products like
biscuits etc which are of assured quality. This satisfies the demands of low-end
customers and local products also give better margins. The store needs to make sure
that no other kirana shop is offering considerable discount compared to its own prices.

PROMOTION
A departmental store which operates in a particular locality does not need full fledged
promotional campaigns. But for a start up, the store should distribute leaflets in local
newspapers to create awareness among residents. The leaflet should include special
features of stores with maximum emphasis on inaugural discounts on items. This
should help it create a favorable ‘word of mouth’ scenario. Another way is to talk to
general public and ask for their suggestions on improving the layout. In this way,
people will feel happy about going to the shop and shopping. The store should use in-
store advertising to make best use of large floor space by putting up discount boards
inside the store above a particular product as well as just outside the shop.

In this way, we can make use of the marketing mix for a new venture which belongs to
the unorganized retail sector. Application of the best marketing practices of organized
retail stores combined with benefits of accessibility of local kirana shops helps to ensure
success.
FINANCIAL PERFORMANCE:

Ratio analysis
“Ratio analysis is a study of relationship among various financial
factors in a business”
Ratio analysis is a technique of analyzing the financial
statements by computating ratios. In other words, it is a
process of determining and interpreting relationship between
the items of financial statements to provide a meaningful
understanding of the performance and financial position of an
enterprise.
MEANING:
A study of relationship between various items or group of items
in financial statements is known as ratio analysis.
Ratio’s can be expressed in the following ways:
 PROPORTIONS
RATE
PERCENTAGE

ADVANTAGES OF RATIO ANALYSIS

With the help of ratio analysis the data given in the financial
statement and make it understandable.
It helps the management in forecasting and co – ordination.
It helps in guiding the financial part of the business.
Comparision of performance of one business with that of
other business doing the same type of business can be
made.
It helps in raising finance from financial institution.

LIMITATIONS OF RATIO ANALYSIS

The base for ratio analysis is financial statements. There are

limitations in financial statements which apply to ratio
analysis also.
It ignores price level changes.
In the absence of full current information we cannot draw
meaning ful conclusions.
Different authors give different formulas to calculate ratios
sometimes there is no uniformity among them.
CLASSIFICATION OF RATIOS

PROFITABLITY RATIOS
Gross profit ratio
Net profit ratio
Operating ratio
Return on investment
Return on equity capital / Earning per share
Return on share holders funds
LIQUIDITY RATIOS
Current ratio
Quick ratio
SOLVENCY RATIOS
Debt equity ratio
Interest coverage ratio
Debts to total funds ratio
Proprietary ratio
ACTIVITY RATIOS
Stock turnover ratio
Debtors turnover ratio
Average collection period
Working capital turnover ratio
Fixed assets turnover ratio
Capital turnover ratio
FORMULAS TO BE USED IN THE RATIO ANALYSIS
o PROFITABILITY RATIOS:

Profit is the most important aspect of the business hence, to calculate

the correct profit is important for every business to attract more
investors and to get the loans from the banks profits play a vital role.

 Gross profit ratio: This ratio establishes the relationship between

gross profit and net sales. It represents the efficiency of the business
in respect of purchasing and selling operation and also market
conditions in which it is operating.
 It is calculated as follows:
 Gross profit = Gross profit x 100
 Net sales
 Where, net sales = gross sales – sales returns
 Gross profit = sales – cost of goods sold
 Where, Gross profit = sales – cost of goods sold

 Net profit ratio: This ratio establishes the relationship between net
profit and net sales. This ratio gives the overall profitability position
of the business.
 It is calculated as follows:
 Net profit= Net profit after taxes x100
 Net sales

o LIQUIDITY RATIOS

The word liquidity means ability to pay short term obligations when it
becomes due. A liquid asset is an asset that can be easily converted into
cash.
 Current ratio: This ratio establishes the relationship between current
assets and current liabilities.
 It is calculated as follows:
  Current ratio = Current assets____
 Current liabilities
 A CURRENT RATIO OF 2:1 IS GENERALLY
CONSIDERED AS GOOD.

 Liquid /Quick /Acid test ratio: This ratio establishes the relationship
between liquid assets with that of current liabilities with the help of
this ratio.
 It is calculated as follows:
 Liquid ratio = ___liquid assets____
 Current liabilities

Where liquid assets = all current assets- closing stock- prepaid expenses.
o SOLVENCY RATIOS:
 The term solvency means the ability of the business to
pay its obligations on the due date. Some payments are
to be paid in short run and some other payments in the
long run.
 Debt equity ratio: This ratio establishes the relationship between
debt & equity with the help of this ratio one can find out how much is
the owners fund when compared to outsiders funds.

It is calculated as follows:
Debt equity ratio = __debt___
Equity
Where debt= All long term borrowings
= debentures and long term loan
Where equity= equity share capital+reserves & surplus.

o ACTIVITY RATIOS:
These ratios help in judging the efficiency of the firm in managing
the assets are converted into sales is captured by activity ratios.
 Stock turnover ratio: This ratio establishes the relationship between
cost of the goods sold with that of average stock.
It is calculated as follows:
Stock turnover ratio= ____cost of goods sold (or) net sales___
Average stock
Where CGS= Net sales – Gross profit
Average stock= opening stock +closing stock
2
 If CGS figure is not available in the problem then take sales as
numerator.

 Working capital turnover ratio: This ratio establishes the

relationship between sales with that of net working capital.
It is calculated as follows:
Working capital turnover ratio= ______sales_________
Net working capital
Where, working capital= current assets – current liabilities.

Ratios

Profitability Jun-03 Jun-04 Jun-05 Jun-06 Jun-07

PBDIT/Total Income 8.57% 8.66% 8.89% 7.99% 9.24%
PBDT/Total Income 4.60% 5.03% 6.29% 6.02% 6.54%
Net Profit/Total Income 2.56% 3.00% 3.65% 3.43% 3.60%
RONW (Average Networth) 18.92% 24.47% 24.42% 17.15% 14.82%
ROCE (Average Capital employed) 20.31% 21.03% 22.41% 18.30% 17.48%

Finanacial Performance Jun-03 Jun-04 Jun-05 Jun-06 Jun-07

Cost of goods sold / Net Sales 68.23% 66.54% 66.52% 66.53% 68.26%
Manpower costs / Total Income 4.29% 4.17% 4.80% 5.99% 6.19%
Advertising and selling cost / 2.65% 2.84% 3.08% 2.72% 2.80%
Total Income
Interest/Total Income 3.97% 3.64% 2.60% 1.97% 2.70%
PBDIT/Interest (Debt-Service Ratio) 2.16 2.39 3.42 4.05 3.43

Balance Sheet Jun-03 Jun-04 Jun-05 Jun-06 Jun-07

Debt-equity ratio 1.53 1.29 0.89 0.50 0.79
Debtors turnover(days) 18 10 4 3 7
Inventory turnover(days ) 93 86 94 98 99
Current Ratio 1.51 1.65 1.73 1.44 2.19
Quick Ratio 0.48 0.52 0.55 0.58 1.08
Asset turnover 2.07 1.96 2.03 1.62 1.96
(Total Income/total assets)

Key Finacial Parameters Jun-03 Jun-04 Jun-05 Jun-06 Jun-07

(Rs in Crores)
Total Revenue 445.62 659.64 1,055.85 1,871.98 3,328.76
Profit before Interest Tax and 38.18 57.14 93.91 149.64 307.62
Depreciation
Profit after Tax 11.41 19.78 38.55 64.16 119.99
Cash Profit 18.89 31.68 58.90 99.85 184.78
Per share

Per share data Jun-03 Jun-04 Jun-05 Jun-06 Jun-07

Basic Earnings 1.13 1.84 3.31 5.06 8.71
(less extraordinary income)
Basic Cash Earnings (Rs.) 1.76 2.66 4.45 6.70 11.39
Dividend (Rs.) 0.20 0.30 0.50 0.50 0.50
Book value (Rs.) 7.39 9.87 20.12 39.20 74.42

Growth in Total Income (Rs. in Crores)

4000
(Rs.in crores)

3000
2000
1000
0
2003 2004 2005 2006 2007
Years

Earnings per share (Rs.)

10
8
6
(Rs)

4
2
0
2003 2004 2005 2006 2007
year

Growth in Profit after Tax (Rs. in Crores)

 150
(Rs.in crores)
100

50

0
2003 2004 2005 2006 2007
years

ROCE (%)

25.00%
(Rs. in crores)

20.00%
15.00%
10.00%
5.00%
0.00%
2003 2004 2005 2006 2007
years

Growth in PBDIT (Rs. in Crores)

400.00%
(Rs.in crores)

300.00%
200.00%
100.00%
0.00%
2003 2004 2005 2006 2007
years

Debt-Service Ratio (X)

 500.00%
(No of times)
400.00%
300.00%
200.00%
100.00%
0.00%
2003 2004 2005 2006 2007
years