Retailing in India Retailing in India

8/8/2019 Retailing in India Retailing in India

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Retailing in India Retailing in India

The Indian retail industry accounts The Indian retail industry accounts for 10% of GDP and 8% of for

10% of GDP and 8% of employment.

India is being touted as the next big India is being touted as the next big retail destination with an

average retail destination with an average three year compounded annual three year compounded annual

growth rate of 46.64%. The Indian economy is poised to take The Indian economy is poised to take the third position in the

world in the third position in the world in terms of Purchasing Power Parity by terms of Purchasing

Power Parity by the year 2010.

The Indian Retail Market is a The Indian Retail Market is a

Rs.1, 200,000 million market as per the Images India Retail Report 2007.

Organized Retail market is zooming Organized Retail market is zooming ahead with an annual growth

rate of ahead with an annual growth rate of 30%

The country will have over 300 malls translating to over 100 million sq.ft. in available mall space by the

end of in available mall space by the end of 2007.

Recent trends

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

be seen in the graph

India is rated the fifth most attractive emerging retail market: a potential market: 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%

Mission & Vision


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Future Group shall deliver everything, everywhere, everytime

for every Indian Consumer the most profitable manner

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.

Introduction to Big Bazaar

A chain of shopping malls in India currently with 31 outlet owned by Kishore Biyanis Pantaloon

Group. Pantaloon Group.

Big bazaar is not just another hypermarket.

Provides the best products at the best price.

Reflect the look and feel of Indian bazaars at their modern outlets. All over India, Big Bazaar attracts a

few thousand customers on any regular day.

Target Audience

Big Bazaar targets higher and upper middle class customers.

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

Big Bazaar specifically targets working women and home makers who are the primary decision makers.

It is part of Big Bazaars (owned by Biyanis Future Group) new Guerrilla Marketing Strategy. Guerrilla

force is divided into small groups that selectively attack the target at its weak points. Wah lah, enter the

future and in the world of cut throat competition, corporate use extension of the same strategy in

marketinghmmmm never imagined this while we were in our shorts!! Corporate like coke, pepsi, etc

have been using the same for quite some time now and the latest entrant is our very own Future Group-

Big Bazaar, Pantaloons, Future Bazaar, eZone are all part of this group and they are taking on the biggies

like Shoppers Stop, Lifestyle, and Tatas Westside. With retail market in India especially in metros where

standard of living and disposable income is at an all time high, competitors will vie for the market shareand can stoop to any levels while marketing their products. Guerilla marketing is just one of the strategies

and surely one can learn a lot from the ongoing battle, especially people interested in

marketing/marketing techniques.

Different elements of retail mix

Merchandise assortment Merchandise assortment

Location

Price

Visual merchandising Visual merchandising

Retail-mix contd.

Store atmosphere Store atmosphere

Customer service Customer service

Advertising

Promotion

Personal selling Personal selling


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Internal Attributes

Envelope lope

Internal layout Methods of display Methods of display

Visual merchandising

Distribution

Distribution is one of the 4 aspects of marketing.marketing.

Traditionally, distribution has been seen as dealing with how to get the product or service to the

customer. the customer

Distribution is done by distributor who is is the middleman between the manufacturer and retailer the

manufacturer and retailer

Logistics

Logistics is the art and science of managing and controlling the flow of goods , energy, information and

other resources like products, services and people from the source of production to the marketplace.

marketplace.

Its Important to have professional logistical support logistical

The operating responsibility of logistics is the geographical repositioning of raw materials, work in

process and finished inventories where required at the lowest cost possible.possible.

Supply Chain

Supply chain, is a coordinated system of organizations, people, activities, information and resourcesinvolved in moving a product or service in physical or virtual manner from supplier to customer.

Supply chain activities transform raw materials and components into a finished product that is delivered

to the end customer.


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Supply chain management

Promotion

Promotion can be loosely classified as "above the line" and "below the line" promotion. The promotional

activities carried out through mass media like television, radio, newspaper etc. is above the line

promotion.

The terms 'below-the-line' promotion or communications, refers to forms of non-media communication,

even non-media advertising. Below-the-line promotions are becoming increasingly important within the

communications mix of many companies, not only those involved in fmcg products, but also for industrial

goods.

Some of the ways by which companies do BTL (below the line) promotions are by exhibitions,sponsorship activities, public relations and sales promotions like giving freebies with goods, trade

discounts given to dealers and customers, reduced price offers on products, giving coupons which can be

redeemed later etc.

BELOW THE LINE SALES PROMOTION

Below the line sales promotions are short-term incentives, largely aimed at consumers. With the

increasing pressure on the marketing team to achieve communication objectives more efficiently in a

limited budget, there has been a need to find out more effective and cost efficient ways to communicate

with the target markets. This has led to a shift from the regular media based advertising.

A definition of below-the-line sales promotion given by Hugh Davidson:

'An immediate or delayed incentive to purchase, expressed in cash or in kind, and having only a short

term or temporary duration'.

Methods of below the line sales promotion


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1. Price promotions

Price promotions are also commonly known as" price discounting". These can be done in two ways:

(1) A discount to the normal selling price of a product, or

(2) More of the product at the normal price.

Price promotions however can also have a negative effect by spoiling the brand reputation or just a

temporary sales boost (during the discounts) followed by a lull when the discount would be called off.

2. Coupons

Coupons are another, very versatile, way of offering a discount. Consider the following examples of the

use of coupons:

- On a pack to encourage repeat purchase

- In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer

- A cut-out coupon as part of an advert

- On the back of till receipts

The key objective with a coupon promotion is to maximize the redemption rate this is the proportion of

customers actually using the coupon.

It must be ensured when a company uses coupons that the retailers must hold sufficient stock to avoid

customer disappointment.

Use of coupon promotions is often best for new products or perhaps to encourage sales of existing

products that are slowing down.

3. Gift with purchase

The "gift with purchase" is a very common promotional technique. In this scheme, the customer gets

something extra along with the normal good purchased. It works best for

- Subscription-based products (e.g. magazines)

- Consumer luxuries (e.g. perfumes)

4. Competitions and prizes

This is an important tool to increase brand awareness amongst the target consumer. It can be used to boost

up sales for temporary period and ensure usage amongst first time users.


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5. Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.

Customers often view these schemes with some suspicion particularly if the method of obtaining a

refund looks unusual or onerous.

6. Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this are the

many frequent flyer or user schemes used by airlines, train companies, car hire companies etc.

7. Point-of-sale displays

Shopping habits are changing for the people living in metropolitan cities. People prefer big retail outlets

like Big Bazaar to local kirana stores. Most of the decisions of buying are taken by the virtue of point-of-

sale displays in these retail outlets.

SOME INTERSTING EXAMPLES OF BTL PROMOTION

Most of the big brands are following the suit of BTL promotion because of rising prices of media based

promotion, advertising clutter and increased impulse purchasing.

Some of the interesting examples are:

Most of the educational institutes like career launcher, Time and PT are holding informative workshops

and free tests for students which give a direct interaction of these institutes with the target customer and

hence a suitable platform to sell themselves.

Ring tones and music videos on cell phones are helping the entertainment industry to promote for a musicvideo or a movie for dirt-cheap rate as compared to media promotion.

Various companies sponsor sport events to promote their brand, but nowadays media companies like

Hindustan Times are holding weekly events through out the country in which companies can put up their

stalls, display banners and posters and arrange for some fun activities. These events give the companies a

platform at very low price to promote their brand and increase visibility among target consumer. These

companies also give discount coupons to winners in the games, which in turn boost the sales of the

products and ensure that first time users try these products as well.

Pepsi organized an inter school cricket event for 425 schools across 14 cities which did wonders for the

company by promoting the brand amongst the right target customer for almost no cost.

Most of the pharmacy companies do BTL promotion by getting shelf space through doctors to display

their products or by giving away free calcium tablets again through doctors, knowing that for a patient a

personal advise from a doctor would hold more value as compared to a commercial advertisement.

Another interesting BTL promotion was by NIKE, an athlete dressed up in Nike sportswear could be seen


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jogging on an elevated treadmill for the whole day on National Highway 8, Delhi.

BTL promotions are gaining popularity among all big companies nowadays considering their

effectiveness because of the "individual customer promotion" at a price, which is much lesser than the

normal media promotions.

Low prices on Wednesday Low prices on Wednesday

Concept of Big Day Concept of Big Day

Promotional offers

School Jao Khushi Khushi

Khushi Ki Barsaat

Happy Fathers Day

E.g.

Big Bazaar's `junk' swap offer

Big Bazaar is launching a promotional offer from Saturday, with the slogan, "Bring anything old and take

something new".

A press release issued by the company says the customer can bring anything old, such as newspaper, and

get coupons issued in exchange of the junk. The customer can redeem the coupons before the due date on

the condition that he/she shops four times the value of the coupon.

The prices fixed by Big Bazaar are: clothes (Rs 200 per kg), newspaper (Rs 25 per kg),

plastics/utensils/leather goods (Rs. 75 per kg), footwear/luggage (Rs. 100 per kg), Pet/beer bottles (Rs 15

per kg), tyres (Rs 50 per kg), furniture (Rs 75 per kg) and others (Rs 20 per kg).

"This offer will help the housewife clean out the junk while getting a good value for it," says Mr Sanjeev

Agarwal, President (Marketing), Pantaloon Retail (India) Ltd.

News related big bazaar

Future Group to hive off Big BazaarKishore Biyani-led Future Group is considering hiving-off its hypermarket format Big Bazaar into a

separate company. Managing a $1 billion business already is a challenge , Biyani said speaking to the

reporters on Friday, referring to the big Bazaar format, which is expected to generate revenue of $1

billion in the fiscal 2007-08. Big Bazaar is a hypermarket format of the Pantaloon Retail (India) Ltd.

The Group expects to increase its revenues to $7-8 billion by 2011, of which Big Bazaar is expected to

contribute a large chunk of around $4 billion. It has emerged as the largest retail format of Future Group's

retail division. Biyani said that the proposal is at a very initial stage and has to be taken to the board.

Currently we have more than 80 Big Bazaars and we are planning to scale it up to 160 by the year end,

he said. Highlighting that the company was going to go very aggressive in rolling out the Big Bazaar

format, he said that the total floor area by 2011 would scale up to 30 million square feet from the present

figure of 10 million square feet. Speaking on the other formats, Biyani said that the group was expecting a

revenue of Rs 1,300 crore from the Home Town stores which the company launched last year.

The consumer electronics segment is doing extremely well, he said, elaborating that the group was

expecting the segment to generate revenue of Rs 2,000 crore by next year

Big Bazar to add more stores

After opening its fourth store in Ahmedabad, Big Bazar, the value retailing concept of Pantaloon Retail

(India) Ltd, part of the Kishore Biyani-promoted Future Group, on Friday announced its plans to open 7 5


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to 80 new stores across India by June next.

Mr Rajan Malhotra, Head of Big Bazar India's Concept Division, told reporters here that the retail chain is

going to double the number of stores in Gujarat next year with two more stores planned in Ahmedabad,

the 39th store opening in Surat on November 24 with three more in the pipeline and similar stores to be

set up in major towns and cities of the State. The 37th store is being opened at Allahabad tomorrow and

the 38th at Coimbatore next week, he added.

Retailing in India Retailing in India

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