A Summer Internship Project Report on

Study of Private Label Brand of Big Bazaar

Submitted in partial fulfilment of the requirements for the degree of Post Graduate Diploma in Management (Marketing) By

PANKAJ KUMAR
(Roll No.-36) Under the guidance of

Mrs. Gunjan Amitabh Ranjan

A Study Conducted for Big Bazaar

At Indira Institute of Management Tathawade, Pune 411033

(2010-12)

ACKNOWLEDGEMENT

Turning aspirations into reality is easier when quality people are supportive of ones effort. We take this opportunity to express our sincere gratitude to all those who contributed directly or indirectly towards completing this project. Project work is an integral part of PGDM program and for that purposes we had joined group what else can be as good as Future group, India's largest Retail group

With immense pleasure, I would like to present this project report for Future Group Big Bazaar(chinchwad). It has been an enriching experience for me to undergo my summer training at Big Bazaar, which would not have possible without the goodwill and support of the people around. As a student of Indira Institute of management, pune, I would like to express my sincere thanks to all those who helped me during my practical training programme.

Words are insufficient to express my gratitude towards Mr.Vinayak Bhivare the Store Manager, Mrs. Krutika Sankhe, the HR manager of Big Bazaar, Mr.Sumit Jain Operational Head of Big Bazaar also the staff of Big bazaar for their cooperation. I am also grateful to my parents, my college sip guide Mrs. Gunjan Amitabh Ranjan for encouraging & giving me moral support. However, I accept the sole responsibility for any possible error of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.

EXECUTIVE SUMMARY

Learning is a continuous process and it is my great pleasure to get such an opportunity to learn in way of project work. It gave us chance to get familiar with working ways of real corporate world and to expand horizon of our knowledge.

The project assigned to us at Future group is an exercise in understanding and implementing various concepts that we learnt during the Post Graduate diploma in management Programme. This project helped us to gain knowledge about Private Label Brands.

The concept Private Label Brand is very important for booming Retail Industry. Future Group is live example of very well organized retail industry.

We welcome suggestions from every reader of this report. Owing to the fact that before one sets out for the survey he/she should have a thorough knowledge of the topic he/ she is assigned with , I as a survey person spent my considerable time in knowing about the Big Bazaar Private label brand started by the company and company policies, vision, mission etc. After being reasonably conversant with the Customers and departments I slowly started the task of setting the ball of customer interaction rolling. Customers interaction was in the shape of Questionnaire. I distributed the questionnaire to each Customer and after that I interact with the customer to know his behaviour and satisfaction level. Data analysis & interpretation was followed by Findings & Recommendations.

Table Of Contents
SERIOL NO. CHAPTER NAME PAGE NO.
5 - 10 11 - 19 20 - 42 42 - 51

1. 2. 3. 4. 5.

INTRODUCTION OF THE STUDY INDUSTRY / SECTOR PROFILE COMPANY PROFILE LITERATURE SURVEY OBJECTIVE PROJECT AND SCOPE OF THE

52 - 63

6. 7.

RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION, OBSERVATION AND FINDINGS SUGGESTIONS AND RECOMMENDATION

64 - 70 71 - 86

8.

87 - 88

9.

CONCLUSIONS

89 - 93

CHAPTER -1

Introduction

Research on private label brands started with focus on explaining the choice of private label brands by simple demographics variables which later expanded into work on attitudinal and behavioural characteristics of customers. However, all these studies had never tried to integrate demographic and psychographic variables to achieve a higher explanatory power, even though researchers had suggested that such a combination is likely to have a higher explanatory power. This paper, after a review of literature, identifies the variables for private label brand proneness. This is followed by mathematical explanation which provides the mathematical model using discrete choice modeling. current Indian retail scenario and concludes with explaining the limitations. The paper also provides operationalization of integrated model in

Growth of organized retail chain in India has also led to growth of private label brands in India. Indian economy has seen average growth rate of more than seven percent since 1994, putting purchasing power in hands of customer. Though, initial growth of private label brands in India has been limited to certain categories like grocery and apparel, it is

slowly expanding into other categories as well. The Indian retail market is the fifth largest retail destination globally and has been considered the most attractive emerging market for investment. Overall, the Indian retail market is growing at 30% annually, with the organized segment, which currently accounts for around 9% of the Indian retail market, registering above average growth of 30% (Report on Indian retail industry by Cygnus, 2010). Thus, with growth of organized retail in India, the private label brands are also expected to grow. Research on private label brands has been of substantial interest to the marketing managers and academics. The growth of private label brands in India presents an interesting opportunity for the retail managers to behind choice of private labels. Previous work in choice of private label brands has reviewed the reasons from manufacturers and retailers point of view (Raju, Sethuraman, & Dhar, 1992; Hoch & Banerji 1993, Dhar & Hoch 1997) as well as consumers point of view. Previous work done in examining the work from consumerss point of view started with focus on explaining the choice of private label brands by simple demographics variables. Later on, as the demographic variables had poor explanatory power, researchers focused their work on attitudinal and behavioural characteristics of customers to determine the choice of private label brands. However, all these integrate demographic and psychographic variables to achieve a higher explanatory power, even though researchers had suggested that such a combination is likely to have a higher explanatory power (Myers 1967, Baltas & Doyle 1998). In this paper, the objective will 7 studies had never tried to understand the motivations

be to integrate the demographics and psychographics variables behind the choice of private label brands.

These studies focusing on identifying the factors behind private label proneness suggest the following: The demographic variables, though they were not able to explain customer behaviour with respect to private label purchase, were able to provide useful insights. The demographic variables important for customer behaviour for private brand purchase were age, education, income, and family size. The psychographic variables were able to provide better explanation for private brand purchase by consumers. Based on the review of literature made earlier, the important variables included in the list of psychographic variables consisted of following: -Purchasing experience (i.e. experience with private label brands, also called private label brand familiarity) -Differential response to marketing activities -Consumer perceptions of the particular category (degree of perceived quality variations, level of perceived risks, and perceived value for money) - Differences in consumer needs -Different product importance among consumers -Price attitude Future Group, Indias leading retailer, has private labels brands like Tasty Treat (food, snacks, cola and soft drinks), Premium Harvest (packaged pulses and rice), Fresh & Pure

(food and staples), Clean Mate (homecare), and Care Mate (personal care products) in its stores. According to data from the Future Group, private label brands contribute around 25% to the overall revenues generated from the FMCG business (The Economic Times, 17 November, 2009). In the potato chips category, which is dominated by brands such as Frito lay, Future Groups Tasty Treats has registered second place with an in-store share of 22%, falling back by a small margin (The Economic Times, 2 May, 2009). In the ready-to-eat snacks category, driven by brands such as Haldirams, Tasty Treats has become a top seller at the groups Food Bazaar outlets with a 21% in-store share . The Tasty Treats brand of cereals, which was introduced after fallout with Kellogs, has been able to capture 18% market share (in Future Groups stores) for cereals (The Economic . The company has lined up a series of brands to make an entry into new categories such as organic and ethnic foods.

As part of this initiative, Future Group recently launched a differentiated community food brand, Ektaa, to retail staples and foods category based on

cultural and geographical considerations. It plans to bring local products such as wheat, cereals, papad, poha and rava to the Ektaa brand over the next year.

Future Group has successfully introduced private label brands in non-food categories as well. The companys Care Mate diaper brand has clocked a share of about 41% in a category known to be built by brands such as Huggies (The Economic Times, 2 May, 2009). In the toilet cleaner segment, Future Groups Clean Mate brand is now neck-toneck in market share with Harpic (who is leader in India with 75 % market share) across its Big Bazaar stores (the group has forayed into oral care with Sachs, a brand jointly developed with Sachin Tendulkar, worlds leading cricketer. The retailers are pursuing different strategies for apparelsegment 9

as far as percentage share of private label brands in their stores is concerned. For some players like Trent and Globus, the business is entirely driven by its private label. Trent, from the Tatas, has developed a business model purely on private labels in apparel under the Westside brand. Similarly, Globus - a multibrand retail chain, became a single store label brand under its own name. On the other hand, there are others like Shoppers Stop which believe in capping the percentage of private labels in apparel in spite of being one of the pioneers of private label concept in India. Currently, 20 percent of apparel section at Shoppers Stop constitute of private labels. Other players like Future group and Reliance Retail have a mix of private label and national brands. Reliance Retail sells 14 private label brands through its stores, which contribute almost 50% to its annual revenues in apparel category .

10

Chapter-2
11

Profile of Retail sector :

Retailing is emerging as a sunrise industry in India and is presently the largest employer after agriculture. In the year 2004, the size of Indian organized retail industry was Rs 28,000 Crores, which was only 3% of the total retailing market. Retailing in its present form started in the latter half of 20th Century in USA and Europe and today constitutes 20% of US GDP. It is the 3rd largest employer segment in USA. Organized retailing in India is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1,00,000 Crores 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 current year ie 2005 is Rs 35,000 Crores. In India, it has been found out that the top 6 cities contribute for 66% of total organized retailing. With the metros 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%. In the year 2004, Rs 28,000 Crores organized retail industry had Clothing, Textiles & fashion accessories as the highest contributor (39%), where as health & beauty had a contribution of 2%. Food & Grocery contributed to 18% whereas Pharma Retail had a contribution of 2%. Pantaloon Retail (India) Limited, is Indias leading retailer that operates multiple retail formats, the company operates over 5 million square feet of retail space, has over 450 stores across 40 cities in India and employs over 18,000 people. 12

INDIAN RETAIL SCENARIO

OVERALL INDIA VIEW

Area(`000 sq km) =3,300 Population(million) =1,095 Medium Age =25 years Government Type =Federal Republic

Economic Overview : Indian is currently undergoing an economic revolution which is generating fast-paced changes and development. There is stable 8 % annual growth,

Rising foreign exchange reserves of close to USD 140 billion, Consistent and flowing Foreign Direct Investment(FDI) of close to UDS 8 billion, Export surge in excess of 20%.

This altogether enable the Indian economy to expand in coming years. Investment eccentric : With a rapidly expanding consumer base (private consumption currently account for 61% of Indias GDP) and stabilized consumer price index rate 4.2%. India is now preferred investment destination and has surpassed the U.S to become the second most favourable destination for FDI, in the world after China.

13

FOREIGN DIRECT INVESTMENTS: Foreign direct investment is opened to single brand retailers. Steady increase in FDI 2002 FDI (INR m) 273530.2 FDI (FDI bn) 5.6
Source :

2003 201379.6 4.3

2004 248062.4 5.5

EIU,

2005 295293.4 6.7

July 2006

DEMOGRAPHICS AND CONSUMER BEHAVIOUR A growing population, a youthful workforce and soaring consumer confidence are solid argument for long term growth.

A growing population, a youthful workforce and soaring consumer confidence are solid argument for long term growth. Indias population in 2005, is estimated to 1095mn. By 2016, India will have second highest population in world after China. 2002 Population (mn) 1049.7 2003 1065.1 2004 1080.3 2005 1095.2

More than 50% of the Indias Population is less than 25 years of age compared to others developed countries.

14

Age profile % of total 1999 2004 2009 Trend

population 0-14 years 15-64 years Over 65 years

Source

34.0 61.4 4.6

:

31.7 63.5 4.8

EIU,

29.6 65.2 5.2

July

2006

MAJOR RETAIL PLAYERS Comprised of organized and traditional retail formats,Indian Retail market is estimated to be worth USD 350 billion.
o

Organised Retail is estimated at USD 8 billion. Organised Retail is growing at over 30% annually. Of Indias 12 million retail outlets, more than 80% are operated by small family business using household labour. The retail industry represents 13% of GDP and accounts for 6% of Indias work force.Burgeoing growth rate in the retail industry are attributed to growth in India economy, rising income and changing consumption and expenditure patterns.

TOP MAJOR RETAIL PLAYERS Retailer Existing Brand No.of Total Total Expansions 15

formats

Names

Stores Retail

Sales

Plans

Space(000 2004sq ft) 05(USD mn) Pantaloon Department Retail Indian Ltd store Pantaloon 13 1,948 241 Invest around USD125 between FY06-FY08. Open 80-100 more across formats. Hypermarket Big Bazaar 18 N/A N/A Triple total stores mn

Retail area by FY08 to 6.5 mn Sq. ft. Supermarkets Food Bazaar 9 N/A N/A Enter Furniture and home into

retailing. Seamless Malls RPG Retail Hyper markets Spencers 3 480 96 Open 21 Central 3 N/A N/A

hypermarkets and supermarkets

16

Music Stores

Music world

225

N/A

N/A

Open another 100 Stores FY08. Music in

Super markets Spencers Shoppers Department Stop Ltd. stores Shoppers Stop

49 20

N/A 1000

N/A 96 Add 2 mn Sq. Ft. of Retail Space FY08 in

Books Music Stores

& Crosswords 33

N/A

N/A

Entering Hypermarket format, Stores planned FY08 by 18

Home furnishing

Home Stop N/A

N/A

N/A

Setting Speciality Stores Home Solutions.

up

for

Landmark Department Group (Based in Dubai) Stores

Lifestyle

370

67

Set New

up

25

Departmental stores by

FY08. Invest USD 65mn

over next 5 years.

17

Trent

Department

West side

19

350

52

Add 640,000 sq.ft. of Retail Space.

India Ltd Stores

Hypermarkets Star

India 1

N/A

N/A

Open

17

Bazaar

Stores under the departmental and Hypermarket formats FY08. by

Books Music Stores

& Land Mark 4

N/A

N/A

Upcoming Malls in India (till 2012)

Metropolitan Cities National Region Mumbai Hyderabad Bangalore Kolkata Chennai Sub Total 28 18 11 12 6 157 No. of Malls

Capital 82

Mini Cities

Metropolitan No. of Malls

18

Pune Ahmedabad Tier II Cities Total

13 6 81 ----

Let us look at the evolution process

Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGESKSA report says that the last few years have seen rapid transformation in many areas and the setting of scalable and profitable retail models across categories. Indian consumers are rapidly evolving and accepting modern formats overwhelmingly. Retail Space is no more a constraint for growth. India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector. The quantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures more and more investors to earn large profits. Investments into the sector are estimated at INR 2000 - 2500 Crore in the next 2-3 years, and over INR 20,000 Crore by end of 201

19

Chapter -3

20

Company Profile:-

Future Group
Future Group is Indias leading business group that caters to the entire Indian consumption space. Led by Mr. Kishore Biyani, the Future Group operates through six verticals: operates through six verticals: Retail, Capital, Brands, Space, Media and Logistics. Apart from Pantaloon Retail, the groups presence in the retail space is complemented by group companies, Indus League Clothing, which owns leading apparel brands like Indigo Nation, Scullers and Urban Yoga, and Galaxy Entertainment Limited that operates Blowing Co, Sports Bar and Brew Bar , The groups joint venture partners include French retailer ETAM group, US-based stationary products retailer, Staples and UK-based Lee Cooper. Group Company, Planet Retail, owns and operates the franchisee of international brands like Marks & Spencer, Next, Debenhams and Guess in India. The groups Indian joint venture partners include, Manipal Healthcare, Talwalkars, Blue Foods and Liberty Shoes. 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 group has launched a consumer credit and financial supermarket format, Future Money and soon plans to offer insurance products through a joint venture with Italian insurance major, Generali. The group is currently developing over 50 malls and consumption centres across the

country and has formed a joint venture company focusing on mall management with Singapore-based CapitaLand, one of Asias largest property companies Future Groups vision is to, deliver Everything, Everywhere, Every time to Every Indian Consumer in 21

the most profitable manner. The group considers Indian-ness as a core value and its corporate credo is - Rewrite rules, Retain values.

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. The motto of Future Group, to not to wait for the Future to unfold itself but create future scenarios in the consumer space and facilitate consumption because consumption is development. Thereby, it will effect socio-economic development for their customers, employees, shareholders, associates and partners. Their customers will not just get what they need, but also get them where, how and when they need. They are not just posting satisfactory results, they are writing success stories.

Future Group conglomerate

Future Group has six business pillars:

Future Retail All the retail lines of business like food fashion and home will come under this vertical.

Future Brand Custodian of all the present and future brands that are either developed or acquired by the group. Future Space Will have a presence in property and mall management.

22

Future Capital Will provide consumer credit and micro finance services, including marketing of MFs and insurance policies, and management of real estate and consumer fund. Future Media Will focus on revenue generation through effective selling of retail media spaces. Future Logistic To drive efficiencies across businesses via better storage and distribution.

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

GROUP MISSION:
Future Group shares the vision and belief that their customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. They will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments - for classes and for masses. They shall infuse Indian brands with confidence and renewed ambition. They shall be efficient, cost- conscious and committed to quality in whatever they do. They shall ensure that their positive attitude, sincerity, humility and united determination shall be the driving force to make them successful.

CORE VALUES:
Indian ness: Confidence in themselves. Leadership: To be a leader, both in thought and business. 23

 Respect and Humility: To respect every individual and be humble in their 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 and Positivity: Simplicity and positivity in their 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 Menz 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. The Pantaloon Shoppe exclusive mens wear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multi-brand retail outlets across the nation. John Miller Formal shirt brand launched. Pantaloons Indias family store launched in Kolkata. Big Bazaar, Is se sasta aur accha kahi nahin - Indias first hypermarket chain launched.

1994

1995

1997

2001

2002

Food Bazaar, the supermarket chain is launched.

24

2004

Central Shop, Eat, Celebrate in the Heart of Our City - Indias first seamless mall is launched in Bangalore. Fashion Station - the popular fashion chain is launched all a little larger exclusive stores for plus-size individuals is launched Future Capital Holdings, the companys financial arm launches real estate funds Kshitij and Horizon and private equity fund in division. Plans forays into insurance and consumer credit Multiple retail formats including Collection Furniture Bazaar, Shoe Factory, E-Zone, Depot, and futurebazaar.com and are launched across the nation. Group enters into joint venture agreements with ETAM Group and Generali

2005

2006

AWARDS
Indian Retail Forum Awards 2008 The INDIASTAR Award 2008 Retail Asia Pacific 500 Top Awards 2008 Coca-Cola Golden Spoon Awards 2008 The Reid & Taylor Awards For Retail Excellence 2008 Platinum Trusted Brand Award Images Retail Award 2005,06 DLF Award 2004

25

BOARD OF DIRECTORS

Mr. Kishore Biyani, Managing Director Mr. Gopikishan Biyani, Whole Time Director Mr. Rakesh Biyani, CEO Retail Ved Prakash Arya, Independent 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

26

Different Formats of Future Group

Format -1
Pantaloon Retail (India) Limited, is India's leading retail company with presence across multiple lines of businesses. The company owns and manages multiple retail formats that cater to a wide cross-section of the Indian society and is able to capture almost the entire consumption basket of the Indian consumer. Headquartered in Mumbai (Bombay), the company operates through 5 million square feet of retail space, has over 331 stores across 40 cities in India and employs over 17,000 people. The company registered a turnover of Rs. 2,019 crore for FY 2005-06. Pantaloon Retail forayed into modern retail in 1997 with the launching of fashion retail chain, Pantaloons in Kolkata. In 2001, it launched Big Bazaar, a hypermarket chain that combines the look and feel of Indian bazaars, with aspects of modern retail, like choice, convenience and hygiene. Food Bazaar, food and grocery chain and launch Central, a first of its kind seamless mall located in the heart of major Indian cities, followed this. Some of its other formats include, Collection (home improvement products), E-Zone (consumer electronics), Depot (books, music, gifts and stationary), all (fashion apparel for plus-size individuals), Shoe Factory (footwear) and Blue Sky (fashion accessories). It has recently launched its retailing venture, future bazaar.com Background: Founded in 1987 as a garment manufacturing company, the company forayed into modern retail in August 1997 with the launch of its first department store, Pantaloons in Kolkata. Listing: Pantaloon Retail is a listed company on the Bombay Stock Exchange (BSE, Scrip Code: 523574) and National Stock Exchange (NSE, Symbol: PANTALOONR).

27

Format-2 CENTRAL
Central, the showcase seamless mall concept is one of the more popular offerings in the lifestyle segment that celebrates shopping in India. During the year, Central capitalized on its positioning of being a destination where citizens can just come and unwind, whether its for shopping for a wide range of national and international brands, enjoying their favourite cuisine at the multiple specialty restaurants and food courts or watching the latest movie releases at the in-house multiplexes. The most reputed brands are showcased in Central. It is also emerging as the destination of first choice for new fashion brands in India. Central assures better visibility, instant recognition, good quality and commercially viable space on the basis of the optimum space utilization concept, taking the brand closer to the consumer. With brands within Central competing against the best brands in the country, it also allows benchmarking for these brands. The coming year will also witness many new concepts being introduced at all Central malls. Some of these concepts include communications (Mort and Gen M), electronics (E-Zone), furniture and accents (Collection I), fitness equipments and wellness zones, books, music, gifts & stationery (Depot) and fine dining restaurants etc. Some of the new alliances that the group has entered into, like Etam, Lee Cooper and Gini & Jony will also share space within all Central malls.

Format-3 PLANET RETAIL

28

A young and emerging India is also eager to experience international brands. We sensed this opportunity some time back and have built a strong portfolio of international brands through our strategic partnership with Planet Retail Holdings Pvt. Ltd. The alliance with Planet Retail provides access to international fashion retail chains like Marks & Spencer, with 9 stores at present; Guess the US brand that has 12 retail stores currently, and the Spanish brand Womens Secret which is retailed through 2 outlets. Planet Retail also has a multi-brand international sportswear format under the brand Planet Sports. The company is the sole licensee for sportswear brands such as Converse, Spalding and the Athletes Foot the venture has also launched other formats like Sports Warehouse, Accessorize, Monsoon, Next, and Debenhams.

Format-4 Depot
This largely untapped unorganized market for books and music with very few players, throws up an enormous opportunity; something that prompted Pantaloon to make its foray through its own format, Depot in 2005-06. Located as standalone stores and within most Pantaloons, Central and Big Bazaar retail formats, Depots vision is to be a one-stop shop where customers will find an extensive range of books, multimedia, toys, gifts and stationery, thereby transforming the way books, music, multimedia and gifts are bought, sold and perceived in India. This would be made possible by the creation of a portfolio of exclusive titles, an Indian experience while shopping and connecting with the mind and soul through different languages, ideas and tunes. Books, Music and Gifts 29

Reading as a habit is ingrained into the Indian psyche from time immemorial. However, it is being increasingly associated with a select few. The company believes that existing formats in the segment offer an intimidating environment that alienates the masses. The company has therefore taken this initiative of launching a chain of books, music and gifts stores that will once again democratize the reading habit in the country. The company believes that with 1.2 billion people, the habit of reading can become a strong business proposition. Depot seeks to work with communities in and around the area where it is located and hopes to attract the entire family to spend quality time together. It is focusing on the introduction of old classics and books in regional languages with an objective to make these affordable to a mass audience.

Format-5 Fashion Station

Fashion Station, which represents the companys offering of the latest in fashion for the masses, has met with reasonable success since its launch in 2004-05. These thematic stores that offer the most contemporary in fashion and accessories, is another of the value added propositions that Pantaloon seeks to offer. The aspirational mass of consumers who are bombarded with the latest in style through media penetration, hedonism and peer emulation, need an outlet that meets their requirements of trendy, latest and yet affordable fashion. Fashion Station is positioned to meet their requirements, and thereby take fashion to the masses.

Format-6 Home Improvement

Some of the key factors contributing to growth in the housing sector in India are increasing purchasing power increasing number of nuclear families, softer interest rates, easy availability of finance schemes and an overall real estate boom across the country. There is a shortage of more than 33 million dwelling units. With the average age of a homebuyer reducing from 50 to sub-30, 4 million new 30

homes are being bought annually. With every house, a dream is planted to decorate the house. And this creates a demand for furniture, electronics and home improvement products. Modern retail is ideally placed to capture a significant chunk of consumer spend made by a new homebuyer. The market for home dcor and improvement is largely unorganized and hence a new homeowner has to literally visit several markets and stores for meeting his home needs. This was the opportunity that Pantaloon perceived and the reason why it entered the Rs. 90,000 crore home solutions market in 2004-05. With its presence in the modern retail and consumer space, this new concept was an opportunity for the company to leverage its experience and offer the consumer an alternative solution to canalize his consumption needs. In the Rs.25000 crore consumer durable industry, which is growing at nearly 6 per cent every year, E-Zone has already emerged as a force to reckon with. This lifestyle retail format offers a never experienced before environment for shopping for the best in national and international consumer electronic and durables brands. It retails products ranging from music systems to laptops, from the latest plasma television sets to DVD players, from washing machines to air-conditioners to name a few. Typically in excess of 12,000 square feet in size, E-Zones are primarily stand-alone concepts, but are also present within the companys Central malls

Format-7 COMMUNICATION

With over 2 billion phone users worldwide, mobility has now become an intrinsic part of our personal and working lives. Mobile operators, cell phone manufacturers, content publishers, wireless application service providers and many other key players in the mobile industry are all working to carve out the best position in the value chain, to find the right place from where they can best serve both their own and their customers needs. En route towards 3 billion phones worldwide, a major shift would occur in consumer 31

interest from carriage to content and from a verbal to a growing visual world. With more mobile cameras sold in 2005 than digital cameras, with more music/video players in mobiles than iPods, with more messaging reach than PCs, convergence with the online world is now very much a reality. In India, the story is no different. With over 150 million mobile subscribers expected by 2008, there exists a huge potential for all players in the mobility space. Most of the mobile phones in India are sold through mom and pop stores, and there is a huge grey market that exists.

MBazaar
Pantaloon realized this largely untapped opportunity and intended to be a dominant modern retail player in the mobile space. This is what prompted the company to set up a new division ConvergeM in 2005-06 to identify, develop and bring to the market, mobile products and solutions tailor-made to suit the consumers requirements at competitive prices. ConvergeM adopts a unique approach of establishing, multi-brand, multicategory, multi-format and comprehensive solution outlets to lead and exponentially expand the market. As in most other formats, ConvergeM too operates in the lifestyle and value platforms. Its value offering, MBazaar is a format that addresses the value seekers quest for possessing latest technologies at lowest prices. Primarily aimed at the replacement market, a typical MBazaar is located within most Big Bazaar stores as well as stand-alone options. This 250-500 square feet offering retails both GSM and CDMA and landline phones, while providing options of M Pods, downloads to name a few. The mission for Converge M is to emerge as the largest organized retailer in the mobile space, while leading innovation in mobile applications and being the most favoured destination for all communication needs.

Format-8 Restaurant, Leisure & Entertainment

32

Increasing urbanization and rising disposable incomes are characteristics that are common in emerging economies like India. Estimates suggest a growth in urban consumption at potentially 20% per annum in nominal terms for at least the next 5-7 year period. The total number of middle to high income households is projected to reach 105 million by 2010, thereby adding a large number of people to the consuming class. These demographic numbers represent a young nation, which has an increased propensity to spend in restaurants and other food service sectors, fuelling growth in the Leisure, Restaurants and Entertainment industries. The company is using the collaborative approach to strengthen its position in the leisure and entertainment space. This has helped the company build a complete bouquet of brands that span from food courts to fine dining. As the shift from high street to malls continues, the restaurant business is expected to increase significantly. For Indians, shopping comes hand in hand with eating and celebrating and these formats are being developed keeping this in mind. F123 is designed as a entertainment zone that can be present in every mall and this business is expected to gain traction in the coming year.

F123, the entertainment zone offering is a leisure solution for all age groups. The focus would be to offer a wide range of gaming options from bowling and pool, interactive video games to bumper cars. The entire concept is built around international thinking and gaming knowledge, with Indian pricing. For the year ending 2005-06, there were three F123s operational, with the first one opening in November 2005.

Format-9 Star and Sitara

Delivery Formats Star & Sitara In the beauty space, the companys offering, Star & Sitara aims at pampering the beauty conscious consumer by offering the latest beauty products, ranging from cosmetics, skin 33

and hair care, aromatherapy and fragrances. Star & Sitara is set to be part of most Big Bazaar and every Beauty and Health Mall, which the company is in the process of setting up. There were 6 Star & Sitara operational as on June 2006.

Star & Sitara Beauty Salon Star & Sitara, the beauty services offering, doubles as a unique parlour and salon for men and women. Customers will be treated to the best quality hair and skin services at unbelievable prices. One such store was operational as on the 30th June 2006.

Beauty & Health Mall

Pantaloon, will be the first retailer in India to offer health, beauty and wellness products and services. This will be led through its Beauty & Health Mall format. Typically, of around 25,000 square feet each, these centres will include pharmacies and beauty product zones and a host of other offerings such as health cafes, gymnasium, healthcare services, retailing fitness equipments, yoga centres and books on health and fitness etc. The company plans to open at least three Health & Beauty Malls during the year 2006-07 in Bangalore, Ahmedabad and Mumbai.

Format-10 E-TAILING

The emergence of a mass base of net savvy Indians is realty today. Access to Internet is no longer limited to a small segment of young, male urban people. Cutting across age groups, gender, geography and socio-economic backgrounds, Indians are taking to the net like fish to water. It is estimated that there are at least 25 million Indians who access the Internet on a regular basis. Falling prices of personal computers and laptops coupled 34

with increasing penetration of internet, and broadband services is driving more and more Indians to the Internet. In fact, Indians are no longer limiting their Internet usage to email and chatting. Online shopping has finally come of age. As the leading retailer in India, Pantaloon could ill afford to overlook this emerging segment. There is a sufficiently large segment of online shoppers whose consumption spends needs to be captured. Its with this belief that the company started exploring this area. Pantaloon perceives its online business as yet another delivery format that can potentially reach out to 25 million customers. Future Bazaar, has modelled itself on a unique complete retailer platform. Etailing requires extensive sourcing capabilities, warehousing capacity, buying trends understanding & most importantly a robust & efficient logistic backend. Future Bazaar leverages the offline brand equity and brick & mortar presence of the group via multi channel integration to benefit on economy of scales, economy of scope in promotion & distribution and utilizing the offline learning into online & vice-versa to grow at a faster pace. As a new delivery format, Future Bazaar can benefit from the learnings and expertise gathered in existing formats as well as boost sales at these formats through the online sale of gift vouchers

Format-11 Liberty Shoes

With fashion being the focus of the company, the intent is to provide a complete wardrobe experience to the consumer that includes not just apparel but fashion accessories also. Accessories speak a lot about the personality of the individual and are a reflection of the attitude of the wearer. Footwear is one such category in the fashion sphere that truly embodies the phrase-best foot forward. Footwear as a category has been present in most of the companys Big Bazaar; Fashion Station, Pantaloons and Central retail formats. During the year under review, Pantaloon explored the opportunity to get into branded footwear, by partnering with the wellestablished footwear company Liberty Shoes. The joint venture named Foot Mart Retail (India) Limited would launch branded footwear retail chains in the country under the Shoe Factory brand. These stores would be located within most retail spaces that 35

Pantaloon would be present in, and as standalone stores across the country. Shoe Factory stores would be a destination for men, women and children of all ages, who can choose from a wide variety of quality footwear at various price points, suiting their budgets. The venture launched its first store in Ahmedabad on 5th May 2006. Spread over nearly 13,000 square feet, this value format houses a wide range of the latest and trendiest footwear and accessories for all occasions, at unbeatable prices.

Format-12 GINI & JONY

The company recognizes that the organized kids wear category has shown signs of sizeable growth over the past couple of years. In order to expand and consolidate its presence in this category, the company entered into a joint venture with the countrys leading kids wear retailer, Gini & Jony Apparels Pvt. Ltd. This equal joint venture named GJ Future Fashions Limited, apart from gaining additional visibility within all existing and upcoming Pantaloons stores and Central malls will set up a chain of exclusive kids wear stores throughout the country, addressing fashion needs of children in all age groups, from 5 to 15 years. This initiative witnessed the opening of two stand-alone stores during the year 2005-06 in Indore and Ahmedabad.

36

Format-13 BIG BAZAAR Isse sasta aur accha kahin nahi!

Big Bazaar has clearly emerged as the favourite shopping destination for millions of its consumers, across the country, its success is a true testament to the emotional bonding it has established with the Indian consumer, on account of its value offerings, aspirational appeal and service levels. Shop till you drop! Big Bazaar has democratized shopping in India and is so much more than a hypermarket. Here, you will find over 170,000 products under one roof that cater to every need of a family, making Big Bazaar Indias favourite shopping destination. At Big Bazaar, you will get the best products at the best prices from apparel to general merchandise like plastics, home furnishings, utensils, crockery, cutlery, sports goods, car accessories, books and music, computer accessories and many, many more. Big Bazaar is the destination where you get products available at prices lower than the MRP, setting a new level of standard in price, convenience and quality. If you are a fashion conscious buyer who wants great clothes at great prices, Big Bazaar is the place to be. Leveraging on the companys inherent strength of fashion, Big Bazaar has created a strong value-for-money proposition for its customers. This highlights the uniqueness of Big Bazaar as compared to traditional hypermarkets, which principally revolve around food, groceries and general merchandise. Boasting of an impressive array of private labels, Big Bazaar is continually striving to provide customers with a complete look. So be it mens wear, womens wear, kids wear, sportswear or party wear, Big Bazaar fashions has it all!

Format-14 Food Bazaar

37

Across India, food habits vary according to community, customs and geography. Food Bazaar, through its multiple outlets addresses this. At the same time it offers best quality products at wholesale prices to a wide cross section of the India population. Food Bazaar effectively blends the look, touch and feel of the Indian bazaar with the choice, convenience and hygiene that modern retail provides. The food and grocery division of the company was launched in 2002-03 and has grown to 47 stores nationwide at the end of the current financial year. Most stores are located within Big Bazaar, Central and Pantaloons and act as strong footfall generators. There are separate stand-alone Food Bazaars as well. The business contributed just fewer than 50 per cent of value retailing, and about 20 per cent to the companys turnover during 2005-06. Food Bazaar offers a variety of daily consumption items, which include staples, soaps and detergents, oils, cereals and biscuits. On the product category side, the primary segregation is done on the basis of staples, fresh produce, branded foods and home and personal care products.

Sections at Big Bazaar

B.B Fashion Electronics Food Bazaar G.M. Home care Depot SIS NAVRAS Home Fashion Communication

Facilities offered by Big Bazaar:

Online shopping: Big Bazaar has an official website, FutureBazaar.com, which

is one of the most favourite sites among people of India for online shopping. 38

Future Bazaar is an online business venture of Future Group, which sells an assortment of products such as fashion, which includes merchandise for men and women, mobile accessories, mobile handsets and electronics like home theatres, video cameras, digital camera, LCD TVs, kitchen appliances and many more.

Discounts: Hfte ka sabse sasta din was introduced by the Big Bazaar, wherein
extra and special discounts were offered on Wednesday every week, to attract the potential buyers into their store.

Free Gift wrapping: Big Bazaar also provides Gift wrapping facility for the
product purchased from the store. This facility is provided to all customers that also free of cost.

3.3 SWOT Analysis of Big bazaar: Before going in to depth first of all lets clear the meaning of SWOT analysis. Following terms clarifies the meaning of the SWOT analysis.

s
W O T

Strengths

Weaknesses
Opportunities Thearets

Figure 39

All industries and companies have some strength, weaknesses, opportunities and threats. Strengths and weaknesses are internal and are controllable while opportunities and threats are external and are uncontrollable. I have done SWOT analysis of Big Bazaar which is as below.

Strengths of Big bazaar:

At Big Bazaar customer can get large variety of goods under one roof A price of products at Big Bazaar is lower than the market prices. It has good security system at all stores. Quantity of sales is high at all stores.\ High quality private labels.

Weaknesses of Big bazaar: Lacks in branded products Unable to provide enough parking spaces to its customers at all stores.

Opportunities:
To grab the rural market of India. To bring in the customers of other retail outlet by dealing with branded products. Add more products to its product category To open up more and more number of big bazaars in different cities of the country.

Threats for Big bazaar:

Opening up of other discounted stores like Vishal mega mart, D Mart etc. Customers have the option of nearby kirana stores so they may prefer to go there for small purchases. 40

 Availability of products in other retail outlets. Possible future competition from International retail companies like WalMart.

Chef Zone of Big Bazaar

41

Organization Structure Of Big Bazaar:

Store manager

Asst store manager

Dept manager

Human resource manager Asst dept, manager. Info

Sales mana ger

Team leader

Customer service dept

Visual merchandisi ng

Security

Cashiers

Team member

Asst Dm.

Administr ation

Marketing

Maintenan ce

House keeping

42

Chapter-4
43

Literature Survey.....: Introduction and theoretical background of the study

Growth of organized retail chain in India has also led to growth of private label brands in India. Indian economy has seen average growth rate of 6.8 percent since 1994, putting purchasing power in the hands of customer. Though initial growth of private label brands in India has been limited to certain categories like grocery and apparel, it is expected to expand into many other categories as well. The CSO estimated the economic growth of India for the last quarter of 2005-2006 to be 9.3 percent, marginally below 9.9 percent registered for China in the same period. For the same, given scope for high growth, management consultancy A. T. Kearney has placed India on top of its Global Retail Development Index in 2006. Currently, organized retail in India is estimated to have only 3 percent share. In the total retail market, it is expected to grow at 25-30 percent. Thus, with the growth of organized retail in India, the private label brands are also expected to grow as experienced in other developed countries. The growth of private label brands in India p resen ts an interesting opportunity for the retailer to understand the motivations of consumers behind choice of private label brands

Meaning of Private Label Brands:

A private-label product is a manufactured good that a retailer purchases from a supplier, with the intention of renaming, repackaging and selling it under the distributors own brand name. Depending on the agreement between a

manufacturer and a retailer, the manufacturer sometimes handles the packaging and labelling for the retailer for an additional charge. Otherwise, the retailer is responsible for the process of dressing up the product as its own. Thus, it can be said that Brands owned not by a manufacturer or producer but by a retailer or supplier who gets its goods made by a contract manufacturer under its own label are called private label brands. Manufacturers use either their own name, that of a Middleman or a combination of both when they are marketing their product 44

Private labeling occurs when middlemen, usually large retailers or wholesalers, develop their own brand. Building a following from scratch through private-label products, especially in rough economic times, is challenging because smaller retailers do not have the marketing budget compared to competition. their larger-sized

Evolution of private label brands:

The definition of private label branding has evolved significantly over time. Some would argue the term private label is a misnomer of great proportions. There is no question that the words private label acknowledges the birth, history and existence of generic and store brands. Yet, the term does not adequately capture the extent to which private label has progressed. Today's retail marketers are managing their proprietary brands with the same combination of care and innovation as manufacturers of national brands. In recent years, retailers have been liberating themselves from the traditional definition of private label marketing as being the poor relative of national brand consumer goods, and, in doing so, opening up huge opportunities for private label branding. These opportunities require the adoption of a different set of marketing and branding practices to support and propel the retailers business and marketing ideals for its private label brands.

The key to successful marketing management for todays retailers is to understand the contribution and role of their proprietary or own brands in the long-term business strategy and marketing mix of the retail store and consider both the supply side and the demand side of the equation. Effective category management can enable retailers to solidify and optimize supply chain relationships. Strategic brand management goes hand in hand with these endeavours to establish Sustainable points of difference in each aisle and segment within the store. 45

46

It also spurs decisions about how to appropriately define the retailers own brand portfolio in order to galvanize consumers to connect and reconnect with its franchise in a compelling manner.

Benefits of Private Label Brands:

1) Since manufacturers' (producers') brands have large advertising

expenditures built into their cost, a private labeler is able to buy the same goods at a lower cost and thus sell them at a lower price and/or at a better profit margin. 2) In addition, private labelers have more control over pricing and are able to advantageously display their own brands for maximum impact. For example, a grocery store can quickly reduce the price of its own privatelabel brand in order to meet or beat a competitor's price. Or the grocery store can create a special point-of-purchase advertising display and/or give its brand predominant shelf space in order to boost sales. 3) Private-label brands are usually priced lower than comparable

4) Manufacturers'

brands and therefore

appeal

to

bargain-conscious

consumers. An example of a private-label brand would be a supermarket product bearing a store label with a product's name. As already mentioned, retailers like PLBs because of their potential to increase store loyalty, chain profitability, manufacturers. control over shelf space, bargaining power over

47

Introduction to private brand strategies:

Private brand strategy has become a superior category of management skills and a basis for establishing customers shopping preference in retail channels. The marketing channels are facing increasingly fierce challenges, which include continuous development, new product types, new category management and new privately own brands that meet customers diverse demands. With rapid marketing advancement, more innovative types of retail channels, such as department stores, hypermarkets, wholesale warehouses, warehouse clubs, shopping malls, shopping centres, power centres, theme/festival centres and outlet centres are develop and introduced into the market. Fig-1 Private label Brand: conceptual frame----

48

Brief view of Big Bazaars Products and it s own brands :

Fashion Dept

Food Bazaar

GM-Home

Gm-fashion

Table-1 (Big bazaars products and its own brands)

Staples PURE & Denims & T-shirts FRESH Utensils(dream line) AFL, DJ & C Luggage Fabrics & Cut pieces Fruits & Vegetables AFL Formal wear Ready to cook TT Casual wear KNIGHTHOOD Non food CM,sach DJ & C Party wear Species NYX wear Ethnic Live kitchen SPUNK Accessories KORYO, SENSUI carriers(mi Furniture(dreamline,mo lestone) nza) Electronics Depot

Under garments RIA RITU SHYLA Night wear

SHYLA Dress material

RIA RITU 49

Saree SHRISTHI Foot wear DJ &C,

MERCHANDISE OF OWN BRAND:

Private labels are brands owned, merchandised and sold by retailers themselves. These can be categorized into store brands, store sub-brands &Umbrella brands. They are also called in-store or own brands. Private labels are unique to a particular retailer and they can be divided into a number of categories where the retailers name is evident on packaging. From apparel, healthcare products and furnishings to consumer items, they are making their presence felt in a variety of retail items in the country. Globally, private labels contribute 17% of retail sales with a growth of 5% per annum. International retailers like Wal-Mart of USA and Tesco of UK have 40% and 55% own label brands representation in their stores, respectively. Private label penetration in the United Kingdom is close to 37 per cent currently, and is forecast to exceed 40 per cent by 2011. In Germany private label has shot up from 12 per cent of sales to 34 per cent over the last decade. And apart from the multi-brand retail stores, a category of retailers like IKEA, Toys R Us, Zara has also been created who sell only private label brands.

Growth in IndiaAnd now, the role of private labels is gaining significance in the
developing markets too. In India there is a growing trend towards acceptance of private label brands and thus

50

their penetration is on the rise especially in the apparel, consumer durables, home care and FMCG segments. India is still an under-branded country and in each category there is still a lot of scope for growth, this is where the private label comes in and the story is looking good so far. For instance, Future Group has already tasted the success with its Tasty Treat brand which is just behind Frito Lay in the potato chips segment. Its Care Mate in the baby diaper segment has left behind Huggies in the in-store sales. At Spencers, diapers and agarbattis sell more than market leaders across the store chain. Experts comment that when it comes to local tastes and preferences, private label brands have an advantage over national brands and this reflects in the increasing percentage share of these goods in Indian retail chains. As the figure 1 shows, among the major Indian players, the degree of private label penetration is the highest in Trent with 90 per cent, followed by Reliance Retail (80 per cent) & Pantaloon (75 per cent).

51

Chapter-5

52

OBJECTIVES and SCOPE of the project Commercial Objectives behind launching Private Labels

There are certain objectives that a retailer has in mind before getting into private label goods. Figure 2 lists the benefits that a retailer expects from the in-store brands.

Higher

Margins

Private label goods are cheaper to produce than branded goods. Besides, due to the lack of advertising and marketing expenses they provide double advantage to the retailer when it comes to the profit margins. While majority of branded goods provide margins in the range of 6-12%, private label goods can offer margins up to 40% . Not only they give a higher margin to the retailers, private labels have also changed the balance of power between brand manufacturers and retailers, giving the latter a decided advantage when negotiating terms with the brand manufacturers.

Stronger Customer Loyalty:

As the private label offerings increase and the quality is assured, a high sense of loyalty is cultivated among its customer base. This customer loyalty is the result of an affinity with the retailer brand which implies that the development of private label brands can tangibly enhance the retailers brand itself. So in the long run, the private labels become an important tool for the retailer to establish its positioning and strategically attract the target customers to its outlet. Numerous studies have also shown that private label buyers are more store-loyal and not as easily influenced as brand buyers. 53

Differentiation
Through private labels, retailers get a chance to bring in unique products in their supply chains that have not been branded before. So if a retailer can cater to the local tastes and preferences of the consumers well by top quality private labels then they from can other differentiate stores and

themselves

become destination stores. In effect, its a win-win situation even for the producers who get a chance to display their produce.

Freedom with Pricing Strategy

A retailer promoting a private label has the added benefit of greater freedom to play with pricing strategies, as a result of which these are overall cheaper than brand leaders. For instance, in USA, some private labels are 25 percent cheaper than leading brands. In addition, since it is an own private label, the retailer has the freedom to create its own marketing strategy and have more control over its stock inventory. This command of all the stages that a product goes through, gives the retailer high flexibility inpricing.

Positioning during economic downturns:

The growth of private labels is likely to continue in the current financial environment as cash-strapped consumers' perception of the products as a cheaper option changes. The price advantage of private labels leads to the belief that these score in times of economic meltdown, and further that this newly-acquired market share is maintained even as the recession swings out. Even after the economy bounces back, consumers will naturally gravitate towards products marked at lower prices yet offering the same quality, especially where the retail name is a trusted national or regional player.

Private

Label

Maturity

Curve

The share of private labels is related to the level of retailer sophistication and concentration in the country. In economies where retail is more consolidated, private 54

label shares are both higher and expected to grow faster. However, the Indian retail industry is highly fragmented at the moment and organized retail is in its nascent phase presently with contribution of about 5% to the whole market . In this stage, the private labels that are launched play mostly the price game to compete with the branded products. At this stage, most private labels which have acceptance are at the bottom of the pyramid of retail products. However, as the retailers mature and gain experience they want to move up the pyramid where realizations are higher. As figure 3 depicts, over a period of time as the market matures, the retailers shift their focus from price to product quality which leads them to a stage where they can launch their own brands in the premium category expecting to capture the brand equity and the customer loyalty built over years of good service. The consumers too, at this point, have enough trust and confidence to accept premium products from the retailer.

Implications_for_Indian_Retail_Marketers
Identify the needs of your customer base

The private label should provide the required functional as well as emotional attributes and benefits. Keeping in mind that it already has a price advantage, this ensures that it takes into account needs that are important to consumers and hence, offers a reliable point of difference from other category players. By offering a differentiated value proposition, a private label utilizes the approach that national brands use to arrive at a holistic benefit proposition rather than the specific positioning they use. This furthers its promise that has been already informed by the competition, confirming its category membership, but is clearly not a me-too expression. It is also successful as it demonstrates a commitment to offer consumers multiple choices and varieties with distinct attributes, benefits and price points.

Leverage_the_Consumer_Connection
A successful private label has the ability to own the consumer connection and has the capacity to strike a chord with consumers in multiple categories of products. Unlike national brands, private labels are offered exclusively through a specific retailer and 55

can easily surpass specific categories because they have a consumer focus rather than a product focus as their brand foundation. These brands instigate trustworthiness and allegiance from their loyal consumers that the parent store becomes their conscious and obvious retail source for certain categories. Moreover, these categories may be the reason that consumers are initially drawn into the store, but once they get there, the store also has the prospect of encouraging them to spend more on impulse purchases. Therefore, the private labels not only reinforce enduring loyalty and positive feelings for the retail brand, they also enable the retailer to capture a more significant share of the consumers heart, wallet, mind space and lifestyle than a national brand.

Communicate

at

the

Point

Of

Sale

Retailers need to be more cognizant of the significance of the communication with the consumer at the point of sale. They own the canvas consumers shop on and thus, through store environments, in-store messaging (like signage), merchandising systems, and packaging as well as external messaging like circulars, catalogs and advertising in a congruent manner, the retailer is able to create a lasting impression in-store, at shelf, at the time of purchase and during usage. Retailers need to make sure that they send out the right message at these interaction points. Moreover, many of these messages do not require revolutionary change for extended periods of time, so they perpetuate a persuasive branded voice and dont require constant investment from the retailer.

Collaborative

category

management

Category management is instrumental for a retailer to realize its own-brand goals and aspirations. To maximize the efficiencies of product flow throughout the distribution system, a retailer must be aligned with the supplier. The relationship between the retailer and trade should become increasingly about cooperation and lesser about the retailer negotiating with the manufacturer or supplier on price. By joining hands, they can strengthen their trade relationships and ensure that the category as a whole remains profitable and emotionally appealing to the customer resulting in both private label and branded goods as winners. They can collaborate in understanding and deciding how to optimize the product lines and Stock Keeping Units (SKUs) that will progress the category definition as a whole and determine plan grams and shelf allocations to rally the greatest degree of category interest and excitement from 56

consumers.

Manage

Brand

Architecture

the

right

way

Brand architecture is a critical consideration for private label marketing. Once the brand proposition solidifies, the brand architecture strategy enables decision makers to promote this promise at the store level in order to stimulate a sense of familiarity, recognition and trust. Also, private labels have broader set of aisles than national brands. Because of this, it becomes more and more important to differentiate its attributes and benefits on an aisle, category and product basis. So the implication for the retailer is to strike the right balance of similarities and differences with brand messaging and portfolio offerings.

METHODLOGY
How Big Bazaar grow, and what it does to market its products ? 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 crores by 2010. Big Bazaar is Indian personification of retail. Its like an Indian bazaar or mandi or mela. Big Bazaar, which has become a household name by now, has emerged as one of the prominent organised retailing player in Indian arena. It has been successful in establishing a chain of shopping malls in various cities of India, reflecting the look and feel of Indian bazaars at their modern outlets targeting higher and upper middle class customers with a strong distribution network. Big Bazaar faces a formidable competition from the unorganised sector. Change in consumer behaviour, intensification of competition with the emergence of new players has made it difficult to achieve the forecasted success. An insight into unorganised retailing reveals that it enjoys higher margin due to many reasons 57

including

low

operational

cost,

and

low

taxations.

Being aware of the threats and opportunities present in the Indian retailing, the top management at Big bazaar planned various strategic alternatives. Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to prompt people to do bulk shopping. There are two types of promotional strategies of big bazaar. One is the holistic advertisement which promotes the brand and creates awareness among people. Other type of promotion is the particular store oriented promotion. There are promotional efforts even inside the store

Big Bazaar ensures that no other kirana store / departmental store are offering considerable discount compared to its own price. This helped it Big Bazaar in being the "value for money" store. Product mix at Big Bazaar is compared to kirana.store.

7P Analysis of Big Bazaar

Product: Big Bazaar offers a wide range of products which range from apparels, food, farm products,furniture, child care, toys, etc. Products of all the major brands are

available at Big Bazaar Price: The tag-line is "Is se Sasta aur accha aur kahin nahi". They work on the model of economics of scale. There pricing objective is to get "Maximum Market Share". Place: Big Bazaar stores are located in 50 cities with 75 outlets. Big Bazaar has presence in almost all the major Indian cities. Promotion: The various promotion techniques used at Big Bazaar include "Saal ke sabse saste teen din", Future Card (the card offers 3% discount) Brand Endorsement by M. S. Dhoni, Exchange Offer - Junk Swap Offer, Point-of-Purchase Promotions. Advertising has played a crucial role in building of the brand. Big Bazaar advertisements are seen in print media, TV, Radio (FM) and road-side bill- boards. People: Well-trained and dressed staff, Employees are motivated to think out-of-thebox. Process: Multiple counters with trolleys to carry the items purchased. Proper display / 58

posters

of

the

place

like

(DAL,

SOAP,

etc.).

Physical Evidence: It deals with the final deliverable or the display of written facts. This Strategic includes Decisions the current Taken to system Build and the available Big Bazaar facilities. Brand

Indian customers prefer to purchase grains, grams, etc., after touching them, so its better not to sell in polythene packs. Big Bazaar has counters where you can touch wheat, rice, sugar, etc., before purchasing. Advertisements about schemes and offers through local newspapers, radio in local languages, inspires customer more than the traditional ways. For Indians, shopping is an entertainment; they come in groups, with families so Big Bazaar offers something for every section of family. Their newspaper advertisements are present just before launch of any new scheme. This creates aura about the Big Bazaar brand in the minds of customers. Big Bazaar bill-boards are displayed on prime locations in various cities as a brand building exercise. They display the catch-phrases now-a-days. For a retailer, location is one of the most important things. The strategic decisions to secure spaces before other retailers join in have resulted in creating early presence in market.

STRATEGY TO INCREASE OWN BRAND SALES

Customers decide daily whether to pay the extra cost for a prettier label and have to make the choice on whether or not the produce is as good as the branded products they buy. There are two generic philosophies that come into play when considering whether to buy supermarket own or well known branded products, one is that you only get what you pay for and quantity grants quality. Alternatively, there is the thought of why should you pay about three times the price for a product with a colourful label and a name everyone recognises Human mind is a strange thing. It combines the conscious and the unconscious, the rational and the irrational. People act as the mind asks them to do. If somebody can influence the human mind he/she can get the desired result. This is very much true in case of branding your company. Whether you have a small business or a big business, the customers have developed certain ideas about your company, product or service and this is 59

called brand in a nutshell. The best way of improving your business is spreading awareness about your brand among the consumers. It seems that many of the companies have lost sight of the significance of establishing brand loyalty and it is mainly reflected in the poor quality of their product and inadequate customer service. So firstly you should improve the quality of your product as well as offer satisfactory customer service. Another important factor that contributes a lot in developing brand loyalty is advertisement and marketing. In present time wherever we look TV ads, banners, hoardings, magazines, billboards draw our attention and we find some or the other brand is reminding us of our need and promising to provide us with more than our expectations. When a customer comes to buy a product a number of factors meld his/her decision of buying a product of a particular brand. The decisive factors include past experience of quality, price, word-of-mouth, customer service, brand connotation and so on. Brand loyalty occurs only when the customer is satisfied. Brand loyalty can be divided into two broad categories: behavioural brand loyalty and attitudinal brand loyalty.

Behavioural Brand Loyalty

Behavioural brand loyalty is mainly determined by repeat purchase. If a customer buys your product over and again it means that the customer is loyal towards your brand. But at times it might not be true and the customer might be forced to buy your products because of situational constrains. However customer behaviour always reflects his/her perception about a brand. Depending on a customer's perception a company develops its branding strategy.

Attitudinal Brand Loyalty

Attitudinal brand loyalty should be the ultimate goal of any company. It determines a customer's favourable attitude towards a brand. It is not only indicated by repeat purchase but much more than that. If a customer is completely committed to a brand he/she will be indifferent to price change. They will be ready to pay high for a product when they know that the company offers value for money. Not only that he/she will also

60

recommend your brand to others when they realize that your brand actually keeps the promise it makes. When the customers are committed to your brand they will not only look for their own interest but also the interest of the brand. So be honest to your customers and don't fool them. You can be benefited by doing so (e.g. selling a bad product at a high price) for once but you will lose that customer for ever.

Brand loyalty is an asset for a company.

Food and Non Food private label products of BIG BAZAAR

61

Electronic private label products of BIG BAZAAR

KEY FINDINGS:
1) Considering d e m o g r a p h i c s a n d t h e i r p r e f e r e n c e towards hyper market, Big Bazaar has competitive advantage over other store since it is the only hyper market in the city. 2) Most of the customers are looking for brand with lower price. 3) Male customers were more brand conscious rather than female, it seems male fashion private brands need intensive care while entering.
62

4) Non food department is the area where customerwouldntt compromise at brand, 2nd would be the food department.

5) On the other side foot wear and electronics are the least bothered about brands. 6) Among five promo mediums that Big Bazaar-Hubli follows, Advt in print or digital is the most effective one. 7) Among the fashion private brands, DJ & C and AFL are well known brands for the customers. 8) Among the Food Bazaars private brands, Tasty treat and Pure & Fresh are well known brands for the customers. 9) The brand Koryo is being the preferred one in electronics segment . 10) Customers felt that private brands are more economical and quality assured. 11) Even the brand conscious customers have shifted towards private brands, performance of these quality, lower price and service. 12) Among fashion private brands, DJ & C is the brand which made higher customer shift from national brand, like wise we got Tasty treat in Food Bazaar and Koryo in electronics segment. 13) The non food segment private brand, Sach has least awareness among all other available private brands in the store. brands ii quite well in terms of

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Chapter-6

64

RESEARCH METHODOLOGY

Big Bazaar basically means business and in business collection of raw data allows the managers to see the real scenario and then take a decision as per the data obtained. There are several implications in this statement:

They can examine the available information in the form of data to make a decision They can even get a clear picture of the scenario or potential of Big Bazaar as compared to other retail stores in the city. The information can only be gathered by data collection and then analyzing the available data.

Therefore, it can be said that the data collection is an important part of the project.

Data Raw numbers

Information

The projected objectives were considered and as per the requirement a market survey was done.

Procedure:
The procedure that followed can be enlisted as below: Reading about the product Deciding on the objective to proceed. Developing Survey instruments Conducting personal interviews of different age-groups, sex, monthly income and occupation through a Questionnaire. 65

Process adopted:
1.Gaining knowledge about the product at Big Bazaar: Reading about the products was the first step undertaken. This gave not only in depth knowledge about what is been offered by other players but also proved useful while developing the questionnaire. 2. Steps in the Development of the Survey Instruments The main instruments required for survey was a well-developed questionnaire. The questionnaire development took place in a series of steps as described below:

Research objectives are being

transformed into information objectives.

The Appropriate data collection methods have been determined

The information required by each objective is being determined.

Specific Questions/Scale Measurement format is developed.

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Question/Scale Measurements is being evaluated.

Research

objectives

are

being

transformed into information objectives.

The number of information needed is being determined.

The questionnaire and layout is being evaluated.

Revise the questionnaire layout if needed.

The Questionnaire format is being finalized.

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Customer Survey:
The people play an important part as a clear perception of people about the product can be estimated and known. Studying the need levels of the people regarding the products can be observed. It was very useful in knowing about the requirements of the people.

Research Design:
A two stage Research was conducted:

1. Secondary Research:
Data was collected from websites and catalogues to understand the product of the different players

2. Primary Research:
A Primary Research was conducted: The questionnaire was prepared for the companies and following areas covered: competing retail stores Features offered by different stores Consumer profile Satisfaction level Reasons for their purchase. Desirable features of the product and service.

Sampling Plan: Elements: The target population of the study included the general population of every age who enters to the Big Bazaar

Sample size: 150 people.

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Data Collection
The final draft of the questionnaire (see Appendix) was prepared on the basis of the observations from the pilot study. These were then finally filled by 100 customer, for the conclusive study. Finally the data collected was fed into the data analysis software- SPSS, to be analyzed using statistical techniques.

Types of Primary Data collected: Socioeconomic Characteristics:

Socioeconomic characteristics are sometimes called states of being in that they represent the type of people. The factors on which we are working are occupation. Monthly transaction is also an important parameter but it is difficult to verify. Although the amount of money that business unit earns in a month is an absolute, not a relative quantity but it is a sensitive topic in our society and it is difficult to determine.

Attitudes/Opinions:

Through the questionnaire we have tried to get hold of customers preference, inclination and requirement. Attitude is an important notion in the marketing literature, since it is generally thought that the attitudes are related to the behaviour of customer.

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 Motivation:
Through the questionnaire we have tried to find the hidden need or want of customer and have tried to find if these people can be tapped as the potential customer for Big Bazaar.

Behaviour:

Behaviour concerns what subjects have done or are doing. Through the questionnaire we have tried to find out the behaviour of the individuals regarding the product and their responses. If the responses are favourable then the person can be said to be our potential customer. The primary data serves as an important tool to measure the behavioural trend of the customer. It helps in answering some of the vital Questions.

Obtaining the Primary Data:

The data collection was primarily done through communication. Communication involves questioning respondents to secure the desired information, using a data collection instrument called questionnaire. The questions were in writing and so were the responses.

Versatility:

It is the ability of a technique to collect the information on the many types of primary data of interest to marketers. It has also been found that some of the people do not answer truthfully to all the questions especially in the case of the personal details. 70

Chapter-7

71

Data Analysis and Interpretation:

Q.1 Do you purchase private label brands?

We have selected all 150 members purchases Private brands.

Q.2 Generally in which category you purchase private label brands?

Consumer FMCG 46 Durables 36 Apparels 42 Grocery 26 Other 0

Sales
FMCG Consumer Durables Apparels Grocery other

Findings: From the above Pie chart, it can infer that large amount of purchase is occurring in FMCG and Apparels category which are followed by Consumer Durables. It may be, because the consumer durables products are normally high involvement products. Consumers normally dont hesitate in spending their money easily in low involvement products which does not have long term life.

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Q.3 Where do you buy the private label brands from?

Shopping mall 72

Speciality stores 58

Internet 20

others 0

Sales
internet 13%

others 1%

speciality stores 38%

shopping mall 48%

Findings: From the above Pie chart, it can be infer that normally consumers gives first preference to large shopping malls and speciality stores who sells their own branded product, who are also known to local public. With some increase in use of internet in shopping habits of Indians, these medium also has starting to play their role.

Q.4 Mark the following statements with 1 if you strongly agree to 5 if you strongly disagree. Statement 1- I feel confident when I use PLBs

Strongly agree 23

agree 46

neutral 31

disagree 30

highly disagree 20

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50 45 40 35 30 25 20 15 10 5 0 strongly agree agree neutral disagree highly disagree

Findings: From the above data, it can be inferred that out of 150 respondents, majority of them are more confident when they use private label brands. They dont hesitate to use private label brands.

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Statement 2- I find economical to buy PLBs.

Strongly agree 26

agree 72

neutral 32

disagree 20

highly disagree 0

80 70 60 50 40 30 20 10 0 strongly agree agree neutral disagree highly disagree

Finding: From the above data, it can be inferred that out of 150 respondents, high percentage of them are feeling economical when they purchase private brands.

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Statement 3-PLBs may be associated to luxury.

Strongly agree 19

agree 54

Neutral 35

disagree 42

highly disagree 0

60 50 40 30 20 10 0 strongly agree agree neutral disagree

Findings: From the above data, it can be seen that respondents showed a mix response though the weight age is more inclined to positive side for private label. 73 respondents (19-strongly agree, 54-Agree) were agree that it may be associated to luxury, while 42 were disagree.

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Statement 4- I find PLBs good for ones image.

Strongly agree 19
45 40 35 30 25 20 15 10 5 0 strongly agree

agree 42

Neutral 42

disagree 32

highly disagree 15

agree

neutral

disagree

highly disagree

Findings:

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Statement 5- PLBs have youthful image.

Strongly agree 20

agree 36

neutral 31

disagree 55

highly disagree 8

60

50

40

30

20

10

0 strongly agree agree neutral disagree highly disaree

Findings: One negative aspect about PLBs which is seen in this context of Youthful image of PLBs is if we compare the data, few of respondents have considered the PLBs as having youthful image. The reasons may low advertisement of private label brands than that of national brands.

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Statement 6- It is securing to use PLBs

Strongly agree 52

agree 58

neutral 25

disagree 15

highly disagree 0

70 60 50 40 30 20 10 0 strongly agree agree neutral disagree

Findings: Most of responded have agreed that its secure to use PLBs as we can see from the above chart. Most of the owners of PLBs provides all information about their products so that there will be no confusion regarding the same. This may be the main reason.

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Statement 7- I find PLBs simple to purchase.

Strongly agree 28

agree 75

neutral 19

disagree 28

highly disagree 0

80 70 60 50 40 30 20 10 0 strongly agree agree neutral disagree highly disagree

Findings: From the above data, it can be seen that most of the respondent found it simple to purchase PLBs compare National Brands. This may be because the owner of the shop always has more information about his products rather than the products of the National brands. So the consumer can easily acquire the information which he needs to make a purchase of a product.

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Statement 8- Its reasonable to buy PLBs

Strongly agree 30

agree 49

neutral 42

disagree 22

highly disagree 17

60

50

40

30

20

10

0 strongly agree agree neutral disagree highly disagree

Findings: From the above data, it could be gained that majority of the respondents find Private label brands to be very reasonable to buy. Reasonability is not gaining very strong response but major of them agree on a neutral scale that it is reasonable to buy PLB.

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Statement 9- Warranty is provided with PLBs

Strongly agree 17

Agree 65

neutral 46

Disagree 22

highly disagree 0

70 60 50 40 30 20 10 0 strongly agree agree neutral disagree highly disagree

Findings: Normally owner of shop provides warranty on his own products, because he is confident about his product as this would build up his brand. And giving warranty is a major source to attract clients and also repurchase could be enhanced by the same. Respondents also agree with this belief as it can be seen from the above table and chart.

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Statement 10: I think that PLBs are innovating

Strongly agree 20

Agree 62

Neutral 39

disagree 16

highly disagree 13

70 60 50 40 30 20 10 0 strongly agree agree neutral disagree highly disagree

Findings: From the above data, it can be seen that consumers agree that PLBs are innovating. The major reason could be because of the launch of the Private label brands in many new sectors and that too with more features and quality in comparison to the national brands.

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Statement 11 It is convenient to purchase PLBs

Strongly agree

agree

Neutral

disagree

highly disagree

43

51

36

20

60

50

40

30

20

10

0 strongly agree agree neutral disagree highly disagree

Findings: From the above data, it can be imbibed that respondents/consumers feels purchasing PLB to be convenient may be due to the easy availability and reasonable pricing.

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Management Implications

In consumer marketing, brands often provide the primary points of differentiation between competitive offerings, and as such they can be critical to the success of retailers and manufacturers.

Private label brands have made tremendous inroads over the past two decades. Although the success of private labels has been limited to certain product categories and segments of consumers, retailers continue to expand the domain of private label offerings.

In this exploratory study, our objective was to assess how PLBs are perceived in a multicultural context. Findings comprise some main points that are valuable for retail firms operating in multi-cultural contexts.

First, an array of statements is found to be highly associated with PLBs image including convenience, economy, reason and simplicity. Some of these items (i.e. convenience and reason) were previously associated with national brands. This result shows that consumers are now aware that PLBs are improving their quality. So, from now on, retailers have to launch much more PLBs products and to focus on their improved PLBs quality.

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Limitations of the Research

This work does suffer from some limitations. The first of these limitations stems from the use of a student sample. Although the sample does have some characteristics that are desirable in terms of their similarity to the wider population of consumers students, the sample does not allow for consideration of the impact of consumer variables such as income or education, both of which have been demonstrated to impact private label purchasing behaviour. Future research in this area needs to consider a broader array of consumers living in multi-cultural contexts. Second, future studies should also investigate other factors that influence the PLB image perception, i.e. characteristics of the consumers who buy PLBs, their exposure to global consumer culture, amongst other traits. In this respect, they can distinguish clearly between intrinsic and extrinsic cues in PLB image perceptions.

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Chapter-8

87

SUGGESTIONS AND RECOMMENDATIONS:

1) This is the time to create a positive image of private brands for your
customer which will lead to stronger brand loyalty. 2) We have greater freedom with pricing strategy to create our own marketing plans, so promos or melas should be private brand centric. 3) Reduce dependence on brand names for sales, other side private brand needs to be promoted as national brand. 4) As of now better not to introduce more private brands in to the non food and food segments. Since it is brand sensitive area. 5) Foot wear and electronics is the area where more no of private brands can be introduced. 6) Advertising in print/digital media is being the best medium for promotions so this is the place where customers get aware of new brands. 7) Fashion private brands such as Knighthood, Spunk and Matrix, electronics private Sansui, Food bazaars private brands Sach, care mate and clean mate need more promotional activities to be sensed by the customers frequently. 8) DJ & C should concentrate on providing latest models, this was the reason for DJ & C rejection. 9) As of now, Koryo is best choose for small appliance so this the time to grab attention towards it. 10) Higher visibility in possible media and proper visual merchandising can

increase the awareness of the brand Sach.

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Chapter-9
89

Conclusion
The growth of private labels in the Pantaloon retail industry is inevitable but Big Bazaar retailers do need to keep a few things in mind. Promotion of own label and allocation of large shelf space at the expense of well-marketed other brands can depress the overall size and value of the category while on the other hand, joining hands with them and following principles of category management can create a win-win situations for both. Retailers need to realize the importance of consistent brand message and should ensure that the product quality backs it well. Moreover, when used as an umbrella brand, the brand portfolio should be managed properly as to avoid any negative impact on the store brand. To conclude it is quite evident that as the Pantaloon retail industry consolidates over next decade, retailers will look to differentiate among themselves and private labels will form a highly significant part of their strategies.

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Appendix

Consumer perception towards private label

Questionnaire
1. Do you purchase private label brands? Yes No

2. Generally in which category you purchase private label brands? FMCG Consumer Durables Apparels Grocery Other(please specify)_______

3. Where do you buy the private label brands from? Shopping malls Speciality stores Internet Others (please specify)_________

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4. Mark the following statements with 1 if you strongly agree to 5 if you strongly disagree
STATEMENTS STRONGLY AGREE AGREE 1 2 3 4 NEUTRAL DISAGREE STRONGLY DISAGREE 5

I FEEL CONFIDENT WHEN I USE PLBS

I FIND ECONOMICAL TO BUY PLBS

PLBS MAY BE ASSOCIATED TO LUXURY

I FIND PLBS GOOD FOR ONES IMAGE

PLBS HAVE YOUTHFUL IMAGE

IT IS SECURING TO USE PLBS

I FIND PLBS SIMPLE TO PURCHASE

ITS REASONABLE TO BUY PLBS

WARRANTY IS PROVIDED WITH PLBS

I THINK THAT PLBS ARE INNOVATING

IT IS CONVENIENT TO PURCHASE PLBS

Personal Details:

Name:_____________________________ Area of Residence:___________________

Age__________________ Sex___________________ 92

BIBLIOGRAPHY

www.futurebytes.com
www.privatelabel-india.com

www.pantaloon.com
www.bcognizance.iiita.ac.in www.mywestside.com

www.pantaloon.com www.futuregenerali.in www.indiaretailbiz.com

BOOKS: Strategic Brand Management - Kevin Lane Keller Retailing Management Swapna Pradhan Research Methodology - C.K. Kothari, M.V. Kulkarni. Marketing Management - Philip Kotler

NEWSPAPERS: Economic Times and Articles..

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