Mrp Mid Review Report

8/19/2019 Mrp Mid Review Report

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A PROJECT ON

MARKETING RESEARCH PROCESS

MARKETING STRATEGIES FOLLOWED BY SELECTED

PLAYERS OF FMCG & RETAILS

(CASE OF AHMEDABAD)

In Partial fulfilment for the awards of the PGPGBM (2014-16)

Submitted by:

Ankit Malli (240)

Vimal Rupapara (218)

Harshil limbani (233)


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ACKNOWLEDGEMENT

I acknowledge the sincere assistance provided to me from several rather unexpected quartersduring the course of execution of this study. It would be a mammoth task to place on record mygratitude to each and every one of them but a whole hearted attempt would be made nevertheless,least I be branded ungrateful.

I am extremely thankful to Xcellon institute for giving me an opportunity to A STUDY ON

MARKETING STRATEGIES FOLLOWED BY SELECTED PLAYERS OF RETAIL AND FMCG and making my memorable learning experience.

I am deeply thankful to Prof. Jitendra Sharma (Mentor) for his encouragement, affections,valuable advice and guidance that helped me to complete this project successfully.


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PREFACE

This report focus on study of marketing strategies followed by selected retail and fmcg company,its marketing environment , demographic factor ,marketing factors. We designed a report toprovide a brief description about its marketing mix & its major competitors in India. We alsodiscuss four P’s of marketing & their marketing tools. We apply application of industry analysistools of retail and fmcg and make data analysis of it.

In addition to it, this report includes a research base survey on marketing strategy fmcg and retailuse, we take interview to selected players of retails and fmcg industry. We all have tried our levelbest to fulfill all the requirements mentioned to us. Now it’s depend upon the reader to read itcarefully and understand what we want to communicate. This report provides a brief knowledgeabout all type marketing strategy used by every retail and fmcg company.


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EXECUTIVE SUMMARY

The present business scenario is totally customer oriented. Each company faces stiff competition

from its competitors, each provides the best services at competitive rates. As a result customerhas lot of choices to get the best with least cost. To face this competition, it is very important toknow customer’s behavior towards different products and services.

This project is aimed at understanding the Marketing strategies adopted by retail and fmcg playersand its impact on the perception Customers.

Research has showed that it is far more costly to win a new customer than it is to maintain anexisting one, and there is no better way to retain a customer than to exceed his expectations. Forthis purpose it is essential to know the level of customer satisfaction. Finally the results of theresearch verify the fact that keeping the customer satisfied is the best strategy to not only retainsthe existing customers but also to expand the business to new horizons.

My objective of research is:

To study marketing strategies of Broad-line Retailers in Ahmedabad

To study marketing strategies followed by FMCG (Personal Care) company in Ahmedabad

To study effectiveness of different marketing strategies followed by Broad-line retailers andpersonal care.

To study the difference between personal care and broad-line retailing marketing strategies


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TABLE OF CONTENTS

SRNO. PARTICULAR

PAGENO.

1 Chapter 1 INTRODUCTION2 Overview of Industry 63 Present status of Industry 104 Major Trend Industry 125 Key driver of Industry 146 Brief of player 167 -Swot analysis

8 -marketing mix9 -competitive strategy10 -key functional strategy11 Regulation framework for Industry 4412 Future Prospects For Industry 4813 Chapter 2 Application of Industry Analysis Tools 5314 Pestle Analysis 5315 Five Force Analysis 5616 Bcg Matrix 5817 I/O Framework 6118 Value Chain Analysis 6219 Strategy Group Mapping 6320 Chapter 3 Research 6521 Research methodology 6522 Appendixes & Bibliographic 6723 Data Analysis 6824 Discussion Guide 69


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Chapter: 1 INTRODUCTION

Retail Industry

The Indian retail industry has emerged as one of the most dynamic and fast-paced industries dueto the entry of several new players. It accounts for over 10 per cent of the country’s GrossDomestic Product (GDP) and around 8 per cent of the employment. India is the world’s fifth -largest global destination in the retail space.

Market Size

The Boston Consulting Group and Retailers Association of India published a report titled, ‘Retail2020: Retrospect, Reinvent, Rewrite’, highlighting that India’s retail market is expected to nearlydouble to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth,

urbanization and attitudinal shifts. The report adds that while the overall retail market is expectedto grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent perannum and traditional trade at 10 per cent.

Retail spending in the top seven Indian cities amounted to Rs 3.58 trillion (US$ 57.6 billion), withorganized retail penetration at 19 per cent as of 2014. Online retail is expected to be at par withthe physical stores in the next five years. India is expected to become the world’s fastest growinge-commerce market, driven by robust investment in the sector and rapid increase in the numberof internet users. India’s e-commerce market is estimated to expand to over US$ 100 billion by2020 from US$ 3.5 billion in 2014.

INVESTMENT SCENARIO

The Indian retail industry in the single-brand segment has received Foreign Direct Investment(FDI) equity inflows totaling US$ 275.4 million during April 2000 –May 2015, according to theDepartment of Industrial Policies and Promotion (DIPP).With the rising need for consumer goodsin different sectors including consumer electronics and home appliances, many companies haveinvested in the Indian retail space in the past few months.

Paytm plans to set up 30,000 –50,000 retail outlets where its customers can load cash on theirdigital wallets. The company is also looking to enroll retailers – mostly kirana stores – asmerchants for accepting digital payments. Mobile wallet company MobiKwik has partnered withJabong.com to provide mobile payment services to Jabong’s customers.

Data Wind partnered with HomeShop18 to expand its retail footprint in the country. Under thepartnership, HomeShop18 and Data Wind would jointly launch special sales programs acrossbroadcast, mobile and internet media to provide greater access to the latter’s tablet range. Fashion And You has opened three distribution hubs in Surat, Mumbai and Bengaluru toaccelerate deliveries. Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 402.0million) in a fruit and vegetable processing unit, an integrated meat processing unit, and a modernshopping mall in Hyderabad, Telangana.


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FMCG INDUSTRY

INTRODUCTION

The overall fast moving consumer goods (FMCG) market is expected to increase at a compoundannual growth rate (CAGR) of 14.7 per cent to US$ 110.4 billion during 2012 –2020, with the ruralFMCG market expected to increase at a CAGR of 17.7 per cent to US$ 100 billion during 2011 –2025.Rising incomes and growing youth population have been key growth drivers for the sector.Brand consciousness has also aided demand. It is estimated that First Time Modern TradeShoppers (FTMTS) spend will reach US$ 1 billion by 2015.

The industry has witnessed healthy foreign direct investment (FDI) inflow, as the sector accountedfor 3 per cent of the country’s total FDI inflow in the period April 2000 to October 2013. Organizedretail share is expected to double to 14 –18 per cent of the overall retail market by 2015.

The Government of India has approved 51 per cent FDI in multi-brand retail, which will boost thenascent organized retail market in the country. It has also allowed 100 per cent FDI in the cashand carry segment and in single-brand retail. The government has also amended the Sugarcane

Control Order, 1966, and replaced the Statutory Minimum Price (SMP) of sugarcane with Fair andRemunerative Price (FRP) and the State Advised Price (SAP).

The FMCG sector has grown at an annual average of about 11 per cent over the last decade. Theoverall FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$ 110.4billion during 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7per cent to reach US$ 100 billion during 2012-2025.Food products is the leading segment,accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12per cent) come next in terms of market share.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers forthe consumer market. The Government of India's policies and regulatory frameworks such asrelaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers for theconsumer market.

Road Ahead

FMCG brands would need to focus on R&D and innovation as a means of growth. Companiesthat continue to do well would be the ones that have a culture that promotes using customerinsights to create either the next generation of products or in some cases, new product categories.

One area that we see global and local FMCG brands investing more in is health and wellness.

Health and wellness is a mega trend shaping consumer preferences and shopping habits andFMCG brands are listening. Leading global and Indian food and beverage brands have embracedthis trend and are focused on creating new emerging brands in health and wellness.

According to the PwC-FICCI report Winds of change, 2013: the wellness consumer, nutritionfoods, beverages and supplements comprise an INR 145 billion to 150 billion market in India, isgrowing at a CAGR of 10 to 12%.


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Investments Overview

Bosch & Siemens, the largest manufacturer of home appliances in Europe, plans to manufacturemore products in India in the next three years, led by rise in demand for premium home andkitchen appliances. San Francisco-based Fit bit Inc., a fitness-tracking device maker, haslaunched its fitness wristbands across 300 towns in India and expects the country to be among

its top five markets in next two years, with increasing demand for health monitoring devices in thecountry. Italian premium apparel and denim brand GAS has planned to form a joint venturecompany with Reliance Brands for consolidation and expansion of its business in India.

FMCG major Hindustan Unilever (HUL) announced a reorganization of its go-to-marketoperations from the traditional four sales branches to 14 consumer clusters in order to provideservices to diverse consumers across channels and geographies. The company has termed theinitiative as “Winning in Many India’s”. Hero Group is set to acquire a majority stake in direct-to-home devices manufacturer my box Technologies through its subsidiary Hero Electronics. Thedeal is the first step by Hero Group, which operates in numerous business verticals, towardsentering the consumer electronics market.

Chinese technology major Huawei is entering the consumer broadband networking segment inIndia, with a range of devices aimed at homes and SOHO customers. With the aim to strengthenits position in the Indian market, online cashback and coupon site CashKaro.com plans to listabout 50 global retailers over the next six months, according to one of its founders.

Smartphone brand Gionee is entering the urban market in a big way through tie-ups with India’stop large format retailers. The company’s smartphones will now be available at stores such asSpice, The Mobile Store, Mobility World, Jumbo Electronics, Croma Retail and Planet M retail,expanding its overall footprint to over a thousand retail stores.

GROWTH OF FMCG

According to a study by TMW and Marketing Sciences that surveyed 2,000 people across differentage groups ranging, young consumers are the most ‘rational’ and likely to spend more timeweighing up potential purchases. The survey also suggests that younger people are usingrecommendations from their peers about products and services in order to make rationalpurchase decisions. According to the study, shoppers aged 18 to 24 are 174 per cent more likelyto use recommendations on social media than shoppers aged 25 and over.

Another key factor today is – speed. Today's consumer wants packaged goods that work better,faster, and smarter. The “need for speed" trend highlights the importance of speed as a potentiallydecisive purchase factor for packaged goods products in a world where distinctions betweenproducts are shrinking.

Younger consumers express the greatest need for speed, not a huge surprise for the smartphonegeneration. Data monitor’s 2013 Consumer Survey found that younger consumers those in the15-24 year old age group were twice as likely to say that "results are achieved quickly" has a"very high amount of influence" on their health and beauty product choices than consumers in theoldest age group, those aged 65 or older. Speed matters, and 2014 will almost certainly see theintroduction of new game-changing timesavers.


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PRESENT STATUS OF THE INDUSTRY

RETAILING IN INDIA: THE PRESENT SCENARIO

The present value of the Indian retail market is estimated by the India Retail Report to be aroundRs. 12, 00,000 crore ($270 billion) and the annual growth rate is 5.7 percent. Retail market forfood and grocery with a worth of Rs. 7, 43,900 crore is the largest of the different types of retailindustries present in India. Furthermore around 15 million retail outlets help India win the crownof having the highest retail outlet density in the world. The contribution of retail sector to GDP hasbeen manifested below:

Source: CII-AT Kearney Retail Study

As can be clearly seen, retailing in India is superior to those of its contenders. Retail sector is a

sunrise industry in India and the prospect for growth is simply huge. There are many factors thathave stimulated the rise of the shopping centers and multiplex-malls in a jiffy. Some of them canbe listed as follows:

Rise in the purchasing power of Indians- the rise in the per capita income in the last few yearshas been magnificent. This has led to the generation of insatiable wants of the upper and middleclass. The demand of new as well as second hand durables has risen throughout the country thusproviding the incentive for taking up retailing.

Favorable to farmers- retailing has helped in removing the middlemen and has thus enhancedthe remuneration to farmers. This is a new revolution in the agricultural sector in India and will goa long way in amending the condition of agriculture, a major concern among policy makers.Use of credit- a typical Indian is most conversant with using credit cards than carrying money.This has led to a shift of the consumer base towards supermarkets and make the payments inthe form of credit.

Comfortable Atmosphere- a visit to a retail store appears to be more soothing for the generation.People and kids prefer to shop in an air conditioned a tech savvy manner.The retail industry is the second largest employer in India. It currently employs about 7 percent ofthe total labor force in India. Finance Minister P. Chidambaram's recent statement “salaries oughtnot to be legislated” is a welcome move as most of the organized retail is in private hands.However only about 4.6% of the total retail trade is in organized sector. It generates about Rs.55,000 crore ($12.4 billion). The major and minor players desperately need to work hard in thisdirection so that next time the figures look more decent. The government must also make an

attempt to ameliorate the situation as political instability and infrastructure namely power androads are the major roadblocks in the path of smooth functioning of the market.


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FMCG IN INDIA: THE PRESENT SCENARIO

Fast Moving Consumer Goods (FMCG) Industry in India is one of the fastest developing sectorsin the Indian economy. At present the FMCG Industry is worth US$ 13.1 billion and it is the 4th

largest in the Indian Economy. These products have very fast turnaround rate, i.e. the time fromproduction to the revenue from the sale of the product is very less. In the present economicscenario, time is regarded as money, so the FMCG companies have to be very fast inmanufacturing and supplying these goods. Fast Moving Consumer Goods (FMCG) Industry inIndia Facts.

The Fast Moving Consumer Goods (FMCG) Industry in India include segments like cosmetics,toiletries, glassware, batteries, bulbs, pharmaceuticals, packaged food products, white goods,house care products, plastic goods, consumer non-durables, etc. The FMCG market is highlyconcentrated in the urban areas as the rise in the income of the middle-income group is one ofthe major factors for the growth of the Indian FMCG market.

The penetration in the rural areas in India is not high as yet and the opportunity of growth in theseareas is huge by means of enhanced penetration in to the rural market and conducting awarenessprograms in these areas. The scopes for the growth of the FMCG industry are high as the percapita consumption of the FMCG products in India is low in comparison to the other developedcountries. The manufacturing of the FMCG goods is concentrated in the western and southernbelt of the country. There are other pockets of FMCG manufacturing hubs.

The FMCG sector has grown at an annual average of about 11 per cent over the last decade. The

overall FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$ 110.4

billion during 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7

per cent to reach US$ 100 billion during 2012-2025.Food products is the leading segment,

accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12per cent) come next in terms of market share.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for

the consumer market. The Government of India's policies and regulatory frameworks such as

relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-

brand and 100 per cent in single-brand retail are some of the major growth drivers for the

consumer market


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MAJOR TRENDS IN THE INDUSTRY

REATAIL SECTOR

In the past few years, Indian Retail sector has seen tremendous growth in the organized segment.Major domestic players have stepped into the retail arena with long term, ambitious plans toexpand their business across verticals, cities and formats. Companies like Tata, Reliance, AdaniEnterprise and Bharti have been investing considerably in the booming Indian Retail market.

Along with these giant retailers, a number of transnational brands have also entered into themarket to set up retail chains in close association with bigger Indian companies.

High consumer spending over the years by the young population (more than 31% of the countryis below 14 years) and sharp rise in disposable income are driving the Indian organized retailsector’s growth. Even Tier I & Tier II cities and towns are witnessing a major shift in consumerpreferences and lifestyles, the result of which, they have emerged as attractive markets forretailers to expand their presence. The Indian retail sector is highly fragmented and the

unorganized sector has around 13 million retail outlets that account for around 95-96% of the totalIndian retail industry. However, going forward, the organized sector’s growth potential is expectedto increase due to globalization, high economic growth, and improved lifestyle.

Although the growth potential in the sector is immense, there are obstacles too, that could slowthe pace of growth for new entrants. Rigid regulations, high personnel costs, real estate costs,lack of basic infrastructure, and highly competitive domestic retailer groups are some suchchallenges within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce, fashion and lifestyle. Incorporation of technology in the organized retail segment hasbeen something to reckon with in the past few years. Use of computers for merchandise planningand management, control of inventory costs and supplies and replenishment of goods doneelectronically, internal store billing, etc. has changed the face of product retailing.

Online retail business is the next gen format which has high potential for growth in the near future. After conquering physical stores, retailers are now foraying into the domain of e-retailing. Theretail industry is all set to test waters over the online medium, by selling products throughwebsites. Food and grocery stores comprises the largest chunk of the Indian retail market. Anemerging trend in this segment is the virtual formats where customer orders are taken onlinethrough web portals which are delivered at the door step the very same day or the following day.This trend has been catching up with most of the large sized retail chains that have their websites.

Flourishing organized retail sector: The construction of mega malls and hypermarkets is boosting

organized retailing. Spending capacity of youth is showing an upward trend. India has large youth

population Easy availability of customer credit, increase in use of credit cards, access to cheap

and quick loans. Changing mindset of consumers. The mindset of buyers is shifting from low price

and higher quantity to better quality and high satisfaction. High brand consciousness amongst

buyers.


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FMCG SECTOR

The Indian FMCG industry represents nearly 2.5% of the country’s GDP. The industry has tripledin size in past 10 years and has grown at ~17%CAGR in the last 5 years driven by rising incomelevels, increasing urbanization, and strong rural demand and favorable demographic trends. Thesector accounted for 1.9% of the nation’s total FDI inflows in April 2000 - September 2012.

Cumulative FDI inflows into India from April 2000 to April 2013 in the food processing sector stoodat `9,000.3 crore, accounting for 0.96% of overall FDI inflows while the soaps, cosmetics andtoiletries, accounting for 0.32% of overall FDI at `3,115.5 crore. Food products and personal caretogether make up two-third of the sector’s revenues. Rural India accounts for more than 700 MNconsumers or 70% of the Indian population and accounts for 50% of the total FMCG market. Withchanging lifestyle and increasing consumer demand, the Indian FMCG market is expected tocross $80 ban by 2026 in towns with population of up to 10 lakh. India's labor cost is amongst thelowest in the world, after China & Indonesia, giving it a competitive advantage over othercountries. Unilever Plc.’s $5.4 billion bid for a 23% stake in Hindustan Unilever is the largest AsiaPacific cross border inbound merger and acquisition (M&A) deal so far in FY’14 and is the fifthlargest India Inbound M&A transaction on record till date. Excise duty on cigarette has beenincreased in the Union Budget for 2013-14, which would hit major industrial conglomerates like

ITC, VST Industries in the short term.

Untapped rural market India is one of the world’s biggest producers of a number of FMCGproducts but the country’s exports account for a very small proportion of the overall output. Food-processing Industry: With 200 MN people expected to shift to processed and packaged food, Indianeeds around USD 30 ban of investment in the food processing industry.

India’s per capita income, a measure of living standards, is projected to have increased 11.7 percent to `5,729 per month in 2012-13 at current prices, up from `5,130 in the previous fiscal. Theper capital income at current prices during 2012-13 is estimated to have stood at `68,747, up from`61,564 in FY 2011-12. Rising per capital incomes are likely to bolster discretionary spending,driving growth in the Indian FMCG sector. The per capita income in real terms (at 2004-05

constant prices) during 2012- 13 is likely to attain a level of `39,143 as compared to the FirstRevised Estimate for the year 2011-12 of ̀ 38,037. According to the IMF, India’s per capital incomeis tipped to grow at a CAGR of 8.8 per cent to USD 2,228.5 over a period of 2012-17. In 2012-13, India’s per capita income stood at USD 1,535.6. Also, rising number of working women andthe reducing popularity of the joint family system has increased the demand for processed andpackaged food products. Further, rising awareness has also boosted demand for personal careand healthcare products. People in the rural areas have become more open to consuming modernpackages food products and personal grooming products as satellite TV and internet powersawareness.


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KEY DRIVING FORCES OF THE INDUSTRY

RETAIL SECTOR

Economic growth: The increased disposable income resulting from economic growth has spurredhigher spend on retail as consumers look out for preferences and become brand conscious. Thisgives firms the chance to target the large middle class who were earlier hard to reach because oftheir price sensitivity.

Demographics: As the demographics change, the consumer demand also shifts, favoring certainproducts over others. Hence it's important for the retail industry to look out for these demographicchanges and realign themselves to be ready to cater to the changing demands.

Urbanization: As people move into the urban areas and spend long hours at work, they requireproducts that make life easier for them. Retail industries have sprung up to cater to these needsin the form of ready-to-eat food and affordable readymade clothing.

Credit availability: The availability of credit spurs a proportional growth in spend. However theextent of spend is also dependent on the culture of the place - some cultures tend to be creditloving while others tend to discourage too much use of credit in everyday life. In Philippines, creditdoes spur growth, though on a moderate scale.

Supply chain: A superior and well established supply chain ensures that the products are moreaccessible to the customers, improving demand-supply matching. This also reduces inventorycosts and spurs sales


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FMCG Sector Key Drivers:

Disposable Income:

There is increase in disposable income, observed in both rural and urban consumers, which isgiving opportunity to many rural consumers to shift from traditional unorganized unbranded

products to branded FMCG products and urban fraternity to splurge on value added and lifestyleproducts. The increasing salaries, along with rising trend of perks in the corporate sector at regularintervals, have increased people’s spending power. As per some research, there is a highcorrelation between Disposable per capita and HPC per capita.

Organized Retail:

The emergence of organized retail have led to more variety with ease in browsing, opportunity tocompare with different products in a category, one stop destination (entertainment, food andshopping) etc., which is playing an important role in bringing boom in the Indian FMCG market.Currently the modern. Trade is capturing 5% of the total retail space, which will increase to 10%and 25%in 2010 and 2025 respectively. Also, as the credit card and organized retail trend picksup, people won’t think much while buying and buy more.

Distribution Depth - Rural Penetration:

There are 5500 towns and 6.38 Lacsvillages with 2.5Mln and 5Mln outlets respectively. Due tosaturation and cut throat competition in urban India, many FMCG companies are devisingstrategies for targeting rural consumers in a big way. Many FMCG companies are focusing onincreasing their distribution network to penetrate with a step by step plan. This is the reason thatFMCG urban market size has dropped from 50% to 29% in last 5years. The FMCG market sizefor semi-urban and rural segment was 19% and 52%respectively for the year 2006-07. Theplanned development of roads, ports, railways and airports, will increase FMCG penetration inthe long term. 180 million rural and semi-Urban people’s attention has already Been divertedtowards FMCG products, according to latest estimates released by industry chamber, Ascham in

2008. The estimated number of household’s using FMCG products in rural India has grown from131 million in 2004 to 140 million in2007, according to market research company IMRB. Over70% sale of FMCG products is made to middle class households and over 50% of middle classis in rural India.

Buying Pattern Shift:

The crisis of declining FMCG markets during 2001-04 was driven by new avenues of expenditurefor growing consumer income such as consumer durables, entertainment, mobiles, motorbikesetc. Now, as many consumers have already upgraded, their income is being directed towardspampering themselves.

Favorable Indian Economy & Demographics:

45% people in India are under 20years of age. Per capita disposable income has increasedfrom $550 to $600 in 2007(9% increase). GDP is growing at a CAGR between 8 to 9%.In the nextfive years, affluent and aspirers as a total will supersede strivers and will be dominated byaspirers, as per NCAER.


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Brief on Major players in the Industry

BIG BAZAAR

Big Bazaar is the largest hypermarket chain in India. Big Bazaar was launched in September,2001 with the opening of its first four stores in Kolkata, Indore, Bangalore and Hyderabad in 22days. Currently, there are 214 stores across 90 cities and towns in India covering around 16million sq. of retail space. It was started by Kishore Biyani. Big Bazaar was launched mainly as afashion format selling apparel, cosmetics, accessories and general merchandise. Over the years,the retail chain has included in its portfolio a wide range of products and services, ranging fromgrocery to electronics.

Big Bazaar is popularly known as the „Indian Wal-Mart‟ today. Most Big Bazaar outlets are multi-leveled stores and are located in stand-alone buildings in city center as well as within shoppingmalls. These stores have more than 2, 00,000 stock keeping units (SKU) in a wide range of

categories, led primarily by fashion and food products. The retail space of these stores in themetros range between 50,000 and 1, 60,000 sq.

According to Kishore Biyani‟s 3-C theory, Change and Confidence among the entire populationis leading to rise in Consumption, through better employment and income which in turn is creatingvalue to the agricultural products across the country. Big Bazaar has divided India into threesegments:-

1. India One: - Consuming class which includes upper middle and lower middle class (14% ofIndia's population).

2. India Two: Serving class which includes people like drivers, household helps, office peons,liftmen, watchmen, etc. (55% of India's population).

3. India Three: Struggling class (remaining 31% of India's population).

While Big Bazaar is targeted at the population across India One and India Two segments, Aadhaar Wholesale is aimed at reaching the population in India Three segment. With this, FutureGroup emerged as a retail destination for consumers across all classes in the Indian society.


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SWOT ANALYSIS:

1. Strengths

Everyday low pricing

Point of purchase

Experience marketing team executive staff

Emphasis on providing total customer satisfaction

Variety of stuff under single roof

Maintain good employee-employer relationship

2. Weakness

Failing revenue/sq.

Unable to meet store targets

Unavailability of popular brands

3. Opportunities

Population of country is growing where the scope of market is kept on increasing for retail sector.

Evolving consumer preference

Organized retail presently nearly 5% in India. So it acts as a great opportunities to the organizationfor its growth.

4. Threats

Competition from organized retail players which are in market and are emerging.

Competition from local retailers.


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Competitive strategies:

Big Bazaar has launched new marketing strategy which is based on Guerrilla Marketing. Guerrillamarketing warfare strategies are a type of marketing warfare strategy designed to wear down theenemy by a long series of minor attacks, using principles of surprise and hit and run tactics. Attack,retreat, hide, then do it again, and again, until the competitor moves on to other markets. Herein

guerrilla force is divided into small groups that selectively attack the target at its weak points. Inthe world of cut throat competition, corporate use extension of the same strategy in marketing.Corporate like Coke, Pepsi, etc. have been using the same for quite some time now and the latestentrant is our very own „Future Group‟- Big Bazaar, Pantaloons, Future Bazaar, e-zine are all partof this group and they are taking on the biggies like Shoppers Stop, Lifestyle and Tata’s Westside.In order to do the same, Future Group have come up with 3 catchy and cheeky ad campaignswhich surely do catch our eyes and surely one can’t resist appreciating the same.

1. Keep West-aside. Make a smart choice!

2. Shoppers! Stop. Make a smart choice!

3. Change Your Lifestyle. Make a smart choice!

Advertising: - The departmental store chain Big Bazaar has launched a commercial sometimeback to promote 'The Great Exchange Offer'. The commercial portrays how customers canexchange any old and broken items (junk) and get new products at a discounted price from BigBazaar.

The 30 seconds film unfolds through the eyes of a cabbie in a busy city street, he is intrigued bythe disruptive visual of a well-dressed office executive carrying a bundle of old newspaper andwalking through a crowded place. The cabby then notices a young office going lady in westernwear carrying a rusty bucket filled with broken utensils, the cabbie is absolutely confounded butcontinues to follow her with a broken tire in his hand and comes across another absurd situationof a highly placed executive in a chauffeur driven car with a broken commode on the top of the

car. Penultimate situation reveals everybody is heading towards Big Bazaar for the exchangeoffer; the cabbie comes out of the store happy and excited after getting an amazing deal for his junk tire. Moving images are interspersed with supers that hi-light the amazing prices a consumercan get for his junk. The sound track uses a typical kabada guy's shout as he walks through CityStreet calling for junk.

The month of January and February is generally a low-key affair in terms of customer footfallsand revenue generation. Innovative, out of the box promotions is one of the effective ways to drawcustomer attention and shore up the revenue. Historically exchange schemes have been used toinduce better sales, it also has a strong appeal with the Indian mindset of getting value even fortheir junk, states an official release from Big Bazaar.

Brand Ambassador: - A brand ambassador is a celebrity (or an attractive or interesting person)

used to help advertise a product or services. Big Bazaar, has roped in cricketer Mahendra SinghDhoni as the brand ambassador for its new range of fashion apparel. Dhoni would feature in aseries of advertisements across all media. Dhoni and Big Bazaar have a lot of synergies as theIndian one-day international teams captain stands for the aspirations of youths, while Big Bazaaris looked up to by millions of Indians to fulfill their aspirations.

In this way, Big Bazaar make full use of the marketing mix for a new venture which earlier belongsto the unorganized retail sector, i.e., kirana stores. Application of the best marketing practiceshelps Big Bazaar in a great way.


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SPECIAL STRATEGIES:-

1. To minimize retailing cost.

2. Operating: - Fewer staff on the floor; one person for every 500 sq.

3. Minimize the furniture cost.

4. Saving shelf space.

5. Way to deal unsold stock off.

6. “Today’s Price”:- Everyday a chosen product is being sold at lower than usual price.


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MARKETING MIX OF BIG BAZAAR:-

Product: - Big Bazaar offers a wide range of products which range from apparels, food, farmproducts, furniture, child care, toys, etc. of various brands like Levis, Allen Solly, Pepsi, Coca-Cola, HUL, ITC, P&G, LG, Samsung, Nokia, HP etc. Big Bazaar also promotes a number of inhouse brands like:-

1. DJ & C

2. Tasty Treat

3. Clean Mate

4. Sensei

5. Care Mate

6. Koryo and 44 other brands.

Pricing: - The pricing objective at Big Bazaar is to get “Maximum Market Share”. Pricing at BigBazaar is based on the following techniques:-

1. Value Pricing (EDLP – Every Day Low pricing):- Big Bazaar promises consumers the lowestavailable price without coupon clipping, waiting for discount promotions, or comparison shopping.

2. Promotional Pricing: - Big Bazaar offers financing at low interest rate. The concept ofpsychological discounting (Rs.99, Rs.49, etc.) is also used to attract customers. Big Bazaar alsocaters on Special Event Pricing (Close to Diwali, Gudi Padva and Durga Pooja ).

3. Differentiated Pricing: - Differentiated pricing, i.e., difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which isaggressively used by Big Bazaar. For example, Wednesday Bazaar.

Bundling: - It refers to selling combo-packs and offering discount to customers. The combo-packsadd value to customer and lead to increased sales. Big Bazaar lays a lot of importance onbundling. For example 3 Good Day family packs at Rs.60 (Price of 1 pack = Rs.22), 5 kg oil + 5kg rice + 5 kg sugar for Rs.599.

Place: - The Big Bazaar stores are operational across three formats – hypermarkets spread over

40,000 - 45,000 sq., the Express format over 15,000 - 20,000 sq. And the Super Centers set upover 1 lakh sq. Currently Big Bazaar operates in over 34 cities and towns across India with 116stores. Apart from the metros these stores are also doing well in the tier II cities. These stores arenormally located in high traffic areas. Big Bazaar aims at starting stores in developing areas totake an early advantage before the real estate value booms. Mr. Biyani is planning to investaround Rs.350 cores over the next one year expansion of Big Bazaar. In order to gain acompetitive advantage Big Bazaar has also launched a website www.futurebazaar.com, whichhelps customers to orders products online which will be delivered to their doorstep. This helps insaving a lot of time of its customers.


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Promotion: - The various promotion schemes used at Big Bazaar include:-

1. Saal ke sabse saste 3 din.

2. Hafte ka sabse sasta din “Wednesday bazaar”.

3. Exchange Offers “Junk swap offer”.

4. Future card (3% discount).

5. Shakti card.

6. Advertisement (print ad, TV ad, radio).

7. Brand endorsement by M S Dhoni and Asin.

8. Big Bazaar has come up with 3 catchy lines written on hoardings taking on biggies likeWestside, Shoppers stop and Lifestyle. They are:-

a) “Keep west - aside. Make a smart choice!”

b) “Shoppers! Stop. Make a smart choice!”

c) “Change your Lifestyle. Make a smart choice!”

People:-

1. Well trained staff at stores to help people with their purchases.

2. Employ close to 10,000 people and employ around 500 more per month.

3. Well - dressed staff improves the overall appearance of store.

4. Use scenario planning as a tool for quick decision making multiple counters for payment, staffat store to keep baggage and security guards at every gate, makes for a customer – friendlyatmosphere.

Process: - Big Bazaar places a lot of importance on the process right from the purchase to thedelivery of goods. When customers enter the stores they can add the products they which topurchase in their trolley from the racks. There are multiple counters where bill can be generatedfor purchases made. Big Bazaar also provides delivery of products over purchases of Rs.1000.

Physical Evidence: - Products in Big Bazaar are properly stacked in appropriate racks. Thereare different departments in the store which display similar kind of products. Throughout the storethere are boards/written displays put up which help in identifying the location of a product.Moreover boards are put up above the products which give information about the products, its

price and offers. Big Bazaar stores are normally „U shaped‟ and well planned & designed.


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HyperCity

Founded in 2006, HyperCity Retail (India) Ltd. is part of the K. Raheja Corp. Group, a leader inthe Indian retail sector. K. Raheja Corp helped create modern retailing in India with the Shopper'sStop, Mall and Crossword chains in addition to its successes in realty and hospitality.

HyperCity opened its first store in Malad, Mumbai. Today, HyperCity has opened a total of 17 stores sincethe company's founding and has established a presence in cities

including Hyderabad, Bangalore, Jaipur, Amritsar, Bhopal, Navi Mumbai, Ahmedabad, Vadodara and Pune

New Delhi

The K. Raheja Corp. Group, with retail interests in two existing chains, Shoppers' Stop(department store) and Crossword (bookstore), has further expanded its presence in the retailarena, with India's largest hypermarket - 'HyperCity’. HyperCity provides a truly internationalshopping experience, where customers can shop comfortably in a large, modern, and excitingenvironment. HyperCity offers a wide and contemporary range of innovative products, sourcedfrom both local and international markets.

Background and Inception of the Company

At over 1.2 lace sq. ft.; is the biggest Hyper CITY and will continue to offer the widest selection ofinnovative products sourced from both local and global markets. Hyper CITY,

India’s finest hypermarket chain which was launched its Bangalore store on 25th March atEmbassy Paragon, ITPL Road, near Brooke Field. “The city of Bangalore has the relevantcharacteristics of a rapidly emerging market: A cosmopolitan environment, a broad base ofcustomers with a high propensity to purchase and above all, fast growing organizedretail.HyperCITY houses well-acclaimed international brands like Waitrose and Raleigh. The store hasdeveloped a suite of exclusive brands across all categories via; Fresh Basket in Food, Beano and

Avro in Home-ware, Maxi in Sports, Techno in Appliances, City, Reverencing Fashion amongothers.


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SWOT Analysis

Strengths

Leader in the Indian retail sector with prior experience in running retail stores such as Shopper’sstop, In-orbit mall and crossword before establishing HyperCity

Accomplished over 12 HyperCity superstores in India in all major cities such as Mumbai,Hyderabad, Pune, Bangalore etc.

Excellent management team with experience of many years in running retail businesslarge economies of scale compared to competitors

Weakness

Huge infrastructure costs involved in HyperCity projectsLow possibility of success of this store format in lower tier-2 and tier-3 cities

huge operating costs put an upward pressure on price

Opportunity

Expansion in other major cities of India such as Delhi, Luck now, Chandigarh etc.Development of its own in-store brandsMassive advertising and brand promotion

Putting sound customer loyalty programmer in place

Threats

Increasing competition from other retailers and store formatsRecession in real estate and infrastructure sectorrising inflation for food and fuel prices


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Competitive strategies:

Raheja-owned HyperCity plans its growth on the back of quality merchandise rather than cheaperprice points.

A few months ago, an international business consultancy conducted a perception survey on howconsumers perceive prices charged by different hypermarkets in Thane, near Mumbai.

Most respondents felt the Raheja-owned hypermarket chain HyperCity was among the mostexpensive ones. HyperCity Chief Executive Officer Mark Ashman, however, says he is notconvinced with the results of the survey given its thin participation, adding that HyperCity iscompetitive in many categories such as staples, food and so on. A hypermarket is a larger versionof a supermarket. Apart from food and groceries, it stocks apparel and general merchandise too,among other things.

Big retail chains like Reliance Retail, Aditya Birla Retail, Trent Hypermarket, D Mart and Spencer'sare increasingly focusing on hypermarkets, which are considered essential for generatingvolumes and economies of scale for retailers. Some of these chains offer up to seven per centdiscount on maximum retail price (MRP).Ashman, however, feels attracting customers withdiscounts is a short-sighted strategy. "I can't see how it is ultimately sustainable? You are taking

customers only on price. If you stop giving discounts, customers go away," he says.

In early 2009, when the economy was still reeling under slowdown, Ashman as the CEO of Mark'sand Spencer Reliance India (M&S) had lowered the prices of some its products by 20 per cent.

Ashman back then had told Business Standard that the strategy was aimed at retaining customerswho were moving away to cheaper products.

Ashman is now planning a different strategy for HyperCity. When other chains are competing witheach other on pricing, he says HyperCity wants to differentiate itself with different products andquality merchandise. "If you go to most of the hypermarkets, everybody is selling the same plasticboxes, steel utensils and so on. We want to sell different products that are not available withothers,'' the chief executive adds. The chain wants to launch more international designs in itshomeware and apparel - two of its focus areas. It has increased products of the UK-basedWaitrose (with which it has an exclusive supply agreement) by 50 per cent and reduced prices ofWaitrose products to attract buyers.

Launching imported products, however, is not unique to HyperCity. Tata's hypermarket chain StarBazaar has already launched store brands of UK's Tesco (with which it has a franchiseagreement) in personal care, health and food, among other things. RPG group's Spencer's and

Aditya Birla's more also sell imported products.

With 27 per cent same store sales growth and growing number of stores, Ashman says there areno issues with topline. "We want to drive profitability with better margins,'' he says. He adds thatthe company wants to drive margins with a better mix of products."If we can reduce the percentage of food and increase the apparel from eight to 10 per cent next

year and 12 per cent a year after that, we can do much better," he says. Though food contributesto 57 per cent of HyperCity revenues, it carries gross margins of 10-15 per cent while apparelcarries margins of 30-35 per cent.

HyperCity is also focusing on private labels to boost its margins. While it sells almost 100 per centprivate labels in men's wear and plans to launch private labels in undergarments and socks. Italso plans to increase the share of private labels in kids wear to 70 per from 50 per cent in thecoming autumn. Private labels are considered major margin drivers for retailers as they can bedirectly bought from vendors, thus saves marketing and advertising costs. Private labels in


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apparel range between 50 and 55 per cent, while that of food account for 30-35 per cent. ArvindSinghal, chairman of business consultancy Technopak Advisors, says there are enoughopportunities for premium products in hypermarkets and department stores. However, Hypercity'speers say premium has limited catchments. "They had great success in certain areas like Maladin Mumbai, Hyderabad, and Whitefield in Bangalore. But in cities like Jaipur, Thane and Bhopal,which do not have great catchments, they are yet to see success,'' says a senior executive of a

retail chain who does not want to be quoted.

"It is not a hugely scalable model," the executive says. But Hypercity's management does notbelieve so. Last year, Hypercity Vice-Chairman BS Nagesh said the retail chain's current storesare set to break-even by 2012 and the chain will become profitable by 2013.

"I have no reason to disagree with Nagesh. We are capable of doing that," says Ashman.Hypercity posted sales of Rs 456.83 crore (Rs 4.56 billion) and a loss of Rs 50 crore (Rs 500million) year to date till December 31, 2010.

Hypercity has eight stores now and plans to open in Ludhiana, Bangalore, Ahmedabad and Pune.


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Marketing mix of Hypercity

Product: - it offers a wide range of products which range from apparels, food, farm products,furniture, child care, toys, etc. of various brands like Pepsi, Coca-Cola, HUL, ITC, P&G, LG,Samsung, Nokia, HP etc. it also promotes a number of in house brands like:

Pricing: - The pricing objective at Big Bazaar is to get “Maximum Market Share”. is based on thefollowing techniques:-

1. Value Pricing (EDLP – Every Day Low pricing):- it promises consumers the lowest availableprice without coupon clipping, waiting for discount promotions, or comparison shopping.

2. Promotional Pricing: - it offers financing at low interest rate. The concept of psychologicaldiscounting (Rs.99, Rs.49, etc.) is also used to attract customers. It also caters on Special EventPricing (Close to Diwali, Gudi Padva and Durga Pooja).

3. Differentiated Pricing: - Differentiated pricing, i.e., difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which isaggressively used by Big Bazaar. For example, Wednesday Bazaar.

Bundling: - It refers to selling combo-packs and offering discount to customers. The combo-packsadd value to customer and lead to increased sales. Big Bazaar lays a lot of importance onbundling. For example 3 Good Day family packs at Rs.60 (Price of 1 pack = Rs.22), 5 kg oil + 5kg rice + 5 kg sugar for Rs.599.

Place: - The stores are operational across three formats – hypermarkets spread over 40,000 -45,000 sq., the Express format over 15,000 - 20,000 sq. And the Super Centers set up over 1lakh sq. Currently Big Bazaar operates in over 34 cities and towns across India with 116 stores.

Apart from the metros these stores are also doing well in the tier II cities. These stores arenormally located in high traffic areas aims at starting stores in developing areas to take an earlyadvantage before the real estate value booms. Mr. Biyani is planning to invest around Rs.350cores over the next one year expansion of Big Bazaar. In order to gain a competitive advantageit has also launched a website www.futurebazaar.com, which helps customers to orders productsonline which will be delivered to their doorstep. This helps in saving a lot of time of its customers.

Promotion: -

Advertisement (print ad, TV ad, radio).

Make a smart choice!”

“Change your Lifestyle. Make a smart choice!”

People:-

Trained staff at stores to help people with their purchases.

Well - dressed staff improves the overall appearance of store.

Use scenario planning as a tool for quick decision making multiple counters for payment, staff atstore to keep baggage and security guards at every gate, makes for a customer – friendlyatmosphere.


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Process: - it places a lot of importance on the process right from the purchase to the delivery ofgoods. When customers enter the stores they can add the products they which to purchase intheir trolley from the racks. There are multiple counters where bill can be generated for purchasesmade. It also provides delivery of products over purchases of Rs.1000.

Physical Evidence: - Products are properly stacked in appropriate racks. There are differentdepartments in the store which display similar kind of products. Throughout the store there areboards/written displays put up which help in identifying the location of a product. Moreover boardsare put up above the products which give information about the products.


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Pantaloons

Pantaloons Retail (India) Limited was incorporated as Manz Wear Private Limited by Mr. KishoreBiyani on 12 October 1987, converted into a public limited company in September1991, renamedas Pantaloons Fashions (India) Limited a year later and thereafter into Pantaloons Retail (India)Limited in July 1999. The company is headquartered in Mumbai. Mr. Kishore Biyani is the

Managing Director. Pantaloons Retail forayed into modern retail in 1997 with the launching offashion retail chain, Pantaloons in Kolkata. In 2001, it launched its first set of Big Bazaar storesin 2001 in Kolkata, Hyderabad and Bangalore, a hypermarket chain that combines the look andfeel of Indian bazaars, with aspects of modern retail, like choice, convenience and hygiene. Thiswas followed by Food Bazaar, food and grocery chain and launch Central, a first of its kindseamless mall located in the heart of major Indian cities. Some of its other formats includecollection I (home improvement products), E-Zone (consumer electronics), Depot (books, music,gifts and stationary), all (fashion apparel for plus-size individuals), Shoe Factory (footwear) andBlue Sky (fashion accessories). It has recently launched its e-retailing venture, futurebazaar.com.Today Pantaloons Retail (India) Limited, is India's leading retail company with presence acrossmultiple lines of businesses. The company owns and manages multiple retail formats that caterto a wide cross-section of the Indian society and is able to capture almost the entire consumption

basket of the Indian consumer. The company operates through 12 million square feet of retailspace, has over 1000 stores across 71 cities in India and employs over 30000 people

The USP is primarily on offering fresh fashion at affordable prices. Pantaloons Retail was awardedthe International Retailer of the Year 2007 by the US based National Retail Federation (NRF) andthe Emerging Market Retailer of the Year 2007 at the World Retail Congress held in Barcelona.Pantaloons Retail is the flagship company of Future Group, a business group catering to the entireIndian consumption space.

Mail stone to world class retiling

The company was established in 1987 as Manz wear private Limited launched its first productPantaloons rousers. In May-1992 company offered Initial public offering. The company enters inmodern retails business in 1997 from Kolkata with 8000Sq.ft store. In 2002 company initiated alunch of food chain market Food bazzar. In 2004 central mall was lunched to concentrate on Indiaone sector launched near brigade road in Bangalore. In 2005 group moves beyond retailing startsdiversification and in organic growth by acquiring galaxy entrainment, Indus League clothing andPlanet retail. In 2006 company starts finical facilitation company to help internal need Futurecapital Holdings. Starts its first Home building and improvement product retailing in Bangalore.Starts joint ventures with Staples, US based company and with Generally an Italian Insurancemajor. In 2007 Group had turnover of $1 billion. Specialized companies in retail media, logistics,IPR and brand development and retail-led technology services become operational. In2008 bigbazaar crosses 100 malls.


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SWOT analysis of Pantaloons

Strengths

” Pioneer in the industry, largest market share and capitalization.” Reputation for value for money(Competitive pricing), convenience and a wide range of

products all in one store” Presence in major cities” Highly Strategic human resource management and development. It invests time and money intraining people, and retaining them.” Most trusted and respected brand by the consumers

Weakness

” Pantaloons does not function internationally, which has an effect on success, as they do notreach consumers in overseas markets.” PRIL is the World’s largest grocery retailer and control of its empire, despite its IT advantages,could leave it weak in some areas due to the huge span of control” Since Pantaloons Retail India Ltd sell products across many sectors, it may not have theflexibility of some of its more focused competitors.” Each business line faces competition from specialty companies. Fashion segment, ShoppersStop, Trent, Lifestyle. In hypermarket-RPG (Spencer’s), Trent (Star India Bazaar) In Foodbusiness, Reliance Fresh, Spinach, Food World

Opportunities

” Huge untapped market” (The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010

making India one of the largest consumer markets of the world)” Organized retail is only 3% of the total retailing market in India. It is estimated to grow at therate of 25-30% p.a. and reach INR 1, 00, 000 Crore by 2010.” To take over, merge with, or form strategic alliances with other global retailers, focusing onspecific markets

Threats

” Being number one means that you are the target of competition.(Extra competition and newcompetitors entering the market could unsteady pantaloons retail India)” A slow economy or financial slowdown could have a major impact on pantaloons retail Indiabusiness and profits.

” Consumer lifestyle changes could lead to less of a demand for pantaloons retail Indiaproducts/services” Price wars between competitors, price cuts and so on could damage profits for pantaloonsretail India.” The actions of a competitor could be a major threat against pantaloons retail India, forinstance, if they bring in new technology or increase their workforce to meet demand” Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are justa place to hang around with family and friends and largely confined to window-shopping.


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Key Functional strategies

The company observes retail customer trend and changing consumption tastes. Organizationscustomer driven opposed to product driven .Company is very conscious about culture andregional consumption pattern. Strategies change frequently due to orient to the customer’s needs.The continues of learning, unlearning and relearning is applied to update the quick changing

strategies across the organization. As Kishore Biyani MD Pantaloons retail India LTD says³Retailis like riding bicycle. In uphill if you stop pedaling you will slide down´. The statement express theneed of continues learning process to form the strategies. Based on analysis its businessstrategies can be categorized in 3 major groups.

Diversification strategy

Classes’ destination strategy

Maximum market shares strategy

Diversification strategy

The company started its business as textile manufactures but growth in modern organizedretailing attracted the company to switch diversify to the next consumption pattern. The companydiversified and acquired a large business in organic and inorganic way. But company did not forgetripe its strategy and values in the diversified company. In every new business company.


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Classes destination strategy

Future group has diversified its business keeping the retiling as common goal. To set andconcentrate on one stratum is main objective of this strategy. Each business is set to operate ondefined strata. Company has divided Indian customers in three different groups. INDIA ONE,INDIA TWO, INDIA THREE. Each has different values, products and quality requirements. INDIA

ONE or consuming class .The population of this constitutes only 14%.Till recent times the modernretiling formats is offered for this class. According Maslow’s theory of hierarchy the 14% peopleare in self-actualization and Esteem needs in the pyramid. For this class pantaloons patternedFuture bazaar, E zone, Central, brand factory, Home town and star Galaxy entertainment. INDIATWO or the serving class it includes people like house hold helpers, office phonetic. This is thepeople who make service INDIA ONE class. The population of this class is more than 30%. In theneeds hierarchy they are located in for Social and security .Earning capacity of this class is 60%lesser than INDIA ONE. For this class as the big bazaar, Food bazaar, Future money and otherretail formats are presented.

INDIA THREE or struggling class. The class led life on hand to mouth existence. They afford forbeater living style. This segment doesn’t contribute much in the contribution cycle. The need of

the segment is local as they are finding it cheaper. The present business model is not addressingthis class. Figure 3 shows change in consumption patter by different class in 2001-02 and 2007-08.INDIAONE has changed from 25% to 35% normally the total profit in this segment willcomparatively20% more than they are sold in next segment. As ambiance is factor and otherpleasuring no value added services are necessary. INDIA TWO has not changed it conceptionlevel. INDIATHREE has seen 10 % decline


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Maximum market shares strategy

The retail chain by pantaloons in all business patterns tries to achieve maximum market share inall the products or service it provides .The Company does not bothers about short term profit orloss by a strategy. This are considered as learning. The business will sell at marginal profit sometimes to attract the new customer who will prove potential customers in future. The strategy

achieved by focusing pricing factors in INDAI TWO and on service and quality in INDIA ONE.

Pricing strategies

Pricing is strategy used by Pantaloons retail chain to attain maximum market shares. Thecompany offers numerous schemes to attract the new customer as well as to retain the presentcustomers. The company’s schemes are categorized in following groups.

Value pricing this approach is used where external factors such as recession or increasedcompetition force companies to provide 'value' products and services to retain sales. The productvalue will be associated with external factors.

Promotional pricing to promote a product is a very common application. The application of this

done by BOGO (Buy one Get One), BTGO (Buy Two Get One Free) etc.

Bundling is marketing tool sell two or more complementary product as a package with attractiveprice. The price is will lesser then individual selling price.Example: A Person needs one soap for a period of time but bundling with attractive price withmore than 3 soaps can attract them.

Low interest rate financing Future money helps in asset purchase at 0% interest.

Physiological discounting In India this approach is called as Bata rating system. Organizationutilizes this approach when product has emotional value rather than rational value. Example aproduct is priced for 99 instead of 100.When board shows price reduction from 100 to 99,Consumer looks at 3 digits to 2 digits rather than exact value

Time pricing the innovative way of attract the customer is Timely pricing it is known that duringholidays rate of customer is more. Reduction of profit margin with lot of advertisement will invitenew customers. The company has learnt it from strategy made on public holiday 26-Feb. Whenthe turnover of the day reached 30 cores where average is 5 cores. With such experience crowdedmanagement is essential so to divert potential customer’s ³Wednesday bazaar´ where it will offerless profit margin sales.

Bundling Marketing: Technique of offering two or more complementary goods or services togetheras a package deal. Bundled items are sold at a price attractively lower than the total of theirindividual selling prices.


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7p’s of Marketing mix

1. Product:

E-commerce: Pantaloons’ website Futurebazaar.com has revolutionized the e-commercebusiness in India. It offers a wide range of products at affordable prices.

Food: In food business, the group offers a host of options.

Food Bazaar – a chain of large supermarkets; Brew Bar – a beer bar; café Bollywood – a nationalchain of eateries; Chamosa – a pan-Indian chain of snack counters, and Sports Bar – a bistrofocused on the world of sports.

Fashion: The group offers a variety of options in fashion. Its brands include all, Blue Sky, Central,Etam, Fashion Station, Gini & Jony, Navarro’s, Pantaloons, and Top 10.

2. Price:

Pantaloons India has brought a whole new revolution when it comes to pricing strategies, whichis evident through the success of its Big Bazaar and Food Bazaar outlets.

3. Place:

The company operates over 12 million square feet of retail space, has over 1000 stores across71 cities in India and 65 rural cities with taking over Aadhar(). It plans to take up floor space of30 million square feet by 2011.It has plans to open over 3000 new stores by 2010. It is targetingthe Tier-2 and 3 cities which has a huge unleashed potential.

4. Promotion:

They use magazines, newspapers, television, radios, hoardings, internet etc. for promoting thebrand. They have joint ventures and alliances with many companies to promote the brand.

Seasonal Discounts, Sales Discounts during Festivals are offered to attract consumers.

5. People:

At the senior management level, the group hired high profile executives from reputed

organizations like Goldman Sachs, Coca-Cola India, and PRIL also tied up with a fewmanagement schools to create a management talent pool for the lower levels.

Best Employers in India (Rank 14th) in the Hewitt Best Employers 2007 survey.

The company follows a multi-format retail strategy that captures almost the entire consumptionbasket of Indian customers.


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6. Processes:

Pantaloons Retail has implemented SAP with an investment of $10 Million in keeping pace withthe technology and it is currently in the process of setting up a SAP consultancy software. SAPwill be helpful in building robust transaction management system and

7. Physical Evidence:

It has a huge list of awards, recognition in its kitty like Most Admired Fashion Group Of The Year,Most Admired Food & Grocery Retailer Of The Year , Most Admired Food Court , Most AdmiredRetailer of the Year, ,Most Admired Food & Grocery Retailer of the Year – Supermarket

It is the pioneer in the retail industry and it believes in developing strong insights on Indianconsumers and building businesses based on Indian ideas, as espoused in the group’s core value of ‘Indianans.’ The group’s corporate credo is, ‘Rewrite rules, Retain values.’


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Shoppers stop

Shoppers Stop is an Indian retailing company promoted by the K Raheja Corp Group, started inthe year 1991 with its first store in Andheri, Mumbai. Shoppers Stop Ltd has been awarded "theHall of Fame" and won "the Emerging Market Retailer of the Year Award", by World Retail

Congress at Barcelona, on April 10, 2008. Shoppers Stop is listed on the BSE. As of 2013,Shoppers Stop has 73 stores in India. Shoppers Stop began by operating a chain of departmentstores under the name “Shoppers’ Stop” in India. Shoppers Stop has 74 stores across 35 citiesin India. Specifically, Shoppers Stop stores retails clothing, accessories, handbags, shoes,

jewelry, fragrances, cosmetics, health and beauty products, home furnishing and decor products.Shoppers Stop launched its e-store with delivery across major cities in India in 2008. The websiteretails all the products available at Shoppers Stop stores, including apparel, cosmetics andaccessories. Shoppers Stop opened stores in Amritsar, Bhopal and Aurangabad

THE MILESTONES OF JOURNEY....

THE FOUNDATION OF SHOPPERS STOP was laid on October 27, 1991, by the K. Raheja Corp.

group of companies. Being amongst India's biggest hospitality and real estate players, the Groupcrossed yet another milestone with its lifestyle venture

FROM INCEPTION, SHOPPERS STOP has progressed from being a single brand shop tobecoming a Fashion & Lifestyle store for the family. Today, Shoppers stop is a household name,known for its superior quality products, services and above all, for providing a complete shoppingexperience.

WITH AN IMMENSE AMOUNT OF EXPERTISE and credibility, Shoppers stop has become thehighest benchmark for the Indian retail industry. In fact, the company's continuing expansion plansaim to help Shoppers Stop meet the challenges of the retail industry in an even better mannerthan it does today

VISION

To be a global retailer in India and maintain its No.1 position in the Indian market in theDepartment Store category.

Values that help us in achieving our mission and vision:

We will not take what is not ours.

The obligation to dissent (against a viewpoint that is not acceptable).

We will have an environment conducive to openness.

We will believe in innovation.We will have an environment conducive to development.

We will have the willingness to apologies and forgive.


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SWOT Analysis

Strengths

-skilled workforce-existing distribution and sales networks

-domestic market-high growth rate-experienced business units

Weaknesses

-future debt rating-competitive market-productivity-investments in research and development-tax structure

Opportunities

-growth rates and profitability-growing demand-income level is at a constant increase

Threats

-Financial capacity-increase in labor costs-tax changes-increasing rates of interest-cash flow-increasing costs-rising cost of raw materials


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MARKETING MIX

PRODUCT

General Products: Shopper’s Stop includes domestic as well as international

Retail articles and products

Private Label: Shopper Stop has also launched their own private labels such as STOP.

Others:

In addition to the above, Shopper Stop also does promotional marketing. E.g. they launched ZooZoo range and also other similar products have been launched. These also form the part of theProduct as SS.

PLACE

Shoppers Stop is Indian largest chain of Super Stores and has many stores in whole of India

Shoppers Stop Ltd. Excels in Service quality and the stores of a high class feel which is differentfrom Big Bazaar or similar stores.

PROMOTION

The communication strategy of Shopper’s Stop has been to reach out to the Customers in theirown style and language

SS uses print as well as OOH media to promote the brand. The brand uses brand ambassadorslike Kareena Kapoor to endorse the brand.

The private label STOP is promoted in store through logo and proper placement in the store adjoin

similar national brands Associates itself with Local festivals and events

PRICING

SS has a proper mix of both premium and affordable priced products. The brands are sold at MRPand lower.

The main USP is the choice given to the customer rather than the Price. Various Pricing S

Strategies used by Shopper’s Stop are as below:

Premium Pricing

Economy Pricing

Psychological Pricing

Optional Product Pricing

Promotional Pricing

Geographical Pricing


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Function strategy of shopper stop

Promotional strategy:

Promotional strategy deciding on a marketing communications strategy is one of the primary rolesof the marketing manager and this process involves some key decisions about how who the

customer is, how to contact the consumer them, and what the message should be. Thesequestions can be answered using a three stage process, which is equally relevant for all elementsof the marketing mix: Segmentation Dividing the marketing into distinct groups Targeting Decidingwhich of these groups to communicate with, and how to talk to them Positioning How the productor brand should be perceived by the target groups Messaging Delivering a specific message inorder to influence the target groups 1. Segmentation dividing potential customers into discretegroups is vital if you want to increase the success rate of any communications message. If youdon't know who you are talking to, it's unlikely you will get much of a response. Who are thepotential customers? How many sub-groups should you divide them into? How do these groupsdiffer? Hopefully, most of this information will be readily available from your market research.Once you have an idea of the customer, you should further drill down to explore them in moredetail. What are their media consumption habits? What are their expectations and aspirations?

What are their priorities? How much disposable income do they have? What are their buyinghabits? Are they likely to have children? How many holidays to they take a year? How muchmoney do they give to charity? How can you help them? This information can be obtained in avariety of ways, from commissioning a specialist market research agency, to examining salespatterns or social media interactions.

Digital marketing – new channels are emerging constantly Company websites Social mediaapplications such as Facebook or Twitter Blogging Mobile phone promotions usingtechnology such as Bluetooth YouTube E-commerce Deciding which media channel to useIn nature, evolution occurs most rapidly when competition for resources is intense. The sameprocess is now occurring with promotional media. All traditional media channels are nowsaturated, and competition for consumer attention is intense. At the same time, the impact of any

one medium is becoming diluted. There are many more TV and radio channels, consumer havethe ability to skip adverts and free information is now much more accessible. As a result,companies are becoming increasingly innovative in their approach to communications and a hostof new media channels have emerged. As a result, media choice is becoming a tricky task, whichis why detailed segmentation is so important - it's no use starting a Twitter campaign if none ofyour target market are regular users of the site. Highly targeted communications often lead tobetter results. You can usually expect a response rate of under 1% for a relatively generic massmailing. However, personal letters to a handful of your most loyal customers would lead to adramatically increased rate of return. When deciding which media to use consider the reach,frequency, media impact and what you can expect for your budget but most of all, ensure yourtarget customer will see the message in the first place. Media choice is a matter of compromisebetween volumes of people versus the personalization of the message. Ensuring your messagereflects the stages of the purchasing funnel once you have made the audience aware of yourbrand, work doesn't stop there. The customer needs to be guided through the purchasing process.

Sales promotion - price / money related communications, Coupons, Discounts, CompetitionsLoyalty incentives Public relations - using the press to your advantage, Press launches PR eventsPress releases Personal selling – one to one communication with a potential buyer, SalesmenExperiential marketing, Dealer or showroom sales activities, Exhibitions, Trade shows Directmarketing - taking the message directly to the consumer, Mail order catalogues, Bulk mailPersonalized letters, Email Telemarketing, Point of sale displays, Packaging design.


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Product and market diversification

Production policies are the general rules that management makes to guide itself in makingproduction decisions. Developing new product, modifying and improving upon the existing ones,diversifying into new areas and markets, branding and survey of market demand are some of thekey areas of product planning. Product policies may be stated in the form of series of either short

definition or of question arranged as a check list. According to Kline “A product strategy is thestrategy for improving the company’s overall sales and profit position in respect of a particularproduct as well as to promote the sale of the company’s other products and in case this policyhinders the sale of other products of the company it should have a greater potential long rangeprofit than the products in conflict with it.

Product line extension strategy

Groups of products that are used together, sold and to the same customers and marketed throughthe same channels are known as product lines. Extension in these product lines is said to occurwhen same additions in their width or depth are made for holding their position in the market.Their width relates to the number of product and depth refers to number of items in each line. Inproduct line extension strategy different aspects are to be taken into consideration which mayvary from firm to firm and from one situation to other situation. A readymade garment industryplans to produce many product lines such as men’s wear, ladies wear, kids wear etc., casualwear, sportswear etc. which are consumed domestically and are being exported.

Miscellaneous Branding strategies

Line extension: this is where an organization adds to its current product line by introducingversions with new features.

Brand extension: if your current brand is successful you may use brand names to extend into newor existing areas. E.g. Virgin extends its brand from record to airlines, and mobiles.

Multi branding: the company decides to further introduce more brands into a already existingcategory.

New brands: an organization may decide to launch a new brand into a market. A new brand maybe used to compete with existing rivals and may be marketed as something new or fresh


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Oriflame

Oriflame is an internationally successful company providing consumers withScandinavian naturalskin care and cosmetic products marketed through direct sales systems. In accordance with itsvision, it started its operation in the largest consumer market of world in India in July 1996 througha joint venture. Now,

thecompany has good reputation among Indian consumers, but its direct sales,systems and multi-level marketing systems has made the academics and practitioners of Indian corporate market tofocus centrally on the issue. It is inthisconcern that, finding the issue most interestingly; I selected this topic andcompany for my finalyear project. The present study makes an attempt to inquire about the impact of innovation inmarketing system (direct marketing and multi-level marketing) on Oriflamme’s performance inrelation to making improvements in customer service system. For this study both the primary andsecondary methods of research methodology have been applied. Based on these a brief findingsand analysis follows. After the completion of whole study, plainly suitable suggestions andrecommendations have been made, which would be useful not only for the future operationof Oriflame, but several other companies wishing to adopt the concerned marketing system, maylearn a lot and in this way the utility of this study goes without saying.

Oriflame Holding AG (Switzerland) (until mid-2015 "Oriflame Cosmetics S.A.", Luxembourg) is acompany, founded in 1967 in Sweden by the brothers Jonas af Jochnick and Robert af Jochnick,and publicly traded at NASDAQ OMX since 2004. The company sells personal care, accessoriesand nutritional products online and direct.

Oriflame Cosmetics is an international cosmetics company, which uses multi-level marketing tosell directly to customers. The company began operations in 1967 in Sweden and today has apresence in over 62 countries worldwide. The company has over 3.0 million marketing associatesworldwide with annual sales of €1.365 billion.

The brand is named for the Oriflamme, the royal banner of medieval France

Oriflame Holding AG is a company, founded in 1967 in Sweden by the brothers Jonas af Jochnickand Robert af Jochnick, and publicly traded at NASDAQ OMX since 2004.

Headquarters: Schaffhausen, Switzerland

CEO: Magnus Barnstorm

Founded: 1967

Founders: Robert AF Jochnick, Jonas AF Jochnick


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SWOT Analysis

Strength

1. Easily available products in residential areas, at parlors and sold by people whom customersknow and trust

2. Release catalogues frequently with offers on products

3. Customers get help from sponsors who help them as a consultant choose product accordingto their skin type, climate etc.

4. Established brand name since 43 years

5. Provides natural beauty products through an independent Salesforce of over 3 million people

Weakness

1. Lack of promotional activities through mass media

2. Depends on the network of individual sponsors on most of its distribution and available in very fewstoresOpportunity

1. Develop deeper distribution network

2. Expanding in rural areas

3. Investing in R&D, launch of new products through innovation

Threats

1. Aggressive price competition from local and multinational players

2. Availability of cheap beauty products

3. Presence of many established brands at one place in the stores thus giving customers variety


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Functional Strategy

Flexibility

By contracting customers at their convenience rather than yours.

Demonstration

Using the opportunities to conductdetailed demos at customs atcustomer comfort and beforepotential user and the buyer both.

Building Relationship Goodwill

By satisfying a customer sight from 1st call i.e. till the service giving stages.

Reducing confusion and saving time

By giving personalized visits,customers get attention andunderstand product attributes clearlygetting confused byother products.

Multi-level marketing

Using your customer to sell your product to other customer by enlisting direct sales agents fromits customer base.

By allowing salesperson to take pricing decisions on the spot when he can conclude the dealimmediately.


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Direct selling strategy:

On the International front direct selling has been always an important conceptinthe marketing world. This promotion of the direct selling concept is theimportant objective.To fulfill this objective the World Federation of Direct Selling Association was established.Today the direct selling associations are operational in 43 countries all over the World. These

associations have thedirectselling companies as their members. The direct selling associations have the principleobjectives such as:1.Promote Direct Selling industry in the particular country.2. Meet the collective need of the member companies.3. Protect the rights ofconsumers.The World Federation of Direct Selling Associations, ensures full protection toconsumers and assures ethical behavior among direct selling companyandcustomer through its cods of conduct. The member company should: I)Respect the right of consumers and promote a healthy environment it theindustry.II)to serve with honesty, sincerity, and commitment.

Strategy followed:

According to Gabriel Benet, the implementation of such a performance management system wasalso an important criterion for the successful introduction of the concept of integrated businessmanagement. ―That concept implies that you already have a single set of figures, or in otherwords, permit only one version of the truth with regard to your business performance,‖ Bennettexplains. ―By ensuring that all countries and departments within our group worked with the samecorrect, unambiguous data, we were hoping to boost both the quality and speed of ourcommunication.

For that reason, Oriflame Cosmetics had already invested in the construction of an Oracle datawarehouse and in acquiring IBM Congo’s financial consolidation software. In this sense, we hadalready begun the first phase of our project, says Bennett. To completely finalize that phase, allwe had to do was further roll out IBM Congo’s 8 Controller, throughout our organization. That ishow we were able to lay the foundations for an all-encompassing, completely integratedmanagement platform.‖

When we were to go in search of a supplier who could offer us a total package for performance

management, we were quick to return to IBM Congo’s, says Christian Jonson, Group IT Director

at Oriflame Cosmetics. ―On closer inspection, the majority of the other suppliers appeared to

offer only parts of the required solution. IBM Congo’s was one of the few who could compile all

the necessary elements for us in order to develop a complete performance management system

software for financial consolidation, analysis and reporting, and planning and forecasting. SoOriflame turned to IBM Congo.

Again for the second and third phases of its project, and in addition to IBMCognos 8 Controller,

decided to roll out IBM Cognos 8 BI and IBM Cognos 8Planning as well. The real reason we

decided to go with IBM Cognos Was the rich pallet of functionalities afforded by the technology,

along with its

Mrp Mid Review Report

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