RETAIL ANALYSIS OF “STAR BAZAAR”

By

Perneti SukumarRMSMBA-1341Prof. Bibhas BasumataryUniversal Business School

Retail Management Strategy

Table of Contents

1. Introduction

2. About Retail Industry

3. Socio-economic Importance

4. Retail type and its products

5. Key strategic drivers of the industry

6. Retailing in India

7. Marketing mix strategies

8. Use of Technology

9. Customer loyalty programs

10. Future proposals

11. bibliography

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Vision:

We look forward to you over at our stores to experience first-hand our promise and commitment to be the best for our customers at all times.

About Star Bazaar:

STAR Bazaar, A Tata enterprise, is a multi-format hypermarket chain present in Mumbai, Bengaluru, Pune, Ahmedabad, Surat, Chennai, Kolhapur and Aurangabad.

Each of our 15 stores are spread over a large area (40000 – 80000 sq. ft.) and offer the entire spectrum of product categories, ranging from fresh food, grocery, apparel, general merchandise and consumer durables. It provides a range of more than 30,000 items at great prices, showcased in a modern shopping environment and backed by the strong values of the Tata Group.

It also offer a wide range of services and facilities to the customers such as express counters, free wheat grinding, live bakery, free home delivery within a specified radius and for a minimum value, modern shopping environment, serviced by friendly staff and shopper friendly return policies, trial rooms and alteration facilities.

Star Bazaar is a unit of Trent Hypermarket Ltd which is a subsidiary of Trent. Trent, a Tata Group entity in retailing, is a Rs. 1,845 Crore enterprise with 100 stores in 38 cities across the formats: Westside, Star Bazaar and Landmark.

Type of retailer: Hypermarket retailer

Layout of the Retailer: Race circuit layout

Availability of private products: Yes, they own their own brand in apparels, food & puja needs etc.

In store marketing: Yes!

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About retail industry:

Retail sector I India is the key factor of our economy which constitutes 14-15 % of GDP.

The total value is above $500 billion industry and one of the top 5 retail markets in the world.

The main problem in Indian Retailing sector is that about 90% of the industry is unorganized.

Socio Economic importance of Star Bazaar in Andheri, Mumbai

Star Bazar has three stores in the city of Mumbai. They are located into different places like Andheri, Thane and Dahisar naka. It is growing at quite a pleasant rate, due to various aspects. One of which is the trustworthy name of Tata’s.

To initiate with, Star Bazaar is not a standalone store in that vicinity. It is surrounded by various competitors like Big Bazaar, Infiniti mall etc. with which they have to share footfall or traffic.

Star Bazaar is a store with an area of 40000-80000 sq. Feet. It is a hypermarket which has a wide range of food and grocery, personal and homecare, home and kitchen needs, fashion and accessories and their own brand products. The store differentiates itself from others because of its structure and ambience, its product arrangement, vast product lines etc. The name of the Tata group and above factors generates more traffic to the store.

With total of 3 stores located in Mumbai, I have selected Star bazaar-Andheri store for my retail

Visit as it’s a one-stop shop for every day conveniences, Geographic area Andheri, MumbaiTotal population 1.5 million +Per Capita Income INR 9000 (approx.)

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Advantages:

Tata Star Bazaar is a retail grocery famous for quality products and customer service.

The store’s personality as a spacious and vibrant store gave it an advantage that we could use.

These stores introduced an organized signage system in neutral grey and contrasting colors.

Easily understandable and illustrative visual language that embraced existing features and categories of the store – fruits, bakery, décor, etc. for every type of customer

Internal branding of the Bakery - strategically positioned to let the aroma of the freshly baked products waft into the store.

On the growth of the company’s private label brands, he said that currently about 30 per cent of the sales come from the in-house brands.

Branding the store to create an inviting and welcoming look, an extension to the existing logo identity.

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A distinctive typographic map guided the customer, just as in-store communication, graphics and signage system firmly positioned the store as communicating a sense of quality and approachability.

“Wherever advantages go, the dis-advantages follows it! “

Cons: Hyper market is a low margin business and as a big store it should

execute the strategies carefully.

Nearly situated malls, other retail stores.

Less customer satisfaction.

Although Star Bazaar had set up its first store in 2004, it is yet to achieve profits. In FY13, the chain registered a net loss of Rs 72 crore on net sales of Rs 785 crore.

Big retailers find profits swallowed by size and space

Retail chains are now sold on smaller stores which are threats to large markets.

Decrease in the performance of retailer in terms of sales.

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Identify the Retail Type and its Product and or Service Categories:

The Star Bazaar comes under the hyper city market in which you can be able to get many products in one roof. It provides you all the goods, food & grocery, consumer durables etc.

The above part was the “Product-mix strategy” and it offers different range of products.

Service category:

In this they also used to deliver the goods which are at a distance less than or equal to 3-5 kms. Through this store they are providing many customer oriented services. If you login with your id and password, it will gives you the purchase history

Apart from that, they cannot provide service for the electronic goods but they can guide or replace the old product with the new one if it is defected.

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Key strategic drivers of the industry in which this Retailer Star bazaar: Retail Challenges

Location: Food retail needs to be within a 5 km radius of the customer. Given high real estate costs, and unavailability of large sized retail space, if one wants to be closer to the customer then the format will need to shrink. This is do-able since customers in India tend to shop in a narrow range of 3,000 SKU’s. The 50,000 SKU’s that are available at hypermarkets are designed to grow consumption in the medium run. 

Staffing: Though in the case of hypermarkets and in food retail, it is not critical, because it is a relatively self-serviced model. However, in food retail, it is an entry level job and no one wants to be there forever.

They want to move to apparel or jewelry retail. But as you go higher up the value chain, in apparel and electronics, it becomes an acute situation.

Generally, there is a problem of qualified people and attrition is high. Modern retail however, creates urban jobs. At Star Bazar, the business employs about 150 people per store.

Property: Availability in the right size, at the right rentals, at the desired location.

Supply Chain: The current system is geared towards traditional retail, with a lot of middle men executing deals that eat into retailer margins. The supply chain needs to be shrunk and made more efficient.

Hyper markets operators tweak models to cut costs, increase margins  

Retailers are opting for smaller sizes under two circumstances—one, when they do not get large stores and secondly, when store economics does not make sense to run large stores and they are better off removing certain categories from the stores which are not working well.

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The retailer has a much focused to it’d growth, despite the fact it is witnessing stiff competition from domestic player and international players000000000000

What is easy shop card and how it’s useful?

Easy Shop Card is a unique facility by Star Bazaar to make your hypermarket shopping experience more convenient and hassle-free than

ever before.

Cashless-no fear of losing cash and easy to carry

Rechargeable- you can recharge the card with customized amounts that suit your budget and spending pattern

Convenient: quick and easy, one swipe biling.no need to count money and no fear of giving away extra notes.

Smart gifting: a meaningful gift for your loved ones that really shows you care.

For an Easy Shop card all you have to do is ask the cashier for the card and load it with your required / convenient amount and you are ready for smart shopping.

No paperwork-no minimum balance saves time.

Retailing in India:

Indian shop in a very narrow band. It means we don’t need to have 50,000 products in our stores. We can manage with say 10,000 products only.

As of now, the retailer has a much focused approach to its growth, despite the fact that it is witnessing stiff competition from both domestic player as well as international firms such as Walmart, Target etc.

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Launch/expansion of the stores depends on cheap real estate but would primarily depend on traffic and consumer behavior perspectives.

The big retailers are focusing on food and grocery items, as it forms about 60 % of consumer spending.

Marketing Mix Strategies:

Products:

Star bazaar offers a wide range of products ranging from food & grocery to apparel and consumer durables.

Price:

If we see the price listings, people are satisfied with the present price tags as they are getting all the products under one roof for the cheapest prices. It’s a place worth spending your time and money.

Promotions:

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Food & Grocery

Personal & Home care

Home & Kitchen care

Fashion & Accessories

Star Bazaar brands

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Retail Management Strategy

Star bazaar creates a good communication strategy with the customers by promoting/attracting about the products in different ways:

Weekly advert language:

In this the store will promote about their products by targeting by respecting the local language and by understanding their needs.as the local language is Marathi in Mumbai they will release the flyers with respect to the local language.

This is the new way of promoting by targeting the local customers and their value to the store.

This type of promotion takes place in all the stores of Star bazaar.

They also promote same type of flyers as

“Weekly leaflets” in the English language which cannot create any negative impression of the outsiders who are visiting the particular store.

They use to introduce “Buy more save more” campaign, during the particular days till the offers exists, customers can buy products at very low prices compared to normal discount prices.

They are having weekly offers on limited number of products.

They also promoting through the “Social networking” sites like Facebook & YouTube.

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Place:

As we all know this also plays a very important role in the success of a retailing store.

This store (Star bazaar-Andheri) was located in one of the main area “crystal point –Andheri-west” where many residents used to leave. The main targets are these people as the total population of Andheri is nearly 2 million people and the store is situated in 2floors occupying above 50000 sq.ft.

Use of Technology:

Unique Club card:

Star Bazaar is using unique club card for the customers. This ID of customer is redeemed in any of the star bazaar stores in India.

Inventory.

To track the goods & shipments, they use the latest technology as it is having the own software company TCS

It uses up-to date soft wares. By using the technology user can know about his purchasing

history by login in to their website.

Logistics: A product sold and being shipped could also be tracked and inventory is updated automatically.

Maintaining the customer database:

Star bazaar maintains a unique user database. User’s database is accessible by login in to the website.

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Barcode system:

Barcode system is used for billing purpose. Rather than typing and entering the prices for the products,

Star bazaar is using barcoding system. Basically the barcode readers will read the barcodes and generate the bills on computers. Barcode system will prevent the unnecessary delay in the process of billing.

Customer loyalty programs:

Club cards: Club card is free to join and it’s a great way to get something back – simply for doing you’re shopping.

Customers buying pattern at the stores:

Mostly, people are buying all the household, groceries & personal care products for 3-6 days.As we know, Andheri is highly residential cum commercial area, people won’t have time to visit daily, so they do like this.Maximum, every customer is having their loyalty cards, which will be useful in order to lessen of bill payment.

Customer’s different views about Star bazaar:

A bit expensive than big bazar Great for imported food items It’s a place worth spending your time &

money

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Customers wanting an SMS regarding deals Poor service, kept waiting for long time when we take a defective

product to their notice.

Overall rating:

Recommended by 100% customers

Future proposals:

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To start building propositions in terms of selling fresh food segment by devoting almost a quarter of the store space to it.

To take the food retail in India to the next level in terms of quality, freshness, availability and pricing,” by selling 10-15 percent less than local market prices

Retailers are adopting new technology for the transportation and preservation of perishable products.

To build smaller size stores and being present in fewer cities to make a perfect business sense.

“SLOW AND STEADY” strategy to create long-term business

The retail space of Star Bazaar stores would be cut down by about 50%, to a manageable 30,000 sq. To break even early.

Star bazaar is also reportedly looking at opening a new form called “Star Market”, which is a go between Star Bazaar and Star Daily.

Star bazaar is having intention to open stores in Mumbai, Chennai, Bangalore, Ahmedabad, but not in North-eastern states.

According to industry sources, Star Bazaar is treading cautiously on expanding its store count. IN FY 2013, it did not open a single store due to real estate delays. In FY 2014, it has opened three stores so far and by 2016 their target is to open 50 stores.

The sales of this stores went up to 7.9 % from 5.4 % indicating that the company has started working steps towards possibility.

Bibliography:

http://www.mouthshut.com/product-reviews/Star-Bazaar- Ahmedabad-reviews-925590572

https://www.starbazaarindia.com

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http://www.business-standard.com/article/companies/star-bazaar- to-take-few-years-to-break-even-111080800026_1.html

http://mumbai.burrp.com/listing/star-bazaar-_andheri- west_mumbai_super-markets/1504468059

www.leafdesign.com www.retailangle.com www.Burrp.in.com

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