The recipe of retail success In India

A study on Low Pricing strategy at Big Bazaar as a recipe of retail

success where other retail hypermarkets lag
 DECLARATION

We hereby declare that this end term project report entitled “The recipe of retail success
In India.”- A study on Low Pricing strategy at Big Bazaar as a recipe of retail success
where other retail hypermarkets lag; is a bonafied work done by us, submitted for
Marketing research, under the supervision & Guidance of Prof. Shinu Abhi, at IFIM
Business School, Bangalore.

Place: Bangalore
Date: 07-Dec-2009 Members of group - 3
Ankita Hazarika
Monu Dihingia
Ranjan Shetty
Rosh K Joy
Suhana K.R

The recipe of retail success In India 2

 ACKNOWLEDGEMENT

First we would like to extend our gratitude to our faculty Prof. Shinu Abhi
for supervising and guiding us throughout the various stages of our research.

We thank one and all who have helped in making key decisions and held
discussions which helped us to complete this project successfully in time.

Last but not least we would like to thank our families for extending their
support.

This project is not the endeavour of any one individual, but is the result of
valuable time, effort and co-operation of one and all of us. So, we would like to
acknowledge each other for a great teamwork, Thank You.

Members of group – 3
Ankita Hazarika-5
Monu Dihingia-33
Ranjan Shetty-41
Rosh K Joy-44
Suhana K.R-56

The recipe of retail success In India 3

Table of Contents
Executive Summary....................................................................................................................................... 5
Indian retail sector on the Fast track ........................................................................................................ 5
Chapter 1: General Introduction ................................................................................................................... 7
Why Is a Modern Price Strategy So Important? ....................................................................................... 7
Background to the study ........................................................................................................................... 8
Chapter 2: Introduction to the problem ....................................................................................................... 9
Title of the study ....................................................................................................................................... 9
Statement of the problem ........................................................................................................................ 9
Objectives of the study ............................................................................................................................. 9
Scope of the study .................................................................................................................................. 10
Limitations of the study .......................................................................................................................... 10
Chapter 3: Industry / Company profile ....................................................................................................... 11
Overview ................................................................................................................................................. 11
Products/services profile ........................................................................................................................ 15
Chapter 4: Review of Literature .................................................................................................................. 17
Chapter 5: Research methodology ............................................................................................................. 19
Research design ...................................................................................................................................... 19
Hypothesis............................................................................................................................................... 19
Sampling.................................................................................................................................................. 19
Tools for data collection ......................................................................................................................... 19
Field work................................................................................................................................................ 20
Methods of data analysis ........................................................................................................................ 20
Chapter 6: Data Analysis ............................................................................................................................. 21
Chapter 7: Findings, suggestions and recommendations ........................................................................... 28
Findings ................................................................................................................................................... 28
Suggestions ............................................................................................................................................. 28
Chapter 8: Conclusion ................................................................................................................................. 30
Bibliography ................................................................................................................................................ 32
ANNEXURE .................................................................................................................................................. 33

The recipe of retail success In India 4

Executive Summary

Indian retail sector on the Fast track

The Indian retail sector has caught the world‟s attention in the last few years. The Indian
retail industry is one of the fastest growing industries in the world as evident by the ranking
achieved by it by GRDI1 2008 (ATkearney, 2008). For two years in a row, A.T.Kearney has
ranked India at the top of the Global retail Development Index ™ (CII - A.T.Kearney, 2008).
India had a GDP growth rate of 7.9% during the July-September second quarter of 2009
(Economic Times, 2009). despite the global recessionary trends, the second fastest growing
economy in the world, the third largest economy in terms of GDP 2 in the next 3 years and the 4th
largest economy in PPP3 terms after USA, China & Japan (IMAGES F&R Research, 2009). The
Indian retailing industry is a US$270 billion industry and growing at over 13% pa (Datta, April-
Oct 2009). Retailing in India is evolving rapidly, with consumer spending growing by
unprecedented rates and with increasing number of Global players investing in this sector, such
as, Wal-mart, Metro, which already have established hypermarkets in India, particularly wal-
mart which have joint-ventured Bharti for setting up hypermarkets across India under the brand
name of Easy day, which can be a major competition for other hypermarket Stores. Pantaloon,
the flagship company of Kishore Biyani's Future Group, runs 119 Big Bazaar stores in more than
70 cities across India, and plans to have 275 stores by 2014 (Economic Times, 2009).

The other side of retail in India is that it is the second most populous market in the world
with a population of 1.14billion. It is also among the youngest market with an average age of

1
Global Retail Developmental Index
2
Gross Domestic Product
3
Purchasing power parity

The recipe of retail success In India 5

population at 24 years; with the rise in per-capita disposable income power and greater access to
consumer finance which have higher aspiration for branded products and directly related to the
young Indian consumer who is buying big to look good and feel good. Forecasts for India‟s real
GDP growth rate over the coming two decades generally range between 6 and 9 percent per year.
Our base case assumes real compound annual growth of 7.3 percent from 2005-20254. The
combinations of rapidly rising household income and a robustly growing population will lead to
a striking increase in overall consumer spending; we forecast that aggregate consumption in
India will grow in real terms from 17trillion Indian rupees today to 34trillion by 2015 and 70
trillion by 2025-a fourfold increase (McKinsey & company, May 2007).

Indian organized retailing is under transition today, bringing a lot of changes in the
format of retailing, the shoppers are enjoying the privilege of shopping the good and services at
very attractive prices, the dos and don'ts about wooing customers and making them come back to
the stores. Unfortunately, in India, the attitude toward retailing has been that of spending more
on creating glitzy outlets than on operational efficiencies. This is changing and retailers are
becoming aware that retail is not just about image; it's about becoming an operational superstar -
that's how you drive down your costs and make your profits in a situation where you have fixed
MRPs5. This is the competency that has made Pantaloon retail India Limited‟s Big Bazaar one of
the biggest hypermarket chain with 119 Big Bazaar stores in more than 70 cities across India.

Figure 1

4
Our forecast of GDP growth is derived from a macroeconomics model developed by Oxford Economics. Unless.
Unless otherwise noted, growth figures are reported as real compound annual growth rate (CAGR) and thus may
appear somewhat lower that the nominal average annual growth that are often reported.
5
Maximum Retail Price

The recipe of retail success In India 6

Chapter 1: General Introduction

Why Is a Modern Price Strategy So Important?

There is strong emergence of India specific retail formats irrespective of the size. For
example, hypermarkets, supermarkets or convenience stores that are emerging in India today are
specifically designed for the Indian consumer. A store in India will have non-vegetarian section
sealed-off from the rest of the store out of respect for a group of consumers. Spices, vegetables
and grains are seen stacked high in a special section. Retailers in India have realised the
relevance of designing and executing world-class hypermarket formats in India, specifically
catering to the Indian consumer yet offering world-class products at prices that India can afford
(IMAGES F&R Research, 2009).

To survive and thrive in the highly competitive retail world, retailers must become more
attentive and meticulous with their pricing. More than ever before, the financial success of
companies selling retail goods depends on their price strategy. Consumers demand fair prices in
exchange for their business and are constantly comparison shopping. With the ever-present
pressures from shrinking margins, rising costs, and competition, winning in the retail arena today
demands price strategies that reliably and frequently guide retailers decision-making (Frazier-
Coleman, 2008).

For an industry that is booming at the scale clearly evident from the A.T.Kearney reports,
the parties involved have to look ahead in time and take proactive decisions to remain in
business. The competition gets tougher day by day as more companies enter the market, and
therefore survival in this market requires a lot of correct decisions involving low pricing strategy
with increase in promotions and effective customer satisfaction.

The recipe of retail success In India 7

Background to the study
The Indian retail industry is divided into organized and unorganized sectors. Organized
retail sector includes the corporate-backed hypermarkets and retail chains, and also the privately
owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional
formats of low-cost retailing, for example, the local kirana shops, owner manned general stores,
paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.

The last few years witnessed immense growth by organized retail sector, the key drivers
being changing consumer profile and demographics, increase in the number of international
brands available in the Indian market,
economic implications of the
Government increasing urbanization,
credit availability, improvement in the
infrastructure, increasing investments
in technology and real estate building
a world class shopping environment
for the consumers. In order to keep
pace with the increasing demand, there
has been a hectic activity in terms of
entry of international labels, expansion

Figure 2 plans, and focus on technology,

operations and processes.

Every successful Hypermarket requires a proper supply chain that will help meet the
competition head-on, manage stock availability; supplier relations, new value-added services,
cost cutting and most importantly reduce the wastage levels in fresh produce. Large players like
Reliance6, Bharti, ITC7, and many others are making significant investments in this sector
leading to emergence of big retailer who can bargain with suppliers to reap economic of scales,
hence discounting is becoming an acceptable practice.

6
Reliance Mart/ reliance Fresh
7
ITC- e choupal

The recipe of retail success In India 8

Chapter 2: Introduction to the problem

Title of the study

The recipe of retail success In India. A study on Low pricing strategy at Big Bazaar as a
recipe of retail success where other retail hypermarkets lag with low customer satisfaction.

Statement of the problem

It is unknown: How Big Bazaar has adapted to low pricing strategy with increase in
promotions and effective customers satisfaction, to determine where other retail hyper markers
lag to increase customer satisfaction with a strategy of Low price.

The overall objective is to discover the “strategy used for low pricing at big bazaar and
where other hypermarket lags behind”

Objectives of the study

1. To determine how low pricing linked to customer satisfaction.

2. To identify the attitude of Big Bazaar„s competitiveness.
3. To identify the process of low pricing at Big bazaar.
4. What is the influence of people while shopping at Big Bazaar?
5. Why customers of Big bazaar opt to shop at Big bazaar, when compared to Other
stores?
6. Is Low pricing a competitive tool in success of Big bazaar?

The recipe of retail success In India 9

Scope of the study
High level of customer satisfaction translates in to positive word of mouth; Satisfaction is
derived from value which in turn is benefit/price. EDLP 8 segment tries to improve the value of
product sold by decreasing the price.

But it has come to notice that certain Hypermarkets in the EDLP segment have not been
able to perform like Big Bazaar. This research would arrive at some reasons of such difference
and propose measures for improvement.

The research has the potential to improve the awareness, footfalls and there by profits of
hypermarkets that lag with a preference on improving customer satisfaction

Limitations of the study

There are three limitations that need to be acknowledged and addressed regarding the
present study. The first limitation is as this being a convenience sample, the analysis may not be
a true picture of the target population.

The second limitation has to be the place where the samples are collected i.e., in
Bangalore.

The Third limitation is the Time constrain.

8
Everyday Low price

The recipe of retail success In India 10

Chapter 3: Industry / Company profile
Overview
Retail Sector is the most booming sector in the Indian economy. A CRISIL9 report says
that the Indian retail market is the most fragmented in the world and that only 2% of the entire
retailing business is in the organized sector. This suggests that the potential for growth is
immense. There are about 300 new malls, 1500 supermarkets and 325 hypermarkets currently
being built in the cities across India. The emergence of Shopping Centres is already beginning to
define a new lifestyle for India. There is no doubt a huge demand for clean, contemporary
shopping and entertainment complexes that will house India‟s brands and retail formats and offer
New India an exciting and rewarding shopping experience for the whole family.

India has a large number of retail enterprises. With close to 12 million retail outlets India
has one of the highest retail densities in the world. In terms of the structure, the industry is
fragmented and predominantly consists of independent, owner-managed shops. The retail
businesses include a variety of traditional retail formats, such as "kirana" stores which stock
basic household necessities (including food products), street markets-regular markets held at
fixed centres retailing food and general merchandise items, street vendors‟ mobile retailers
essentially selling perishable food items-fruits, vegetables etc and small non specialized retailers.

Traditionally the retail industry in India was largely unorganized, comprising of drug
stores, medium, and small grocery stores. Most of the organized retailing in India have started
recently and is concentrating mainly in metropolitan cities.

9
Credit Rating and Information Services of India Ltd

The recipe of retail success In India 11

 The growth in the Indian organized retail market is mainly due to the change in the
consumer‟s behaviour. This change has come in the consumer due to increased income, changing
lifestyles, and patterns of demography which are favourable. Now the consumer wants to shop at
a place where he can get food, entertainment, and shopping all under one roof. This has given
Indian organized retail market a major boost. Retail market in the organized sector in India is
growing can be seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new
malls are being built. Many Indian companies are entering the Indian retail market which is
giving Indian organized retail market a boost. One such company is the Reliance Industries
Limited. It plans to invest US$ 6 billion in the Indian retail market by opening 1000
hypermarkets and 1500 supermarkets. (IBEF)

Pantaloon is another Indian company which plans to increase its retail space to 30 million
square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks
with Tesco a global giant for a £ 750 million joint venture. The biggest challenge facing the
Indian organized retail sector is the lack
of retail space. With real estate prices
escalating due to increase in demand
from the Indian organized retail sector, it
is posing a challenge to its growth. With
Indian retailers having to shell out more
for retail space it is effecting there
overall profitability in retail.

1. Pantaloon Retail:

It is headquartered in Mumbai
Figure 3 with 450 stores across the country
employing more than 18,000 people. It
can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-India retail
space of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largest
retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments -
Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar,
collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot),

The recipe of retail success In India 12

Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing
(Futurbazaar.com), entertainment (Bowling co.) (IMAGES F&R Research, 2008)

One of their recent innovations include e-commerce‟ hybrid format of ‟small‟ shops , the
area for these stores will be 150 sq. ft. fitted with 40 digital screens. Customers will be
encouraged to browse through the entire range of products on digital screen. They will be able to
place the order, the delivery of which will be arranged by the shop to their homes within a few
hours.

2. K Raheja Group

They forayed into retail with Shopper‟s Stop, India‟s first departmental store in 2001. It is
the only retailer from India to become a member of the prestigious Intercontinental Group of
Departmental Stores (IGDS). They have signed a 50:50 joint venture with the Nuance Group for
Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75
billion. The first Hypercity opened in Mumbai in 2006 with an area of 1, 20,000 sq. ft. clocking
gross sales of Rs. 1 billion in its first year. Crossword brand of book stores, Homes stop a store
for home solutions, Mothercare a concept stocking merchandise related to childcare are also
owned by them. Recently, Raheja‟s have signed a MoU with the Home Retail Group of UK to
enter into a franchise arrangement for the Argos formats of catalogue & internet retailing.

The group has announced plans to establish a network of 55 hypermarkets across India
with sales expected to cross the US$100 million mark by 2010. (IMAGES F&R Research, 2008)

3. Tata group:

Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a
lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at
the lowest prices. In 2005, it acquired Landmark, India's largest book and music retailer. Trent
has more than 4 lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58
mn in 2006.

Tata‟s has also formed a subsidiary named Infiniti retail which consists of Croma, a
consumer electronics chain. It is a 15000-17000 sq. ft. format with 8 stores as of September

The recipe of retail success In India 13

2007. Another subsidiary, Titan Industries, owns brands like “Titan”, the watch of India has 200
exclusive outlets the country and Tanishq, the jewellery brand, has 87 exclusive outlets. Their
combined turnover is Rs 6.55 billion. Trent plans to open 27 more stores across its retail formats
adding 1.5 mn sq ft of space in the next 12 DLF malls. (IMAGES F&R Research, 2008)

4. RPG group:

One of the first entrants into organised food & grocery retail with Foodworld stores in
1996 and then formed an alliance with Dairy farm International and launched health & glow
(pharmacy & beauty care) outlets. Now the alliance has dissolved and RPG has Spencer‟s Hyper,
Super, Daily and Express formats and Music World stores across the country. RPG has 6 lakh sq.
ft. of retail space and has registered a turnover of Rs 4.5 billion in 2006. It is planning to venture
into books retail, with the launch of its own bookstores “Books and Beyond” by the end of 2007.
An IPO is also in the offering, with expansion to 450+ MusicWorld, 50+ Spencer's hyper outlets
covering 4 million sq. ft. by 2010. (IMAGES F&R Research, 2008)

5. Bharti-Wal-Mart

Their plans include US$ 7 billion investment in creating retail network in the country
including 100 hypermarkets and several hundred small stores. They have signed a 51:49 percent
joint venture agreement with Wal-Mart. Wal-Mart will do the cash & carry while Bharti will do
the front-end. (IMAGES F&R Research, 2008)

6. Reliance

India‟s most ambitious retail plans are by reliance, with investments to the tune of Rs.
30,000 cr ($ 6.67 bn) to set up multiple formats with expected sales of Rs 90,000 crores ($20 bn)
by 2009-10. There are already more than 300 Reliance Fresh stores and the first Reliance Mart
Hypermarket has opened in Ahmadabad. The next ones are slated to open at Jamnagar, followed
by marts in Delhi / NCR, Hyderabad, Vijayawada, Pune and Ludhiana.

7. AV Birla Group

They have a strong presence in apparel retailing through Madura garments which is
subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen

The recipe of retail success In India 14

Solly, Peter England, Trouser town. In other segments of retail, AV Birla Group has announced
investment plans of Rs 8000 - 9000 crores in the first 3 years till 2010.The acquisition of
Trinethra (food & grocery) chain in the south has moved their tally to 400 stores in the country.
Their “More” range of 15 supermarkets are slated to open at Nashik. Pune and other tier II cities
in Western India in 2007. (IMAGES F&R Research, 2008)

Products/services profile
Big Bazaar The hypermarket chain was introduced by Pantaloon which moved a large
format lifestyle retailing with the launch of “Pantaloons”, India‟s family
store, e management was aware that retail size mattered They then targeted
large Indian middle class market waiting to tapped and introduced Big Bazaar
to meet the aspirations of the middle class. In the span of two years, it has
added a Food Bazaar and Gold Bazaar to its range of offering; from the
finding they knew “Saving is the key to the Indian middle class consumer”
The concept of “Bazaar”, As the store offers large mix of products at a
discounted price, the name “Big Bazaar” was finalized Price was the basic

value proposition at Big Bazaar. The Big Bazaar outlets sold a variety of Figure 4

products at prices, which were 5 to 60% lower than the market price. The
catch line “Isse sasta aur acha kahin nahin” emphasised this.

The Company has identified a range of categories wherein it believes that there is either a
product or price gap or existing brands aren‟t able to meet customer expectations. The private
brands provide customers with more choice, thereby increasing consumption. It further helps in
more freedom and flexibility in pricing, more control over product attributes, maintaining high
quality and higher margins or lower selling price. The private brands in the food category are
Tasty Treat Premium Harvest and Fresh & Pure. Ketchup, instant noodles, jams, cookies, chips,
Indian snacks or nankeens, papads and pickles. Fresh & Pure offers basic processed foods in 17
merchandised categories like edible oils and dairy products. The private brands in home and
personal care segment products are CareMate and CleanMate. CareMate is present in 13
merchandised categories and CleanMate is present in 10 categories. The most recent addition to
this portfolio of private brands is Sach – a brand co-developed with Sachin Tendulkar. A first-of-
its kind brand in India, Sach has been extended across multiple categories including kids wear,

The recipe of retail success In India 15

milk, toothbrush and body wash. The company is also working on a private brand, Ektaa that
will offer staples customized to regional and community preferences. (Pantaloon Retail AR-08-
09, 2008-09)

Figure 5

The recipe of retail success In India 16

Chapter 4: Review of Literature

The Great Exchange Offer

Big Bazaar announced The Great Exchange Offer with a “Bring anything old and take
anything new” concept which started from the 16th of Feb 2008 at the Landmark store. The offer
was valid till the 16th of March 2008 at the store. Under the exchange offer, old garments,
utensils, furniture, plastic ware, newspapers or just about anything was weighed and valued and
customers were given exchange coupons. The customer could redeem the coupons before the due
date on the condition that he/she shops four times the value of the coupon. There were also direct
exchanges on mobiles and electronic goods during the period with attractive discounts on new
purchases. These exchange values were found to be almost 4 to 5 times higher than the road side
“kabari wala”. For the consumer, this offer aimed at helping the housewife clean out the junk
while getting a good value for it. The coupons availed by the customer were equivalent to a 25%
discount on products that could be purchased under this offer. For Big Bazaar, this promotion
campaign helped boosting sales during the period of February and March as it has been noticed
that these months are dull months for consumer buying. (2007)

Wednesday Bazaar – Hafte ka sabse sasta din10

In January 2007, Big Bazaar introduced a Wednesday Bazaar concept called “Hafte Ka
Sabse Sasta Din” with the aim to give homemakers the power to save the most on this day of the
week. Wednesday Bazaar offers clothes, accessories and fashion jewellery and personal care

10
The cheapest day in the Week

The recipe of retail success In India 17

products on greater discounts. For Big Bazaar, Wednesday Bazaar is a concept, which it intends
to run on a long-term basis. For which the aim is to inculcate in the minds of customers that
every Wednesday is a day of greater savings at Big Bazaar. It is therefore, incumbent on the
brand to have the offer grow and create deep impact on the minds of the customers. (Jain, 2009)

“26 Jan Republic Day A National Holiday”

Big Bazaar Marketing Department gave a new thought on this day in 2006 they started a
new shopping festival, i.e. Sabse Saste Teen Din11. None of the retail industry was aware about
this surprise shopping festival. Big Bazaar did it in its own way!! They showed this National
holiday can be celebrate in festival mode , while doing shopping Big bazaar throwed Up to 65%
of on each & every products in the store for three days. So the promotion was called Sabse Saste
Teen Din. (Rediff, 2008)

11
Cheapest day for Three days

The recipe of retail success In India 18

Chapter 5: Research methodology

Research design
We have enhanced our knowledge of retail market by interviewing method, web page
survey, and scanning questionnaire and pre-test of questionnaire. Our research of source of
information has been carried out to refine the objective and provide lines of enquiry for the next
stage. After exploratory nature of some aspects of objective of retail success in hypermarkets
such as Big Bazaar, we will provide with detail Qualitative information of retail market.

Hypothesis
H0: Majority of the customer‟s perception and preference for low pricing is Low quality.

Sampling
The sample size which is particularly small, a small sample size with 50 samples and
research sample development knowing how to design a set of questions that will generate
meaningful results is vital not only to protect statistical integrity, but also to producing accurate
results with high level of confidences. Method approached is Simple random sampling.

Tools for data collection

The Tools used for data collection are Online Survey, Questionnaire, for Quantitative
study, and web links and published report for exploratory research, and Published journals and
articles in the news papers for secondary research. And while analysing the data we used
Microsoft Excel 07.

The recipe of retail success In India 19

Field work
The field work was done quite casually during free time and was conducted on 29th of
November 2009 at Big Bazaar Koramangala Hypermarket, and an online survey that was done
through www.questionpro.com as a URL12 as http://bigbazaar.questionpro.com started on 29th
November 2009 and ended the questionnaire on 1st of December 2009.

Difficulties: The group consisted of 5 members since we had only one Kannada speaking
member in the group, so for some particular respondent the time consumed was more. In some
cases we were getting some contradictory answers which seemed to show that they were trying
to get over with the interview as soon as possible.

Experience: We got to know how the Door to door salesmen might be facing when they
are turned away from the gate itself while marketing their products, in many cases it was felt that
when a consumer was confused as to a particular response when he/she usually responded with
the same answer that the surveyor hinted out.

Methods of data analysis

We will analyse the data about how pricing in retail hypermarket takes place, the study
concentrates on store based Pricing, Some analysis include,

1. Promotion effectiveness analysis

2. Low pricing effectiveness Analysis
3. Category and Brand Dynamics
4. Attractiveness pricing strategy with customer satisfaction analysis.
5. Perception of customer towards low pricing.

Tabulation as well as diagram representation of the same will be done.

12
Uniform Resource Locator

The recipe of retail success In India 20

Chapter 6: Data Analysis
In all, our group members as a part of the survey met 24 respondents and the other 26
respondents have filled online survey here is simple Composition as the following shows the
distribution of the people interviewed.

Sex

40% Male

60% Female

Sample Size =50

Age Group
Series1

24
21

4
1

Age: 18-25 26-35 36-45 46 & Above

Age Sample Size = 50

The recipe of retail success In India 21

 OCCUPATION
Retired Student
20% 28%

Employed
46% Self employed
6%

Sample Size = 50

INCOME GROUP

500,001/-p.a & above 4

300,001/-p.a – 500,000/- p.a 18

150,001/-p.a – 300,000/- p.a 17

> 150,000/- p.a 11

Sample Size = 50

Do you Shop at big bazaar?

26%

Yes
No

74%

The recipe of retail success In India 22

 Our survey comprised of 9 questions for the respondents while analysing the data
collected from these respondents, we basically identify some important aspects as asked, which
hypermarkets do you shop at? And to rank accordingly (Rank Accordingly – 1 most & 5 Least).
Of the 50 respondents 32% of respondents have ranked Big bazaar No-1, 20% for total at No-2,
18% for Reliance Mart, 22% ranked Spar at No-3, and 23% for Tata Star Bazaar.

Thus it is clear that in the case of our sample, Big Bazaar is a preferred Hypermarket.

Preference of Hypermarket
Total Big Bazaar Spar Reliance Mart Tata Star Bazaar

100%
4 7 7
4 9
80% 4 23
15 12
% of Sample

60% 18
0
2
8
40% 32
8 22
15
20% 20 7
1 3
6 8 8 7
0%
1 2 3 4 5
Rank

The survey also had to focus on the frequency of people visiting the stores, and 21% of
people have chosen they visit Big Bazaar monthly,

Frequency Visit to Big Bazaar

Weekly Fortnightly Monthly Once in 3 months < 3 months

12%
20%
20% 6%

42%

The recipe of retail success In India 23

 After looking at the frequency of visiting the stores here it is now to focus on what do
they buy at Big Bazaar, and almost all the respondents have answered this question, and in others
the majority of them shop Medicine.

what is purchase?
26

16

10 10 10
7 7
5

Major influence while making the purchase. While conducting the survey, personal
experience of attracted towards Big Bazaar along with many others price was the important
factor and the variety of choice, and the respondents agree that Big Bazaar do not offer quality.

What attracts to Big Bazaar

Varity of choice Price Availability of Product Discounts Quality

0 0 4
6 8 9
5
11 11
15 19 37
11
23 12
13
20
10 14 4 12
5 0
1
1 2 3 4 5

The recipe of retail success In India 24

 6. Choosing the most appropriate option

Big Bazaar gives value for money, the customers‟ preference and perception which adds
as a catalyst to this study as the behaviour or influence is a major decision.

Big Bazaar gives value for Money

Series1

Strongly Agree 5

Agree 32

Undecided 6

Disagree 1

Strongly Disagree 6

Usually when the respondents have agreed with the Price which have a huge influence in
buying then Offers and discount have the same kind of effect.

Offers and Discounts are Genuine

Strongly Agree 7

Agree 20

Undecided 15

Disagree 8

Strongly Disagree 0

The recipe of retail success In India 25

 When asked the respondents about the quality that satisfies them which is purchased from
Big Bazaar, most of the respondents feel that the Electronic products at big bazaar should be
improved.

Quality
Strongly Agree

Agree

Undecided

Disagree

Strongly Disagree

0 5 10 15 20 25
Strongly Strongly
Disagree Undecided Agree
Disagree Agree
Series1 3 22 15 10 0

Shopping at Big Bazaar is convenient, almost 54% of them agree about the convenience
of shopping which is a main focus on the ambience.

Convenient
Strongly Agree

Agree

Undecided

Disagree

Strongly Disagree

0 5 10 15 20 25 30
Strongly Strongly
Disagree Undecided Agree
Disagree Agree
Series1 1 8 10 27 4

The recipe of retail success In India 26

 This question was asked to the respondents to find out whether they choose the nearest
store or Big Bazaar, but the option we had clearly showed that 50:50 combination as respondents
agree or disagree.

Do you prefer nearest Store?

Strongly Strongly
Agree Disagree
8% 10%

Agree
34% Disagree
34%

Undecided
14%

Particularly in this question had an influence on the behavioural pattern of the

respondents what they prefer most when compared to other Hypermarkets.

Big Bazaar when compare to Other stores

Satisfied Neutral Dissatisfied

29
23 23 24 24 23
21
19 19
17 16
15
10 11
9
6 7
4

Price Promotion/ Quality Convenience Product Location

Advertising Availability

The recipe of retail success In India 27

Chapter 7: Findings, suggestions and recommendations

Findings
Big Bazaar enjoys a good brand image, especially due to its reputation of
conforming to price in the Indian Hypermarket, the story dates back to the time when there were
not many hypermarkets in the industry and Big Bazaar was only such brand which got hugely
popular especially due to its price and good quality levels. But lately it has been noticed that.

1. The competition is steadily increasing

2. The level of customer satisfaction with the quality of products is decreasing.
3. The stores are crowed and the ambience makes it unpleasant to shop.
4. Because of the convenience of local stores, respondents prefer nearby stores.
5. The level of competitiveness is higher when compared to other hypermarkets with an
aspect of ranking the hypermarkets.
6. Respondents feel that they get value for money and the discounts are genuine at big
bazaar so they shop at this hypermarket, and this is the main aspect why they prefer to
shop at Big Bazaar.
7. From the above research we clearly feel that the competitive tool at Big bazaar is Price,
as almost all the respondents feel this is a cheapest mart, and Big bazaar have a
competitive edge of price compared to other hypermarkets.

Suggestions
There were some interesting suggestions from the respondents so here are some

Big bazaar must first try and attract high end customers. Right now it is attracting just
about middle class people and may be doing reasonably well in business. It should have very
high standard quality products and start targeting upper middle class customers.

The recipe of retail success In India 28

 It should be a convenient shopping destination. - Sangita pal

Use more varieties of products...

Improve the quality of the electronic products sold.

Have more malls closer to home.

Make the escalators work even on weekdays.

Improve the quality and Decrease the price

Have a good store arrangement (display of the product), ambience should be standard.

It can have a better ambiance and more space to move around all the centres are
overcrowded with things that is the reason; I don‟t like to shop there.

Make changes regarding its location, good discounts should be offered

These were some of the suggestions given by the respondents and most of the suggestions
are given for the quality and the service level, location, Thus it is necessary to come out with
more quality products and awareness from the advertising which do not hamper the quality
aspect of Big bazaar, and we think Big Bazaar should go for stringent quality checks.

The recipe of retail success In India 29

Chapter 8: Conclusion

The problem analysed by us is “A study on Low pricing strategy at Big Bazaar as a

recipe of retail success where other retail hypermarkets lag with low customer satisfaction”. But
it has come to our notice that certain Hypermarkets in the EDLP segment have not been able to
perform like Big Bazaar. This research has arrived at some reasons for such difference and
proposes measures for improvement:-

1. Women are famous for shopping this can be seen in the case of Big bazaar also as the
number of females shopping at Big Bazaar is much more than the number of men.
2. We could analyse that the people between the age group of 26-35 are the main shoppers
at Big Bazaar.
3. Most of the respondents whom we surveyed were employed. A majority of the
respondents earn an income between Rs3,00,001/- – Rs5,00,000/-.
4. 74% of the respondents out of the 50 respondents shops at Big Bazaar about 26% does
not. This portrays if out of 50 people 74% shop at Big Bazaar the store is preferred by a
majority of the people.
5. Respondents agree Big Bazaar does not offer quality. Food and Grocery is the thing
shopped most at Big Bazaar.
6. About 32% of the respondents agree Big Bazaar gives value for money.
7. Price has a huge influence on the buying behaviour of customers. Offers and discounts
also have an influence.
8. Electronic products at big bazaar have to be improved.
9. Shopping at Big Bazaar is convenient, almost 54% of them agree to this fact this shows
that people would shop at a place which is more convenient to them.

The recipe of retail success In India 30

 10. Respondents are satisfied with the price factor of Big Bazaar, with respect to promotion
and advertising, quality, convenience they feel that they are neutral, with respect to
product availiabity, location they think they are satisfactory.

From the analysis of our findings we have come to the conclusion that Big Bazaar did
enjoy a monopoly in the market as the first mover in the hyper market arena. But as slowly
competition began to increase their advantage as the first mover began to decline. Now consumer
perception of Big Bazaar is that of a store that offers low price but at a dubious quality. People
have started preferring other hypermarkets because of better shopping experience. Since people
spend a lot of time shopping, they would like the experience to be more enjoyable and
comfortable.

The locations of the hypermarkets also decide the level of footfalls of the market as
people prefer to shop at the nearby kirana store than travel long distances for a hypermarket.
Hence these markets should be located near high density residential areas.

There have been suggestions for Big Bazaar for improvement. Some of these include
improving the quality of products so as to retain current customers and bring in the higher
middleclass to shop there. Then a lot of respondents have mentioned about the lack of ease of
shopping in the stores. An overriding concern was quality and ambience of the store.

The recipe of retail success In India 31

Bibliography

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afjkbakfb. jfjbeb.

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standard.com/india/news/indias-gdp67-in-fy09-despite-slow-industry-growth/00/44/63146/on

CII - A.T.Kearney. (2008). Retail in India: getting organized to drive growth. A CII - A.T.Kearney report.

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McKinsey & company. (May 2007). The bird of gold: the rise of India’s consumer market. McKinsey &
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http://www.rediff.com/money/2008/jan/25rep.htm

The recipe of retail success In India 32

 ANNEXURE

The recipe of retail success In India 33

 Questionnaire on Customer Perception of Big Bazaar
Greetings,
We, the students of IFIM BUSINESS SCHOOL, are conducting a survey to find out the
shopping experience at Big Bazaar.
The filling up of this questionnaire will last approximately 8 minutes, and the
information provided in this questionnaire will be kept confidential.

PART – A

1. Which hypermarket do you shop at? (Rank Accordingly – 1 most & 5 Least)

Total
Big Bazaar
Spar
Reliance Mart
Tata Star Bazaar

2. Do you shop at Big Bazaar?

Yes No (If no, go to part-B)

3. How often do you shop at Big Bazaar?

Weekly
Fortnightly
Monthly
Once in 3 months
< 3 months

4. What do you purchase at Big Bazaar? (Tick whichever applicable)

Food & Grocery

Clothing
Kitchenware
Kids-toys
Electronic Items

The recipe of retail success In India 34

 Foot ware
Furniture/home furnishing
Others please specify:
5. What attracts you to Big Bazaar? (Rank 1 highest & 5 lowest)

Varity of choice
Price
Availability of Product
Discounts
Quality

6. Choose the most appropriate option,

Statements Strongly Somewhat Neutral Somewhat Strongly

Agree Agree Disagree Disagree
Big bazaar gives value for Money
Offers/discounts at Big Bazaar are
genuine
Quality of the products purchased
at Big Bazaar, Satisfies you.
Shopping at Big Bazaar is
convenient
You prefer the nearest store than
Big Bazaar.

7. Your opinion of Big Bazaar when you compare with other stores?

Parameters Satisfied Neutral Dissatisfied

Price
Promotion/ Advertising
Quality
Convenience
Product Availability
Location

PART – B

8. Reason for not shopping at Big Bazaar?

The recipe of retail success In India 35

 Convenience Quality Product Availability

Ambience Price

Any Other reason (Please specify):______________________________________

_____________________________________________________________________
_______________________________________________________________

9. To make Big bazaar a favorite shopping destination it can________________

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_________________________________________________________

PART – C (Personal Details)

Name (Optional): _____________________________________________

Gender: Male Female

Age: 18-25 26-35 36-45 46 & Above

Income: > 150,000/- p.a 150,001/-p.a – 300,000/- p.a

300,001/-p.a – 500,000/- p.a 500,001/-p.a & above

Occupation: Student Self employed Employed

Retired

We appreciate your patience and the time you have allocated for filling the questionnaire.

Thank you,
Students of IFIM Business School

The recipe of retail success In India 36