MULTILOCATIONAL RETAILING: FACTORS

TO BE CONSIDER IN LOGISTICS

__________________________
DPGD/_______________
SPECIALIZATION: MARKETING

PRIN. L. N. WELINGKAR INSTITUTE OF MANAGEMENT & DEVELOPMENT RESEARCH

YEAR OF SUBMISSION: MAY XXXX

 ACKNOWLEDGEMENT
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short lived but when put it blank and white; one hopes it to enjoy a longer life. Many people have given

their valuable time and ideas to enable us to complete our project and project report. I am deeply

indebted to all for their ideas and assistance, and I bear the entire responsibility for weaknesses in the

project, if any. I am highly obliged to express my praise and profound thanks to ___________________

(Project Guide) for his expert guidance and cooperation and also to ______________ (HOD),

_____________ (Colleague), & ______________ (Colleague) for their supervision, encouragement and

valuable advice.

Lastly I would like to thank all those, who have, directly or indirectly, helped me in making the project.
 DECLARATION

I hereby declare that project entitled “Multilocational Retailing: Factors to

be consider logistics” is a bonafide and authentic record of work done by

me under supervision of Mr. Abhimanyu ________ during academic

session 20XX-20XX.

The work presented here is not duplicated from any other source & also
not submitted earlier for any other degree/diploma to any university.

I understand that any such duplication is liable to be punished in

accordance with the university rules.

Place: MUMBAI Mr. ____________

 CERTIFICATE

This is to certify that the Project work titled Personnel Selection

Techniques in Mahindra International Ltd is a bonafide work carried out
by __________ (Roll No. DPGD / MAYXX/ XXX ), a candidate for the Post
Graduate Diploma examination of the Welingkar Institute of
Management under my guidance and direction.

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 INDEX

SR.NO TOPIC PAGE NUMBER

CHAPTER 1 EXECUTIVE SUMMARY 1

CHAPTER 2 INDUSTRY OVERVIEW 4

CHAPTER 3 THEOROTICAL BACKGROUND 39

CHAPTER 4 RESEARCH METHODOLOGY 51

CHAPTER 7 DATA ANALYSIS 55

CHAPTER 8 CONCLUSION 69

CHAPTER 9 BIBLIOGRAPHY 72
Executive Summary
The Indian retail industry is now beginning to evolve in the line with the transformation that has
swept other large economies. It witnesses tremendous growth with the changing demographics
and an improvement in the quality of life of urban people. The growing affluence of India’s
consuming class, the emergence of the new breed of entrepreneurs and a flood of imported
products in the food and grocery space, has driven the current retail boom in the domestic
market.

The concept retail which includes the shopkeeper to customer interaction, has taken many forms
and dimensions, from the traditional retail outlet and street local market shops to upscale multi
brand outlets, especially stores or departmental stores. Though at this moment, it is still
premature to say that the Indian retail market will replicate the success stories of names such as
Wal-Mart stores, Sainsbury and Tesco but at least the winds are blowing in the direction of
growth.

Hence, focusing on two aspects of retail marketing i.e. Store Retailing and Non-store Retailing.
Store Retailing as the departmental store, which is a store or multi brand outlet, offering an array
of products in various categories under one roof, trying to cater to not one or two but many
segments of the society and Nonstore Retailing as the direct selling, direct marketing, automatic
vending.

Therefore, this concept of retail marketing through departmental stores, which is coming up in a
big way in India was decided to be studied in detail, through an exploratory and conclusive
research.

The objective being to assess the various parameters that influences a buyer to visit or shop at
departmental store thereby contributing to its turnover (in terms of sales and profits) hence
leading to its overall success.

The extensive research brought me to conclude that departmental stores are soon emerging on
the top priority lists, amongst the shopping spree in Delhi, as they seem to derive immense
pleasure of convenience and exposure to variety under one roof, in their extremely busy lives,
when they don’t have time for things.
Though some of the customers perceive departmental stores to be expensive and only high
income category’s cup of tea, the stores make constant efforts to induce them to at least visit the
store at once during the same period, or discount offers.

Most of these stores believe in creating not just a marketing activity with its customers, but
rather favor relationship building with him so as to convert first time customers into a client.

Hence this document entails me through these aspects in great detail, helping me to understand
the concept of retail marketing through departmental stores in Delhi.
INDUSTRY OVERVIEW
RETAILING – THE SUNRISE INDUSTRY

The word ‘retail’ means to sell or be sold directly to individuals. Retail is India’s largest
industry, and arguably the one with the most impact on the population. It is the country’s largest
source of employment after agriculture, has the deepest penetration to rural India, and generates
more than 10percent of India’s GDP. However, retailing in India has so far, been mostly in the
hand of small disorganized entrepreneurs. It is also India’s least evolved industries. In fact, it is
not even considered a real industry. The industry suffers from lack of management talent, poor
access to capital, unfavorable regulation and denial of access to best practices. The Indian retail
industry is only now beginning to evolve in line with the transformation that has swept other
large economies. Fifty years of restricting the consumer goods industry, a national mindset
which favored denial over indulgence, and a fractured supply chain for agricultural products
have all contributed to prevent the development of modern tenants based on scale advancements
and consumer preferences.

India has some 12 million retail outlets, but many of these act merely as subsistence providers
for their owners and survive on a cost structure where labor and land is assumed to be free and
taxes nil. Compare this with the global retail industry, which is one of the world’s largest
organized employers, is at the cutting edge of technology, and which leverages scale and scope
to offer value-added services to its customers.

However, only recently has there been an awakening in this sector, with more organized retailers
starting to make an impact. The liberalization of the consumer goods industry, initiated in the
mid-80s and accelerated through the 90s has begun to impact the structure and conduct of the
retail industry. Backed by changing consumer trends and metrics, liberalization in mindsets
driven by media, new opportunities and increasing wealth, retailing in India, presents a vast
opportunity for a variety of businesses - real estate, store design & operations, visual
merchandising logistics and communications, B2C service providers, and FMCG companies who
can add to their offers by partnering this revolution.

The Indian Retailing Industry stands poised to take off into the 21st century. It is one of the
fastest growing sectors in the nation that caters to the world's second largest consumer market.
Retail boom is unabating. India has five million retailers with a business volume of $180 million
growing at 5 to 7 per cent a year. The middle class drives retailing anywhere in the world and
this segment should have reasonable income. The next driver is availability of variety of goods,
products and brands. The third one is “sense of awareness”.

In other developing economies, this transformation has already begun. In many of these
countries, organized retail already has a 40 percent share of the market, compared to India’s
current levels of 2 percent. As India goes through this transformation, new businesses with sales
of 1billion – 2 billion US $ will be created in grocery and of 250million - 500million US $ in
apparel. Smaller but still interesting opportunities will be created in other sectors like books,
electronics, and music. This transformation will also impact the supply chain in agriculture, the
tax collections from trade and the way people shop.

In the last 10 years, all Southeast Asian countries like Indonesia, Malaysia, Taiwan and Korea
have gone through similar phases. China, with a per capita income of $650-700 per annum, is
going through the same phase what India is also facing now. Europe went through this phase of
retail revolution about 40-50 years ago. It is believed that when a country’s per capita income
reaches the level of $1,200 per annum, organized retailing begins to takeover. Though India has
a per capital income of $ 400, on the basis of purchasing power parity (PPP) it has already hit the
$1200 level. This does strengthen the belief that probably, the right time for organized retailing
to click in India has come.

This report aims at providing an insight into the emerging trends in the industry and the barriers
to change and a perspective on what this industry could become, using the global industry as the
backdrop.
Overview of the Global Retail Industry

Retail: world largest industry

Retail, with total sales of $ 6.6 trillion, is the world’s largest private industry ahead of financial
industries $ 5.1 trillion. It is also home to a number of the world’s largest enterprises. Over 50 of
the Fortune 500 companies, and around 25 of the Asian top 500 companies, are retailers. The
industry accounts for over 8 percent of the GDP in western economies.

Retail: Largest private industry in the world economy

A Study by Mc Kinsey states that organized retail accounts for just around 2 percent (out of
which modern retail formats account for 7 percent of trade) presently is set to grow at
exponential exceeding 35 percent. Fitch estimates the current share of organized retail to grow
from 5 percent presently to around 15 to 20 percent by 2020.

Table 1:

Retail Consumption areas US $ billion Existing Companies in the organized sector

Food Retailing 130 Food Bazaar (Pantaloon) Food World

Subhishka.

Clothing & Apparel 12 Pantaloon Westside, Shoppers Stop

Jewelry, Watches 7 Tanishq, Titan, Gold Bazaar (Pantaloon)

Home Furnishing 5 Home Store, Arcus (Pantaloon)

Foot wear 1.7 Bata, Woodland

Beauty Care 3.6 VLCC, Health & Glow

Source: economic time’s industry report

Traditionally, most retailers have had very localized operations. This localized nature of the
industry is changing as retailers face low rates of growth and threatened profitability at home.
New geographies will help them sustain top-line growth as well as permit global sourcing.
Profits in retail have steadily been rising and have generated 19 percent shareholder returns
between 2015 and 2014. Significantly, retail is also one of the world’s largest employers,
accounting for instance 16 percent of the US workforce, Poland 12 percent, China 8percent,
India 10 percent and Brazil 6percent. Factors such as scale in sourcing, merchandising,
operational effectiveness and ambience have driven the spread of organized retail.

Grocery, electronics are examples of categories that compete on the strength of better pricing,
which in turn is driven by superior sourcing and merchandising and cost-efficient operations.
Wal-Mart, Home Depot and Kingfisher are benchmark retailers in these fields.

In apparel, home furnishings and furniture, the advantage is driven by the marketers’ ability to
provide better products in a comfortable ambience at affordable prices. In these cases sourcing
capability has to be backed by strong design capability and store management. IKEA and GAP
are good examples of this model of retailing.

Over the last few decades, retail formats have changed radically. The basic department stores and
co-operatives of the early 20th Century have given way to mass merchandisers, hypermarkets,
warehouse clubs, category killers, discounters and convenience stores. Each of these formats has
been driven by marketer’s need to offer relevant, distinctive and economic propositions to an
evolving consumer base.

Global retailers have also reached a position of strength that enables their brand to be leveraged
across a wide range of services. Many of them have expanded their offering, over the years to
include fuel retail, car retail, convenience services and personal financial services. This has put
them in a position where they are not only beginning to capture growth from geographical
expansion, but are also entering large new areas of business.

The recent evolution of the Internet has helped further broaden the scope of operations of large
retailers. Further, a large number of retailers are pursuing innovative aggregation and supply
chain-streamlining initiatives using B2B technology.
The word 'retail' is derived from the French word 'retaillier' meaning 'to cut a piece off' or 'to
break bulk'. In simple terms it involves activities whereby product or services are sold to final
consumers in small quantities. Although retailing in its various formats has been around our
country for many decades, it has been confined for along time to family owned corner shops.

Englishmen are great soccer enthusiasts, and they strongly think that one should never give
Indians a corner. It stems from the belief that, if you give an Indian a corner he would end up
setting a shop. That is how great Indians retail management skill is considered.

The Facts

Retailing in more developed countries is big business and better organized that what it is in
India. Report published by McKinsey & Co. in partnership with Confederation of Indian
Industry (CII) states that the global retail business is worth a staggering US $ 7 trillion. The ratio
of organized retailing to unorganized in US is around 80 to 20, in Europe it is 70 to 30, while in
Asia it comes to around 20 to 80.

In India the scenario is quiet unique, organized retailing accounts for a mere 5% of the total retail
sector. Although there are around 5 million retail stores in India, 90% of these have a floor space
area of 500 sq.ft. or less. The emergence of organised retailing in India is a recent phenomenon
and is concentrated in the top 20 urban towns and cities.

The Reason

This emergence of organized retailing has been due to the demographic and psychographic
changes taking place in the life of urban consumers.

Growing number of nuclear families, working women, greater work pressure, changing values
and Lifestyles, increased commuting time, influence of western way of life etc. have meant that
the needs and wants of consumers have shifted from just being Cost and Relationship drive to
Brand and Experience driven, while the Value element still dominating the buying decisions.
Global Scenario

Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in USA.

China on the other hand has attracted several global retailers in recent times. Retail sector
employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour have already
entered the Chinese market. In the year 2013, Wal-Mart & Carrefour had sales of US $ 170.4
Crore & US $ 260 Crore respectively.

The global retail industry has traveled a long way from a small beginning to an industry where
the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone accounts for
30 % of the worldwide demand. Retail turnover in the EU is approximately Euros 2,00,000 Crore
and the sector average growth is showing an upward pattern. The Asian economies (excluding
Japan) are expected to grow at 6.7% consistently till 2016-17.

On the global Retail stage, little has remained same over the last decade. One of the few
similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still
holds that distinction. Other than Wal-Mart's dominance, there's a little about today's
environment that looks like the mid-1990s. The global economy has changed, consumer demand
has shifted & retailers' operating systems today are infused with far more technology than was
the case six years ago.
Scenario of Retailing in India

Retailing is the most active and attractive sector of last decade. While the retailing industry itself
has been present since ages in our country, it is only the recent past that it has witnessed so much
dynamism. The emergence of retailing in India has more to do with the increased purchasing
power of buyers, especially post-liberalization, increase in product variety, and increase in
economies of scale, with the aid of modern supply and distributions solution.

Indian retailing today is at an interesting crossroads. The retail sales are at the highest point in
history and new technologies are improving retail productivity. though there are many
opportunities to start a new retail business, retailers are facing numerous challenges.

KEY CHALLENGES:

1) LOCATION:

"Right Place, Right choice"

Location is the most important ingredient for any business that relies on customers, and is
typically the prime consideration in a customer’s store choice. Locations decisions are harder to
change because retailers have to either make sustainable investments to buy and develop real
estate or commit to long term lease with developers. When formulating decision about where to
locate, the retailer must refer to the strategic plan:

* Investigate alternative trading areas.

* Determine the type of desirable store location

* Evaluate alternative specific store sites

2) MERCHANDISE:

The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more
central to the strategic thrust of the retailing firm. Merchandising consists of activities involved
in acquiring particular goods and services and making them available at a place, time and
quantity that enable the retailer to reach its goals. Merchandising is perhaps, the most important
function for any retail organization, as it decides what finally goes on shelf of the store.

3) PRICING:

Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its
interaction with other retailing elements. The importance of pricing decisions is growing because
today's customers are looking for good value when they buy merchandise and services. Price is
the easiest and quickest variable to change.

4) TARGET AUDIENCE:

"Consumer the prime mover"

"Consumer Pull", however, seems to be the most important driving factor behind the sustenance
of the industry. The purchasing power of the customers has increased to a great extent, with the
influencing the retail industry to a great extent, a variety of other factors also seem to fuel the
retailing boom.

5) SCALE OF OPERATIONS:

Scale of operations includes all the supply chain activities, which are carried out in the business.
It is one of the challenges that the Indian retailers are facing. The cost of business operations is
very high in India.
PRESENT INDIAN SCENARIO

* Unorganized market: Rs. 583,000 crores

* Organized market: Rs.5, 000 crores
* 5X growth in organized retailing between 2015-2016
* Over 4,000 new modern Outlets in the last 3 years
* Over 5,000,000 sq. ft. of mall space under development
* The top 3 modern retailers control over 750,000 sq. ft. of retail space
* Over 400,000 shoppers walk through their doors every week
* Growth in organized retailing on par with expectations and projections of the last 5 Years: on
course to touch Rs. 105,000 crores (US$ 21 Billion) or more by 2015-16
Major players

- Food and grocery

- Fashion
- Others
- Food world
- Shoppers' Stop
- Vivek's
- Subhiksha
- Westside
- Planet M
- Nilgris
- Lifestyle
- Music World
- Adani- Rajiv's
- Pyramid
- Crossword
- Nirma-Radhey
- Globus
- Life spring

Let us look at the evolution process:

Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGES-KSA
report says that the last few years have seen rapid transformation in many areas and the setting of
scalable and profitable retail models across categories. Indian consumers are rapidly evolving
and accepting modern formats overwhelmingly. Retail Space is no more a constraint for growth.
India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner
with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC,
Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and private equity
players are firming up plans to identify investment opportunities in the Indian retail sector. The
quantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures
more and more investors to earn large profits. Investments into the sector are estimated at INR
2015 - 2500 Crore in the next 2-3 years, and over INR 70,000 Crore by end of 2020.
Few of India's top retailers are:

1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is already
India's biggest retailer. In the year 2013-14, it had revenue of Rs 1658.31 crores & by 2020; it is
targeting revenue of Rs 16,800 Crore.

2. Food World: Food World in India is an alliance between the RPG group in India with Dairy
Farm International of the Jardine Matheson Group.

3. Trinethra : It is a supermarket chain that has predominant presence in the southern state of
Andhra Pradesh. Their turnover was Rs 178.8 Crore for the year 2012-13.

4. Apna Bazaar: It is a Rs 140-crore consumer co-operative society with a customer base of

over 12 lakh, plans to cater to an upwardly mobile urban population.

5. Margin Free: It is a Kerala based discount store, which is uniformly spread across 240
Margin Free franchisees in Kerala, Tamil Nadu and Karnataka.

Wholesale trading is another area, which has potential for rapid growth. German giant Metro AG
and South African Shoprite Holdings have already made headway in this segment by setting up
stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These
new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who
do not have to maintain relationships with multiple suppliers for all their needs.
INDIAN RETAIL IS MOVING INTO SECOND GEAR

1) FIRST GEAR:
(Create awareness)
* New retailers driving awareness
* High degree of fragmentation
* Real estate groups starting retail chains
* Consumer expecting 'value for money' as core value

2) SECOND GEAR:
(Meet customer expectations)
* Consumer-driven
* Emergence of pure retailers
* Retailers getting multi-locational and multi-format
* Global retailers evincing interest in India
3) THIRD GEAR:
(Back end management)
* Category management
* Vendor partnership
* Stock turns
* Channel synchronization
* Consumer acquisition
* Customer relation's management

4) FOURTH GEAR:
(Consolidation)
* Aggressive rollout
* Organized retail acquitting significant share
* Beginning of cross-border movement
* Mergers and acquisitions
INFORMATION TECHNOLOGY IN RETAIL

Over the years as the consumer demand increased and the retailers geared up to meet this
increase, technology evolved rapidly to support this growth. The hardware and software tools
that have now become almost essential for retailing can be divided into 3 broad categories:

Customer interfacing systems

Bar coding and scanners

Point of sale systems use scanners and bar coding to identify an item, use pre-stored data to
calculate the cost and generate the total bill for a client. Tunnel Scanning is a new concept where
the consumer pushes the full shopping cart through an electronic gate to the point of sale. In a
matter of seconds, the items in the cart are hit with laser beams and scanned. All that the
consumer has to do is to pay for the goods.

Payment

Payment through credit cards has become quite widespread and this enables a fast and easy
payment process. Electronic cheque conversion, a recent development in this area, processes a
cheque electronically by transmitting transaction information to the retailer and consumer's bank.
Rather than manually process a cheque, the retailer voids it and hands it back to the consumer
along with a receipt, having digitally captured and stored and image of the cheque, which makes
the process very fast.

Internet

Internet is also rapidly evolving as a customer interface, removing the need of a consumer
physically visiting the store.

Operation support systems

ERP System
Various ERP vendors have developed retail-specific systems which help in integrating all the
functions from warehousing to distribution, front and back office store systems and
merchandising. An integrated supply chain helps the retailer in maintaining his stocks, getting
his supplies on time, preventing stock-outs and thus reducing his costs, while servicing the
customer better.

CRM Systems

The rise of loyalty programs, mail order and the Internet has provided retailers with real access
to consumer data. Data warehousing & mining technologies offers retailers the tools they need to
make sense of their consumer data and apply it to business. This, along with the various available
CRM (Customer Relationship Management) Systems, allows the retailers to study the purchase
behavior of consumers in detail and grow the value of individual consumers to their businesses.

Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way from raw
material suppliers right through to the retail shelf. These APS packages complement existing (but
often limited) ERP packages. They enable consolidation of activities such as long term
budgeting, monthly forecasting, weekly factory scheduling and daily distribution scheduling into
one overall planning process using a single set of data.

Leading manufactures, distributors and retailers and considering APS packages such as those
from i2, Manugistics, Bann, Mercial incs and Sterling-Douglas.
Strategic decision support systems

Store Site Location

Demographics and buying patterns of residents of an area can be used to compare various
possible sites for opening new stores. Today, software packages are helping retailers not only in
their locational decisions but in decisions regarding store sizing and floor-spaces as well.

Visual Merchandising

The decision on how to place & stack items in a store is no more taken on the gut feel of the
store manager. A larger number of visual merchandising tools are available to him to evaluate
the impact of his stacking options. The SPACEMAN Store Suit from AC Nielsen and Modacad
are example of products helping in modeling a retail store design.
FOREIGN TOUCH IN INDIAN RETAIL

The chief of Marks & Spencer has been making trips to India over the past year. Global
investment bank Warburg Pincus is awaiting the Indian government's clearance to pick up a 25.1
per cent stake, worth $13 million, in Shoppers Stop.

Dairy Farm International and Jardine Matheson are present here, through tie-ups with the RPG
Group. Fast food major McDonalds have already made a dent in the marketplace and in Indian
palates.

The Dubai-based Landmark group is making its presence felt in Chennai through its Lifestyle
mega store of over 30,000 sq ft. Landmark is owned by Mukesh Jagtiani, a non-resident
Indian. Lifestyle International Private Limited, formed in India recently, is a wholly-owned
subsidiary of the Mauritius-based Lifestyle International which, in turn, is wholly-owned by the
Landmark group. In India, according to Lifestyle International's marketing manager, Roshan
Mathew, the target is to "have 12 to 16 stores by 2020." These stores will sell all lifestyle
products, barring furniture, under one roof.

Immediate plans include opening a 46,000 sq ft store in Hyderabad, which Mathew terms "The
Millennium Store". The Hyderabad store will have additional sections for books and music,
unlike the Chennai store. Besides, as soon as Lifestyle gets a keenly awaited Foreign Investment
Promotion Board clearance for a Rs 100 crore investment, it will create outlets in Bangalore,
Pune, Mumbai, Delhi and Ahmedabad.

The Hong Kong-based Dairy Farm International, a 125 year old retail major with around 1,300
outlets across nine countries, recently converted its technical tie-up (since 1996) with the RPG
group's Spencer & Company for Foodworld into a 49:51 joint venture. The new venture is called
Foodworld Supermarkets Limited. DFI also has a 50:50 joint venture with the Indian group in
RPG Guardian. DFI is the retail arm of Jardine Matheson.

In Western markets, a familiar sight is the McDonalds golden arch. In India too McDonalds has
maintained its unique selling proposition -- providing the same quality of food and the same
ambience as anywhere in the world. Its raw material requirements are totally out-sourced. But
what it has taken care of is world class quality in all its raw material sourcing, with specifications
ensured strictly. The chain has been smart enough to tailor its products to the Indian
environment, adding fare for the large number of vegetarians who love fast food, and avoiding
certain beef and pork in deference to social sensitivities. In a market place where Kentucky Fried
Chicken failed to make an impact, McDonalds seems to be finding its place slowly but surely.
Operation of Retail Formats

Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the modern
Indian shopper.

 Merchandise: food grocery to clothing to spots goods to books to stationery.

 Space occupied: 50000 Sq .ft. and above.

 SKUs: 20150-30000.

 Example: Pantaloon retail’s Big Bazaar, RPG’s Spencers (Giant).

Supermarket: A subdued version of a hypermarket.

 Merchandise: Almost similar to that of a hypermarket but in relatively smaller

proposition.

 Space occupied: 5000 Sq. ft. or more.

 SKUs: Around 10000.

 Example: Nilgiris, Apna Bazaar, Trinethra.

Convenience store: A subdued version of a supermarket.

 Merchandise: Groceries are predominantly sold.

 Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.

 Example: stores located at the corners of the streets, Reliance Retail’s Fresh and Select.
Department store: A retail establishment which specializes in selling a wide range of products
without a single prominent merchandise line and is usually a part of a retail chain.

 Merchandise: Apparel, household accessories, cosmetics, gifts etc.

 Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

 Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and higher
volumes.

 Merchandise: A variety of perishable/ non perishable goods.

 Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.

Specialty store: It consists of a narrow product line with deep assortment.

 Merchandise: Depends on the stores

 Example: Bata store deals only with footwear, RPG’s Music World, Crossword.
MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in busy
market places and Metros.

 Merchandise: Offers several brads across a single product category.

Kirana stores: The smallest retail formats which are the highest in number (15 million approx.)
in India.

 Merchandise: Mostly food and groceries.

 Space occupied: 50 sq ft and even smaller ones exist.

Malls: The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts.

 Merchandise: They lend an ideal shopping experience with an amalgamation of product,

service and entertainment, all under a common roof.

 Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.

 Example: Pantaloon Retail’s Central, Mumbai’s Iorbit.

The percentage of organized retail per sector wise is very miniscule and this does not mean that
there is stagnation of growth because if we look at the following table we can clearly observe the
burgeoning pace of growth happening in all the sectors of Indian retailing.
 The organized retail industry is growing at 25- 30 percentage and is expected to reach the
mark of 1, 00,000 crore INR by 2020 from the present figure of 35,000 crore INR approx. With
such a mouth watering figures the organized retailing has been attracting many players and even
persuading the existing retailers to expand and experiment with newer formats. This can also be
substantiated by looking the estimation of the organized retail space to be around 102 million sq
ft. by the end of 2017. The present players and their retail formats details are presented below:
Trends in Present Retail Market:

New Product Categories:

For a long time, the corner grocery store was the only choice available to the consumer,
especially in the urban areas. This is slowly giving way to international formats of retailing. The
traditional food and grocery segment has seen the emergence of supermarkets/grocery chains
(Food World, Nilgiris, Apna Bazaar), convenience stores (ConveniO, HP Speedmart) and fast-
food chains (McDonalds, Dominos).

It is the non-food segment, however that foray has been made into a variety of new
sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside),
apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, MusicWorld,
Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant & Co.),
drugs and pharmacy (Health and Glow, Apollo).

Increasing competition in the retail market:

New entrants such as Reliance, Bharti Enterprises and the AV Birla group will compete
against well-established retailers, such as Pantaloon Retail, Shoppers’ stop, Trent, Spencer’s and
Lifestyle stores. Foreign retailers are keenly evaluating the Indian market and identifying
partners to forge an alliance with in areas currently permitted by regulations. With an estimated
initial investment of USD 750 million, Reliance is planning to launch a nationwide chain of
hypermarts, supermarkets, discount stores, department stores, convenience stores and speciality
stores. These 5,500 stores will be located in 800 cities and towns in India.

Increase in Private Labels:

With the emergence of organized retail and modern retail formats, private labels have
been gaining significance. They enhance the profitability levels of product categories, increase
retailers’ negotiation powers and create consumer loyalty. More retailers are introducing their
own brands in all categories including Food & Groceries, apparel, accessories, footwear. These
own brands also do not have to manage intermediaries since retailers maintain oversight of the
supply chain.

The label penetration is in a huge rise. Private Label penetration has been on a rise. It is
mainly growing among FMCG products in most supermarkets with groceries accounting for
45.9%

Expanding to Tier II and III cities:

Indian retailers are planning to extend operations into Tier II and Tier III cities as
heightened IT offshoring activity in these locations have increased consumers’ disposable
income. The population in these cities is typically well educated and willing to purchase goods
and services. Some major retailers, like Globus, Reliance Retail and Pantaloon, have already
begun building a retail presence in Tier III cities before many retailers have finalized their Tier II
retail operations.

Foray into Retail Agri-Business:

India’s most prestigious business houses and global retailers are planning to enter retail
agri-business. Market entrants plan to invest in the entire value chain, moving goods “from the
farm to the fridge at home.” Viewed as India’s next “Sunrise Sector,” retailers are employing
contract farming as a means of boosting their ventures. Contract farming enables farmers to
access land, manpower and farming skill without having to purchase land. Of the total Cultivable
land of 400 million acres in India, contract farming represents 7 million acres thus indicating a
tremendous opportunity. For pure corporate contracts between farmers and companies, only
2,00,000 acres are used.

Experimenting with formats:

Selecting the right retail format is essential in modern retailing. The difference between
urban and rural customers is one of the reasons why multiple formats are required in India. Local
conditions and insights into buying-behaviour shape the format choice. No single format will be
suitable for an all India strategy and selecting the relevant format is the key success factor.
Theoretical Background
Logistics is the management of the flow of things between the point of origin and the point of
consumption in order to meet requirements of customers or corporations. The resources managed
in logistics can include physical items, such as food, materials, animals, equipment and liquids,
as well as abstract items, such as time, information, particles, and energy.

The logistics of physical items usually involves the integration of information flow, which
is material handling, production, packraging, inventory, transportation,warehousing, and
often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized
by dedicated simulation software. The minimization of the use of resources is a common
motivation in logistics for import and export.

Logistics viewpoints

Inbound logistics:-Inbound logistics is one of the primary processes of logistics, concentrating

on purchasing and arranging the inbound movement of materials, parts, and/or finished inventory
from suppliers to manufacturing or assembly plants, warehouses, or retail stores.

Outbound logistics:-Outbound logistics is the process related to the storage and movement of
the final product and the related information flows from the end of the production line to the end
user.

Procurement logistics consists of activities such as market research, requirements planning,

make-or-buy decisions, supplier management, ordering, and order controlling. The targets in
procurement logistics might be contradictory: maximizing efficiency by concentrating on core
competences, outsourcing while maintaining the autonomy of the company, or minimizing
procurement costs while maximizing security within the supply process.
Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It
consists of order processing, warehousing, and transportation. Distribution logistics is necessary
because the time, place, and quantity of production differs with the time, place, and quantity of
consumption.

Disposal logistics has as its main function to reduce logistics cost(s) and enhance service(s)
related to the disposal of waste produced during the operation of a business.

Reverse logistics denotes all those operations related to the reuse of products and materials. The
reverse logistics process includes the management and the sale of surpluses, as well as products
being returned to vendors from buyers. Reverse logistics stands for all operations related to the
reuse of products and materials.

It is "the process of planning, implementing, and controlling the efficient, cost effective flow of
raw materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal. More
precisely, reverse logistics is the process of moving goods from their typical final destination for
the purpose of capturing value, or proper disposal. The opposite of reverse logistics is forward
logistics.

Green Logistics describes all attempts to measure and minimize the ecological impact of
logistics activities. This includes all activities of the forward and reverse flows. This can be
achieved through intermodal freight transport, path optimization, vehicle saturation and city
logistics.

RAM Logistics (see also Logistic engineering) combines both business logistics and military
logistics since it is concerned with highly complicated technological systems for
which Reliability, Availability and Maintarinability are essential, ex: weapon systems and
military supercomputers.
Asset Control Logistics: companies in the retail channels, both organized retailers and suppliers,
often deploy assets required for the display, preservation, promotion of their products. Some
examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames.

Logistic families and metrics

A logistic family is a set of products which share a common characteristic: weight and
volumetric characteristics, physical storing needs (temperature, radiation), handling needs, order
frequency, package size, etc. The following metrics may be used by the company to organize its
products in different families:

 Physical metrics used to evaluate inventory systems include stocking capacity, selectivity,
superficial utilization, volumetric utilization, transport capacity, transport capacity
utilization.
 Monetary metrics used include space holding costs (building, shelving and services) and
handling costs (people, handling machinery, energy and maintenance)

Other metrics may present themselves in both physical or monetary form, such as the
standard Inventory turnover.
Factors to be consider in Logistics for retailers

Competitive pressures, mergers, acquisitions, new product lines and greater customer
expectations are just the tip of the change iceberg for the modern logistics leader. On the surface,
this continuum of change is just a cost of doing business in the latest "new economy." However,
for those intimately involved in a distribution process, how these changes are accommodated can
mean the difference between survival, burnout and/or even extinction in today's rapidly changing
supply chain. Below are the key areas that are the roadmap to an effective, flexible and
proactively responsive distribution operation.

1. Centralization v s. Regionalization

In distribution network planning, there is a well-established relationship between the number of

distribution points, transportation costs and customer service targets. In a graphical sense, the
point at which these three entities merge is the optimum balance of facility and transportation
costs to develop a low-cost, high service distribution network. Normally, as distribution
networks become more centralized, so do the internal support structures such as facility
management, order entry, customer service and data processing? Depending on the degree of
centralization achieved in support staffs, it is not uncommon to see cost savings of 50 percent or
higher over decentralized networks. However, service levels, limitations on total facility size,
risk mitigation and throughput peaks must be factored into the decision matrix.

2. Energy

Any significant shift in the cost of energy—electricity, fuel, etc.—could have an impact on
operating costs and, therefore, on distribution. Many distribution projects that are otherwise
viable fail once the cost of energy becomes a factor. This is especially true for energy-intensive
facilities such as refrigerated warehouses. For this reason, it is crucial to work with all energy
providers to determine the load that a prospective operation would put on the local energy
system and develop solutions that conserve energy while achieving goals. Some interesting
energy solutions are: Abatement programs: Many energy providers provide incentives to users
who cut back their usage during defined high load periods. This could be as simple as running
the facility on minimal power during off-shifts or as complicated as metering the use of the
facility or using a secondary power source (high power generator or solar power) to run normally
on a reduced energy load. High-efficiency units: Many companies install high-efficiency
appliances and fixtures in a facility to conserve energy usage with no performance penalty. There
is some investment required, but the payback is often reduced rates and/or a lower monthly bill.
Rising fuel costs make this a very sensitive component of distribution costs regardless of whether
transportation is handled via third party carriers or private fleet. Some strategies to consider
mitigating this are: Cube out containers: When a trailer is partially cubed out, you are often
paying to transport air. Utilizing the maximum cube ensures that more of the shipping costs are
being used to ship product.

Mode assessment: Depending on service requirements, it may be possible to move from LTL
services to truckload or from parcel to LTL. In general, each shift will result in reduced freight
costs. Transportation management systems (TMS): Poor transportation performance often stems
from poor transportation planning. A TMS can provide more efficient route planning and load
tendering, and result in savings in the process. Private fleet concerns: Private fleets can benefit
from an in-house fuel supply program to gain control over fuel costs and usage. The investment
can be offset by the elimination of one or more fuel supply chain links, reducing operating costs
and sometimes allowing fuel blends that are more efficient and economical. Regional vs.
centralized networks: The costs of delivery using different modes of transportation, as well as
service availability, can be directly impacted when fuel costs rise. Understanding the modes used
most often, the customer expectation and the risk associated play into the network structure
decision.
3. Flexibility

In today's unpredictable business climate, flexibility is a key to continued success for some and
survival for others. When designing a distribution facility, specifying versatile equipment is a
critical requirement. The latest technology may look nice at start up, but if it can't keep pace with
unpredictable events, it is simply a waste of money. Planning for likely (and unlikely) changes in
the distribution profile should drive the warehouse design and equipment specifications. For the
majority of distribution operations, flexible equipment is the more practical choice.

4. Global Marketplace

In the ever-changing supply chain, global impact must always be considered. This could be as
minor as a domestic customer wanting direct shipments to an international location, or as major
as an acquisition by a global company or addition of a key global account. Successful
distribution operations are ready for this type of change. Transportation systems should be
designed with exports in mind; there should be contingencies for customs documentation and
international shipping paperwork. Operations should be designed in a manner that product re-
labeling or special packaging for international customers can be accomplished easily. Facilities
may need to accommodate inbound or outbound airfreight or ocean freight containers. Customer
service functions may need to operate in 24-hour mode to assist customers in all time zones.
Preparedness is the critical element in a global marketplace. If you are not a global company
today, your success will drive you into that marketplace sooner rather than later.

5. Government Involvement

Just as government involvement has an impact on distribution, distribution leadership has an

obligation to be involved and aware of legislation that involves their industry. Many decisions
are made daily at a local, state, and federal level that impact distribution operations. Taxes, labor
regulations, transportation restrictions and infrastructure decisions are continually up for review
and discussion at every level of government. Without proper input, uninformed decisions often
have a dramatic effect on the distribution community. In addition, involvement in professional
societies (many of which conduct lobbying activities) is an effective way to track the pulse of
legislative movement and also an ideal forum to make your concerns known. For some ambitious
souls, a direct role in local or municipal government may be an effective and fulfilling way to
make an impact. By being proactive, distribution leaders can ensure that distribution and
government entities can collaborate to provide benefit to both sides without unpleasant surprises.

6. Information Systems

In today's e-enabled world, timely and accurate information is a requirement. The days of
keypunching in daily distribution activity and nightly updates to host financial systems are
becoming a distant memory for successful distribution operations. Today's reality is that
distribution execution systems must be: Real-time: Customer requirements are moving toward
being able to instantly track an order through every step of the fulfillment process to delivery.
Optimally, this information is linked to an Internet front-end where a customer can easily log in
and see the exact status of their order. Real-time interfaces and host system updates enable this
customer-focused initiative.

Paperless: The reality is that paper equates to errors. Language and educational barriers result in
paper pick documents that are often misinterpreted, at best resulting in lost dollars within the
distribution operation or, worse still, lost customers due to fulfillment issues that escape even the
best inspection processes. The solution is paperless systems requiring operator validation that the
right steps were followed and that the correct product was picked and packed. Standardized: In
the past, many companies developed proprietary, legacy systems to manage their distribution
operations. With the high growth associated with a successful distribution operation, many of
these companies are finding that the investment to develop and maintain an in-house system no
longer is viable. Standardized, industry-tailored software is now the rule rather than the
exception. Software companies leverage their client base to continually update their product,
adding far more base functionality than inflexible legacy systems.
7. Modularity

As companies in the distribution space come and go, their business will typically move to a new
distributor or distributors. The ability to quickly take on significant business volumes dictates
that modularity is a necessity for a thriving distribution organization. Modularity must be evident
in: Assets: Distribution assets must be modular, providing the ability to easily expand facilities,
capacities and equipment to meet increasing demands and diverse products. Many companies
design this into a facility, while others are constantly tracking alternate local space that could be
closed on quickly. Work assignments: The workforce must be able to handle new work
assignments and transfer knowledge to new employees effectively. This is a key to a successful
start-up of a new operation or an addition to an existing operation. Labor management systems:
These systems must be able to handle the addition of new operations quickly and economically
so that performance can be measured and costs kept under control.

8. Off-Highw ay Vehicles

In the United States, issues regarding the environment and air quality continue to be under
scrutiny. The push for more stringent air-quality regulations will impact the warehouse. Electric
vehicles will take over as the preferred models in the warehouse, displacing non-electric vehicles
in the process. As this evolution occurs, manufacturers of electric rolling stock will respond with
higher power, higher efficiency vehicles to facilitate this process.

9. Pace

Anyone with access to an e-tailer web site can now order product, specify their service
requirements, pay for their order on-line, and track the order right to their doorstep. For
distributors, this means that the pace of distribution must increase significantly to account for the
reduced lead times, shorter product lives, increased inventory turnover and greater customer
expectations that is considered standard in the modern business-to-business and business-to-
consumer marketplace. If a customer places an order today with next-day delivery, a company
that picks and ships the order the next day won't be competitive for long. The entire supply chain
needs to keep pace, from vendor compliance to information and execution systems in order to
support the new economy that the Internet has enabled.

10. People

Success demands a team-based, participatory organizational culture and a total dedication to

customer satisfaction. There are many ways to achieve this, ranging from simple solutions such
as employee celebration days, employee suggestion programs, and other simple programs to
more structured approaches such as revised organizational designs,
compensation/incentive/bonus plans, and other processes that directly tie the distribution
associates on the floor to satisfied customers. 11. Price—While service and quality are key
factors in selecting a distribution partner, for many companies, decisions still comes down to
price. Successful past relationships are no longer a good indicator of the future. Modern free
enterprise demands efficient, effective and low-cost distribution. Competition is fierce and many
low-cost providers will not be here tomorrow as they undercut the market to get short-term
volumes at an operating loss. The goal of a successful distribution operation should be to operate
within their core values at the lowest cost possible. The path to competitive pricing is to operate
efficiently and flexibly at low cost—to offer low prices any other way is inviting failure.

11. Accountability

A successful distribution operation must have accountability. Accountability is made possible by

effective leadership, clear communications and efficient systems and equipment to enable
productive operations and a fulfilling work environment. Accountability requires that leadership
make difficult decisions while maintaining the commitment of the organization. Accountability
requires establishing standards, identifying improvement opportunities and measuring
performance. Also required is some form of a reward process that answers the inevitable
question, "What's in this for me?" Care must be taken that any rewards are tied to something that
can be quantified as a true benefit to the organization; rewards without a basis will result in lack
of credibility and a process that will ultimately fail.

12. Reverse Logistics

How to handle the products that are coming back into the operation as well as any returnable
packaging that must be accounted for on a regular basis is a challenge. The decision on whether
to accept the product, whether a refused shipment, an authorized customer return, or an
unexpected return must be planned for and communicated with the distribution operation as well
as the receiving and handling process for the product or chaos will likely ensue. For example, a
Tompkins Associates client in the direct-to-consumer home goods industry was having a horrible
experience with returns. An item would be returned and graded 'return to stock.' An order would
come in for the same item and the returned item (which was first quality) would be shipped.
Once the customer received the item, they would return it with the comment that it appeared not
to be new.

The solution was to establish a vendor-quality packaging initiative that looked very similar to the
original vendor packaging. By implementing the new packaging for returns, the client was able
to realize a 75 percent decrease in second-pass returns, saving over $5 million annually in returns
freight and reducing the size of their returns department. Another opportunity in reverse
distribution is returnable packaging, either pallets or containers. Another Tompkins client moved
from disposable corrugate containers in their retail store replenishment operations to returnable
containers and used the freight backhaul to return the empty containers to the distribution center.
Operations in the DC were far more efficient as the plastic totes were much more reliable and
were more easily conveyed and stored than their corrugate predecessors, and the retail stores did
not have to break down and dispose of thousands of corrugate boxes every year.
13. Third Party Logistics (3PL)

A growing number of companies are turning to 3PL organizations to handle the customer
fulfillment portion of their supply chain. Companies that are accustomed to true partnering with
customers and suppliers have less trouble migrating to the 3PL world and achieving the potential
cost savings. The key steps are to conduct a comprehensive search for the right 3PL vendor,
thoroughly review cost proposals and contracts to ensure there is financial benefit, and work with
the 3PL to make their operation is a seamless extension of your company. This may involve
shared management, integrated execution systems and a unified appearance to partners and
customers.

14. Variety

Special packaging, unitizing, pricing, labeling, kitting and delivery requirements are becoming
the norm and must be addressed in any distribution plan. These tasks should be designed into the
operation, not "tacked on" as a reactive afterthought. Many companies invest large amounts of
capital setting up specialized packing or value-added services (VAS) lines with the mandate to
gain competitive advantages and in hindsight gain little except increased costs and headaches. A
few key questions need to be answered when setting up these operations: What is the benefit of
the process? How will we recoup our investment? Can we charge the customer for these
services? Is it better to outsource this operation? A simple review process can often provide
justification to move forward and establish key design parameters to ensure that any "extra"
requirements are integrated into the operation responsibly. Properly planned, these services can
be a profit center, providing differentiation in a competitive marketplace while boosting the
bottom line at the same time.
Research Methodology
Organization is set of people working together for accomplishment of a common objective.
The roles and responsibilities are stated clearly without any ambiguity. The positions
occupied by different individuals are presented in the form of organization chart.
Organizational structure is essential for continuity of the mission & co-ordinates & controls
the business activities. Organization helps management to perform its actives effectively.

Need for the Study

This study is taken up to fulfill the requirement of PGDBA course at Welinker Institute. The
Project is undertaken during Jan 2015 to Feb 2015 and the main purpose of the Project is to
know the application of the theoretical aspects in our course in the corporate environment and
gain firsthand experience and expose ourselves to corporate policies, ethics, culture, practices,
procedures, facts about the work collate and policies of the company.

Objectives of the study

The objective of the study was:

1 To know distribution channel Strategy of retailers specific to Big bazaar
2 To know the importance of Distribution channel strategy in Positioning of the product
3 To know the Big Bazaars’ planning towards the distribution channel strategy
4 How strong relationship Big Bazaar has with the distributors and retailers
5 Perception of retailers towards the Multilocational strategy

Scope of the Study

 This report is based on the study conducted at Big Bazaar

 It aims at understanding the company's establishment. Organization structure, departments,

techniques, marketing strategies and the advantages it is having over the competitors.

 An attempt is made to analyze the company's performance in comparison to the theoretical

aspects.

 It aims to understand the skills of the company in the areas like technological
 advancements, competition and in management.

 Study of logistics and distribution channels

 Knowing how logistics is done in Big Bazaar which is working from multiple locations

Limitation of the Study

 Time limit is a major constraint

 As per the company rules many information was not disclosed
 As the managers are busy in their daily schedules it is not possible for us to spend more time
in interaction and discussion with them.

Methodology adopted for the Study

Observational method

Observation were made in the Big Bazaar store regarding the customer groups present there,
retail formats adopted by the store, various verticals inside the store for each category of product,
ambience, services provided to buyers and discount techniques

 Observing the working of various departments like finance safety, human resource
production, purchasing etc.
 Discussion with the company executives, managers and employees
 Visiting and surfing websites of the company.
Survey Method

Personal meeting with manager and assistants. Questionnaire was prepared for the staff at Big
Bazaar, which included several open-ended and close-ended questions aimed at knowing the
following

 Why Big Bazaar

 Loyalty level
 Effect of logistics

Sources of Data

 Primary data

 Secondary data

(a) Primary Data

The data collected for the first time through observation and interview method. The data is
collected by observing the working of various departments and also by interviewing the managers
of all the departments. It is also obtained by the help of staff members.

Secondary Data

The data is collected by secondary sources also. The data is collected through company
manual, product brochure, company website and annual report.
Data Analysis
Q.1. BigBazar have good distributions channel?

TABLE 1
SHOWING WHAT RESPONDENT THINKS ABOUT BIGBAZAR DISTRIBUTION
CHANNEL.
Sl No. Particulars No of Respondent Percentage
1 Strong Agree 32 32
2 Agree 43 43
3 Can’t Say 05 05
4 Disagree 20 20
Total 100 100

ANALYSIS:

From above table it can be observed that it can be observed that 43% of the respondent believe
that BigBazar has good distribution channel and 32 % of the retailer and distributer strongly
agree that company has best distribution channel while 20% disagree that BigBazar don’t have
good distribution channel and 5% of them can’t say.

GRAPH 1

SHOWING WHAT RESPONDENT THINKS ABOUT BIGBAZAR DISTRIBUTION

CHANNEL

Strong Agree Agree Can't say Disagree

20%
32%
5%

43%
INTERPRETATION: The data shows that company have good distribution channel but should
focus more on their distribution channel and try to convert customer in strongly agree respondent
by providing them better services and schemes.
Q.2. Distribution channel has an important role in positioning of the product?

TABLE 2

SHOWING DOES DISTRIBUTION CHANNEL IMPORTANT FOR POSITIONING THE

PRODUCT

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 30 30
2 Agree 45 45
3 Can’t Say 05 5
4 Disagree 08 20
Total 100 100
ANALYSIS:

From above table it can be observed that 45% of the respondent agree that Distribution channel
plays an important role in building the positioning of the company and 30% strongly support that
While 20% doesn’t agree with the statement while 5% chooses can’t say.

GRAPH 2

SHOWING DOES DISTRIBUTION CHANNEL IMPORTANT FOR POSITIONING THE

PRODUCT

Strong Agree Agree Can't say Disagree

20%
30%

5%

45%
INTERPRETATION: It shows that our objective is fulfilled by this research and we can say
that if we have to promote our product then we should have strong distribution channel. Most of
the retailer and distributer support the statement that means if distribution channel is improved
more it will help in the positioning of the company.
Q.3. You being provided the Value added service by the company?

TABLE 3

SHOWING THAT RETAILERS ARE PROVIDED THE VALUE ADDED SERVICE OR

NOT.

Sl No. Particulars No of Respondent Percentage

1 Yes 70 70
2 No 30 30
Total 100 100
ANALYSIS:

From above table it can be observed that 70% are saying that they are getting Value added
service from the company side to keep their product but 30 % are saying that they are not getting
any Value added service from the company.

GRAPH 3:

SHOWING THAT RETAILERS ARE PROVIDED THE VALUE ADDED SERVICE OR

NOT.

Yes No

30%

70%
INTERPRETATION:

It means company is not focusing on all customers that major concerns for the organization.
Most of the retailers having the Value added service which is given by the company but some of
them don’t have because they are smaller customers where sales are very less, also some of the
retailers puts different brands into the same Value added service by which also they loss their
Value added service.
Q.4. BigBazar has good relationship with the logistics partner?

TABLE 4

SHOWING THE RELATIONSHIP OF THE COMPANY WITH THE LOGISTICS PARTNER

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 32 32
2 Agree 43 43
3 Can’t Say 05 5
4 Disagree 20 20
Total 100 100

ANALYSIS: From above table it can be observed that 43% of the retailer and distributor Agrees
that BigBazar has a good relation with them and 32% strongly support the statement while 20%
of the retailer and distribution was against the statement means they said BigBazar doesn’t
having good relation with them.
 GRAPH 4

SHOWING THE RELATIONSHIP OF THE COMPANY WITH THE RESPONDENT

Strong Agree Agree Can't say Disagree

20%
32%

5%

43%

INTERPRETATION: It shows that company should thing that how can they maintain better
relationship with every retailers and distributors.
Q.5. Perception of retailers/distributors towards the BigBazar’s Distribution Channel?

TABLE 5

SHOWS THE PERCEPTION OF LOGISTICS PARTNERS TOWARDS THE BIGBAZAR’S

DISTRIBUTION CHANNEL

Sl No. Particulars No of Respondent Percentage

1 Excellent 27 27
2 Good 55 55
3 Bad 13 13
4 Worst 05 05
Total 100 100

ANALYSIS: From above table it can be observed out of 100 % respondent only 27% are saying
that BigBazar have excellent distribution/logistics channel and 5% are saying that BigBazar have
worst distribution and 13% of them says it has bad distribution channel but 55 % are saying that
BigBazar have good distribution channel.

GRAPH 5

SHOWS THE PERCEPTION OF LOGISTICS PARTNERS TOWARDS THE BIGBAZAR’S

DISTRIBUTION CHANNEL

Excellent Good Bad Worst

5%
13%
27%

55%
INTERPRETATION: Here area of concern that how company can make happy those
respondent who are thinking that BigBazar have worst/bad Distribution channel and how can
company develop good distribution channel and change the perception of retailers and
distributors.
Q.6. How much average time, logistics channel takes to make reach the product at big bazaar’s
warehouse?

TABLE 6

SHOWS IN HOW MUCH TIME LOGISTICS GET DELIVERY OF PRODUCTS

Sl No. Particulars No of Respondent Percentage

1 One day 46 46
2 Three Day 37 37
3 One Week 17 17
4 One Month 00 00
Total 100 100
ANALYSIS: From above table it can be observed out of 100 % respondent only 46% of retailers
get their stock in one day and 37% of the respondent gets their stock in 3 days while only 17% of
the respondent gets their stock in 01 week.

GRAPH 6

SHOWS IN HOW MUCH TIME LOGISTICS GET DELIVERY OF PRODUCTS

One Day Three Day OneWeek One Month

0%

17%

46%

37%
INTERPRETATION: Here area of concern that how company can reduce the delivery time of
different products. They should provide all the logistics partner cut off time which help to make
good distribution channel and well as build the positioning of the company.
Findings
BIG BAZAAR - FOR THE INDIAN MIDDLE CLASS FAMILY

It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class. It was
started as a hypermarket format in Mumbai with approx. 50,000 sqft of space. Its values and
missions are to be the best in Value Retailing by providing the cheapest prices and hence goes
the tag-line “Is se sasta aur achcha kahin nahin”

It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the
city but the level of services offered is also very low. Usually the items are clubbed together for
offers as on the lines of Wal-mart and Carrefour and it also offers weekend discounts. It
currently operates out of 64 stores and top 15 stores register a cumulative footfall of 27 lakh a
month on an average.

The following graph shows the retail life cycle and we can say that Big Bazaar is currently at the
Growth Stage.

Cash flow
Flows

Maturity

Growth
Decline

Introduction

Time

Fig:- Showing Retail life cycle

OBSERVATIONS
 There were various observations made from the time I entered the store. They can be summed up
as follows:

Verticals inside the store relates to each category of product

Food Bazaar

Depot- books

M-bazaar

Electronic Bazaar

Furniture Bazaar

Footwear Bazaar

 Trolleys are not easily available, especially on other than ground floor.

 Little attention to cleanliness. Dust on shelves as well as some product items.

 In-house packaging not efficiently done.

 Crowded store interiors. Items are arranged in a cluttered way. Tried to stock maximum number
in limited area.

 Sign boards are not prominent. Lack of direction creates confusion.

 Family crowd is evident. Youth comprises of only around 10% of the crowd.

 Food Bazaar very efficiently managed. It is a bit over-staffed but layout is very good. Shelf space
is used very well to stock products with clear distinction.

Logistic chain
Supply in big bazzar occurs by two methods:

1. Suppliers Warehouse Internal

This type of supply chain is used in crockery items and other durable goods.

2. Vendors Big bazzar

This type of supply chain is used in food items and other FMCG.

PROBLEMS AT BIG BAZZAR LOGISTICS.

Significant losses/damages during shipping.

The next problem in setting up organized retail operations is that of supply chain logistics. India
lacks a strong supply chain when compared to Europe or the USA. The existing supply chain has
too many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor -
Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retail
chains will have to build a supply chain network from scratch. This might run foul with the
existing supply chain operators. In addition to fragmented supply chain, the trucking and
transportation system is antiquated. The concept of container trucks, automated warehousing is
yet to take root in India

Inadequate infrastructure

The lack of proper infrastructure and distribution channels in the country results in inefficient
processes. This is a major hindrance for retailers as a non-efficient distribution channel is very
difficult to handle and can result in huge losses. Infrastructure does not have a strong base in
India. Urbanization and globalization are compelling companies to develop infrastructure
facilities.

The storage infrastructure, too, is severely restricted. In 2014, India had a total warehousing
capacity of 81 million tones. Like the rest of the infrastructure sector, warehousing is highly
fragmented and unorganized.

Transportation, including railway systems, has to be more efficient. Highways have to meet
global standards. Airport capacities and power supply have to be enhanced. Warehouse facilities
and timely distribution are other areas of challenge. To fully utilize India's potential in retail
sector, these major obstacles have to be removed

Almost 78% of total freight is transported by road

Almost 78% of total freight is transported by road . But, according to the FICCI-E&Y retail
report, roads connect less than half of the half a million Indian villages. The normal distance
covered by trucks and trailers in India are 250-300 km a day, whereas the international norm is
600-800 km a day. Most roads in India are designed to carry a maximum gross weight of 16.2
tonnes, which allows for a maximum loading of about 9 tonnes. This severely restricts the ability
to transport goods on larger vehicles.

Warehouses located far from city

Some of the warehouse are located in villages and are far from the city so it takes time for goods
to reach mall.
Recommendation and
Conclusion
Recommendation

Improvement in Logistics

Big bazzar should use more better techniques for improvising its logistics operation. The
organisational structure and the business model of Wal-Mart are its winning-formula for some
markets. But this also dooms it to failure in others. The heart of the matter is high-volume-low-
cost strategy, which made it a success in cost-conscious smaller, everybody-knows-everybody
cities in the US. But this very strategy doomed it to failure in larger (anonymity, high
consumerism) cities in the US. A very high real estate cost in big cities was also detrimental to
its strategy in such cities.

Warehouse location

Though it is a cost cutting formula of big bazzar, but now the Indian scenario has changed.
Though it has its own logistics called Future logistics, it should try some other ways to improve
its in housing of goods. Many a times it happens that goods are not available to customers as the
time taken between ordering and processing is very long.

Improvement in packaging

Big Bazzar should ask suppliers to send goods with good packaging so that losses due to
breakage should be avoided. Moreover its own handling and carrying should be improved.

Infrastructure

Internal ware house of big bazzar has very low capacity. Its completely hoch- poch. Due to
insufficient space of storage losses are very frequent. Shop lifting especially internal is very high.
It should allow its suppliers to have a track of their goods so that when stock finishes they will
automatically supply.

Use of RayMedi Head Quarter

RayMedi HQ is designed to manage your chain of shops more easily. RayMedi HQ is a web-
based, easy-to-use software which gives you more control in managing your chain of shops. It
works seamlessly with your individual shops data (RayMedi RPOS/RE/DE data) and gives you a
consolidated and centralized way of managing your chain bett RayMedi HQ gives you the
Real-time business status at HQ from about every point of sale. From the head office, you can
monitor sales & inventory position at each one of your store. The software helps you in
consolidating the data from your various branches into one system and do an integrated analysis
of sales, inventory and purchase. RayMedi HQ primarily focuses on managing your branch wide
sales, purchase, inventory, receivables and profits. It helps in controlling expenses, decreasing
costs and increasing your profits.

Conclusion

Big bazzar is having its own logistics called future logistics but in near future to cope up with
changes it has to do a lot. As its one of the biggest company working at multilocation, they has to
integrate the linage between their own logistics with the private players. Below are some of the
important factors needs to be consider while defining strategies.

1. Warehouse location – As a multiplication company, location of warehouse matters, which

should be easily accessible from different location from same or different cities

2. Transport vehicles – As it has into many products like furniture’s, groceries, vegetables, cloths
etc they has to have special vehicles as per the quantity needed

3. Floor space – Company can adjust their in-house warehouse in a way which is easily
accessible from outside of company by logistic vehicles

The logistics companies at present provide services from transportation to warehousing and
inventory management. But, in the near future, they will have to expand their products basket to
include new value-added services, such as packaging, labelling and reverse logistics.

The biggest challenge that faces these companies is that they should quickly imbibe latest
technologies, such as GPC/GIS tracking of consignments, and uncork new services to cater to
corporate seeking to outsource their logistics needs. Also, the Government should come out with
a sound policy that facilitates the operations of the logistics companies.
Bibliography
1. Company annual report

2. Journals
(a) http://search.ebscohost.com

3. Magazines

(a) Business Today

(b) Business World
(c) Bazaar.com
4. News papers
(a) Standard Charted
(b) Economics Times
(c) Business Line
(d) Financial Express

5. Websites
(a)http://pantaloon.com
(b)http://bigbazaar.com
(c)http://retailbiz.com
 6. Marketing Management
Philip Kotler, PEASON PUBLICATION