IN THE NAME OF ALLAH THE MOST MERCIFUL THE MOST BENEFICIENT

Today’s business dynamics is very fast, environment is changing. To understand the

changing market behaviour the organization has to do a systematic study. A project
behaviour is a scientific and systematic study intended to catch the nerves of the problem
or issue with the application of management concept and skills. I was assigned to do a
competitive market analysis on retail outlets offering consumer electronics.

This report has been complied preliminary in partial fulfillment of the requirement for the
award of the degree of management studies programme.

I have included a brief introduction about consumer electronics in India and my findings.

HASSAN AL BANNA

PGPRM 2008-10

COMPETITIVE ANALYSIS ON CONSUMER ELECTRONICS

 CONTENT page
ELECTRONICS IN INDIA………………………………………………….. 2-3
KEY PLAYERS IN CONSUMER DURABLES SEGMENT………………. 4-5
CONSUMER ELECTRONIKS INDUSTRY – A CHALLENGE…………... 6-11

ABOUT BIG BAZAAR…………………………………………………… 12-13

7P ANALYSIS OF BIG BAZAAR………………………………………… 14-16
BRAND EXTENSION AND FUTURE POSSIBILITIES…………………. 17
CONSUMER INSIGHT AND PERCEPTION……………………………... 18-19
ADVERTISING CONCEPT……………………………………………….. 20
FACTORS THAT SHAPED BIG BAZAAR DURING ITS LIFE CYCLE.. 21-22
STRATEGIC DECISION TAKEN………………………………………… 23-24
SWOT OF BIG BAZAAR…………………………………………………. 24
COMPETITIVE STUDY OF THE COMPANIES

BIG BAZAAR……………………………………………………………… 25
SPENCER…………………………………………………………………… 26
KHOSLA ELECTRONICS…………………………………………………. 27
GREAT EASTERN…………………………………………………………. 28
E-ZONE……………………………………………………………………... 29
SALES EMPORIUM ………………………………………………………. 30
CAPITAL ELECTRONICS…………………………………………............ 31
HARMONY………………………………………………………………….. 32
FUNDAMENTAL…………………………………………………………… 33
LG SHOPPE…………………………………………………………………. 34-35
SAMSUNG…………………………………………………………………… 36-37
SONY WORLD……………………………………………………................. 38

COMPETITIVE ANALYSIS TABLE……………………………………… 39-40

POSITIVE ASPECTS ………………………………………………………. 41
NEGATIVE ASPECTS……………………………………………………… 42

ELECTRONICS IN INDIA

2
Electronics companies in India offer consumer electronics ranging from kitchen
appliances to daily utility systems. As the lives of people are gaining speed everything
from kitchen to offices have been mechanized to make the work easier and quicker. Daily
chores that used to take up hours have now reduced down to just a few minutes of
exercise. We can find a large variety of electronic gadgets catering to every demand of
our day-to-day life. The electronic shops present kitchen appliances like

o Refrigerators
o Microwave ovens
o Oven/toaster/grillers
o Food processors
o Juicer/ mixer/grinders
o Electric chimneys etc

o In varying sizes, prices and brands. To buy Electronic products and accessories In
India, all one needs to do is visit any of the electronic shops or electronics
showrooms and check out the entire range available. Electronic gadgets from
China are gaining popularity for their affordable price range.

Majority of these companies have their own retail electronics showrooms all over India
along with service centers in every city. The electric products for sale are broadly divided
into four categories:

o Mobile Phones - GSM, CDMA

o TV, Video, Audio - Televisions, DVD Player, I pods, Camcorders, Audio
systems, Home Theatre systems, Mp3 Players, Mp4 Players, Digital Still
Cameras.
o Information Technology Products - Computers, Laptops, Monitors, Hard Disk
Drives, CD/ DVD ROM, CD/DVD Writer, Laser printers and laser based multi
functional products, Fax etc.

3
 o Home Appliances - Microwave oven, Air-conditioner, washing machine,
refrigerator etc.

Each of these electronic products have their own usage and importance in our lives.
Mobile Phones have become a part of our daily wardrobe. Televisions and Audio
Systems; Food Processors and Refrigerators; Washing Machines and even Computers
have become some of the mandatory items in our lives. DVD Players, Mp3 and Mp4
Players have become toys for teenagers and the still older people have Laptops, I-Pods,
Digital Cameras, Camcorders and Home Theatre Systems as their toys. As the population
density in the metros is increasing the buildings are clustering together which is eating up
the space required for everything. The demand for lighter and more compact electronic
gadgets is on a high. Electronics that require minimum space with minimum power
utilization and maximum output are high on the priority levels of the buyers. We can find
top companies like LG, Samsung, Philips, Panasonic, BPL, Sony etc. offering electronic
appliances to suit all pocket and usage needs. The Indian consumer is now aware of the
international standards and the Latest electronic items available in the market. Imported
electronic goods are breaching the Indian electronics market that has shown a huge
appetite to all the imported appliances.

China takes the flagship in this case. The middle class accounting to the mass of the
Indian population swears by Chinese electronic goods that are far more affordable than
their Indian or other international counterparts. Many electronic products manufactured
In China are imported and assembled in the local markets. India is one of the largest
electronic products markets in Asia with all the latest and quality electronics for sale.
Indian electronic companies like BPL; Godrej etc. have shown great potential in the
international market and have been expanding their reign across the globe. The
consumers chose smartly the electronics satisfying their requirements and providing best
value for money.

4
KEY PLAYERS IN CONSUMER DURABLES SEGMENT :-

COMPANIES PRODUCTS

Videocon Industries Refrigerator, Washing machine ,Television, Air conditioner,

Oven.

Godrej Refrigerator, Washing machine, Air conditioner, Oven

Whirlpool India Refrigerator, Washing machine, Air conditioner, Oven

Voltas Refrigerator, Air conditioner.

Panasonic Television, DVD players, Air conditioner, Refrigerator.

Sony Television, Music system/DVD players.

Samsung Television, DVD players, , Air conditioner, Refrigerator,

Washing machine, Oven.

LG Television, DVD players, Refrigerator, Washing machine, Air

conditioner , Oven.

Electrolux Refrigerator, Vacuum cleaner, Washing machine, Air

conditioner, Oven.

5
Bajaj electronics Geysers, Toaster, Juicer/mixer, Electric fan.

Eureka forbes Vacuum cleaner, Water purifier.

Philips Television, Oven, DVD players, Juice/mixer, Iron.

Onida Television, Oven, Air conditioner, DVD players.

Hitachi Refrigerator, Washing machine, Air conditioner.

Haier Refrigerator, Washing machine, Television, Music system.

Others Sharp- Television, Refrigerator.

Blue Star – Air conditioner.
IFB- Washing machine, Oven.
Morphy- Oven, Toaster, Iron.
Sanyo- Television, Refrigerator, Washing machine.
Kenstar- Water purifier, Juicier/mixer, Oven.
Usha- Fans, Juicer/mixer.
Glen- Chimney.

6
 CONSUMER ELECTRONICS INDUSTRY – A CHALLENGE

Driven by factors including a rise in disposable income among the rapidly growing
middle class and increasing acceptance of newer technologies and products among the
masses, the Indian consumer-electronics industry reached $3.4 billion in 2005, up 14
percent from $3 billion in 2004, according to iSuppli Corp.

iSuppli projects that the Indian consumer-electronics industry will expand at a Compound
Annual Growth Rate (CAGR) of 11 percent through 2010, when it will exceed $5.8
billion. Figure 4 presents iSuppli's forecast of India's domestic consumer-electronics
industry.

Figure 4: India Consumer Electronics Industry Forecast (Revenue in Millions of U.S.

Dollars)

Source : iSuppli Corp. | Jan 2009

Video boom
"An estimated 90 percent of India's consumer-electronics market is being driven by
demand for video products, including color TVs, set-top boxes and DVD players," said
Jagdish Rebello, principal analyst with iSuppli.

7
"iSuppli expects this robust growth to continue through the next few years. The Indian
economy is expanding strongly, with GDP growth projected at a healthy rate of between
7 and 8 percent annually. This economic growth is causing a rise in disposable incomes,
especially among the middle class."

Giving credit
The credit culture also is starting to gain traction among India's middle class, Rebello
noted. Higher consumer confidence is leading to greater credit uptake, which now is at its
highest level in history, resulting in increased sales of consumer electronics products.
Manufacturers are taking advantage of the increased propensity for credit buying by
teaming with financial institutions to offer attractive loans to consumers.

Manufacturing momentum
Domestic manufacturing of electronics within India also is gaining momentum. In
product categories like televisions, DVD players and set-top boxes, there have been
tremendous increases in the proportion of products that are locally manufactured and/or
assembled. Domestic manufacturing is allowing companies to tackle price erosion, and to
gain flexibility in order to cater to local demand as well as to the export market.

However, iSuppli believes that manufacturing in India of digital consumer products, such
as Digital TVs (DTVs), will not increase significantly in the immediate future. India now
lacks the infrastructure for sophisticated electronics manufacturing.

Consumer challenges
Despite the growth projected for the consumer-electronics industry in India, significant
challenges remain for companies targeting the nation's market.

New players are entering the market and existing OEMs and Electronics Manufacturing
Services (EMS) providers are increasing their manufacturing capacity. This is spurring a
glut in supply which, together with aggressive price wars, is adversely affecting the
margins and profitability of companies.

8
Furthermore, although the industry has been experiencing healthy growth over the past
few years, the penetration of consumer electronics products has been low, especially in
rural India.

In order to tap the rural markets, which are growing at a good pace, companies will need
to strengthen their distribution networks in semi-urban and pastoral areas. These channel
expansions will be expensive and the Return On Investment (ROI) will be lower,
especially at the start. This will be a significant challenge for players to judiciously plan
their expansions to increase their sales.

Finally, new product launches tend not to catch on quickly among a large portion of the
population in India. This is because of a lack of awareness about products or
technologies, although a consumer base exists for them.

Companies will need to develop ways to popularize these products. Given the Indian
consumers' aversion to new products, this aspect becomes important. Higher uptake of
newer technologies will help companies to improve their top line.

Despite these challenges, India remains an attractive market for multinational players in
the consumer-electronics industry.

Consumer Durables: Industry size, growth and trends

During FY08, volume share of the single largest consumer durable was colour TVs at
30%, followed by refrigerators and air conditioners at 18% and 13% respectively.
Washing machines and other assorted consumer durables captured a share in the total
volume by 5% and 34% respectively.

9
Source : supply Corp. | Jan 2008

Television Sets: Growth in sales

FY08 witnessed the highest number of TV sets being sold when compared to the previous
two corresponding years. As per CMIE, growth in sale of TV sets was slower at 14.3%
during FY08 when compared to a 21% growth in the previous year. On the demand side,
domestic consumption of refrigerators declined by almost 4% between FY05 and FY08,
while imports climbed. The imposition of anti-dumping duties on import of colour
picture tubes will hit the manufacturing costs of CTVs produced in India. Further, the
reduction in the general rate of excise duty (CENVAT) from 16% to 14% as proposed in
the Union Budget for FY09 will not have any effect on the selling price of colour TVs.
This is because the combined effect of rising input costs and a higher interest burden will
negate the effect of such reduction.

Sales of Consumer Electronics Companies

The consumer electronic goods industry underwent a slowdown during the last quarter of
FY08. According to CMIE, the industry witnessed a slower 10.5% growth in the Mar 08

10
quarter compared to a substantial 17.4% growth in the previous corresponding quarter.
Domestic consumer electronic companies together reported a subdued sales growth of
almost 17% in FY07, on the back of a robust 40.5% growth in FY06.

Source : supply Corp. | Jan 2007

While the larger companies reported robust growth in sales, it was the smaller ones
whose sales were negatively affected that eventually brought down the industry sales
growth.

Industrial Growth

The industrial sector grew in moderation during FY08 at 8.5% on the back of a
comparatively higher growth of 11.5% during the previous fiscal. The country’s real
GDP grew by 9% during FY08; a tad lower than 9.6% in the previous fiscal.

Source : supply Corp. | Jan 2008

11
The consumer durables segment witnessed a fall in production particularly for items
where consumer preferences have shifted towards newer products. Shifting in the
consumption pattern coupled with rising input costs of steel, iron ore etc, may further
affect the production levels of these goods. On the supply side newer variants of
consumer durables on the back of technological advancements have flooded the market,
whereas on the demand side it is the prospering middle class and consumerism which
have led to changing demand patterns.

Foreign Direct Investment

Source : supply Corp. | Jan 2008

The net Foreign Direct Investment (FDI) inflows to India increased from US $ 22 bn in
FY07 to US $ 32.3 bn in the following fiscal. During 2007 and 2008, the share of FDI in
the electronic goods segment remained flat at 0.2%, coming on the back of a 1.5% share
in CY06.

12
ABOUT BIG BAZAAR

Big Bazaar is Indian personification of retail. It’s like an Indian bazaar or Mandy or
meal, the environment created by traders to give shoppers a sense of moment. Its
personality is of being an entity away from fancy or pretty and being authentically "no-
frills". Inshore Binyamin never hired any foreign consultant for Big Bazaar which is
evident from Indian-specific personality of the brand. The brand’s personality is self-
explanatory by its tag-line only. This statement places Big Bazaar at the top of
customer’s mind. It reflects that entrepreneurship and simplicity are the essence of
character of Big Bazaar. To use predatory pricing is not in the personality of Big Bazaar,
they never sell goods below the price they have purchased it. Big Bazaar, the "Indian
Wal-Mart", is the modern Indian family's favorite store. Big Bazaar symbolizes modern
retail, the business which isn’t looked up to in our country, is now in the eyes of many
multi-national biggies. Big Bazaar has shown a robust growth in recent years.

Source :- economic times 2008

Big Bazaar is not just another hypermarket. It caters to every need of your family. Where
Big Bazaar scores over other stores is its value for money proposition for the Indian
customers.
At Big Bazaar, you will definitely get the best products at the best prices - that’s what we
guarantee. With the ever increasing array of private labels, it has opened the doors into
the world of fashion and general merchandise including home furnishings, utensils,
crockery, cutlery, sports goods and much more at prices that will surprise you. And this is
just the beginning. Big Bazaar plans to add much more to complete your shopping
experience.

13
14
7P Analysis of Big Bazaar

7P Marketing Mix is more useful for services industries and knowledge intensive
industries. Successful marketing depends on number of key issues. The seven keys issues
are explained as: -

Product

Big Bazaar offers a wide range of products which range from apparels, food, farm
products, furniture, child care, toys, etc. Products of all the major brands are available at
Big Bazaar . Also, there are many in house brands promoted by Big Bazaar. Big Bazaar
sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-ovens. In
all, the fashion, electronics and travel segments made up about 70% of sales. Last year,
these categories made up only about 60%.

Price

The tag-line is "Is se siesta aura ache aura chain nail". They work on the model of
economics of scale. There pricing objective is to get "Maximum Market Share". The
various techniques used at Big Bazaar are: -

• Value Pricing (EDLP - Every Day Low Pricing): Big Bazaar promises
consumers the lowest available price without coupon clipping, waiting for
discount promotions, or comparison shopping.
• Promotional Pricing: Big Bazaar offers financing at low interest rate. The
concept of psychological discounting (Rest. 99, Rest. 49, etc.) is used as
promotional tool. Big Bazaar also caters on Special Event Pricing (Close to Dial,
Guido Padua, and Durra Poona).
• Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and
non-peak hours or days of shopping is also a pricing technique used in Indian
retail, which is aggressively used by Big Bazaar.
• Bundling: Selling combo-packs and offering discount to customers. The combo-
packs add value to customer.

15
Place

Big Bazaar stores are located in 50 cities with 75 outlets. Big Bazaar has presence in
almost all the major Indian cities. They are aggressive on their expansion plans.

Promotion

Big Bazaar started many new and innovative cross-sell and up-sell strategies in Indian
retail market. The various promotion techniques used at Big Bazaar include "saal ke
sabse saste teen din", Future Card (the card offers 3% discount), Shakti Card,

Brand Endorsement by M. S. Dhoni, Exchange Offer - ‘Junk Swap Offer’, Point-of-

Purchase Promotions.

Advertising has played a crucial role in building of the brand. Big Bazaar advertisements
are seen in print media, TV, Radio (FM) and road-side bill-boards.

People

They are one of the key assets for any organization. The salient features of staff of Big
Bazaar are: -

Well-trained staff, the staff employed by Big-Bazaar are well-suited for modern retail.

Well-dressed staff improves the overall appearance of store.

Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so staff
is empowered to take innovative steps.

Employs close to 10,000 people and recruits nearly 500 people every month.

Use of technology like scenario planning for decision making.

Multiple counters for payment, staff at store to keep baggage and security guards at every
gate, makes for a customer-friendly atmosphere.

16
Process

The goods' dispatch and purchasing area has certain salient features which include: -

• Multiple counters with trolleys to carry the items purchased.

• Proper display / posters of the place like (Television, Oven, etc.).
• Home delivery counters also started at many places.

Physical Evidence

It deals with the final deliverable or the display of written facts. This includes the current
system and available facilities.

17
Brand extensions and Future possibilities

Future Group is planning to split Big Bazaar into two entities. One will be front-end
consumer-oriented entity and other will be for back-end operations. Back-end entity may
enter into joint venture with leading international cash and carry retailers. Foreign
partners like Carrefour, Metro, Costco, etc., are in the race, and their role will be to
improve efficiency in sourcing and logistics, which will help drive down prices and boost
margins.

Source :- Buyer Behavior: buyerbehaviour.blogspot.com

The front-end operations will be further divided in three categories, Big Bazaar Express
with store area less than 40,000 sq. ft., Standard Big Bazaar with store area between
40,000 to 75,000 sq. ft., and Big Bazaar Supercentres with store area more than 75,000
sq. ft.. Future Group is also planning to distribute financial products like consumer loans
and insurance through Big Bazaar outlets.

18
Consumer insights and perceptions

Big Bazaar is based on 3-C theory of Inshore Binyamin. The 3-C symbolize Change,
Confidence and Consumption, and according to this theory, "Change and confidence is
leading to rise in Consumption". They divided Indian customers in three categories: -

India One

Consuming class, constitutes only 14% of Indian population.

They are upper middle class and most of customers have substantial disposable income.

India Two

Serving class which includes people like drivers, house-hold helps, office peons, washer-
men, etc.

For every India One, there are at least India Two and have around 55% of Indian
population.

India Three

Struggling class, remaining population of India.

Cannot afford to inspire for better living, have hand-to-mouth existence.

Needs cannot be addressed by current business models.

The potential customers of Big Bazaar are India One and India Two. The customer
insights were developed by close observation of the target set. The insights that came out
were: -

• The clean and shiny environment of modern retail stores creates the perception
that such store are too expensive and exclusive, and are not meant for India Two.

19
• India Two finds moves and find a lot of comfort in crowds, they are not
individualistic. They prefer to be in queues.
• Indian-ness is not about swadeshi, it’s about believing in Indian ways of doing
things.
• Indian customers prefer to purchase grains, grams, etc., after touching them, so
it’s better not to sell in polythene packs. Big Bazaar has counters where you can
touch wheat, rice, sugar, etc., before purchasing.
• Advertisements about schemes and offers through local newspapers, radio in local
languages, inspires customer more than the traditional ways.
• The guards, salesman at the Big Bazaar outlets should not look smarter than
customer, so they prefer not to have tie, etc., in their uniform.
• Hypermarkets in India should be situated in city unlike western countries where
they are located away from city.
• Purchased bags / goods should be sealed at check-out as customer can enter and
exit multiple times.
• For Indians, shopping is an entertainment; they come in groups, with families so
Big Bazaar should offer something for every section of family. That also led
separate section for clothes, vegetables, food, etc., that is multiple clusters within
a bazaar.
• Developed a diversity tracing cell to cater local patterns, demands, festivals, as
every region of customers has unique demands.

20
Advertising concept

Advertising is an essential component of brand building. The advertisement and brand

building is done through various ways, the techniques used are: -

Tag-line: Big Bazaar tag-lines are the key components of advertising. These tag-lines are
modified according to demographic profile of customers. These catch-phrases appeared
on hoardings and newspapers in every city where Big Bazaar was launched. Everybody
understood and connected easily with these simple one-liners. The catch-liners include
"Hindi - Chane ke bhaw kaaju", "Bengali - Rui er dame illish", "Hindi - Stall ke bhaw
balcony", etc.

Print Ads: Big Bazaar newspaper advertisements are present just before launch of any
new scheme. This creates aura about the Big Bazaar brand in the minds of customers.

TV Ads: Inshore Binyamin spends a lot of money in brand building exercise. Big Bazaar
commercials are shown on various channels in India. Presently, Fashion@Big Bazaar
commercial is aired.

Road-side Advertisements: Big Bazaar bill-boards are displayed on prime locations in

various cities as a brand building exercise. They display the catch-phrases now-a-days.

Radio Ads: This technique is used in cities like Sangli (Tier 1 / Tier 2 cities). Now-a-
days, it is replaced by advertisements on FM channels. This informs customers about all
new happenings at Big Bazaar.

Fashion Shows: "FASHION @ BIG BAZAAR - Desh Badla, Bhesh Badlo" is the latest
invention of the Indian iconic brand. In an effort to take the Fashion to the masses, Big
Bazaar, the flagship hypermarket brand of retail chain of Future Group, organized a
three-day Fashion Show on the streets of Bandra, Mumbai.

Brand Endorsement by Celebrity: Big Bazaar is always associated with celebrities for
advertising and marketing of its brand name—M S DHONI, ASIN .

21
Factors that Shaped Big Bazaar During its Life Cycle

The Big Bazaar brand name is in its growth stage. Pantaloon Group faced various small
and large scales troubles in the introductory stage of the brand.

Present years are the high growth years in retail sphere as market has high potential to
sustain growth. The sales are increasing, more and more firms are coming to market,
foreign players are entering into retail sector, and pie of organized retail is increasing in
retail sector.

The factors that shaped the brand during its life cycle are: -

Influence of Sarvana Stores Located in Theyagraya Nagar, Chennai

Many people think that Big Bazaar was inspired by Wall-Mart but the truth is that
Inshore Binyamin and his team members are neither inspired by US ways of doing
retailing nor they have been to US much. The credit for foundation and inspiration goes
to Saravana Store, a family-run 25-years-old store, whose philosophy was - low margin,
high turnover. In that store, food, groceries, clothes, everything had a separate section. It
had around 120 people just to manage crowd. The single shop was doing business of
more than INR 200 Crore per year. This shop was the template for Big Bazaar.

22
Observing Customers Regularly
Regular customer feedback is also an influential factor for the success of Big Bazaar. The
Big Bazaar has a separate team that looks for customer’s purchasing pattern and how they
like or dislike products, how they approach particular products. For example, unlike other
stores where the most expensive and catchy item is placed at the front display, Big
Bazaar places the "Value for Money" items at check-out points.

Imbibed Entrepreneurial Spirit in Organization

Decision making power is given to every level of employees at Big Bazaar. Inshore
Binyamin has given risk-taking power, which led to exposure of entrepreneurial spirit in
every employee. Everybody in Big Bazaar operates with speed and confidence when it
comes to decision making.

Building on Core Values

Core values of Indian-ness, valuing and nurturing relationships, and simplicity shaped the
brand. Inshore Binyamin always believes in long-term relationships, with customers,
suppliers and employees. Once thinking about offering gifts to employees close to Dial,
Inshore Binyamin suggested giving them wall-paints to keep their house clean. The paint
is used in Indian culture to keep house clean and brings freshness. The motive behind this
was to keep everything clean and bring freshness in organization.

23
Strategic Decisions Taken

Real Estate Game

For a retailer, location is one of the most important things. According to Inshore
Binyamin, real estate cost should be less than 5% of total sales of store in order to
provide maximum benefits to customer.

The strategic decisions to secure spaces before other retailers join in have resulted in
cost-saving. Also, it has created early presence in market.

Nurturing Relationships

Inshore Binyamin follows strategy to develop trust and nurture relationships with
suppliers. This trust led to strategically correct decisions most of the time. Whoever
works with Future Group, either leaves in initial deals or continues forever.

Use of Technology, Scenario-Planning & Story-Telling

Big Bazaar planning and design used advance technologies like scenario-planning and
story-telling. These techniques were mainly used for store-design layout, store-location
selection. The strategy to use user-focused, prototype-based development tool made the
brand adapt to the fast-changing external environment.

Design Management

Design-led thinking helped Big Bazaar to achieve ‘customer-first’ objective and

ultimately led to better financial performance. Big Bazaar strategy to focus on design led
to creation of Idiom, an independent design and consultancy firm, based in Bangalore.
They are one of the few organizations in India having economists, ethnographers and
sociologists working across various teams as a part of Design Management team.

24
Back-end Operations, Supply Chain

Harvard Business School just did a case study on Pantaloons' Supply Chain and it says
that Pantaloons' is the most cost-effective supply chain in the world. India may not have a
modern supply chain but it definitely has a cost-effective one. Retailers have made use of
the existing supply chain.

SWOT OF BIG BAZAAR

STRENGTH
• High brand equity in evolving retail
markets.
• State of art infrastructure of the Big
Bazaar outlet.
• All major brands under one roof.
• Variety of products under one roof
increases customer time and
available choices.
OPPORTUNITY
• Organized retail is just 4.15 % of
total pie of Indian retail market.
• Evolving customer preference in
recent years.
WEAKNESS
• Unable to meet store opening target
till now.
• Product prices are high in
comparison to other retail outlets.
• Falling revenue per square feet.
THREATS
• Unorganized retail market of India.
• Great promotional offers by it
competitors- khosla, Spencer,
Harmony.
• Discounted product offered by its
competitors- Great eastern, Sales
emporium, Spencer.
• Vast product range from Great
Eastern and Spencer.
• Free services and free gifts provided
by its competitors- Khosla and
Spencer.

The SWOT Analysis of current strategy of Big Bazaar elaborates the core competencies
and areas of improvement.

25
Company name :- BIG BAZAR.
Company location :- LIC building.
Company format :- Hyper market.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Fan, Vacuum cleaner, Water purifier, Geyser,
Toaster, Juicer/Mixer/Grinder, Iron, Rice cooker .
Brands available:- LG, Samsung, Koryo, Onida, Kenstar, Whirlpool, Morphy, Bajaj,
IFB, Panasonic, Philips, Sensei, Sharp, Sony, Eureka forbes, Jaipan,
Inalsa, Usha, Kenwood, BPL, Kent.
What’s hot:- The most number of brands and products available under one roof.
What’s not:- Product Brand
Air conditioner Panasonic, Videocon, Godrej, Electrolux,
Blue star, Hitachi , Haier, Voltas.

Refrigerator Panasonic, Godrej, Voltas, Samsung, LG,

Electrolux, Hitachi, Haier, Sharp.
Washing machine Godrej, Electrolux, Hitachi, Haier
Television Videocon, Sony, Haier, Sanyo, Akai, TCL,
Thomson, Toshiba, Aiwa.
Music system/DVD Panasonic, Samsung, Onida, Haier.
Chimney Glen
Oven Videocon, Godrej, Electrolux, Philips, IFB.
Laptops HCL, Lenevo, Sony, HP, Samsung, LG,
Compaq, Acer.

Other information:- In 2008, Big Bazaar opened its 100th store, marking the fastest ever
organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in
Kolkata, Hyderabad and Bangalore.

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Company name :- SPENCER.
Company location :- South city.
Company format :- Hyper market.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Fan, Vacuum cleaner, Water purifier, Toaster,
Juicer/Mixer/Grinder, Iron, Rice cooker .
Brands available:- LG, Samsung, Gerat, Onida, Kenstar, Whirlpool, Morphy, Bajaj,
IFB, Panasonic, Philips, Videocon, Voltas, Electrolux, Kenwood,
Sony, Eureka forbes, Maharaja, Inalsa, Usha, Kent, Godrej.
What’s hot:- Free instillation of Split AC. Videocon 21’ slim Rest. 4900/-
What’s not:- Product Brand
Air conditioner Panasonic, Videocon, Blue star,
Hitachi , Haier.
Refrigerator Panasonic, Voltas, Hitachi, Haier, Sharp.
Washing machine Hitachi, Haier
Television Panasonic, TCL, BPL, Akai, Aiwa,
Thomson, Toshiba, Haier, Sanyo.
Music system/DVD Onida, Haier.
Chimney Glen
Oven Electrolux, Philips.
Laptops HCL, Lenevo, Sony, HP, Compaq, LG,
Samsung, Acer.
Water purifier Whirlpool.

Other information:- Spencer’s Retail Limited is one of India’s largest and fastest
growing multi-format retailer with 400 stores, including 32 large format stores across 66
cities in India.
Free dinner set 20p with Videocon Washing machine.
Maharaja Nano Mixer grinder Rest. 1075/-

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Company name :- KHOSLA ELECTRONICS.
Company location :- Park circus.
Company format :- Retailer.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Water purifier, Iron, Juicer/Mixer/Grinder.

Brands available:- LG, Samsung, Onida, Kenstar, Whirlpool, Bajaj, Philips,

Sharp, Sony, IFB, Voltas, Electrolux, Hitachi, Haier, Videocon,
Kenwood, BPL.
What’s hot:- Free gifts, exchange offer and low priced goods.
What’s not:- Product Brand
Air conditioner Panasonic, Blue star.
Refrigerator Panasonic, Voltas, Sharp.
Television Panasonic, TCL, Toshiba, Thomson, Sanyo
Music system/DVD Panasonic.
Oven Videocon, Philips, IFB.
Laptops HCL, Lenevo, Smasung, LG, Sony, HP,
Compaq, Acer.
Water purifier Kent, Whirlpool, Eureka forbes.

Other information:- Khosla has less number of brands to offer to its customer. But the
best buy price of its product is less compared to any retail outlet. The technical know how
of its employees makes it easier of its customer to make the purchase. The customers can
easily rely on the information provided by its employees.

Free gift worth Rest 7000 with 22” LCD – Tatasky connection, Holiday package.
Free gift worth Rest 12000 with 26” LCD – HD DVD player, Holiday package.
Free gift worth Rest 20000 with 32” LCD –10.2 MP camera with 5X optical zoom.
DVD player, Holiday package, 2GB+ carry case
Free gift worth Rest 25000 with Refrigerator- 10.2 MP camera with 5X optical zoom.

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 DVD player, Holiday package, 2GB+ carry case
Fully auto washing machine.
Company name. :- GEAT EASTERN.
Company location :- Dalhousie.
Company format :- Retailer/Dealer.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Fan, Vacuum cleaner, Water purifier, Toaster,
Juicer/Mixer/Grinder, Iron, Rice cooker.
Brands available:- LG, Samsung, Onida, Whirlpool, IFB, Indiset, Haier, Hitachi,
Mosabear, Philips, Sanyo, Videocon, Sansui, Sharp, Sony,
Aquasure, Supremo, Glen, Godrej, Electrolux.
What’s hot:- A huge range of product to choose from.
What’s not:- Product Brand
Air conditioner Panasonic, Videocon, Godrej, Electrolux,
Blue star, Hitachi , Haier, Voltas.

Refrigerator Panasonic, LG, Sharp.

Washing machine Hitachi.
Television Haier, TCL, BPL, Onida, Aiwa, Akai,
Toshiba, Thomson, Panasonic, LG.
Music system/DVD Panasonic, LG, Onida, Haier.
Oven Videocon, LG.
Laptops Sony, LG, Samsung, Acer.
Water purifier Kent, Philips, Whirlpool, Eureka forbes.

Other information:- Located at Ultadanga, the outlet has the widest range of products to
offer. The outlet also has its own service center at Chandni. The service space is bigger
than that of Big Bazaar and the products offered are relative cheap. The outlet doesn’t
invest exclusively on promotions.

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Company name :- E-ZONE.
Company location :- E-Mall.
Company format :- Hyper market.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Fan, Water purifier, Rice cooker, Laptops,
Toaster, Juicer/Mixer/Grinder, Iron.
Brands available:- LG, Samsung, Koryo, Onida, Kenstar, Whirlpool, Morphy, Bajaj,
IFB, Philips, Sensei, Sharp, Sony, Eureka forbes, Hitachi, Godrej,
Inalsa, Usha, Kenwood, HP, HCL, Lenevo, Acer, Compaq,
Maharaja, Whirlpool.
What’s hot:- A huge product range. Customer friendly attitude. Highest number of
Brands.
What’s not:- Product Brand
Air conditioner Panasonic, Videocon, Electrolux,
Blue star.
Refrigerator Panasonic, Voltas, Electrolux, Videocon.
Washing machine Electrolux.
Television Videocon, Panasonic, Toshiba, Akai, TCL,
Aiwa, Thomson, BPL, Onida.
Music system/DVD Panasonic, Onida, Haier.
Oven Electrolux.
Water purifier Kent, Philips.

Other information:- Unlike Big Bazaar, Ezone also has the maximum brands under one
roof. It also has a wide range of product to chose from. The few things that distinguishes
between the two companies are its product display, product segmentation and physical
evidence.

30
Company name : SALES EMPORIUM.
Company location :- Lansdowne.
Company format :- Retailer.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Water purifier, Laptops.
Brands available:- LG, Samsung, Onida, Whirlpool, Panasonic, Philips, Videocon,
Electrolux, Sanyo, Hitachi, HCL, LG, Godrej, Sony.
What’s hot:- Products available at easy installment. Spot finance for credit holder
What’s not:- Product Brand
Air conditioner Blue star, Voltas.
Refrigerator Voltas, Hitachi, Haier, Videocon, Sharp.
Washing machine Haier, IFB.
Television Videocon, Philips, Sharp, Toshiba, TCL,
Akai, BPL, Sansui, Thomson, Aiwa.
Music system/DVD Haier, Onida, Sony.
Chimney Glen
Oven Videocon, Morphy, Philips, IFB.
Laptops Lenevo, Sony, HP, Compaq, Acer.
Water purifier Kent, Eureka forbes, Whirlpool.

Other information:- Sales Emporium has been providing its services for over 45 years
now and is one of the few retailers providing Panasonic Split AC and other Panasonic
products along with Harmony. The service space is less compared to that of Big Bazaar.
Unlike Khosla, Sales emporium also has free gifts to offer to its customer and the prices
of its product are relatively lower than that of Big Bazaar.

31
Company name :- CAPITAL ELECTRONICS.
Company location :- Ultadanga.
Company format :- Hyper market.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Vacuum cleaner, Water purifier, Laptops,
Toaster, Juicer/Mixer/Grinder, Iron, Rice cooker.
Brands available:- LG, Samsung, Koryo, Onida, Kenstar, Whirlpool, Akai, TCL,
Hyundai, Bajaj, IFB, Toshiba, Philips, Sansui, Sharp, Sony, Eureka
forbes, Acer, HP, HCL, Zenith, BPL, Haier, Videocon.
What’s hot:- LG steam washer dryer :- WD 1457ERD.
What’s not:- Product Brand
Air conditioner Panasonic, Electrolux, Blue star,
Hitachi , Haier, Voltas.
Refrigerator Panasonic, Voltas, Hitachi, Haier,
Electrolux, Sharp.
Washing machine Electrolux, Hitachi.
Television Sanyo.
Music system/DVD Panasonic.
Chimney Glen
Oven Electrolux, Philips, IFB.
Laptops Lenevo, Sony, LG, Samsung.
Water purifier Kent, Whirlpool.

Other information:- The company offers easy installment facility for almost all items.
It has a similar sales strategy to that of sales emporium.
The brands hugely missing are Electrolux and Panasonic. The outlet has a wide range of
products to choose from. The outlet has its own service center located at Chandni which
is an added plus point for the outlet.

32
Company name :- HARMONY.
Company location :- Park street.
Company format :- Retailer.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD, Water purifier.
Brands available:- Samsung, Onida, Panasonic, Philips, Sharp, Sony, Eureka forbes,
Voltas, TCL, Mosabear, kent.
What’s hot:- Panasonic split AC---At the lowest possible price.
What’s not:- Product Brand
Air conditioner LG, Godrej, Electrolux,
Blue star, Hitachi , Haier, Voltas.

Refrigerator Godrej, Voltas, Samsung, LG,

Electrolux, Hitachi.
Washing machine LG, Godrej, Electrolux, Hitachi,
Haier
Television Videocon, Haier, LG, Sanyo, TCL, BPL,
Akai, Aiwa, Toshiba, Thomson, Onida.
Music system/DVD Samsung, Onida, Haier.
Chimney Glen
Oven Videocon, Godrej, LG, Philips,
IFB.
Laptops HCL, Lenevo, Sony, HP, Compaq, Acer.
Water purifier Eureka forbes, Philips, Whirlpool.

Other information:- The outlet is providing three huge offers :-

• Super 6 offer---free gifts. Voucher, free holiday-India/international.
• Super pack 1—Refrigerator + oven.

33
 • Super pack 2--- Refrigerator + steel burner.
The brand missing is LG and Videocon. The outlet has a poor product display and non
availability of various products and brands.

Company name :- FUNDAMENTAL.

Company location :- South city.
Company format :- Retailer.
Products available:- Refrigerator, Washing machine ,Television, Air conditioner, Oven,
Music system/DVD.
Brands available:- LG, Samsung, Whirlpool, Sony, Hitachi.
What’s hot:- The outlet has good display of products.
What’s not:- Product Brand
Air conditioner Panasonic, Godrej, Electrolux,
Blue star, Haier, Onida, Voltas.

Refrigerator Panasonic, Godrej, Voltas, Electrolux,

Hitachi, Haier, Videocon, Sharp.
Washing machine Godrej, IFB, Sanyo, Electrolux,
Hitachi, Haier
Television Videocon, Panasonic, Philips, Onida,
Toshiba, Thomson, TCL, BPL, Akai, Sharp,
Haier, Sanyo.
Music system/DVD Panasonic, Philips, Onida, Haier.
Chimney Glen
Oven Videocon, Godrej, Morphy, Onida,
Philips, IFB.
Laptops HCL, Lenevo, Sony, HP, Compaq, Acer.
Water purifier Kent, Philips, Whirlpool, Eureka
forbes.

34
Other information:- The only brands available are LG, Samsung, Whirlpool, Sony,
Hitachi. Non availability of products and brands are its negativity. The outlet offers no
discount on products and the price of products are comparatively high than that of most
retailer. The outlet makes no effort towards promotion of products/brands.

Company name :- LG SHOPPE.

Company location :- E-Mall.
Company format :- Stand alone outlet.
Products available:- Television, Washing Machine, Air conditioner, Oven, Mobile,
Refrigerator, Music system/DVD.
Brands available:- LG
What’s hot:- LG LCD--- Scarlet, Jazz.
LG Front Loader---- WD-1437*FD--- LG Steam Direct Drive
washing machine gives you the benefit of energy and water saving.
It also provides Steam Refresh function which effectively removes
wrinkles and odors with hundreds of steam particles in high
temperature.
Showcase your child's talent in the LG Lead XI Contest and fly to
England along with your child. This June ICC Twenty20 World Cup
in England is going to witness something unique in the history of
Cricket. LG together with ICC takes pride to introduce a new
concept of singing the National Anthem before beginning of the
game. LG is looking for eleven talented children who will handhold
the Indian Cricket Stars in England and the world will watch them
leading the cricketers to the ground.

What’s not:- Poor after sales service. Delivery of product may take more than 48
hrs depending on availability of product. Poor after sales service and
non availability of products.
http://www.consumercomplaints.in/?search=LG

35
Other information:- In November 2002, LG Electronics India (LG), one of the leading
consumer durables companies in India, launched advertising campaigns featuring
cricketers.
LG announced that it would release 22 ad films featuring world-class cricketers to
strengthen its association with cricket.
The campaign, 'Cricket First,' which featured captains of the 14 teams participating in
World Cup 2003, highlighted the spirit of cricket with a tagline, 'Captains of Cricket
World, for the Captain of Consumer Electronics and Home Appliances.

The company announced that it would spend around Rest 400-500 million on advertising
during the World Cup. Analysts felt that LG might reap rich benefits by associating itself
with cricket in a cricket crazy country like India.

Since 1997, when LG entered India, it has emphasized on marketing. Analysts felt that
LG was trying to sell a brand of consumer durables using an FMCG marketing model,
and was trying to create a mass market for a brand, which had a premium image.

Like the marketing of FMCG products, LG's marketing was heavily dependent on
advertising. Its ad spend to sales ratio at 5-6% of sales was very close to that of FMCG
giant HLL. By 2002, LG was the market leader in Colour Televisions (CTVs), air
conditioners, microwave ovens, semi automatic washing machines and frost-free
refrigerators

36
Company name :- SAMSUNG.
Company location :- E-Mall.
Company format :- Stand alone outlet.
Products available:- Television, Washing Machine, Air conditioner, Oven, Mobile,
Refrigerator, Music system/DVD, Notebook.
Brands available:- SAMSUNG
What’s hot:- Upgrade offers on Samsung Flat TV.
The company offers its sleek J700 multimedia phone with every
Samsung notebook.
What’s not:- Delivery of product may take more than 48 Hrs depending on
availability of product. Poor after sales service and non availability
of products.
http://www.complaintsboard.com/?search=smasung

Other information:- In 1998, South Korea's leading consumer electronics major, Samsung
Electronics Corporation (Samsung), entered into an agreement with the International
Olympic Association to sponsor the 1998 Seoul Olympics. According to company
sources, Samsung wanted to sponsor Olympics to establish itself as a global brand.

Analysts felt that by associating itself with the Olympics, Samsung would increase its
brand visibility and brand recall among its consumers worldwide. They also pointed out
that to become the next Sony (Refer Exhibit I) of the consumer electronics market,
Samsung would have to invest heavily in marketing.

37
In the late 1990s, Samsung entered into various marketing alliances with companies
worldwide and sponsored events to enhance its brand awareness. Due to its marketing
efforts, its brand value appreciated by 200% from $3.1 billion in 1999 to $8.3 billion in
2002.

Consequently, in 2002, Samsung emerged as the only non-Japanese brand from Asia to
be listed in the global top 100 brands valued by Interbrand . The company was ranked
34th in Interbrand's list of the world's top 100 brands.

Main approaches to sustainability at Samsung

38
Company name :- SONY WORLD.
Company location :- Park street..
Company format :- Stand alone outlet.
Products available:- Television, Music system/DVD, Play station, Digital Camera,
Mobile, Laptops.
Brands available:- SONY
What’s hot:- Sony BRAVIA ,Play station 3, Free 2 GB memory card with Sony
Cyber shot.
What’s not:- High priced products. VAIO Digital Studio PCV-RX590G is
technically obsolete---replaced by PCV-RX690G.

Other information:- One of the most recognized brand names in the world today, Sony
Corporation, Japan, established its India operations in November 1994, focusing on the
sales and marketing of Sony products in the country. In a span of 12 years Sony India has
exemplified the quest for excellence in the world of digital lifestyle becoming the
country’s foremost consumer electronics brand. With relentless commitment to quality,
consistent dedication to customer satisfaction and unparalleled standards of service, Sony
India is recognized as a benchmark for new age technology, superior quality, digital
concepts and personalized service that has ensured loyal customers and nationwide
acclaim in the industry.

With brands names such as BRAVIA, Xplod, Sony hi-fi, Handycam, Cyber-
shot‚ WEGA, VAIO, Walkman, Memory stick‚ PlayStation an AIWA, Sony has

39
established it self as a value leader across its various product categories of Audio/Visual
Entertainment products. In India, Sony has its footprint across all major towns and cities
through a distribution network comprising of over 7000 channel partners, 215 Sony
World and Sony Exclusive outlets and 21 direct branch locations. Sony India also has a
strong service presence across the country with 21 company owned and 172 authorized
service centers. A distinctive feature of Sony’s service is its highly motivated and well-
trained staff that provides the kind of attentive and sensitive service that is rare today.

40
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42
POSITIVE ASPECTS

• Variety – Big Bazaar offers a wide variety of products of different prices and
different qualities satisfying most of its customers.
• Quality – Providing quality at low prices and having different types of products
for all income group is another advantage.
• Price – As noted the prices and offers in Big Bazaar have been one of the main
attractions and reason for its popularity.
• Location – The location of Big Bazaar LIC is in the heart of the city. It is one of
the most prime location and easy access to transport.
• Advertisement – Big Bazaar has endorsed very popular figure like M.S. Dhoni
and other famous personalities which have attracted a lot of customers.
• Middle class appeal – Considering the fact that there are a lot of middle class
families in India, Big Bazaar has had a huge impact on the middle class section of
India. The prices,quality and sales strategy has helped in getting the middle
income groups getting attracted towards Big Bazaar.
• Brand Availibility - Big Bazaar has the most number of brands available than any
other electronics retail outlet.
• Product Availibility – Big bazaar has a wide range of products to choose from---
Iron to oven, Television to Air conditioner.

43
NEGATIVE ASPECTS

• As mentioned above, the main customers are middle income and a few high
income groups. The elite do not like to shop at Big Bazaar.
• Big Bazaar is not know for high class service. The staff recruited is not very well
trained and the billing takes a long time to move. This irrates customers.
• Despite its prime location people find it harder to pak their own vehicle. Lack of
parking fascility hinders the growth of the company.
• Big Bazaar prices of electronic goods are more compared to most of the
electronics retail outlet.
• The competitors of Big Bazaar have better promotional offers :-
1 – Harmony comes up with three big offers --- super six, super pack 1
and super pack 2. It has provides Panasonic split AC(all models) at the
lowest price.
2 – Khosla which is considered to be one of the biggest competitor
provides goods at the cheapest price and also offers products with free
gifts. Despite the fact that it has lesser number of brands and product
to choose from.
3 – Prices at Spencer are also less compared to that of Big Bazaar. It also
Provides free instillation for AC(window/split).

4 – Prices at Great eastern and Capital Electronics are also less compared
to that of Big Bazaar. The product range is also very high than that of
Big Bazaar.
• Non availability of some of the bigger brands in most products are a serious
drawback—Sony LCD, Videocon and Panasonic split AC Are some of the brands
that are missing.

44