A PROJECT REPORT ON SALES PROMOTION STRATEGY USED IN RETAIL INDUSTRY (Comparative Analysis of Big-Bazaar & Reliance Retail) UNDER THE GUIDENCE OF PROF.VIRENDRA PATIL (Marketing) (2011-2013) IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF Master in Management Studies (MMS) (UNIVERSITY OF MUMBAI) SHIVAJIRAO .S JONDHALE INSTITUTE OF MANAGEMENT SCIENCE AND RESEARCH ASANGAON THANE

PRESENTATIONON SALES PROMOTION STRATEGY USED IN RETAIL INDUSTRY (Comparative Analysis of Big-Bazaar & Reliance Fresh)

UNDER THE GUIDENCE OFPROF.VIRENDRA PATIL

(Marketing)(2011-2013)IN PARTIAL FULFILLMENT OF THE REQUIREMENT OFMaster in Management Studies (MMS)(UNIVERSITY OF MUMBAI)

SHIVAJIRAO .S JONDHALE INSTITUTE OF MANAGEMENT SCIENCE AND RESEARCHASANGAON THANE

OBJECTIVES OF THE STUDYTo study the different sales promotion strategies.To identifying the effect of sales promotion strategy in retail industry.To understand how a sales promotion strategy help attract new consumer.To know how a sales promotion strategy help to face the competition effectively.To find the most effective tool of sales promotion.To suggest for better management of sales promotion strategy in retail industry.

SCOPE OF STUDYThe important sales promotion strategy can provide vital intelligence about what the retailer has to do, to increase customer footage to their outlet. This information critical is effective to understand effect of sales promotion strategy on the buying behavior of the consumer. This study is helpful to those employees who already work in that industry and new comers, management trainee & for future reference. Our study can be useful by other retail business in similar industries.

INDIAN RETAIL INDUSTRYSize of the IndustryBy 2015 the Organized Retail Sector in India is expected to triple its size. The food and grocery retail sector is expected to multiply five times in the same time frame. The market size of Indian retail industry is about US $312 billion Geographical distributionIn all the major Cities of the countryOutput per annumWith growing market demand, the industry is expected to grow at a pace of 25-30% annually.Percentage in world marketToday India is the fifth largest in the world in terms of Retail IndustryMarket CapitalizationIn 2010 the retail trade accounts for 12 % of the country's GDP. The present value of the Indian retail market is estimated to be around Rs. 12, 00,000 Cr ($270 billion) and the annual growth rate is 5.7%.

MAJOR FOREIGN COMPANIES

Wal-Mart Stores Inc has a cash-and-carry operation with Indian partner Bharti Enterprises, the parent of leading mobile provider Bharti Airtel, and will add 12-15 new cash-and-carry stores this year to its 17 existing stores.Tesco, Britain's largest retailer, has a tie-up with Trent's Star Bazaar hypermarket chain. Tesco is also looking to enter the wholesale market through the tie-up.Germany's Metro AG operates 11 wholesale stores in India. The company plans to open 5 cash-and-carry stores every year.Carrefour has 2 cash-and-carry stores in India. The world's No 2 retailer has been seeking a local partner to enter the hyper or supermarket sectors.

LOCAL COMPANIES

Pantaloon Retail, India's largest listed retailer and part of the Future Group, runs apparel and electronics stores under its lifestyle brands Central, E-Zone, Hometown. Future also operates the Big Bazaar hypermarket chain and supermarket brand Food Bazaar.Second-ranked Reliance Retail is part of Reliance Industries, India's largest listed group headed by Mukesh Ambani, India's richest man.Shoppers Stop, part of the K Raheja Group which operates in real estate, has Trent, part of the sprawling Tata Group, operates 106 stores across formats and runs the Westside range of apparel stores, under Star Bazaar.

COMPANY PROFILE BIG-BAZAARType Subsidiary of Pantaloon GroupFounded 2001Headquarters Jogeshwari, Mumbai, IndiaIndustry RetailProducts Department store, Grocery storeOwner Kishore BiyaniParent Pantaloon GroupSlogan Is se sasta aur accha kahin nahin

RELIANCE FRESHType Subsidiary of Reliance Industries LimitedHeadquarters Ghansoli , Mumbai - 400701, IndiaIndustry RetailProducts Department store, Grocery etcOwner Mukesh D.AmbaniParent Reliance Industries

INTRODUCTION TO TOPIC

DEFINATIONSales promotion includes incentive-offering and interest-creating activities which are generally short-term marketing events other than advertising, personal selling, publicity and direct marketing. (A.H.R. Delons)The purpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioral responses of the firms customers. (W.Q. Kelly)

REASONS FOR RAPID GROWTH OF SALES PROMOTIONIncreasing Competition Sales Promotions Generally Create An Immediate Positive Impact On Sales Consumer AcceptanceExpectations Of Price Decrease

Cont.e) Advertising Has Become More Expensive And Less Effectivef) Emphasis On Sales Volumes g) Impulse Buying Is Increasingh) Excess Stocks

ADVANTAGES OF SALES PROMOTION

Price discrimination Effect on consumer Behaviour (e.g With every 500g pack of Tang, you get a free Tang glass. Offer valid only till stocks last. )

Effect on trade Behaviour (e.g Retailer promotion: Buy Cadburys products worth Rs.3000/- and get any 30 chocolates worth Rs.5 each free. e.g Buy a box of Munch and get 1 Munch free )

Techniques of sales promotions

Store DemonstrationCoupons Price-off-offer SamplesMoney Refund OfferExtra Product Gifts

There are three types of sales promotion strategiesPush Strategy

Pull Strategy A pull strategy is appropriate when The product demand as high. It is possible to differentiate the product on the basis of real or emotional features, Brand consumers show high degree of involvement in the product purchase, There is reasonably highly brand loyalty and consumers make brand choice decision before they go to the store.

PULL AND PUSHA combination sales promotion strategy is just that; it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side with dealer discounts.

COMPARITIVE ANALYSISBIG BAZAARRELIANCE FRESH PRICEBig Bazaar prices are very low because its adopt the low price marketing strategy.Reliance Fresh prices are not low because they give whatever is market price. SERVICEBig Bazaar services are not quite good as billing problem due to crowd.Reliance Fresh does not face these kind of problems as its not overcrowded. PRODUCT VARIETYBig Bazaar has lots of variety in every category of products. In Big Bazaar people can find almost everything.Reliance Fresh have less varieties as it is smaller than Big BazaarCont. CONVENIENCEBig Bazaar has always worked in cheap location so that it is very convenient for the people to go to the Big Bazaar rather than going outer of the city.Reliance Fresh also works in low cost location but it is less popular in comparison of Big Bazaar. SHOPPING EXPERIENCEIn Big Bazaar people can buy the maximum variety of products of every category under one roof helping in attracting customer and their family to shop together and enjoy the shopping experience.Reliance Fresh also provides the products under one roof but there is less varieties so that customers dont attract so they can not enjoy their shoppings. PRODUCT QUALITYThe product quality is good in Big Bazaar because people can find cheap and best things in Big Bazaar. The product quality is also good in Reliance Fresh but the prices are slightly higher.

COMPARATIVE STUDY OF SALES PROMOTION STRATEGY USED BY BIG-BAZAR AND RELIANCE FRESH

Reliance FreshBig-BazaarType ModeModeSpecial Days Saturday And Sunday Wednesday Exchange offer Customer can take new in exchange of old itemPremium and GiftsPremiums in the form of Bill Busters on the purchase of a fixed amount every weekE.G. Pickle Set (set of 4) is free with the purchase of Rs.999/-

Cont..Premium and GiftsPremiums in the form of Bill Busters on the purchase of a fixed amount every weekE.G. Pickle Set (set of 4) is free with the purchase of Rs.999/-Concentrate on bundling offerSampling DistributionEg .free samples of Pick pickle was distributed which was test merchandiseRebates ,DiscountOn MRP of certain productsOn MRP of certain productsOffersBOGO [Buy One Get One]BXGY Buy X and Get YBOGO [Buy One Get One]BXGY Buy X and Get YPOP DisplayPoint of purchase display are used to reach to display the benefit of product.Point of purchase display are used to reach to display the benefit of product.

Research Methodology

The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change management.Data Collection

There are two main sources for collecting data. These are :-1. Primary Data.The Primary data has been collected through questionnaire

Cont.2. Secondary Data.Data has also been collected through internet using various websites such as:-

- www.relianceretail.comhttp://www.pantaloon.com/bigbazaar.htmhttp://en.wikipedia.org/wiki/Big_Bazaarwww. Future bazaar.comwww. Pantaloon Retail (India) Limited.htm

DATA ANALYSIS AND INTERPRETATION

RETAILER ORIENTED

1) Is your Sales promotion Strategy is customer oriented?Yes No100%-

Interpretation

As per our survey100% Retailers{both Big-Bazaar (50sample) and Reliance Fresh (50sample)} said that they use Sales promotion Strategy are customer oriented.

2) Does customer really satisfied with your sales promotion activity in your BIG-BAZAAR ?

YES NO70%30%InterpretationAs per our survey Retailer (50 SAMPLE SIZE) says that 70% of customer (35) are satisfied with your sales promotion activity and remaining 30% (15)are not. So Retailers has to Find some other new way to satisfy remaining 30% unsatisfied customer. 3) Does customer really satisfied with your sales promotion activity in your RELIANCE FRESH ?

YES -73%NO - 27%

INTERPRETATIONAs per our survey Retailer (50 SAMPLE SIZE) says that 73% of customer (37) are satisfied with your sales promotion activity and remaining 27% (13) are not. So Retailers has to .Thus there is only Variance of only 3% between this two retailer for Satisfaction and Dissatisfaction of customer for sales promotion strategy.4) Do customers look for various schemes in the product?(Both BIG BAZAAR AND RELIANCE FRESH)(Sample size of 100)

Promotional SchemesRespondentsCoupons3Price Off45Scratch Cards2Lucky Draws8Bundling Offer22Extra Quantity20InterpretationFrom the above diagram we come to know that PRICE-OFF is most preferable Sales promotion strategy With 45% Followed by Bundling and Extra Quantity22 % &20% and the least preferable is Scratch Card & Coupons which is 2% &3%.5) Which sales promotion Strategy you use most? A) (BIG-BAZAAR)

12345 Very Low Very HighPromotional SchemesRespondentsCoupons2Price Off4Scratch Cards1Lucky Draws2Bundling Offer5Extra Quantity5Interpretation From the above Diagram we come to know that in Big Bazaar Retailer Most concentrate on Extra quantity And Bundling To which they had given rating of point 5 to each And least is scratch card to which they had given only 1 point.7) On which category customer attract more?A) IN BIG-BIZAAR (50 SAMPLE)Promotional SchemesRespondentsFMCG15Apparels12Stationary1luggage2Kids Product10Consumer Durable10Cont..InterpretationWe can see from the figer that the category to which customer get attract more is FMCG Which is 15 CUSTOMER OUT OF EVERY 50 Followed by Apparels which is 12 And the least attract segment is stationary which is only 1 out of every 50 footage.

8) On which category customer attract more? IN Reliance Fresh (OUT OF 50 SAMPLE)

Promotional SchemesRespondentsVegetable10Kids Product4Fruits10FMCG10Apparels7Electronic9Cont..InterpretationWe can see from the Digram that the category to which customer get attract more is vegetable ,FMCG, FRUITS Which is 10 CUSTOMER EACH OUT OF EVERY 50 Followed by Electronic which is 9 And the least attract segment is kids product which is only 4 out of every 50 footage.

Customer Oriented

1) How frequently do you visit to Big-Bazaar or Reliance Fresh?(Out of 50 Sample Each)How frequently do you visit retail outletDailyOnce in WeekTwice in a weekOnce in monthsBig-Bazaar1201910Reliance Fresh218228Cont..InterpretationFrom the above Diagram we come to know that 20 customer go once in week in Big Bazaar while only 18 in Reliance out of 50 in each, and 19 Twice in week in BIG- Bazaar 22 in Reliance Fresh, and 10 once in month & 8 once in month in Big Bazaar And Reliance Fresh.

2)What do you like the most at Big-Bazaar?(out of 50 sample)

what do you like most about Reliance/Big BazaarPrice up to satisfactionVarious option Available to chooseDisplay of Merchandise28157ContInterpretationFrom the above diagram we can see that the customer is mostly attracted by the Price Factor that is 28 customer out of 50 sample which is more then 50% followed by various option available that is 15 customer out of 50sample and only 7attracted by Display of merchandise

3) What do you like the most at Reliance Fresh?(out of 50 sample)what do you like most about Reliance/Big BazarPrice up to satisfactionVarious option Available to chooseDisplay of Merchandise251312

Cont..

InterpretationFrom the above fig. we come to know that 25 that is 50% of customer are attract to price factor and only 13 out o f 50 sample are attract to option available but in big bazaar it is 15 customer out of 50sample that is it is 2 more ,and customer are more attract to display in merchandise it is 12 in Reliance Fresh where it was only 7 in Big-Bazaar which is 5 customer more.

4) Do you consider promotional schemes while visiting Big-Bazaar?(OUT OF 50 SAMPLE)

ParticularsRespondentYes36No14ContInterpretationThus from the above Table and Diagram we come to know that 36 Customer Look for the promotional schemes while visiting a BIG-BAZAAR And 14 does not look for the any scheme.5) Do you consider promotional schemes while visiting RELIANCE FRESH(OUT OF 50 SAMPLE)ParticularsRespondentYes30No20Cont..InterpretationThus from the above Table and Diagram we come to know that 30 Customer Look for the promotional schemes while visiting a RELIANCE FRESH And 20 does not look for the any scheme.

6)How does you compare Reliance Fresh with Big -Bazaar?

How does you compare reliance Fresh with Big- BazaarPrice FactorAvailability of Product Customer ServiceBiz-Bazaar25187Reliance Fresh231710Cont..InterpretationFrom the above diagram we come to know that customer compare both retail outlet on Price basis by25 and 23in Big-Bazaar and Reliance Fresh out of 50sample, 18 and 17are comparing both retail out let on the basis of Availability of product. and only 7 and 10customer compare on the basis of customer Service out of 50 customer each outlet

7) Do you feel easy to find out the product in BIG-BAZAAR?

Do you feel easy to find out the productYes No482InterpretationFrom the above table and figer we can see that 48 customer can easily find out the product and only 2 were not.(OUT OF 50 SAMPLE)

8) Do you feel easy to find out the product in RELIANCE FRESH?

Do you feel easy to find out the productYes No491InterpretationFrom the above table and figer we can see that 49 customer can easily find out the product and only 1 were not.(OUT OF 50 SAMPLE)9). How do you feel about the customer service of Reliance Fresh?How do you feel Customer Service of Reliance FreshAverageGoodExcellent241115InterpretationFrom the Above Diagram we come to know that 24 people has given average Rating to Customer Service in Reliance , Followed by 15 Excellent and 11 as Good.10) How do you feel about the customer service of BIG BAZAAR? (out of 50 sample size)How do you feel Customer Service of Reliance FreshAverageGoodExcellent30155InterpretationFrom the Above Diagram we come to know that 30 people has given average Rating to Customer Service in Reliance , Followed by 15 Good and 5 as Excellent.

Observation & Finding

Temporary price reductions (price off) substantially increase salesSales Promotion leads to brand substitution with the product categorySales Promotion leads to purchase acceleration/stockpiling effectsSales Promotions affect sales in complementary and competitive categories

LIMITATION

It is the time constrains.Due to other work load during the period it could be not be possible to explore more area concern pertaining to study.The study was conducted to limited area on THANE Region only.Respondent may give biased answer due to some lack of information about other brands.Findings of the study are based on the assumption that the respondents have given correct information

Conclusion

We have noted that these kind of promotional tools are useful for short term increase in sales and to induce first trial. These types of promotional schemes should be consistent and changed from time to time depending upon season and competitors schemes.With the Increasing number of supermarket, the branded packaged goods work as silent sales person. So in such stores, sales promotion plays a more effective role in stimulating consumers demandsThus proper use of sales promotion tools help to achieve the objective of organization.

Source

BOOKSC.R.Kothari, Research Methodology methods & techniques,New Age International(p)ltd.publishers,2nd edition, page no 95 ,96 102.Philip Kotler, Marketing Management, 13th edition, Pearson education Asia Publication,page no.355 to 356.Internethttp://www.ril.com/html/aboutus/about_brands.htmlwww.reliance fresh.comwww.Future bazaar.cowww.Big-bazaar. ComStudy_of_Consumer_Oriented_Sales_Promotion_in_FMCG.zip - ZIP archive, unpacked size 574,464 bytesFutureBazaar.com, 2010. Future Bazaar India Ltd. [Online] Available at: http://bigbazaar.futurebazaar.com [Accessed 24 March 2011].Kumar, V., 2010. Promotional Strategy of Big Bazaar & Maintaining the image in Retailing. [Online] Available at: http://www.skylinecollege.com/blog/dissertation/promotional-strategy-of-big-bazaar-maintaining-the-image-in-retailing [Accessed 19 March 2011].