Spar Case

SDM POST-GRADUATE CENTRE FOR MANAGEMENT STUDIES AND RESEARCH A RESEARCH ON “COMPARATIVE STUDY BETWEEN SPAR AND BIG BAZAAR, MANGALORE” SUBMITTED TO MRS. SEEMA SHENOY MBA FACULTY SUBMITTED BY JAWAHAR D’ SOUZA MITHUN N TAUSEEF AHMED M 2nd ND YR MBA – SEC A SDM, MANGALORE Table of content No. | Index| Page No. | 1| Introduction| 1| 2| Industry Profile| 2 -7| 3| About Spar| 8 – 11| 4| About Big Bazaar| 12 – 15| 5| Research Design| 16 – 19| 6| Research Analysis| 20 – 25| 7| Findings, Suggestions And Conclusion| 26 – 27| 8| References| 28| 9 | Annexure| 29 – 31|

Chapter 1 INTRODUCTION Big Bazaar, the country’s leading discount hypermarket, has opened its first outlet in Mangalore on 24th April 2006. It is said that this is the 27th Big Bazaar outlet in the country and the sixth one in southern region.

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Big Bazaar will provide shoppers with 32,000 sq ft of shopping experience and will offer over 1. 6 lakhs products under one roof at the best prices available in the market, he said. Located at Bharath Mall in Mangalore, Big Bazaar has a `Food Bazaar’, `Furniture Bazaar’ and `Electronic Bazaar’.

SPAR India opened its hyper market spread over an area of about 44,000 sq ft at City Mall on K S Rao Road in the city, on Friday April 30 2010, which is stated to be the first store of international standard in the district. The new store offers a choice of over 40,000 different items to customers under one roof.

The items available include food products, clothes, toys, bar items, fresh fruits and vegetables, fish, meat, electronic items, health and cosmetic products etc. Even though spar being a late entrant to Mangalore, it’s been observed that customer’s preference is slowly shifting to spar from big bazaar.

So, this research tires to find out the reason behind this phenomenal change. Chapter 2 INDUSTRY PROFILE The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years.

Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 25-30% annually.

The India retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010. Growth of Indian Retail According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India retail industry is the most promising emerging market for investment.

In 2007, the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is also expected to reach 22% by 2010. According to a report by Northbride Capita, the India retail industry is expected to grow to US$ 700 billion by 2010.

By the same time, the organized sector will be 20% of the total market share.

It can be mentioned here that, the share of organized sector in 2007 was 7. 5% of the total retail market. Major Retailers in India Pantaloon: Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country.

It’s growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country’s first hypermarket ‘Big Bazaar’.

It has the following retail segments: * Food & Grocery: Big Bazaar, Food Bazaar * Home Solutions: Hometown, Furniture Bazaar, Collection-i * Consumer Electronics: e-zone * Shoes: Shoe Factory * Books, Music & Gifts: Depot * Health & Beauty Care: Star, Sitara * E-tailing: Futurebazaar. com * Entertainment: Bowling Co.

Tata Group Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India ‘Landmark’ in 2005.

Trent owns over 4 lakh sq. ft retail space across the country. RPG Group RPG Group is one of the earlier entrants in the Indian retail market, when it came into food ; grocery retailing in 1996 with its retail Food world stores.

Later it also opened the pharmacy and beauty care outlets ‘Health ; Glow’. Reliance Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It’s expecting its sales to reach Rs. 90,000 crores by 2010. AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing.

The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It’s also investing in other segments of retail. It will invest Rs. 8000-9000 crores by 2010. Spar Spar is the world’s largest independent food retail chain present with 13,785 stores present in 37 countries. The company, headquartered in Amsterdam, was established in 1932 and has annual revenue of USD 42 billion.

Spar Hypermarkets and supermarkets in India is the result of a license agreement between the Landmark Group’s Max Hypermarkets India Pvt.

Ltd. and Spar International. Big Bazaar The country wide chain, Big Bazaar is started by India’s retail savvy Kishore Biyani, CEO Future Group. A quintessentially Indian experience, it doesn’t promise more than it delivers. Basic worth allied with reasonable pricing is their USP.

The store itself and the products it stocks may not be on the cutting edge of technology or sometimes even retail but the customer can be assured that he/she is getting their money’s worth. Retail formats in India Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories. Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. * Departmental stores: are general retail merchandisers offering quality products and services. * Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. * Shopping malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof.

* E-trailers: are retailers providing online buying and selling of products and services. Discount stores: these are factory outlets that give discount on the MRP. * Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. * Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods.

This is also known as Multi Brand Outlets or MBO’s. * Specialty stores: are retail chains dealing in specific categories and provide deep assortment.

Mumbai’s Crossword Book Store and RPG’s Music World are a couple of examples. Challenges facing Indian retail industry * The tax structure in India favors small retail business * Lack of adequate infrastructure facilities * High cost of real estate * Dissimilarity in consumer groups * Restrictions in Foreign Direct Investment * Shortage of retail study options * Shortage of trained manpower * Low retail management skill The Future The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1. trillion by the year 2018 at a CAGR of 10%.

As the country has got a high growth rates, the consumer spending has also gone up and is also expected to go up further in the future. In the last four year, the consumer spending in India climbed up to 75%. As a result, the India retail industry is expected to grow further in the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%. Chapter 3 Address: 5th floor, City centre mall, K. S.

Rao road, Mangalore About Spar: * Netherlands based. * 75 years old. * Spread across 75 countries. 6 Million shoppers per day. * SPAR comes from the Dutch word DESPAR meaning “We all benefit from joint co-operation.

Website: www. spar-international. com Spar was founded in the Netherlands in 1932 by Adriaan Van Well, as a voluntary chain of grocers under the name of “De Spar”. His purpose was to secure co -operation between independent wholesalers and retailers as a response to the grocery chains in Europe. Max Hyper Markets India Pvt Limited tied up with SPAR and Max hyper markets are a part of Dubai based Landmark group. Spar Hyper Market is a great retail concept.

Spar’s Products:

Spar fulfils all your household needs from detergent to imported cheese, utensils to electronics and lots more. Spar is a one-stop shop for all your daily needs. Processed food, fresh fruits and vegetables, personal care products, crockery and cutlery as well as confectionary, fine liquors and delicious cooked food line the surroundings of this hypermarket. It offers varieties of Garments, groceries, meat items, fruits, vegetables, home appliances, electronic, liquor items, varieties of Chocolates and biscuits, national and international magazines with different titles and different state newspaper.

Spar is spread over an area of 44,000 sq ft. on the 5th floor of the City Centre Mall.

As in any retail outlet the products targeted towards different segments are clubbed together like here products related to men are arranged nearby for ease of search. End of this hall you may find lots of branded electrical and electronic goods where we can find many choices to compare and select them with discounted prices. Left side at the end of this hall, you may find electronic items most of them related to Computer, IPOD, DVD, Television etc. varieties of branded laptop and desktop displays are there, ifferent IPOD available with discounted price and branded DVD are ready to purchase with warranty and Television has many choices to select such as Flat TV to normal one and from 14″ TV to 110″ home theatre TVs along with verities of Amplifier. Also you may find electrical, electronics and household items.

It is really helpful for monthly groceries from SPAR. Verities of rice, grams, branded teabag, tea, sugar and salt etc. also, varieties of fruits can be found at any day in a year regardless of fruit season. It also helps in buying varieties of vegetable with quality and fewer prices.

Billing: There are around 25 cash counters for the convenience of the customer that makes the billing easier and faster.

Ambience: the ambience at Spar gives and international feel. The shopping experience itself is very appealing. The shop has well kept look with a fresh fragrance with uniform light everywhere. Signage: There are directions and guidelines for the ease of movement for the public. Attractions at SPAR are: * Ample shopping space * Parking space * Quality products * Freedom to Choose * Hassle free trolley drive moving around * Very attractive prices Friendly staff * Good offers Service at Spar: The outlets are spacious and even though they have over 20 cash counters, you can’t avoid the wait at billing on weekends.

Service is attentive and the staff takes your purchases right up to your car. The store is clean and range of products is good but when it comes to prices, it is slightly higher compared to Big Bazaar. Almost all kinds of fresh vegetables are available stacked cleanly. Lots of billing counters that goes at a better pace than all the other stores. There is plenty of parking place for the shopper’s convenience.

Overall the outlet provides a good shopping experience.

Positive points about SPAR: * You can find anything in this place, a great variety and assortment of products. * Spar is divided into many sections according to Grocery, cutlery, confectionaries, electronic items, food, vegetables, meat, bar items and plastic items. Negative points about SPAR: * Problem in finding products as there is less assistance available during peak hours. * It is crowded, especially during the weekends it’s a really busy place. SPAR’s brand proposition revolves around the four pillars of: Freshness, Service, Choice, Value.

SPAR offers a truly International shopping experience and customer satisfaction. Chapter 4 Address: Bharath Mall , Kodialbail Village, Bejai, Mangalore Big Bazaar is a chain of hypermarkets in India, with more than 100 stores in operation. It is a subsidiary of Pantaloon Retail India Ltd’s, Future Group, and follows the business model of United States-based Wal-Mart. With a slogan of “Is se sasta aur accha kahin nahi! ” (“Nowhere cheaper or better than this! “), Big Bazaar targets itself directly at the average Indian’s love of following the crowd and scrambling for a good discount.

However, the chaos and crowds often make shopping there a challenge.

WEBSITE: bigbazaar. futurebazaar. com Description: The Outlets are spread in 60 locations across the country. And the outlet in Mangalore sells furniture, electronics, clothes, cookware, cosmetics, household items, food, gifts, jewelry and books. Also have special Food Bazaar outlets. Products: Men’s Clothing, Women’s and Kids Clothing, Accessories shopping, Furniture, Home Decor, Electronics and Appliances.

Big Bazaar claims to offer over 1, 70,000 products under one roof.

These include clothes, home furnishings, crockery, books, computer accessories, groceries, etc. Big Bazaar gives a variety of options under the same roof starting from kid’s cloths to electronics items to cosmetics and vegetables. The Big Bazaar is a useful place to find cheap household items, clothes, and food all under one roof. Arrangement: It is helpful for the customers to choose products and browse them because all the products are categorized in a uniform way. The store is neatly arranged and well stocked with various items.

Everything is kept so well arranged that you will never find it difficult to locate anything.

The sales staffs are also very professional and well- trained. If you don’t know where a particular item is and they will be delighted to help you find the place where you can find things of your choice. We spend hours there and felt so nice. You can get almost everything here. You won’t find neatly ordered aisles at the Big Bazaar.

Instead, stores are laid out to replicate a market environment, with items all thrown in together. Promotions such as “Sabse Saste Teen Din” (Cheapest Three Days) and “Purana Do, Naya Lo” (Give Old, Take New) result in shoppers flooding the stores.

Ambience: There is no specific theme as such. The ambience is more of a generalized form with uniform lighting everywhere. There are continuous announcements going on about the discounts and the offers the outlet provides.

Signage: There are signage’s placed which are helpful especially for the people who are visiting the store for the first time. Billing: The waiting line model in big bazaar is not so efficient compared to spar because the counters are lesser in number and the crowd is huge. Especially during festivals it’s very difficult to get the products billed.

Service: The sales persons in big bazaar are efficient in directing people towards the products. The space is properly utilized.

Pros: • Low prices. • Great sales and promotions. • Wide range of products under the one roof. • Many stores. Cons: • Overcrowded.

• Checkout can be extremely slow. • Poor customer service. • Quality is of average standard. Attractions at BIG BAZAAR what we felt: The biggest attraction as we felt with Big Bazaar is its continuous discount offers. It always says that you cannot find a product cheaper than what they are selling.

We think this is a legitimate claim.

They really sell with less price tag than what we buy sometime from other stores. However, it applies only to general home based products. Another great thing about this market is the shopping experience that one is bound to get here. Everything is there under one roof. This is a novel experience at least in India.

REVIEW OF LITERATURE Mathew Joseph and Manisha GuptaSeptember 2008: The Indian retail sector is booming and modernizing rapidly in line with India’s economic growth. In this review the author talked about the impact of organized retailing on traditional retailing. With the increase in number of various formats for shopping like malls, departmental stores, hypermarkets etc the Indian consumer’s preferences are changing towards and that’s the reason foreign investors like the king of retail Wal-Mart also came into the Indian retail ground in collaboration with Bharti.

There is a huge untapped market is present in India right now which contains a number of opportunities for retailers Sen-2000: Store Image and Consumer Shopping Habits: Indian Context: In India, some empirical studies provide important information about consumer behavior and its responses to the development of organized retail. Economical and social changes are major contributors for a growing fragmentation of consumers into multiple segments with different values and buying priorities.

Consumers have become more pragmatic, educated and demanding, learning how to manage money and time more efficiently. The focus on low prices was gradually replaced by a value for money perspective. The study developed by ETIG (Economic Times Intelligence Group, 2002) confirms these tendencies. Concerning food, the most important attribute mentioned was quality, followed by price.

Indian consumer has different reasons for preferring different store formats, either modern or traditional; Sen (2000) confirms this in the study undertaken in Indian context.

He confirms that in the case of hypermarkets, the main motives for preferences, in decreasing order are low prices, the possibility of buying everything in the same place and the general appearance of the store. Several investigations emphasize the possible coexistence of different store formats (Chandrasekhar, 2001) and others point out the relationship between the type of store and the type of products. These studies show that, while specialized and traditional stores are preferred for fresh products, hypermarkets are preferred for shopping in general, and also for frozen food, groceries and beverages.

The purchase of perishables in hypermarkets is reduced. Radhakrishnan, 2003: Traditional Retailers Perceptions about Organized Retail As already mentioned, organized retail has deeply changed the Indian commercial structure.

However, it is not exclusively responsible, as other changes (economical, social and cultural ones) have occurred simultaneously. Concerning the more direct effects of organized retail on different types of commerce, it is possible to verify that the major impact is felt on traditional retail and, in particular, on the food sector.

The impact of organized retail is also significant on other types of retail, namely toys, stationery goods and household appliances; moreover, it is probable that competition gets more intense in other sectors, such as clothing and furniture. RNCOS (March 15, 2009/24-7 press releases): Increasing trend of Organized retailing will drive the growth of convenience-store industry in the world. By 2011, Asia remains the fastest growing convenience store marketing the world as the major Asian retail markets registered explosive growth in opening up of new convenience store.

Changing consumer preferences, lifestyle and rising income level, which is heavily influenced by economic growth, remains the major driving force for c-store industry in the Asian region.

As per “Global Convenience Store Market Analysis”. RESEARCH PROBLEM Changes in the customer preferences in favor of Spar from Big Bazaar. RESEARCH TYPE “Descriptive” – A survey method where research problem is studied in-depth by comparing spar and big bazaar on the basis of the changing preferences of customers of Mangalore. OBJECTIVES 1. To analyze the changing preference of customers from choosing spar over big bazaar.

. To compare spar and big bazaar to find out the reasons for the changing preferences. SCOPE There are many different factors that probe into different factors such as sociological, economic and psychological that influences the customers in their decision to buy the products. This research is basically conducted to study about the customer behavior. LIMITATIONS 1.

As time was a hindrance for the research a total in-depth study was not possible. 2. As the research is conducted on the preferences of customers it’s possible that their mind set may change with time. . Sample size restricted to 30 only which was very less according total population.

4. The responses given by respondents were not always accurate because the respondents gave the response according to their understanding. 5. Survey is a time consuming process but the time to collect the data for research was very less. 6. Sometimes the respondents were not willing to fill the questionnaire and hence the resultant may not be correct.

SOURCES OF DATA Primary data: The basic mode adopted in this research was that a survey was conducted based on questionnaire.

The sample size was 60. People of different from different age limits, sex, backgrounds and professions were given the questionnaire. Secondary data: Books, magazines, articles and websites were other main sources of secondary sources that we made use of while carrying out this research. SAMPLING DESIGN: 1. Sampling unit- Respondents of spar and big bazaar and households.

2. Sample element – arbitrarily chosen customers at spar and big bazaar. 3. Size of sample – 30 respondents 4. Sample Method – Non-probabilistic sampling convenience sampling ( the ideal form of sampling was supposed to be used quota sampling, but because of the time constraint convenience sampling was used) 5. Types of questionnaire – close ended.

Chapter 6 RESEARCH ANALYSIS * Big bazaar being the first hyper market in Mangalore, all the respondents had already visited big bazaar. * How many times have you visited Big Bazaar before going to Spar From the above figure we have noticed that the respondents have visited big bazaar regularly before being changing their preference to spar. * What made you change your preference towards Spar?

We have noticed that variety was the main factor that drove the customer’s attention towards spar when compared to big bazaar. * What do you prefer to make purchase in Spar? Most of the customers prefer to purchase food items from spar because of the variety and choice you get in spar. * What influenced your purchasing in Spar? For customers at spar friends were the major source of influence.

* Which advertisement of Spar influenced you the most? Spar advertisement was more informative which was a major advantage for spar in attracting the customers. * How much time do you spend in spar for shopping?

Majority of the respondents spend their time not less than 2 hours for shopping. This also concludes that at spar there are fast moving customers. Since there are large number of outlets and more billing counters customer can do their purchases easier and faster. * According to you what is that part that distinguishes Spar from Big Bazaar? Majority of the customers of spar distinguish spar over big bazaar on the basis of variety of products available at spar.

* What do you value the most in spar? Most customers prefer the floor space at spar because it’s comparatively larger when compared to big bazaar.

Hence, large crowd can be accommodated easily especially during the weekend rush. Larger floor space helps the customers move freely. * What changes did you find in the billing process at spar? Since there are more than 20 billing counters at spar it is easier for the customers to do their billings faster and do their purchase and. * If you have to suggest the best place for shopping would it be spar or big bazaar? The pie chart above clearly shows that 60 % of the responded was in favor of spar when compared with big bazaar. * What is your opinion about after sale services offered at?

Respondents were again in favor to spar when it comes to after sale service at big bazaar.

* Spar vs. big bazaar in different context. Apart from the attractive offers that big bazaar offers, spar has all the major advantages as seen in the graph i. e. price, quality, convenience, brand image, range of product, cleanliness and after sale services. Hence, spar turns out to be any customer’s choice or preference of purchasing any goods services.

Chapter 7 FINDINGS, SUGGESTIONS AND CONCLUSION Findings •It means maximum no of customers were families. •Maximum no of customers are educated and aware about retail store. Maximum no of customers are belonging to upper middle class. •Maximum no of customers are time conscious and desire for many brand under one roof. •Maximum no of customers are price conscious so maximum customers belongs to middle class. •Maximum no of customers did not compromise quality with discount and offers.

Conclusion: This research comes to conclusion that customers preference is slightly shifting to spar from big bazaar because of following reasons. i. e. , better range, better convenience, better parking and better experience. Hence, Spar gives a better shopping experience the customers compared to Big Bazaar.

The shopping malls ; retail outlets are targeting to middle class customers because the purchasing power of this class is rapidly growing as well as the class is also growing.

The young generation is fashion ; show-off conscious so retail outlets are mainly focused on them. Most of the family wants to purchase from big showrooms and malls because there are no bargaining system so they have a trust that there is no cheating. The main strength of most of Big Bazaar and Spar are providing attractive offers to attract customers and also running customer loyalty programmes which has increased profits and no. f customers to increase their business. Suggestions From our research few things that we would like to suggest to big bazaar to survive in the market in the long run the below mentioned points can be helpful.

* The ambience at the big bazaar needs a major change to meet the level of competition against spar. * An improvement or more variety of products could be added to make big bazaar a one stop shop. * Big bazaar can also introduce frozen food items, meats, liquor items which is a major point of sale outlets at spar. Quality of perishable products with low shelf life like vegetable and fruits of big bazaar should be improved when compared with spar. * More billing counters can be added at big bazaar. Chapter 8 REFERENCES * Reference books like Marketing research -G.

C. Beri Consumer behaviour – Kanuk ; Schiffman Marketing research – A. Parameshwaran, Dhruv, R. Krishnan * Websites: www. Google. com www. ebsco. com Chapter 8 ANNEXTURE Dear Sir/Madam, We, the students of Sri Dharmasthala Manjunatheshwara College Post Graduation Centre for Management Studies and Research, of 2nd year M. B.

A would like to undertake a survey on our Research topic i. e. , comparative study between Spar and Big bazaar. Objective of this survey is to do a comparison on the customer preferences towards Spar over Big Bazaar. For this purpose we would like to collect some information from you. 1.

Have you visited Big Bazaar before? Yes [ ]No [ ] 2. How many times have you visited Big Bazaar before going to Spar? Few []Many [ ]Never [ ] 3. What made you change your preference towards Spar? Services [ ]Variety [ ] Location [ ] Parking [ ] Staff courtesy [ ] 4. What do you prefer to make purchase in Spar?

Ethnic wear [ ] Cosmetic [ ] Electronics [ ] Food items [ ] others [ ] 5. What influenced your purchasing in Spar? Friends [ ] News paper [ ] Spouse [ ] Experts [ ] Others [ ] Specify…………… 7. Have you seen the advertisement of Spar? If yes, which advertisement of Spar influences you most? Serious [ ] Informational [ ] Emotional [ ] Humorous [ ] 8.

How much time do you spend in Spar for shopping? 30 mins [ ] Less than an hr [ ] 1-2 hrs [ ] more than 2 hrs [ ] 9. According to you what is that part that distinguishes Spar from Big Bazaar?

Quality [ ] Price [ ] Brand [ ] Ambience [ ] Variety [ ] 10. Do you prefer Spar just for secondary shopping or a large weekly shopping? Specify ……………………………………………………………………………………………………………………………………………………………………………………………………………… 11. What do you value the most in Spar? Offers [ ] Friendly staff [ ] Floor space [ ] After sales services [ ] 12. What changes did you find in the billing process at spar? More billing counters [ ] Cashier interaction [ ] Cashier speed [ ] If any other, specify ……………………………………………………………………………………………………………………………………………………………………………………………………………… 13.

If you have to suggest the best place for shopping would it be spar or big bazaar? Specify………………………………………………………………………………………….

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Spar Case

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