Brand Image in Retail Sector

8/4/2019 Brand Image in Retail Sector

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ACKNOWLEDGEMENT

I take the opportunity to express our gratitude to all the concernedpeople who have directly or indirectly contributed towards completion

of this project. I extend my sincere gratitude towards Pantaloon for

providing the opportunity and resources to work on this project.

I am extremely grateful to Mr.____________, my mentor in Pantaloon for his

guidance and invaluable advice during the projects. Also to my

guide, Mrs. Geeta Raja whose insight encouraged me to go beyond the

scope of the project and this broad ended me learning on this project.

I also want to show my gratitude to Dr. Surya Ramdas whose insight

helped me to complete this project.

WHAT IS RETAIL?The word retail is, in fact, derived from the French word retailer, which meansto cut off a piece or to

break bulk.A retailer may be defined as a dealer or trader who repeatedly sells good in smallquantities. The sale of goods or commodities in small quantities directly to consumers. Of, relating to, orengaged in the sale of goods or commodities at retail. It also means to sell in small quantities directly toconsumers.

RETAIL-The sale of goods individually or in small quantities to the public to sell or be sold in small quantities tothe public.Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or

kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing mayinclude subordinated services such as delivery.The sale of goods directly to the consumer; To sell at retail, or in small quantities directly to customers;To repeat or circulate (news or rumors) to others; Of, or relating to the sale of goods directly to thecustomer; In retail quantities, or at retail pricesTo sell directly to the consumer, usually in small quantities in comparison with the total level of sale.


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Any product for sale in a store or directly to a consumer.Trade in which a client buys or sells an over-the-counter stock through a broker-dealer.

Merchants selling tangible goods in a face-to-face environment who normally use conventional terminals

and swipe transactions.

TYPES OF RETAIL SECTORRetailing is one of the pillars of the economy in India and accounts for 35% of GDP. The retail industry

is divided into organized and unorganized sectors. Over 12 million outlets operate in the country and only4% of them being larger than 500 sq ft (46 m) in sizeOrganized RetailUnorganized Retail

ORGANIZED RETAILOrganized retailing refers to trading activities undertaken by licensed retailers, that is those who areregistered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retailchains, and also the privately owned large retail businesses. Organized retail segment has been growing ata blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells,organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007.The fastest growing segments have been the wholesale cash and carry stores (150 percent) followed bysupermarkets (100 per cent) and hypermarkets (75-80 per cent).Further, it estimates the organizedsegment to account for 25 per cent of the total sales by 2011.

UNORGANIZED RETAILUnorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, forexample, the local kirana shops, owner manned general stores, paan/beedishops, convenience stores, handcart and pavement vendors, etc. Unorganized retailing is defined as an outlet run locally by the owner orcaretaker of a shop that lackstechnicalandaccounting standardization. The supply chain and

5sourcing are also done locally to meet local needs. Its organized counterpart may not obtain its suppliesfrom local sources.Difference between organized and unorganized retailingThe major differences between organized and unorganized retailing lies in its number(chain) of storeoperations. An unorganized outlet may be just stand alone or can have maximum of 2-3 outlets in a city,where as the organized outlets are "any retail chain(more than two outlets)which is professionallymanaged (even if its family run), has a accounting transparency (with proper usage of MIS andaccounting standards) and organized SCM with centralized quality control and sourcing (certain parts canbe locally made) can be termed as an "organized retailing" in India. Retailing in India is predominantlyunorganized. According to a survey by AT Kearney,an overwhelming proportion of the Rs. 400,000 crore


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retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organized. Weare known as a nation of shopkeepers with over 12 million, the highest outlet density in the world in theworld with an estimated turnover of $ 200 billion. However a disturbing point here is that as much as 96per cent of them are smaller than 500square feet in area. This means that India per capita retailing space isabout 2 square feet (compared to 16 square feet in the United States). India's per capita retailing space isthus the lowest in the world. Another point to note is that only 8 % of our population is engaged in Retail

whereas the global average is around 10-12%.

INSTORE RETAILERSThis type of retail format is also known as the brick and mortar format. These retail stores are in the formof fixed point sale outlets. They are specially designed to lure the customers. There are different types ofstores through which the in store retailers operateor excess stock left over at the season. The product category can range from a variety of perishable/ non

perishable goodsDEPARTMENT STORES:Large stores ranging from 20000-50000 sq. ft catering to a variety of consumer needs. Further it isclassified into localized departments such as clothing, toys, home, groceries, etc.DEPARTMENT STORES:Departmental Stores are expected to take over the apparel business from exclusive brand showrooms.Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now hasmore than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand forclothes called Stop!.HYPER MARTS/SUPERMARKETS:Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are locatedin or near residential high streets. These stores today contribute to 30% of all food &grocery organizedretail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food&grocery and personal sales.CONVENIENCE STORES:These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limitedrange of high-turnover convenience products and are usually open for extended periods during the day,seven days a week. Prices are slightly higher due to the conveniencepremium.MBOs: Multi Brand outlets, also known as Category Killers, offer several brands across a single productcategory. These usually do well in busy market places and Metros.

8OVERVIEW OF INDIAN RETAIL SECTOR

Retail Sector is the most booming sector in the Indian economy. Some of the biggest players of the worldare going to enter into the industry soon. It is on the threshold of a big revolution after the IT sector.Although organized retail market is not so strong as of now, but it is expected to grow manifolds by theyear 2010. The sector contributes 10%of the GDP, and is estimated to show 20% annual growth rate bythe end of the decade. The current growth rate is estimated to be 8.5%, but CRISIL report says that the


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retail market is most fragmented in the world and only 2% of the entire retailing business is in theorganized sector. There are about 300 new malls, 1500 supermarkets and 325departmental stores beingbuilt in the cities very soon. The retail boom will face a strong competition from the 12 million mom-and-pop stores which are easily accessible and approachable and provide services like free home delivery andgoods at credit. But buying from Malls, Supermarkets and Department stores like Subhiksha, Marks &Spencers, etc gives a different feeling and the environment of pick and choose from a variety of

products. A number of retail giants are also going to explore the market such as Reliance Retail Ltd andWal-mart. The revolution is driven by large expectations where both domestic and international playerswill be channel through which other large stores in India are spreading themselves across the country.Some of the players present in the industry:

Archies, Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Fabmall, Food Bazaar,Globus Stores Pvt. Ltd., Health and Glow, Liberty Shoes Ltd., MTR Foods Ltd., Music WorldEntertainment Ltd., Pantaloon Retail India Ltd., Shoppers Stop, Style SPA Furniture Ltd, Subhiksha,Titan Industries, Lifestyle, etc. New entrants entering the market soon will be Reliance Retail Ltd, Wal-Mart Stores, Carrefour, Tesco, Boots Group, etc.

9EVOLUTION OF THE SECTOR

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Magnification of the Indian Retail Industry

Yardstick

Situation in 04-05 Situation in 07-0Value of retail sales Rs. 10,20,00 Rs 12,00,00Annual growth rate Value of organized market Rs35,00 Rs 55,00Share of organized market in the sector Forecasts (after 5 years) about size of organizedretail market Over Rs. 1,00,00 Rs. 2,00,00Forecasts about growth rate of organized marketAroun Aroun

The above table clearly shows that the retail market as well as the mindset required for it has experienceda thorough revisal in the last three years. This is just the beginning and Indians are sanguine that the

sector will see rosy days in the future. This confidence has helped India acquire the No.1 position among30 most attractive retailing destinations in the world according to the Global Retail Development Indexof2005 (by AT Kearney, India). Among emerging markets, India holds the second position after China inthe list of most favored retail destinations. The retail industry employs a huge share of the total workforcein India. It is the second largest employer after India. Presently 7 percent of the total labor force isemployed in the retail sector. According to available data it is also the largest employer in the servicessector and maximum growth in the non-agricultural sector has been witnessed by retail trade. Accordingto market analysts 300 new malls, 1,500 supermarkets and325 departmental stores are going to come up


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in India in the next few days. The shopping revolution that has led to this retail boom is going to continueand this is a good news for the government as well as those who wish to work in the organized sector.

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8.90%9.0%6.8%6.0%6.0%5.6%5.2%6.4%6.6%5.4%9.2%0%1%2%3%4%5%6%7%8%9%10%19971998199920002001200220032004200520062007

Projections of 8% sustainable real GDP growth rate till 2020promise high growth potential for IndianRetailCONTRIBUTION OF FDI IN RETAILING-Permitting Foreign Direct Investment in the retailing sector can have immense benefits. It can generatehuge employment for the semi-skilled as well as illiterate population which otherwise can't be employedin the already confined rural and organized sector. The retail sector is highly dependent on the ruralsector. Thus it can facilitate the improvement of the standard of living of farmers by purchasingcommodities at a reasonable cost. It also stems out an indirect employment generation channel by trainingand employing people in the transportation and distribution sectors such as drivers, mechanics etc. It is

also evident that real estate is a genuine challenge for organized retailing. Traditional retailers can use thissituation in their favor by taking franchisees of the mega players of this industry. On the other hand, theconsumer gains from the wide variety of choices and a more diversified basket of prices available underone roof. Secondly the indirect benefits like better roads, online marketing, expansion of telecom sectoretc. will give a 'big push' to other sectors including the rural one itself. Last but not the least the huge taxrevenue generated from these retail biggies and collected in government coffers will gradually wipe outthe ugly looking fiscal and revenue deficits. Besides the transaction in foreign currencies by these MNCswill create a balance in exchange rate and will bring in stable funds in the economy as opposed to FII'shot money. This will in turn act as a boost to the developing (or 'transforming', as suggested by theUSAID) economy of India. The phobias relating to


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14Greater PerCapita IncomeGreater ConsumerSpending due toeconomic boomIncreasingTax PayingPopulationGreaterSourcingFrom IndiaReduced TaxEvasionGDP GrowthIncreased TaxRevenuesGreaterExportsEmploymentBenefitsto Govt.FDI in the retail sector are unfounded as neither the retailing sector in India is an infantindustry, nor itcan outweigh the paramount local tastes and preferences.Let's pray that the retail sector like the IT andmanufacturing sector brings happiness inthe eyes of the people and help remove the regional and class-based disparities.BENEFITS TO THE GOVERNMENT


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It will help in increasing employment levels as FDIwouldresult in market growth and expansion whichin turnwill result in employment generated at variouslevelsIncreased consumer demand impliesemploymentgeneration across the value chain as certain areas inretail does not need very high skill setsas basic needs arehigh school graduates and other similar skill levels whichis currently a majorlyunemployed demographic group.

ESTIMATES AND PREDICTIONS FOR RETAIL SECTOR:

At present, the industry is estimated to be at more than US$ 400 billion by a study ofMcKinsey. TheEconomist Intelligence Unit (EIU) estimates the retail market in India willincrease to US$608.9 billion in2009 from US$394 billion in 2005.KPMG Report says that the organized retail would grow at a higherrate than the GDPin the next five years. The retail sector would generate employment for more than2.5million people by the year 2010, predicts an analysis by MaFoi ManagementConsultants Ltd.Traditional vis a vis Modern Format RetailersThe retail boom will face a strong competition from the 12 million mom-and-pop stores.These are easilyaccessible and provide services like free home delivery and goods atcredit, which is not possible withhypermarkets and supermarkets. Buying from Malls,Supermarkets and Department stores likeSubhiksha, Marks & Spencers, etc. provide a

15different environment where one can pick and choose from a variety of products. Owingto the entry ofsuch big players, the small shopkeepers fear losing their business.Reliance Retail Ltd. has been inviting

such people to join in its Dairy business asfranchisees.


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LEGAL ISSUES IN RETAIL SECTOR

Many countries specially in south east Asia like Malaysia, Indonesia and Thailand have put in place toughregulations with a view to balance the conflicts of interests between modern retail and the traditional

retailers and suppliers to the modern retail. These countries have imposed a number of restrictions on thegrowth of large retail companies particularly the transnational companies as against fairly liberalapproach to the retail sector practiced until the late 1990s.In India in a bid to cushion small retailers fromcorporate giants, the Centre is in consultation with states for setting up a retail regulator. As per theconsolations among states, state level legislative authorities would wield powers to grant licenses toretailers for operating business. The regulators in coordination with the state governments would alsodemarcate zones in the cities for setting hypermarkets. Moreover, the regulators would work in tow withcompetition commission to oversee pricing of products so that small retailers do not fall prey to predatorypricing. States would submit the final guidelines on the regulatory mechanism in 2 months to Commerce& Industry ministry. In fact, the proposal is part of the Icrier report on Big Versus small retail recently submitted to the government. We have had several rounds of consultations with the state governmentsand other ministries. We are now awaiting their comments on the report, a senior commerce ministry

official said. The policy framed by the government based on the report would also set the ground for FDIin retail, which has been facing problems due to lack of consensus among political parties. The regulatorwould also look into real estate cornering by large retail chains to restrict competitor access andcomplaints of muscling out smaller retailers by price under cutting. All the following statutory provisionsrelated to following acts are applicable to retailindustry1) Shops & Establishment2) PF &Misc.Provisions Act


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173) ESI Act4) Bonus Act5) Minimum Wages Act6) Industrial Disputes Act7) Gratuity Act8) MaternityAct9) Welfare Act As part of a big move to liberalize the foreign direct investment (FDI) regime, theCabinet today approved new FDI norms for several sectors including retailing. Retail presents the nextbig opportunity (worth $250 billion) for the foreign investor. However, foreign direct investment in theIndia retail sector is currently restricted. There are several methods pursuant to which a foreign investormay gain exposure to the Indian retail sector:(i) Pursuant to Press Note No. 3 (2006 series), foreign direct

investment up to 51% is now permitted in single brand retail trade with the prior approval of thegovernment;(ii) Pursuant to Press Note No. 4 (2006 series), foreign direct investment up to 100% isnowpermitted under automatic route for cash and carry wholesale trade; or(iii) The foreign investor couldenter into franchise arrangements. LVMH is among the international brands that have indicated interest ina 51% stake. However, multi-brand retail stores such as Wal Mart are not yet permittedCURRENT ISSUESThe boom in Indias retail sector will continue and top $365 billion in 2008, against $300billion a year.With a year-on-year growth of 30-35 per cent, the retail trade sector in India will top $440 billion by2010, says the study by the Associated Chambers of Commerce and Industry of India (Assocham). Thestudy estimated the organised retail segment would witness an additional investment of $70 billion by2010. In 2008, the investment size would be in the region of $25-28 billion.Mukesh Ambani, RILs chairman, plans to open 100m sq ft of retail space in India by2010. Local pressreports talk of between 5,000 and 10,000 stores spread across 1,500towns and cities. Ambani hasdescribed the concept as a pan-India footprint of multi-format retail outlets. Reliance will operatehypermarkets, convenience and speciality stores, as well as business-to-business operations, selling food,clothing, electrical goods, consumer durables, luxury goods and financial and travel services. The projectwill employ 1m people within five years.Protests against reliance fresh in UP and Jharkhand.Chinese conglomerate Li & Fung Group said it is studying India's logistics and retail sectors to expand itspresence in the country. The company, engaged in distribution, retail, logistics, private equity andproperties businesses, currently sources consumer products worth 550 million dollars from India everyyear for its global operations."We will look at India for innovative designs and creativity. In the next threeyears we expect to more than double our sourcing from this country," Li & Fung Group Chairman VictorKFung said today on the sidelines of a FICCI event.Taxpayers, especially corporates in the retail sector who have to bear the burden of huge rentals forcommercial space, could get some relief soon. The government is considering allowing taxpayers todeduct tax at source (TDS) on rents after reducing the total outgo on service tax. North Block isexamining a proposal in this regard after receiving references from field formations, and a clarification


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may be issued shortly. To put it simply, if a taxpayer pays Rs 100 as rent he is liable to pay service tax atthe rate of 12%, taking the total outgo to Rs 112. There was a confusion as to whether TDS would be onRs 100 or Rs 112. As the field formations were in dilemma, in some

19instances they had demanded deduction of tax on the final amount of Rs 112. The confusion had arisenafter the government brought commercial rental service under tax net in the Budget for 2007-08.Wal-Mart Store Inc. will open its first cash-and-carry centre in India in 2009, the head of its Indiaoperations said on Wednesday. Wal-Mart, which has a venture with India's Bharti Enterprises for cash-and-carry wholesale operations, had earlier said it aimed to open the first of its centres by year-end andopen 10-15 centres over seven years.INTRODUCTION

Established in 1998 as part of the Tata Group, Trent Ltd. operates Westside, one of India's largest andfastest growing chains of retail stores. The Westside stores have numerous departments to meet the variedshopping needs of customers. These include Menswear, Womens wear, Kids wear, Footwear,Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts. The company hasalready established 31 Westside departmental stores (measuring15,000 - 30,000 square feet each) inMumbai, Bangalore, Hyderabad, Jaipur, Chennai, Pune, Delhi, Noida, Gurgaon, Ghaziabad, Kolkata,Nagpur, Indore, Ahmedabad, Lucknow, Ludhiana, Surat, Mysore & Rajkot. The company hopes toexpand rapidly with similar format stores that offer a fine balance between style and price retailing.HISTORYThis story began circa 1998 when The Tatas acquired Littlewoodsa London based retail chain. Thisacquisition was followed by the establishment of Trent Ltd(a Tata enterprise that presently operatesWestside). Littlewoods was subsequently renamed Westside. In a rapidly evolving retail scenario,

Westside has carved a niche for its brand of merchandise creating a loyal following. Currently, thecompany has31 Westside stores measuring 15,000-30,000 square feet each across 17 cities. With a varietyof designs and styles, everything at Westside is exclusively designed and the merchandise ranges fromstylized clothes, footwear and accessories for men, women and children to well-co-coordinated tablelinens, artifacts, home accessories and furnishings. Well-designed interiors, sprawling space, primelocations and coffee shops enhance the customers shopping experience.

22THEIR MISSION


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At Westside the mission

is to be regarded by their customers as the mostrelevant retailer in the country.

In order to achieve this goal, they shall develop a comprehensiveunderstanding of their needs, strive towin their confidence, and offer thembest-in-class products and services at affordable prices.

They shall always be in the forefront of fashion and services by anticipatingand exceeding theexpectations of their customers.

Their leadership will be the product of their styling, quality and serviceconsciousness.hey will continue toscale new heights of excellence throughteamwork, in an atmosphere that encourages creativity and

innovativeness.

It is their policy to satisfy our customers with the range, quality and value of the products we offer.However, if they are dissatisfied with any item thatthey might have purchased they would take thenecessary measures to assistthem.

They expect their customers to return unused merchandise along with itsreceipt within 30 days; theywould exchange the returned items or give thecustomers a complete refund.

In the event that the customers do not have the receipt they would offerthem an exchange or providethem a gift voucher to the current or lastknown selling price.

They have complete confidence in the quality of our merchandise howevershould if customers have anygrievances, they would be happy to addressthem once they are brought to our attention.4 Ps

PRODUCTThe Westside stores have numerous departments to meet the varied shopping needs of customers. These

include Menswear, Womens wear, Kids wear, Footwear, Cosmetics, Perfumes and Handbags,

Household Accessories, lingerie, and Gifts. Some of them are as follows;

PRICEMenswear:For men at work and at play, Westsides menswear range extends from formal to casual to sporty. Thereis also a wide price range starting from value and extending into premium.Womens wear:


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For women there are western casual, western formals & very classyethnic wear with a look unique toWestside. The range does not end with clothes but extends right into accessories with a great range ofjewelry, scarves & other accessories. Also available are comfortable lingerie at affordable prices.Kids wear:With a dash of attitude and a sprinkle of playfulness, Westsides Kidswear has a huge range to selectfrom. Catering to a wide age bandstarting rom infants to early teens the garments sport a look that is

hip, trendy and very international.Footwear:The range encapsulates footwear for the entire family with a wide variety of choice, great styles andcolours to charm everyone.Cosmetic, Perfumes and Handbags:The Westside store has a separate section for cosmetics and perfumes in some stores. The handbags aretastefully crafted and range from casual to formal wear.Household Accessories:The Westside motto is -Your Dreams Our Vision- which translates into a Household section that catersto every taste. This section is one of the most contemporary with every item being exclusive & unique.The merchandises well coordinated & allows customers to mix & match and to create their own look. Therange extends from bed linen, towels, table linens to coordinated crockery, a cook shop, glassware and

much more to set up an entire home. The range also includes high quality home accessories and dcorproduct.Gifts :A wonderful gift section with the trendiest of collections that will leave one spoilt for choice. This sectionmatches every requirement and suits every occasion.

24Westsides gift section is vast and includes gifts ranging from photo frames, candle stands, candles,

vases, ceramic mugs, lanterns, lamps and more.PLACEThe company has 31 Westside departmental stores up till now (measuring 15,000 -30,000 square feet

each) in Mumbai, Bangalore, Hyderabad, Jaipur, Chennai, Pune,Delhi, Noida, Gurgaon, Ghaziabad,Kolkata, Nagpur, Indore, Ahmedabad, Lucknow, Ludhiana, Surat, Mysore & Rajkot. The company hopesto expand rapidly with similar format stores that offer a fine balance between style and price retailing.PROMOTION

Westside does its regular brand building through advertisement in the media with brand ambassadoryuvraj Singh and other young models. More importants its in-house promotions which peak during mainfestive seasons, summer, diwali andChristmas. The promotion are mostly them based, with decorations tomatch, live bands and other attractions.

25FINANCIAL INTERPRETATIONDIVIDEND:

On 30th June 2008, the Board of Directors recommended a final dividend of Rs. 7/-per share on1,95,32,896 equity shares (70%) (Previous year interim dividend - 70%on 1,57,60,737 equity shares)


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involving a distribution of Rs. 13.67 crores (previous year Rs. 11.03 crores). The total outflow will be Rs.15.24 crores including the tax on dividend of Rs.1.57 crores.


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26ISSUE OF EQUITY SHARES ON RIGHTS BASIS:


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During the year under review, the Company allotted 31,48,264 equity shares of Rs10/- each at a premiumof Rs. 490/- each for an amount aggregating to Rs. 157.41crores on Rights basis to the existing equityshareholders of the Company in the ratio of one fully paid equity share for every five equity shares heldon the record date i.e. on 15th May 2007. The shares have been listed on Bombay Stock ExchangeLimited and National Stock Exchange of India Limited.DISTRIBUTION OF REVENUE:


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27H R P o l i c y & C o d e o f C o n d u c t

S i n c e W e s t s i d e i s a T a t a E n t e r p r i s e t h e y a d o p tt h e s a m e C o d e o f C o n d u c t p o l i c i e s a s T a t a

Code of Conduct1. National InterestA Tata company shall be committed in all its actions to benefit the economic development of the

countries in which it operates. It shall not engage in any activity that adversely affects such an objective.It shall strive to make a positive contribution to the achievement of such goals at the international,national and regional level, as appropriate.2. Financial Reporting And RecordsA Tata company shall prepare and maintain its accounts fairly and accurately in accordance with the

accounting and financial reporting standards which represent the generally accepted guidelines,principles, standards, laws and regulations of the country in which the company conducts its business

affairs.3. CompetitionA Tata company shall fully strive for the establishment and support of a competitive, open market

economy in India and abroad, and shall cooperate in efforts to promote the progressive and judiciousliberalization of trade and investment by a country.4. Equal - Opportunities Employer

Employee policies and practices shall be administered in a manner that ensures that in all matters equalopportunity is provided to those eligible and that decisions are based on merit.


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5. Gifts and donationsA Tata company and its employees shall neither receive nor offer or make, directly or indirectly, anyillegal payments, remuneration, gifts, donations or comparable benefits which are intended to orperceived to obtain business or uncompetitive favours for the conduct of its business.6. Government Agencies

A Tata company and its employees shall not offer or give any company funds or property as donation to

any government agencies or their representatives, directly or through intermediaries, in order to obtainany favourable performance of official duties

287. Political Non-AlignmentThe company shall not offer or give any company funds or property as donations, directly or indirectly, toany specific political party, candidate or campaign.8. Health, Safety and Environment

A Tata company shall be committed to prevent the wasteful use of natural resources and minimize anyhazardous impact of the development, production, use and disposal of any of its products and services onthe ecological environment.

9. Quality of Products and ServicesThe quality standards of the company's goods and services should meet the required national standards,and the company should endeavor to achieve international standards.10. Corporate Citizenship

Tata companies are encouraged to develop social accounting systems and to carryout social audits of theiroperations.11. Cooperation of Tata Companies

In the procurement of products and services, a Tata company shall give preference to another Tatacompany as long as it can provide these on competitive terms relative to third parties.12. Public representation of the company and the Group

A Tata company shall honour the information requirements of the public and its stakeholders. It will bethe sole responsibility of these authorised representatives to disclose information on the company or the

group.13. Third-Party Representation

Parties which have business dealings with the Tata Group but are not members of the group, such asconsultants, agents, sales representatives, distributors, contractors, suppliers, etc. shall not be authorisedto represent a Tata company if their business conduct and ethics are known to be inconsistent with thiscode.14. Use Of The Tata Brand

The use of the Tata name and trademark owned by Tata Sons shall be governed by manuals, codes andagreements issued by Tata Sons. The use of the Tata brand is

29defined in and regulated by the Tata Brand Equity & Business Promotion Agreement.15. Ethical Conduct

Every employee of a Tata company, including whole-time directors and the managing director, shall dealon behalf of the company with professionalism, honesty and integrity, as well as high moral and ethicalstandards.16. Group Policies


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A Tata company shall recommend to its board of directors the adoption of policies and guidelinesperiodically formulated by Tata Sons.17. Shareholders

A Tata company shall be committed to enhance shareholder value and comply with all regulations andlaws that govern shareholders' rights.18. Regulatory Compliance

Every employee of a Tata company shall, in his or her business conduct, comply with all applicable lawsand regulations, both in letter and in spirit, in all the territories in which he or she operates.19. Concurrent Employment

An employee of a Tata company shall not, without the prior approval of the managing director of thecompany, accept employment or a position of responsibility (such as a consultant or a director) with anyother company, nor provide 'freelance' services to anyone.20. Conflict of Interest

An employee of a Tata company shall not engage in any business, relationship or activity, which mightdetrimentally conflict with the interest of his company or the Group. A conflict of interest, actual orpotential, may arise where, directly or indirectly:21. Securities transactions and confidential information

An employee of a Tata company and his or her immediate family shall not derive any benefit or assist

others to derive any benefit from access to and possession of information about the company or theGroup, which is not in the public domain and thus constitutes insider information.

3022. Protecting Company Assets

The assets of a Tata company shall not be misused but shall be employed for the purpose of conductingthe business for which they are duly authorised.

23. CitizenshipAn employee of a Tata company shall in his or her private life be free to pursue an active role in civic orpolitical affairs as long as it does not adversely affect the business or interests of the company or theGroup.24. Integrity of Data Furnished

Every employee of a Tata company shall ensure, at all times, the integrity of data or informationfurnished by him or her to the company

31Key PersonnelChairman Emiretus:

S.N.TataBoard Of Directors:

F.K.Kavarana (Chairman)N.A.SoonawalaB.S.BhesaniaA.D.CooperK.N.Suntook N.N.Tata (ManagingDirector)

Corporate Social Responsibility

India is a youthful country where a large percentage of the population is in the younger age brackets.

We believe that these young people shall be the backbone of the nation in the coming years. It is


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therefore our intention to focus on socially underprivileged children in order to provide them with a

chance to have a better life tomorrow. We shall dedicate resources commensurate with our business

requirements to community activities that work towards improving the future of socially

underprivileged children. We shall also use our assets and our expertise in the retail business to further

the cause of such communities. Were it not for the active participation of our customers, our social

policy might never have been activated. We are truly grateful for their generosity in supporting our

socially conscious endeavours.

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Lend a hand

Light a Diya, Help a Child Purchase a diya and light it at Westside during the Diwali Promotion. Funds

collected will be donated to NGOs to help bringing smiles to the faces of underprivileged

children. Angels TreePurchase a Silver Star or a Gold Star during our Christmas Promotion, and

decorate our Angels Tree. The money collected will be donated to various NGOs across the countryworking with underprivileged children. Assisting a number of child welfare organizations The company

also extended its technical assistance to new NGOs The company strictly adheres to a number of human

rights principles against discrimination & child labour

FUTURE PLANS OF WESTSIDE

Westside, one of largest and fastest growing chains of retail stores in India, is on an expansion path thesedays. The retail chain has just launchedKIDSWEST, a kids program that incorporates learning with playing, in its stores operating in Delhi, Bangalore and

Pune.

Westside, Tatas leading chain of stores, is planning to adopt the franchisee route to expand its presencein tier-II and tier-III cities. Through this model, 25-30franchisee-operated stores of across 8,000-12,000sq ft and with an initial investment of Rs 1.2 crore, per store would be set up in the next five years. Withthis move, it plans to reach out to consumers across 37 cities.


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Trent-controlled retail chain Westside is planning to open 18 flagship stores in calendar year 2008.Market sources said that Westside, one ofIndias fastest growing retail store chains, will target mostly tierII and III cities as part of its expansion plans for 2008, with flagship stores in the 40,000-50,000 squarefeet range. At least 80 per cent of the property acquisitions required for Westsides next phase ofexpansion have been wrapped up.

Trent is also set to launch its second Star One Global hypermarket (under the StarIndia Bazaar initiative)after Ahmedabad, at Vashi in sub-urban Mumbai.

34SIGNIFICANT EVENTS

In 1998 Tata sold of their 50% stake in the cosmetic products company Lakme to HLL for Rs 200 Crore(approx. 45 million US$), and created Trent from the money it made through the sale. All shareholders ofLakm were given different shares in Trent. SIMON TATA, the chairperson of Lakm, went on to headTrent.

Trent Ltd. operates Westside, one of Indias largest and fastest growing chains ofretail stores thatcurrently operate 29 stores in the major metros and mini metros in India.

Westside has garnered numerous accolades -

Balanced Scorecard Hall of Fame India Brand SummitBrand Leadership Retail IFA Visionary of theYear Award, 2002Mrs. Simone N. Tata Most Admired Large Format Retail Chain of the Year - LycraImages Fashion Awards 2005NDTV Profit Business Leadership Awards 2006 - Retail Category

Westside, Tatas leading chain of retail stores has launched its DesignerDevelopment Programme (DDP)to encourage Emerging Talent of the fashion industry and provide them a mass retailing platform. Aconcept pioneered by Westside; this is a significant step to bridge the gap between exclusive designerwear and the fashion conscious Indian consumers.


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It is significant that Trent had in April this year entered into an agreement with The Xander Group Inc, aglobal private equity firm, to develop and manage an institutional retail real estate portfolio in India inpartnership with Indian developers.

The flagship stores planned next year will substantially improve possibilities for cross-promotion betweenWestside and Landmark, the south-based books and music retail chain in which Trent had acquired 76 percent stake in 2005.

35SUGGESTIONS AND CONCLUSIONSModern retailing is all about directly having "first hand experience" with customers, giving them such a

satiable experience that they would like to enjoy again and again. Providing great experience to customerscan easily be said than done. Thus challenges like retail differentiation, merchandising mix, supply chainmanagement and competition from supplier's brands are the talk of the day. In India, as we are moving tothe next phase of retail development, each endeavor to offer experiential shopping. One of the keyobservations by customers is that it is very difficult to find the uniqueness of retail stores. The problem:retail differentiation. The next problem in setting up organized retail operations is that of supply chainlogistics. India lacks a strong supply chain when compared to Europe or the USA. The existing supplychain has too many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor -Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retail chains will

have to build a supply chain network from scratch. This might run foul with the existing supply chainoperators. In addition to fragmented supply chain, the trucking and transportation system is antiquated.The concept of container trucks, automated warehousing is yet to take root in India. The result: significantlosses/damages during shipping. Merchandising planning is one of the biggest challenges that any multistore retailer faces. Getting the right mix of product, which is store specific across organization, is acombination of customer insight, allocation and assortment techniques. The private label will continue tocompete with brand leaders. So supplier's brand will take their own way because they have an establishedbrand image from last decades and the reasons can be attributed to better customer experience, value vs.price, aspiration, innovation, accessibility of supplier's brand.

In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the valueof building their own stores as brands to reinforce their marketing Positioning, to communicate quality as

well as value for money. Sustainable competitive advantage will be dependent on translating core valuescombining products, image and reputation into a coherent retail brand strategy

Future Group's private brands top the booming modern retail industry


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15 Jul 2011

Retailers' own brands are making rapid gains across consumer product segments in the

booming modern retail industry, weakening several established brands' power to negotiate

lower trade margins.

Leading the charge is the country's largest retailer Future Group, whose private brands have

been outselling some of the country's best-known brands in select categories across 200-plus

Big Bazaar and Food Bazaar outlets.

Private brands already account for close to 7 per cent of modern trade sales in India, compared

to 1 per cent in China, according to market researcher Nielsen's latest survey that covers over 50 countries.

"The private label phenomenon has leapfrogged in India compared to other Asian countries for many reasons: the value conscious Indian shopper,

their familiarity and comfort with unbranded/ generic products, and the focus on quality of private label products on behalf of the retailers," says Dipita

Chakraborty , executive director for retail and shopper practice at Nielsen.

The development will impact the bargaining power of marketers such as Reckitt Benckiser and Cadbury who have had a face-off with big retailers over

margins.

"This is worrisome.... Very soon, large retailers will call the shots. It has already started happening," head of a Delhi based maker of consumer goods

said on condition of anonymity.

In Big Bazaar stores, private labels such as Clean Mate and Tasty Treat outsell national brands such as Domex, Pril and Bambino, and own brands lead

the sales chart in at least four product segments (see chart). Future Group had boycotted chocolate maker Cadbury in 2008, and the following year it

boycotted cereal maker Kellogg's brands across its Food Bazaar and Big Bazaar stores, both demanding higher business margins.

It stopped fresh orders from Reckitt Benckiser, maker of Dettol soaps and Harpic toilet cleaner, in February this year after the marketer slashed

retailers' margins to 14 per cent from 16 per cent on some of its products to partly offset rising input costs. The issue was resolved two months back with

Reckitt products back on Big Bazaar and Food Bazaar shelves.

OTHER RETAILERS STRUGGLE

Largely Future Group is fueling growth in private brands, while others have yet to crack the private label space. Reliance Retail and Aditya Birla Retail's

More have said they will slow down and consolidate their portfolios. More has already removed personal care products from its private brands.


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Future Group Chairman and MD Kishore Biyani says customer acceptance and repeat purchases are what is driving its private brands. "We are working

hard on our private brands," he says. Based on information shared by Nielsen, Future Group president of food and FMCG, Devendra Chawla, says that

Future group's own brands grew 52 per cent last year while private brands in modern trade grew 19 per cent.

"Unlike in the West, where retailers brands started decades later than national brands, in India, we are participating in new age categories, so we can be

significant players in driving consumption," Chawla says.

"Modern trade is a catalyst and incubation ground for categories like corn flakes and hand washes, so we are placing big bets on these brands," he adds.

Future Group recently extended its Sach brand to hand wash. Industry experts, meanwhile, point out private brands' share is miniscule in absolute

numbers.

"Actually the base of private brands remains small, which is why their growth looks impressive," says retail industry veteran and consulting firm Wazir

Advisors MD Harminder Sahni. Retailers sell private labels (or store brands) to consumer at price s 10-20 per cent lower than national brands because

retailers don't incur overheads like marketing and advertising costs.

Pricing depends on the category - in some low-involvement categories like toilet cleaners private brands are priced cheaper, but in others like hand

washes they are costlier than established ones. In developed markets, there are many examples that reiterate the clout of retailers.Private labels cannot replace established brands: HUL31 Mar 2008

Hindustan Unilever Limited (HUL), the countrys largest FMCG marketers, is in the process of

extending its brands portfolio in India.

Speaking to India retailing, Sunil Tolani, business head, HUL, said: HUL is supplying its

products to almost every traditional and modern retailer, and will expand its products portfolio

to meet demands of retailers and consumers."

Asked if the company is benefiting from the growing modern retail sector, Tolani did not make a

direct comment, saying, Both, the traditional and the modern retailers, are equally importan t

for the company. We will have products in every price segment for all kinds of customers."

Answering the India retailing query whether 'private labels from modern retailers, in future, will affect the growth of FMCG brands,' Tolani said: The

emerging private labels in the country cannot outdo established FMCG brands.

HUL, today, launched a new anti-ageing cosmetic range named Aviance Prestige. Speaking about the product, Tolani said, Targeting the elite group,

Aviance Prestige is a collection of age-defence solutions." The product, according to Tolani is a medicated anti-ageing solution and is priced between Rs

750 and Rs 1,650.


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To promote the new product, the company has initiated a new strategy wherein it has employed executives who will personally meet consumers to

demonstrate the products. Our executives will meet potential consumers in their offices and houses to explain the benefits of the product, informed

Tolani.

The product will be stocked at retail outlets as well.Pantaloon private labels to have their own shops02 Apr 2008

To create a separate identity and create national brands of its private labels, Pantaloon Retail

has transferred some of its private labels to Future Brands. Pantaloon private labels will now

move out of Pantaloon stores and probably have their own exclusive shops or will retail through

multi-brand outlets.

"We will use in-house labels in the beginning and then launch pan-India brands at a later stage,"

Santosh Desai, CEO, Future Brands, said in a statement.

The labels to be retailed outside company-owned stores include John Miller, Bare, DJ&C, Ajile,

Rig and Umm. Besides, the company will also split consumer electronics labels Koryo and Sensei, and home dcor brand Greenline.

The company will invest Rs 50 crore for brand-building exercise in 2008-0Pantaloons adding private labels06 Nov 2007

In an effort to add on more products at Big Bazaars, Pantaloon Retail will add more private labels across segments including

apparel, food, cosmetics and electronics.

At present, private labels contribute about 12-14 per cent of total sales while the company is aiming them to this to 25 per cent in the next two years.

We already have a range of private label products at our hypermarkets in apparel, food and electronics. At present, this segment contributes about 12-

14 per cent to our sales. We are planning to increase this to 25 per cent in the next two years, Rohit Malhotra, head, Panta loon Retail, told media.

We have crossed the critical mass of 45 -50 a few months ago, opening up the opportunity in private labels. This number supports a certain amount of

manufacturing, ensuring cost competitiveness, he said.

The Big Bazaar network currently has 70 stores across major cities.


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Brand Image in Retail Sector