INDIAN INSTITUTE OF MANAGEMENT, INDORE

PANTALOONS

Retail Outlet Analysis

Marketing - II

Course Instructor: Prof. Sabita Mahapatra

Date of Submission:

Submitted by:

Group 4, Section B

Aadish Dhakad │ Bharath S │ Kunal Shah │ Srivathsa Bethapudi │ Vaibhav Agarwal

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Contents Introduction .................................................................................................................................................. 3

Other ventures of PRIL .................................................................................................................................. 4

PANTALOONS ................................................................................................................................................ 5

Marketing Decision at Pantaloons ................................................................................................................ 6

Supply Chain Management ........................................................................................................................... 8

Visual Appeal of the Store........................................................................................................................... 11

Customer Loyalty Program ......................................................................................................................... 14

Co-branding................................................................................................................................................. 15

Strategic Analysis ........................................................................................................................................ 15

Key Learning’s ............................................................................................................................................. 17

Conclusion ................................................................................................................................................... 18

References .................................................................................................................................................. 19

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PANTALOON RETAIL is the flagship company of Future Group, a business group catering to the entire Indian

consumption space. FUTURE GROUP, led by its founder and Group CEO, Mr. Kishore Biyani, is one of

India’s leading business houses with multiple businesses spanning across the consumption space. While

retail forms the core business activity of Future Group, group subsidiaries are present in consumer

finance, capital, insurance, leisure and entertainment, brand development, retail real estate

development, retail media and logistics.

Future Group believes in developing strong

insights on Indian consumers and building

businesses based on Indian ideas, as

espoused in the group’s core value of

‘Indianness.’ The group’s corporate credo

is, ‘Rewrite rules, Retain values.’

Pantaloon Retail (India) Limited (PRIL), is

India’s leading retailer that operates

multiple retail formats in both the value

and lifestyle segment of the Indian

consumer market. Headquartered in

Mumbai, the company operates over 16

million square feet of retail space, has over 1000 stores across 73 cities in India and employs over 30,000

people. The company follows a multi-format retail strategy that captures almost the entire consumption

basket of Indian customers.

The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely

Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of

Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of

seamless destination malls. Some of its other formats include Brand Factory, Blue Sky, aLL, Top 10 and

Star & Sitara. The company also operates an online portal, futurebazaar.com.

Pantaloons

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Other ventures of PRIL Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India) Limited. This entity

has been created keeping in mind the growth and the current size of the company’s value retail

business, led by its format divisions, Big Bazaar and Food Bazaar.

The company operates 120 Big Bazaar stores, 170 Food Bazaar stores, among other formats, in over 70

cities across the country, covering an operational retail space of over 6 million square feet. As a

focussed entity driving the growth of the group's value retail business, Future Value Retail Limited

continues to deliver more value to its customers, supply partners, stakeholders and communities across

the country and shape the growth of modern retail in India.

Pantaloons

Star & Sitara

Top 10

aLL

Blue Sky

Brand Factory

Food Bazaar

Big Bazaar

eZone

Collection i

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A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format

home solutions store, Collection-i, selling home furniture products and eZone, focused on catering to

the consumer electronics segment.

PANTALOONS

'FRESH FASHION'- An idea that has captured the

imagination of young India is the tag line of

Pantaloons. With a focus on the youth of today,

Pantaloons offers trendy and hip fashion that

defines the hopes and aspirations of this

demography.

Pantaloons Fresh Fashion stands out as a fashion

trendsetter, on the lines of how fashion is

followed internationally. All Pantaloons stores

reflect the new ideology -- Fresh Feeling, Fresh

Attitude, Fresh Fashion. The stores offer fresh

collections and are visually stimulating thanks to

appealing interiors and attractive product

displays!

The first Pantaloons was opened in Gariahat in

1997. Over the years, it has undergone several

transitions. When it was first launched, this store

mostly sold external brands. Gradually, it started

retailing a mix of external brands while at the

same time introduced its own private brands.

Initially positioned as a family store, it finally veered towards becoming a fashion store with an emphasis

on ‘youth’ and clear focus on ‘fresh fashion’.

Today, the fashion store extends to almost all the major cities across the country. ‘Pantaloons’ has

established its presence with stores not just in the metros, but also in smaller towns. Pantaloons stores

have a wide variety of categories like casualwear, ethnicwear, formalwear, partywear and sportswear

for Men, Women and Kids, watches and sunglasses, footwear, handbags, perfumes, cosmetics and

fashion accessories. The store has now gone for the online shopping portal, the portal helps the

customers to shop online as well as locate the nearest store.

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Marketing Decision at Pantaloons

TARGET MARKET: The target market of Pantaloons is the Youth of today, youth is defined broadly by the

company from the kids to adults whoever considers themselves as young. As discussed above it believes

in Fresh Feeling, Fresh Attitude, Fresh Fashion.

PRODUCT ASSORTMENT: Pantaloons offers trendy and hip fashion that defines

the hopes and aspirations of this demography. It targets the ‘Indianness’ in

the products as well. The store offers wide variety of categories like casual

wear, ethnic wear, formal wear, party wear and sportswear for Men,

Women and Kids. Apart from clothes, Pantaloons offers products in the

ACCESSORIES category and also in the BEAUTY PRODUCTS CATEGORY.

DEPTH: The product assortment is broad and deep, there are many product

categories and each has a lot of variants in terms of size, fit and color.

PRODUCT: Pantaloons benefits because consumers perceive their store

brands to have consistent and comparable quality and availability in relation to branded products.

Pantaloons provides more assortments of private level brands to compete with supplier's brands. They

maintain a lot of brands in the store.

The store offers various famous External Brands as well as a lot of Private Brands. 80% of the revenue is

generated by the Private Brands, this shows that Pantaloons has established its brands as stand alone.

Now Pantaloons is even considering of opening individual stores for the famous Private Brands.

The External Brands in the store include:

PEPE: APPARELS

KILLER: APPARELS

LEE: APPARELS

BLACKBERRY: APPARELS

COLOR PLUS: APPARELS

LEVIS: APPARELS

URBANA: APPARELS

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The Private Brands include:

SCULLERS: APPARELS

VOGUE: GOGGLES

DIOR: GOGGLES

NAVARAS: JEWELLERY

L'OREAL: BEATUY PRODUCTS

LAKME: BEATUY PRODUCTS

ADIDAS: APPAREL & ACCESSORIES (PERFUMES, DEODRANTS ETC)

AXE: ACCESSORIES

AJILE: CASUAL MENSWEAR

AJILE: CASUAL MENSWEAR

ANNA-BELLE: CASUAL/FORMAL WOMEN WEAR

BARE DENIM: CASUAL WEAR UNISEX

BARE: CASUAL UNISEX CASUAL WEAR

BARE LEISURE: CASUAL/SEMI FORMALS UNISEX

CHALK: KIDS WEAR

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Supply Chain Management

Critical components of supply chain planning

applications helps Pantaloons meet retailers'

service levels and maintain profit margins.

Pantaloon has developed an innovative solution

for managing the supply chain problems.

Innovative solutions like performance

management, frequent sales operation

management, demand planning, inventory

planning, production planning, lean systems and

staff help Pantaloons get advantage over

competitors.

F FACTOR: MEN’S PARTY WEAR

HOLII: ACCESSORIES (BAGS) LADIES

HONEY: CASUAL WOMEN WEAR

JM SPORT: MEN’S SPORTS WEAR

LOMBARD: MEN’S FORMAL WEAR

MOHENA: LINGERIE

MY TEE: MEN’S T-SHIRTS

RANG MANCH: WOMEN’S TRADITIONAL WEAR

RIG: CASUAL WEAR UNISEX

UMM: CASUAL WEAR UNISEX

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PROCUREMENT: They have a central procurement system; each region has a regional hub. Under each

regional hub there are several distribution collection centers. The function of each DCC is to distribute

products across Pantaloons retail stores. The total product selection and distribution is handled by the

DCC and the store manager.

MERCHANDISE HANDLING SYSTEM AND INVENTORY MANAGEMENT: The total data flow and the billing process can

be understood from the diagram below.

The Merchandising system orders the goods to the Warehouse through the Order processing system.

The warehouse analyses the data and sends the product to the store. The product is displayed in the

store and the remaining merchandise is stored in form of inventory. As the customer purchases the

product its entry is made into the Inventory store and the merchandising system. The same would be

reflected in the IT systems installed and would inform the store manager of the products to be ordered

which will again follow the same procedure.

PERFORMANCE OF A STORE: Though there was no direct information regarding the store performance, from

the data collected by central division from the store we can deduce a few things. The central division

asked for the number of customers visiting the store. Since each store is connected to the central

division via the internet, they have access to the data about the billings and revenue, the size and

available space in the store and the number of sales representatives present. So the benchmarking is

done on the basis of direct product profitability, profit per square foot basis, profit per customer

entering in the store, or the overall profit.

But as the company is now going forward with the launch of individual retail stores for the private

brands which are doing good, it seems that they might be looking at the direct product profitability. Also

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as the data about number of customers visiting the store is collected they might be doing the

benchmarking on the basis of revenue or profit per customer entering the store.

PRICE: The pricing of the products is done as per the individual brands. The private labels have their own

pricing system. The procurement department, after procuring the materials, fixes the price of the

branded material competitive to the market price.

SMART TAGS: Smart tags help in two ways. First, they help in

the billing process and the merchandise handling system.

Second, they help in preventing the cases of shop lifting. The

scanners at the gates of the store sound an alarm if there is

any smart tag going out of the store premises. There are

three types of tags used by the store: Hard tags, Soft tags and

String tags.

The Hard tags are RFID enabled which help in controlling

shoplifting. Soft tags provide the information about the

product. String tags give the pricing details.

SERVICE: Pantaloons believes that people are its greatest resource. They employ young and energetic

individuals. The average age of the employees in the organization is 27 yrs. They believe that in store

service is the key to better customer satisfaction.

•The sales department also takes care of minoralteration of the clothes if required by the customer.There is also a provision for gift packing. Plus, if thecustomer is not satisfied with the product thedepartment guides the customer through theappropriate channel to solve his/her grievances.

Post purchase service

•Every store has a trained sales force. The sales force isfocused on assisting the customers in the selection ofmerchandise best suited for the customer; they arealso involved in creating awareness about variousoffers which may benefit the customer. Pantaloonsprovide customers with prepurchase trial service.

Pre purchase service

•There are a lot of customer loyalty programs whichrun various schemes for the customers. Thecustomers are made aware of these offers via emailand mobile phones (SMS). As the stores are generallyin a big mall the parking, restroom, recreationalactivities are provided by the mall.

Ancillary service

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Visual Appeal of the Store

Pantaloons focuses a lot on the visual effects inside the store. The use of Lighting, signage’s and

specialized props is very important for any retail store. The visual communication strategy is planned

and is also brand positioned. Theme or lifestyle displays using stylized mannequins and props, which are

based on a season or an event, are used to promote collections and are changed to keep in touch with

the trend. The merchandise presentation ought to be very creative and displays are often on non-

standard fixtures and forms to generate interest and add attitude to the merchandise.

STORE ATMOSPHERE: The store atmosphere is

one of the very important factors influencing

the purchase. Pantaloons pays a lot of

attention to the store atmosphere. The colors,

lighting, music, perfume, arrangement of

products etc are designed store specific. There

is a central team which takes care of the

ambience in the store. These people suggest

the ambience according to the mood of

customers, time of the day, festivals etc to

decide about the ambience of the store. The

store employees are also involved in the

process as they understand the local tastes

better.

The colors inside are more earthly to convey the freshness. Also the lighting is dim so that the customer

is able to focus on the products. In the premium products and beauty products segment, pictures of

celebrities are posted endorsing various brands. There are pictures and signage’s signaling to the

customer about the product category being displayed.

Another strategy used to enhance the visual appeal of the store is the VISUAL MERCHANDISING. In visual

merchandising the store looks at the following aspects:

PLACE OF VARIOUS PRODUCTS INSIDE THE STORE: The height and relative location of various products inside

the store. This is done on the basis of the research and development done by the central team. A main

component is the use of technology like the goggle like devices used to assess the most attractive

position for products in the store.

GOGGLE LIKE DEVICE: The stores’ employees are told to keep certain products at a certain height, and the

store design is made according to that. This shows that somewhere in the system the store chain

implements this strategy may be at the central level of planning to decide about the highest level of

attraction of customer. The customer focuses generally at a particular height level which gives us insight

about place of product.

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COLORS AND SIZES: There is a considerable effort put into the decision making about the sizes and colors

of clothes to be displayed in the store. The central team analyses the data gathered from previous sales

to establish a relationship between the type of product and its colors and sizes. For example: a formal

men’s trouser in the economy range: the store looks into the 4-5 basic colors (black, brown, navy blue,

grey etc.) and sizes (waist size 28-42 inch) sold and their corresponding quantity. The same has to be

incorporated in the display at the store. This helps in Inventory management as well.

DISPLAY: This is the most important part which helps to analyze the order and assortment of colors and

sizes in the display and the type of display used. There are options of wardrobe display or shelf display.

In the wardrobe display the store generally keeps the lighter shades and smaller sizes in the front

followed by darker and larger sizes. In the shelf style the store assorts the product based on the style in a

shelf and the different colors are available in the same shelf.

The display is further boosted by the mannequins and the posters of celebrities along the shelves.

For accessories the display is exhaustive, the store tries to display as many products as possible. Also in

this section the lighting is focused specially on the mirrors where the customer tries on the product. The

atmosphere in terms of colors and lighting is vibrant in tune with the product.

EVERY STORE HAS ITS UNIQUENESS: Each store is given some autonomy and has a say in the decision process.

The company considers that every place has its own unique characters; they accept that the product

that sells in Mumbai may not sell in Indore.

COMMUNICATION: The effectiveness of the Pantaloons’ communication is in its offering to the target

customers, the degree to which the products gets positioned in their minds. The message is

differentiating in offering from that of its competitors without even naming them. The message clearly

conveys to the target audience that the

mall offers them exactly what they

require and that it meets all their

expectations. The core purpose is to

inform the target customers about the

offering of the store, persuade them to

visit the store and remind them about the

store. Various communication tools used

by Pantaloons for this purpose include

advertising, buzz marketing (WoM),

celebrity endorsement, use of print

media, press releases and viral marketing.

The communication is taken care by the

central promotions group. There is a

department to take care of the

advertisement and communication strategy of the whole retail chain. Apart from the advertising at the

central level the store gets a budget for the local advertisement in newspapers, local TV channels,

banners, posters etc.

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OWNERSHIP: All the stores of the retail chain of Pantaloons are owned by the company. The PRIL group is

the owner of the stores.

The stores are in a format of CONVENIENCE SHOPPING. The customers are helped in selecting their apparels.

There are a lot of brands in the store that make it a convenience store rather than a specialty store. The

customers are allowed to SELF SELECT the products with the assistance of the in-store staff.

CHECK OUT SCANNING SYSTEM: The store has a robust check out scanning system. There is a 2-tier system;

the guards are in place to check the customers going out. They tally the baggage with the invoice and

put a seal to avoid duplication of the same receipt. Secondly there is a system to check if someone is

shoplifting and going out, there is an automatic scanning system that beeps in case the locator is not

removed.

ELECTRONIC FUND TRANSFER: The store allows for the payment through credit cards and debit cards from

the customers. Further the store uses the electronic transfer system to pay to its suppliers.

ELECTRONIC DATA INTERCHANGE: There is a system to get the data from the customers. The customers are

asked to fill the forms for the customer loyalty programs and the data is transferred to the central server

so that the analysis of data can be done to forecast the demands and patterns of purchases. The same

data is exchanged between various stores across the country.

IN STORE CCTV: There is in store close circuit TV to ensure that the cases of shoplifting are minimized and

it also allows the manager to keep a check on the employees, and to ensure they are working during

their shift.

STORE TRAFFIC RADAR SYSTEM: The store keeps a track of the number of customers entering and exiting the

store. This is done through the advanced electronic systems to measure the number of customers

passing through the doors.

WOMEN FACTOR: The major chunk of the

total sales is made or influenced to a large

extent by women. According to the data

more than 80% of the total sales in retail

are influenced largely by women.

Pantaloons appreciates this fact and uses

this to improve the sales. They have tried

to understand the buying behavior of

women and have tried to place their

products accordingly. They also have

offers revolving around women.

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Customer Loyalty Program

The flagship loyalty program at Pantaloons is its Green Card Program. The green card enables the

customer to get a whole range of benefits and discounts. Each customer who opts for the loyalty

program is called a Star Member.

As the number of times a customer shops increases, the customer becomes eligible for a higher grade of

the green Card Membership program. Initially, the customer is a “1 Star Customer” at the time of

enrollment. At this stage, the customer is eligible only for discount vouchers. But as the total value of

the merchandise increases, the customer moves up the ranks to ultimately become a “7 Star Customer”

at which point he/she is eligible for a 10% discount on every purchase across any Pantaloons store in

India.

Instant discount everytime the customer shops

Exclusive shopping days to get hold of latest merchandise

Regular updates on collections and promos via catalogues, sms and email

Special invites to the most happening events

Extended exchange periods and complimentary drops for alterations

Exclusive billing counters

1 Star Member

• Gift Voucher worth Rs. 200 on enrolment

3 Star Member

• An exclusive 5% discount on every purchase

5 Star Member

• An exclusive 7.5% discount on every purchase

7 Star Member

• An exclusive 10% discount on every purchase

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Co-branding

In a first of its kind partnership in retail,

Pantaloons Green Card partnered with Jet

Airways’ JetPrivilege to offer dual benefits to

members. With this unique partnership,

JetPrivilege members enjoy benefits from

two loyalty programs i.e. earn JPMiles and

Enjoy Green Card discounts for shopping at

Pantaloons.

The customers earn JPMiles everytime they

shop at Pantaloons. These JPMiles can be

redeemed by the customer when he/she

purchases an Airline ticket from Jet Airways.

Strategic Analysis

We have looked at the store from the view point of the employees, customers and the day to day

operations at a particular outlet. While analyzing the operations it is also essential that we take into

account some macroeconomic factors that might affect Pantaloons in the near future.

1 Star Member

• 2 JPMiles for every Rs. 100 spent

3 Star Member

• 3 JPMiles for every Rs. 100 spent

5 Star Member

• 4 JPMiles for every Rs. 100 spent

7 Star Member

• 5 JPMiles for every Rs. 100 spent

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FIRM ANALYSIS - SWOT

From our visit to the store and understanding of its operations we have made the following inferences.

Pantaloons has outlets across 73 cities with over 4000 supply chain partners. Despite the intense

competition it has been able to retain most of their management level employees. They have been able

to successfully launch and retain a lot of private brands, which as Pantaloons opens exclusive

showrooms for the private brands will directly compete with the more established external brands.

Strengths

•First Mover Advantage

•Strong supply chain

•Unique Market Knowledge

•Presence Across Value Chain

•Private Labels like UMM, Bare , Giny & Jony

Weaknesses

•Shrinkage rates higher than industry average

•Low employee retention level

•Loyalty programs offered by competitors better

•Merchandise, product focus ambiguous

Opportunities

•Expanding consumer base into Tier II , Tier III cities

•Untapped segments such as ethnic wears

•Foray into Luxury brands

•Custom tailored business still untapped

Threats

•Diversification of parent firm - Loss of focus

•Increased competition from foreign firm

•Increasing costs

•Unorganized sector

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ENVIRONMENTAL OUTLOOK

Key Learning’s Pantaloons is one of the most valued and recognized retail merchandize stores in India. It has been able

to do so due to the various reasons and strategies listed above. But some of the main reasons why it has

been able to stay ahead of the competition for so long are

RIGHT POSITIONING

The message conveyed by Pantaloons to its target customers is effective in differentiating its offerings

from that of its competitors without even naming them. The message is clearly conveyed that they offer

the customers the complete shopping-cum-entertainment experience. Pantaloons uses various

communications tools like advertising, buzz marketing, celebrity endorsements etc.

EFFECTIVE VISUAL COMMUNICATION

Pantaloons gives great emphasis to on display visual merchandising, lighting, signage’s and specialized

props. Season and trend based advertising is done to promote the latest collections. The merchandise

presentation is very creative which adds to their visual appeal.

•Govt. support to economic reforms

•FDI in Retail

•Inflation (CPI vs. WPI)

Political

•Increasing disposable income

•Expanding customer base- rural and middle calls

•Expected market by 2012 – US $573 billion

•Expected contribution to GDP – 22%

Economic

•Advent of dual income families

•Increasing consciousness of brands and shopping experience

•High proportion of young population

Social

•MIS leading to cost efficiency

•Electronic media creating wide awareness

•Internet Revolution

Technical

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STRONG SUPPLY CHAIN

To maintain the profit levels a very strong supply chain is essential. Pantaloons has developed innovative

solutions for managing the supply chain problems. They get an advantage over their competitors by

implementing processes like performance management, demand planning, inventory planning, lean

systems and staff among many others.

CHANGING THE PERCEPTION

Pantaloons has been able to benefit because the customers believe that its private brands have

consistent and comparable quality and availability as compared to the more established external brands.

An assortment of private brands is available to compete with the external brands.

Conclusion In the face of fierce competitive pressure, Pantaloons has recognized the value of building its own stores

as brands to reinforce their marketing Positioning, to communicate quality as well as value for money.

They have developed a sustainable competitive advantage by translating core values combining

products, image and reputation into a coherent retail brand strategy.

Mr. Kishore Biyani: The Man behind PANTALOONS

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References PRIMARY

Direct talk with

The store Manager of Pantaloons Store Indore

The sales personnel at Pantaloons Store Indore

The customers at Pantaloons Store Indore

SECONDARY

http://pantaloon.futurebazaar.com/indexPantaloon.jsp

http://www.pantaloonretail.in/index.asp

http://www.sebi.gov.in/dp/pantaloon.pdf