ABSTRACT The lifestyle and profile of the Indian consumer is going through a rapid transformation.

The population of India is young, energetic and full of enthusiasm. 50% of the Indian population is under the age of 25. There has been a transition from price consideration to quality and design, as the focus of the customer has changed. The upper and middle- class population of today needs a feel good experience even if they have to spend a little more for that. People are moving towards luxury and want to experiment with fashion and technology.

STP Comprise A Three Stage Process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

STP FOR RETAIL

Segmentation involves finding out what kinds of consumers with different needs exist In the next step, we decide to target one or more segments. Our choice should generally depend on several factors .Positioning involves implementing our targeting

INDIAN CONSUMERISM The food & grocery, clothing, consumer durables and books & music sectors are the major retail sectors. However, unorganized small outlets largely control the sector. Hence there is tremendous potential for the organized sector in various formats, such as hypermarkets, supermarkets, specialty stores, category killers and discount chains

FACTORS AFFECTING CONSUMER DECISION-MAKING A consumers purchase decision tends to be affected by the following four factors: 1) Demographic 2) Psychological 3) Environmental 4) Lifestyle

Demographic Factors

Demographic factors are unique to a particular person. They are objective, quantifiable and easily identifiable population data such as sex, income, age, marital status etc. It also involves identification of who is responsible for the decision-making or buying and who is the ultimate consumer.

Psychological Factors Psychological factors refer to the intrinsic or inner aspects of the individual. An understanding of consumers psychology guides the marketers segmentation strategy.

Environmental Factors Environmental factors cover all the physical and social characteristics of a consumers external world, including physical objects, spatial relationships, the social factors , co customers, reference groups, social class . The environmental factors influence consumers wants, learning, motives, which in turn influence effective and cognitive responses and among other things the shopping behavior of the individual.

Lifestyle Lifestyle refers to an individuals mode of living as identified by his or her activities, interests and opinions. Lifestyle variables have been measured by identifying a consumers day-to-day activities and interests. Lifestyle is considered to be highly correlated with consumers values and personality.

It is estimated that these rising incomes have led to the development of a middle class population of some 300 million, roughly the population of the U.S., although we find this figure a bit too optimistic and would counter that with a figure of around 200 million, based on 17.5% of Indian households with incomes over $25,000 on a purchasing power parity basis. This is still nearly as large as the 4th most populous country on earth (Indonesia). Furthermore, another approximately 10% of households are right at or just below the middle class line, with annual PPP incomes between $15,000 and $25,000 representing another 100 million consumers the fact that nearly 80% of Indias population is under the age of 45, 54% under the age of 25, and that only a little over 3% of the consumer market is made up of organized retailing, has

perked the interest of such global multi-brand retailers as Wal-Mart of the U.S., Carrefour of France and Tesco of the U.K.(planning to enter the market in a JV with Home Care Retail Mart in a smaller hypermarket format called Magnet), just to name a few, and is or has been targeted by some of Indias largest conglomerates, such as Tata, ITC, Raheja, Murugappa, Piramal and of course Reliance. Moreover, the top 5 retailers in India make up only 2% of the market, making for plenty of opportunity at this point. In fact it is expected that the top retailers in India could capture as much as 10% or even more of the market by 2010. However, retailers will have to move fast as it is said that the Indian retail market is at a peaking stage, where the market is developing quickly and becoming modern. Saturation levels are usually reached within 5 years of this stage.

The current size of the organized retail market in India is only somewhere between $6 and $8 billion, however, it is growing at between 20% and 30% a year much at the expense of the unorganized market made up of family-owned mom and pop businesses which make up about 97% of the consumer market and make for a very fragmented and chaotic retail industry. There are about 5 million (some estimates go as high as 100 million) retail establishments in India which means there are about 22 per 1,000 people with an average floor space of less than 50 square meters.

To put this into perspective, Japan, one of the most densely populated countries in the world, has about 10 stores per 1000 people (the U.S. has 3.8) with an average floor space of 110 square meters, more than double Indias. Additionally, in Japan, which has had a history of protecting mom and pop stores, organized retail (stores with 10+ employees) makes up about 66% of the market in value terms, in the U.S. it is 85%, and even in Chinas it is more than 20%. This potential organized retail market is what is making the Indian retail market so attractive.

INDIAS CONSUMER OUTLAYS This development is a reflection of the growth in the consumer goods market in general. Just between 2003 and 2004 spending on consumer durables or white goods grew 53% and is

expected to grow 12% in 2006. Spending on mobile phones grew 96% between 2003 and 2004 and has more than tripled in the last 3 years. India is now the fastest growing mobile phone market in the world. Passenger car sales grew about 25% annually and computers and peripherals over 10% between 2003 and 2005. Additionally, consumer spending on books and music and vacations was up 32% and home textiles up 29% in the 2003-2004 time frame. White goods, autos and computers are all expected to maintain 10% plus growth through 2006. And the fast moving consumer goods sector, or FMCG, which constitutes such items as food and groceries, household and personal care products, confectionery and tobacco, among others, and makes up the bulk of consumer spending in India (over 70% of total consumption) grew about 6.5% in 2005 and is expected to be 8.5% in 2006.

RURAL AND URBAN However, with 85% of organized retailing taking place in Indias urban areas, 66% taking place in Indias 6 main cities alone, and with nearly all new mall development and hypermarkets aimed at these cities competition in these markets could become fierce. Already the retail focus is shifting to Indias 61 second tier cities with populations of 500,000 or more. Additionally, rural areas with approximately 700 million Indians representing 58% of Indias disposable income and 40% of the middle and near-middle class are increasingly becoming targeted by organized retailing and large consumer product companies, Hindustan Lever, CocaCola and Reliance quickly come to mind. The rural market for FMCG is growing, while not quite as fast, nearly as fast as its urban counterpart. The rural market accounts for half the total market in India for fans, pressure cookers, bicycles, soap, tea, toothpowder and motorcycles. Also, the income gap between rural and urban areas in India is actually shrinking, for every $100 earned in 1990 urbanites made $82 more. That recently shrunk to $56.

RETAIL OUTLETS Future Group companies include, Indus League Clothing, that owns and retails brands like Indigo Nation and Scullers and Galaxy Entertainment that manages Sports Bar, Brew Bar and Bowling Co. Future Capital Holdings, the groups financial arm, focusses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels.

The groups joint venture partners include Italian insurance major, Generali, French retailer ETAM group, US-based stationary products retailer, Staples and UK-based Lee Cooper and India-based Talwalkars, Blue Foods and Liberty Shoes. 7P Analysis of Big Bazaar 7P Marketing Mix is more useful for services industries and knowledge intensive industries. Successful marketing depends on number of key issues. The seven keys issues are explained as: Product Big Bazaar offers a wide range of products which range from apparels, food, farm products, furniture, child care, toys, etc. . Products of all the major brands are available at Big Bazaar .Also, there are many in house brands promoted by Big Bazaar. Big Bazaar sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-ovens. In all, the fashion, electronics and travel segments made up about 70% of sales. Last year, these categories made up only about 60%. Price The tag-line is "Is se sasta aur accha aur kahin nahi". They work on the model of economics of scale. There pricing objective is to get "Maximum Market Share". The various techniques used at Big Bazaar are: Value Pricing (EDLP - Every Day Low Pricing): Big Bazaar promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping. Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja). Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which is aggressively used by Big Bazaar. Bundling: Selling combo-packs and offering discount to customers. The combo-packs add value to customer. Place Big Bazaar stores are located in 50 cities with 75 outlets.Big Bazaar has presence in almost all the major Indian cities. They are aggressive on their expansion plans.

Promotion Big Bazaar started many new and innovative cross-sell and up-sell strategies in Indian retail market. The various promotion techniques used at Big Bazaar include "saal ke sabse saste teen din", Future Card (the card offers 3% discount), Shakti Card, Brand Endorsement by M. S. Dhoni, Exchange Offer - Junk Swap Offer', Point-of-Purchase Advertising has played a crucial role in building of the brand. Big Bazaar advertisements are seen in print media, TV, Radio (FM) and road-side bill-boards. People They are one of the key assets for any organization. The salient features of staff of Big Bazaar are: Well-trained staff, the staff employed by Big-Bazaar are well-suited for modern retail. Welldressed staff improves the overall appearance of store. Employees are motivated to think out-ofthe-box. Retail sector is in growth stage, so staff is empowered to take innovative steps. Employs close to 10,000 people and recruits nearly 500 people every month. Use of technology like scenario planning for decision making. Multiple counters for payment, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere. Process The goods' dispatch and purchasing area has certain salient features which include: -Multiple counters with trolleys to carry the items purchased. Proper display / posters of the place like (DAL, SOAP, etc.). Home delivery counters also started at many places. Physical Evidence It deals with the final deliverable or the display of written facts. This includes the current system and available facilities. Big Bazaar: Brand Extensions Actually Made & Future Possibilities Future Group is planning to split Big Bazaar into two entities. One will be front-end consumer-oriented entity and other will be for back-end operations. Back-end entity may enter into joint venture with leading international cash and carry retailers. Foreign partners like Carrefour, Metro, Costco, etc., are in the race, and their role will be to improve efficiency in sourcing and logistics, which will help drive down prices and boost margins FRESH

Fresh@ is a unique chain of retail stores promoted by Heritage Foods - the leading dairy brand in South India. Designed to meet the needs of the modern Indian consumer, the store rediscovers the taste of nature everyday, making grocery shopping a never before experience. Our wide range of the choicest fresh fruits and vegetables which are directly sourced from the farmers and reached to the stores through our integrated cold chain investment. Farmers Pride, our house brand under which we offer a full range of staples (rice, pulses, spices & dry fruits) of the highest quality sourced from the best growing areas in the country which also ensures that the customer gets them at the most competitive prices. MORE ABRL is committed to assure our consumers of the quality of our products and services on a consistent basis and earn consumer trust and recognition of ABRL as India's premier retail organization. The above will be achieved by : Ensure that the products available at the stores meet the regulatory and statutory requirements through implementation of best practices (Good Manufacturing Practices, Good Hygienic Practices, Good House Keeping, etc.) at every stage and in every operation. Ensuring that for 'Own Brand', the products meet our stringent specification requirements; while at our processing sites and extended supplychain, the manufacturing practices and processes meet the highest standards of GHP & GMP at every stage and in every operation. RELIANCE FRESH Reliance Fresh was the first foray into retailing by the $25 billion behemoth known as Reliance Industries Limited. There were three basic reasons for Reliance Industries Limited (RIL) choosing foods and vegetables for entering into retailing. First, it wanted to go after the very core of the great Indian retail opportunity. Food accounted for over two-thirds of the $200 billion Indian retail market and yet, it had seen hardly any penetration by modern retail so far. Second, its aim was to build a high-profitability business and food was perhaps the best place to start. Third, the grossly inefficient food supply chain provided a well resourced and well managed organization like RIL with an opportunity to think of amending the flaws which would also make business sense. In the traditional supply chain in India, there were several intermediaries, who added their respective profit margin to the cost. Besides, there was huge wastage in

transit. This offered potential for savings and profits and Reliance Fresh was a step in that direction. SPENCERS The supermarket chain, Spencers Super would go up from 6 to 20 by 2008. the smaller formats Daily, Express and Fresh would go upto 600 by 2008. The total number of all its retail outlets would grow from 400 to 2000 stores by 2009 and 5,000 stores by 2011. Spencers Retail, one of Indias largest multi-format retail chain, delights an astonishing 4 million customers a month by delivering on its brand promise Makes Fine Living Affordable. Since inception Spencers has been a consumer-centric brand, constantly innovating, pioneering formats, evolving over time but always keeping consumer needs and satisfaction center-stage. Back in 1920, we were the first grocery chain in India. In 1980, we became the first supermarket chain, and in 2001, we introduced India to the joys of hypermarket shopping. Today, our network of 200+ stores covers a retail trading area of 1 million square feet. None of this would have been possible without our people.

CONCLUSION The convenience and personalized service offered by the unorganized sector holds its future in good stead for the future. Organized retail of late has seen a tremendous boom and is attracting more people to the malls. Interestingly, market pressures from Indias burgeoning consumer class and their growing demand have already started to spur agricultural reform and increased investment in Indias farm to retail field by the private sector. It seems that Indias growing consumer market might be taking on a life of its own