PROJECT ON

PERCEPTION OF PRIVATE LABELS OF

FOOD BAZAAR
 ACKNOWLEDGEMENT

We extend our vote of thanks to our project guide, Prof. Himanshu

Mishra for taking a keen interest in our research work and for
providing help and support at different stages all throughout the
duration of the research.
He also relaxed the deadlines for us so that we could undertake the
study in an effective manner without bothering about the time
constraints.

A very special mention for Shwetank Tripathi, who assisted us in the

questionnaire filling round of our research which expedited the whole
process of primary data collection.

We are also thankful to the Big Bazaar authorities for granting us

permission and for providing us with the resources to carry out the
Blind Taste Test within the store.

2
 CONTENTS

CHAPTER 1
(i) Introduction 4
(ii) Scope 6
(iii) Objective 7

CHAPTER 2
Detail Introduction 8

CHAPTER 3
(i) Research Methodology 18
(ii) Problem 18
(iii) Sampling Plan 18
(iv) Data Collection Tools 18

CHAPTER 4
Analysis of the data 19
(i) Questionnaire 19
(ii) Blind Taste Test 32

CHAPTER 5
(i) Conclusion 33
(ii) Recommendations and Suggestions 35

CHAPTER 6
Bibliography 36

3
 INTRODUCTION

RETAILING IN INDIA

The growth factors in Indian organized sector are various but it is

mainly due to
the fact that India's economy is definitely on a never before boom.
Also, the rise in the working population which is young, pay- packets
which are hefty, more nuclear families in urban areas, rise in the
number of women working, more disposable income and customer
aspiration, western influences and growth in expenditure for luxury
items.

All these are the factors for the growth in Indian organized retail
sector.

In fact, Indian retail industry is the fastest growing industry in India

and it accounts for 10% of the country's GDP. In 2007, the retail
industry in India amounted to US$ 200 billion and out of this the
organized retail sector in India amounted to US$ 6.4 billion. By 2010,
the Indian organized retail sector is expected to rise to US$ 23 billion.
In 2003, the Indian organized retailing sector accounted for more
than 4.5 million sq. ft of space absorption by malls.

Many Indian companies have entered the retail industry in India and
this is also a factor in the growth of Indian organized retail sector.
Reliance Industries Limited is planning to invest US$ 6 billion in
the organized retail sector in India by opening 1500 supermarkets and
1000 hypermarkets. Pantaloons is planning to invest US$ 1 billion in
order to increase its retail space to 30 million square feet. Such huge
investments are also a factor in the growth of the organized retail
sector in India.

The organized retail sector can be seen as a beautiful amalgamation

of National Labels and Private Labels. For quite some time now the
National Labels have ruled the market scenario but now the things
are changing and there is a strong tilt in the balance towards the
Private Labels of various retail outlets.

4
Private Labels
Private Labels or Brands are manufactured and sold by the retailer
and are available only in that particular retail outlet.
The times are changing. Today, in every category, retail outlets are
aggressively stocking private label products next to national brands,
and often using private labels to attract customers into their store.
From packaging down to performance, private labels are giving the
national brands a run for their money.

What does that mean to the savvy marketer?

Simply this: private labels have emerged as a definite threat to sales,
shelf positioning and even the decision of what products are carried.
Foolish personal care marketers ignore these warning signals at their
own peril—and the likely detriment to their products.
Private label development has been the most significant at grocery
stores, with a nearly 20% incursion rate. Super centers are next, with
16%. Both are formidable personal care retail outlets.

How have private labels become such a player in the retail

marketplace? Obviously, a rise in quality has been a major
consideration. Additionally, innovative packaging, advertising and
various promotions help to attract consumers.

And whereas much private label packaging used to resemble a paper

towel drawn on by a kid’s crayon, private label packaging today is
eye-catching and appealing. Private label marketers understand that
packaging is the first place consumers interact with the product, and
they’re not shy about putting their best foot forward at the point of
purchase.

In this study we have tried to understand the perception of the Private

Labels in the minds of the customers of BIG BAZAAR.

5
 SCOPE

In this study we have tried to probe the perception aspect of the

National Brands and Private Brands in the minds of the customers
coming to
BIG BAZAAR.
We selected the FOOD BAZAAR section of BIG BAZAAR to carry
out the study. Since it is an unwieldy task to cover all the categories
of the
FOOD BAZAAR section as that would require a lot of time and other
resources we constricted our study to the SNACKS category of this
section.

FOOD BAZAAR
Food Bazaar invites you for a shopping experience, unique by its
ambience. At Food Bazaar you will find a hitherto unseen blend of a
typical Indian Bazaar and International supermarket atmosphere.

Flagged off in April’02, Food Bazaar is a chain of large supermarkets

with a difference, where the best of Western and Indian values have
been put together to ensure your satisfaction and comfort while
shopping.

The western values of convenience, cleanliness and hygiene are

offered through pre packed commodities and the Indian values of
"See-Touch-Feel" are offered through the “bazaar-like” atmosphere
created by displaying staples out in the open, all at very economical
and affordable prices without any compromise on quality.

6
The outcome of the study is the defined and clear perception and the
attitude consumers towards Private Labels vis-à-vis National Labels. It
also uncovered the potential gaps and loopholes in the management of
Private Labels Most certainly the consumers are more aware about
the National brands as compared to the Private labels but there is also
a positive side to things as many respondents were equally aware of
the Private Labels and also expressed interest in buying them. The
only loop hole that is hindering the growth appeared to be lack of
promotions and appropriate communications about these in-store
brands.If these aspects are given proper attention then definitely the
Private Label Management can become very efficient and yield very
fruitful results for the retailers.

OBJECTIVE

The objective behind carrying out this study was to track the
awareness and knowledge levels about Private Labels in the minds of
the consumers who regularly visit FOOD BAZAAR section of BIG
BAZAAR. We wanted to track the performance of the Private Labels as
compared to the National Labels on various parameters which have
been explained in detail in the analysis section.

The study entailed comparison of the Private Labels with the

National Labels. The other objective was to find out the factors that
are currently hampering the growth of the Private Labels by quizzing
customers through the means of a questionnaire. Also to substantiate
the research we conducted a Blind Taste Test that further assisted in
the comparisons drawn between the two contenders. Our focus was
the SNACKS category of the FOOD BAZAAR section.

7
 DETAILED INTRODUCTION TO THE
PRIVATE LABELS

Private labels in India are poised to grow in near future. Store-

brand labels in apparel industry in India are on a complete upswing.
With more and more retailers offering products under their own
private labels, consumers have not had it so good as far as shopping
for apparels is concerned. The Government of India is looking for
foreign direct investment in retail sector and therefore one can
expect greater growth in large retail chains or outlets in the first
decade of the current century. Marketing managers struggle between
cost-saving standardization for a mass market and high-cost
customization for a specific niche to improve consumer-acceptance.
Given the technological developments in recent times,
standardized products no more enjoy unique selling propositions as
imitations cannot be prevented from entry. Organizations

8
continuously strive to find a method of creating unique selling
proposition (USP) to retain their existing customers and acquire new
customers. Such an outlook, in recent times, has called for a better
understanding of distribution channels in meeting specific customer-
needs. The current thinking emphasizes mass customization, a
seeming synthesis of the two extremes of mass production and
customisation. This has been enabled by innovation in the area of
distribution management that provides scope for modification of
production process to suit customers’ specific needs.
This phenomenon is becoming increasingly relevant in the
changing scenario of distribution in India, where the urban markets
witness frequent birth of private labels introduced by large retail
stores, posing challenge to the brand-strength of national players.
Private label products encompass all merchandise sold under a
retailer’s brand. That brand be the retailer’s own name or a name
created exclusively by that retailer. In some cases, a retailer may
belong to a wholesale group that owns the brands that are available
only to the members of the group (PLMA). A popular private label
changes the status of the retailer from a customer to a competitor for
a national brand marketer. When customers are competitors, standard
predatory strategies and tactics may not be appropriate; instead,
there is a premium on creating a successful basis for coexistence. This
calls for improvisation in the elements of marketing strategy of the
national brands. Manufacturers of national brands need to look for
ways of carrying out business due to the potential loss of business
resulting from such local onslaughts.

Though private labels have attracted attention of channel

researchers about forty years ago in India, private brands have
attracted attention primarily only in the last decade. However,
research work in this area appears to leave a void. For Indian
conditions, the current era symbolizes the wake up call that national
brand manufacturers should take note of, to effectively combat the
threat of private labels.

Changing Face of Distribution in India

The turn of the twenty first century witnessed many changes in
distribution channels in India. Smaller sized convenience stores
encounter challenge from large chains of departmental stores that
offer many product categories under one roof. Though convenience
stores such as general merchants, grocers and mini self-service
outlets will continue to exist in our country, large cities will witness
the growth in one-roof shopping malls of different kinds. Already,

9
large specialty stores such as Subhiksha, Food World in FMCG sector
have set their firm foot in South India, surpassing local chain stores
such as Nilgiris and Vitan in size and reach.
There are over 72 outlets of Food World. Subhiksha has 115
outlets and is still growing in number and gaining popularity among
consumers. The RPG Group that owns Food World has plans afoot to
expand into the hyper store category even more vigorously. Home
Store India Limited (HSIL) is reported to be planning for expansion in
the North. This will result in expansion in two types of retail stores:
one in the hyper malls and the other in large chain of The Sabka
Bazar. Mega malls such as Shoppers’ Stop and Forum have gained
currency among upper middle class shoppers seeking one-roof
shopping combined with class and exclusivity, and discount stores
such as Big Bazaar are frequented by middle class families who seek
one-roof shopping combined with value for money. Shopper’s Stop is
said to have plans for expansion which symbolizes more growth in
private labels.
Reports based on European experience reveal that private
labels grow faster than national brands, the former’s growth rate
being estimated to be two to three times of the latter. Interestingly,
consumers will witness more and more of competition in retail stores
between national brands and the store’s brands. A case in example is
the South Indian retail chain Nilgiris that stocks dairy products under
its own brand and under national brands such as Amul. Food World
has its own brand of jams selling over its counters side by side of
Kissan and Sil. It is easy to comprehend that when the retail store
uses its own private label on an otherwise generic product, it commits
to the customers its guarantee for the quality of the store’s brand.
Such quality assurance will lead to greater trust among the store’s
customers, resulting in greater store-loyalty. This enables the store to
charge a premium on an otherwise generic product, thus making
private labeling an attractive proposition to the large retailers.
However, in FMCG sector, the current practice is in contrast to this
phenomenon, where mainly destination goods good are packed under
retail labels, mostly at cheaper prices than other retail outlets.

If this becomes the trend, then retail labels can be expected to

offer value for money to customers mainly on price-plank and price-
competition to national brands. Price wars often breakout when most
brand leaders in a particular category do not provide private label
products, and when competition comes mostly from smaller
companies with lower cost structures and overheads.
If such be the case, then Indian companies of national brands will
have a lesson to learn from the disposition of the American consumer

10
goods manufacturers, captured comprehensively in the following
statement: Private labels are anathema to many consumer goods
manufacturers. They are viewed as “category killers” – cheap, me-too
products that suck all the profits out of a market by making
consumers more price-sensitive. And they are also a painfully visible
symbol of retailers’ growing control over the distribution chain. By
diminishing the power of traditional brands, private labels remove a
key source of manufacturers’ influence over consumers, and in turn,
their leverage over merchants. They threaten to turn manufacturers
into invisible vendors who must contend themselves with supplying
cut-rate commodities to all-powerful retailers
However, the margins on own-store brands are nearly two-and-half
times higher than on FMCG brandsand this is likely to attract more
and more private labels in FMCG sector. Though private labels in
FMCG sector in India account for less that 1% of the overall sectoral
sales, private labeling is a phenomenon that will grow in near future,
owing to the benefits it provides the stores. It is predicted by industry
sources that retail sector in FMCG will grow by 30% per year in a few
years.

Economics of Private Labeling

Store brands are the only set of brands for which the store is entirely
responsible. Thus, the store has to bear all the costs (development,
sourcing, marketing effort, time, risk and promotion) and it reaps all
the rewards of the brand’s success. It is intuitively evident that a store
will enter into that product category that has
(a) High profit margin
(b) Low entry barrier to labeling and
(c) Low switching cost to the consumers,
which may be either monetary of affective. Commodities offer the best
scope to stores for private labeling since competition against the store
label will be minimal from the unorganized market. Further,
commodities are products over which, through allocation of shelf or
floor space, retail control can be quickly established.

This is because the suppliers of commodities do not “purchase” shelf-

space and therefore there will be little restriction or objection to the
store’s stacking and shelf-display of its own brands. These
commodities are called “Destination” categories, normally stacked at
the far end of a store, inviting the consumers to take a long walk
through a maze of other products so that they may pick up some of
them on the way.

11
In the case of manufactured products being introduced under private
labels, the characteristics that enable store brand introduction are:
(a) Inexpensive, easy, low risk purchase for customer
(b) Easy to make from commodity ingredients
(c) Perishable, therefore local supplies are favored
(d) Category sales are growing fast, enabling the private brand’s
garnering reasonably high volumes and
(e) Low number of national players dominating the category so the
retailer feels the need to reduce dependency on them propose, in a
counterintuitive manner, to suggest that retailer’s profits will increase
more likely in product categories consisting of a large number of
national brands. They explain that the profitability of a store’s brand
depends more on the directness of high competition between the
private brand and the leading national brand, as against a high
competition among national brands which is detrimental to the store
brand.
It has been found as a support to the argument that where large
number of national brands were available, introduction of a store
brand increased the category profits, thus falsifying the much-held
belief that a crowded category has no place for store brands. An
aspect that is left wanting in their analysis is the independence of
competition among national brands and competition between store
brand and national brand. Evidently, this poses four possibilities of
one being low or high and the other being low or high, as shown in
Figure 1 on next page. The figure has been constructed with the
underlying assumption that
(a) It is technically feasible for the store to introduce its own brand
(b) The competitive scenario does not change the position from one
quadrant to another and
(c) The switching costs for the consumers are not high, per sé.

12
 FIGURE 1

 Quadrant I: Low-Low: This quadrant represents a situation in

store where both types of competition are low. A category that
manifests low competition in both dimensions may be, per sé,
unattractive for private label. Such a phenomenon may be caused
by (a) high degree of commoditisation (b) low importance of the
product category for the customers (c) high input-output ratio in
manufacturing. The retail store may never enter such a category
with its own label.
 Quadrant II: High-Low: This quadrant represents high
competition between the store’s brand and the major national
brand and low competition among the national brands. This occurs
when the consumers’ affective attachment to national brands is
high and achieving brand loyalty is a short-term process. This
implies that the retail brand is in direct competition with the
national brand and therefore the chances of consumers’ positioning
it along with the national brand are also high. The retail brand will
not suffer from me-too syndrome. The store can promote it extra
vigorously and the brand is likely to be among the top two brands
in shelf-movement. The store is likely to witness a counter move by
the national brand through extra point of sales promotion. Thus,
the total profit through the product category will be high for the
retail outlet. So, the store is better off launching its brand.

13
 Quadrant III: Low-High: This quadrant represents high
competition among national brands but low competition between
the store brand and national brands. This happens when the
national brands are highly advertised and the customers’
awareness of those brands is high, both cognitive and affective,
while facing the store brand on their visit to the store. Such a
situation is not favorable to the store brand since the switching
costs for customers is high and hence the store will find its brand
positioned among fringe brands. Therefore, if the store assesses its
position in this quadrant, it is better off not launching its brand.
 Quadrant IV: High-High: This quadrant depicts an all-out
competition among the national brands and if the store introduces
its private label, it will come under direct fire as much as it will be
caught in the cross-fires of the national brands. Therefore, it is
expected that a store that views itself in this quadrant is better off
not introducing its private label.

Essentially, a retail store introduces its own private label

(a) To increase customer loyalty

14
(b) To improve their positioning and image
(c) To improve margins in the category
(d) To lower prices to provide value for money to its customers
and
(e) To improve its bargaining power vis-à-vis national brand
manufacturers who use the store for distribution

By introducing a private label, the store creates a situation of conflict

with the national brand; this also makes the store’s position better on
the bargaining table. Thus, it shifts the power in the channel
downstream.
This may compel the national brand manufacturer to offer greater
commission or discount to promote his brand in the store. Another,
but important benefit of introducing private label for the retail store is
the differentiation it provides to the store itself, and thus store loyalty.
Therefore, the benefits of store brand cannot be confined to merely
the profits the category yields but the additional footfalls it brings in.
These economic benefits are not amenable to simple numerical
calculations. More importantly, such benefits cannot be confined to
any specific period and therefore calculation of economics of a private
brand is more complex than what a static economic analysis can do. In
sum, the benefits to a retailer from the introduction of store brands
are

(i) higher unit margin on national brands

(ii) expansion of the category sales and
(iii) higher category margin from sales volume

Managerial Aspects of Store Brands

(a) Motivation for store brand entry
(b) Strategic positioning of store brand
(c) Success of store brand
(d) Impact of store brand on retailer profitability and
(e) Impact of store brand entry on the national brand.
(a) Motivation for store brand entry: Store brand entry is
motivated by the following

(i) Store brand enables the store to discriminate consumers on price

dimension. In most of the product categories, there are two types of
consumers, namely, those who prefer quality-guarantee even at

15
higher price and those who expect reasonable quality at reasonably
low prices. The former display brand loyalty, purely due to their faith
in the quality of nationally advertised brand. The latter are not
affected by national advertising. They are either ready to risk the
quality aspect for the gain in price or not ready to risk. Those who are
ready to risk quality for price choose one of those brands from the
competitive fringe in the store shelf. Those who are not ready to risk
quality need a brand that is an acceptable balance between quality
and price. These are the customers who can be targeted by store
brand, since the quality assurance by the store that is in the vicinity
provides them the confidence of accessibility in case anything goes
wrong with the product. Thus, such price discrimination is possible
only when
national / regional advertising does not create high level of utility to a
sizable chunk of the store’s customers. In Indian conditions, table
butter stands as an example for such products where the national
advertising offers high utility to the customers, and thus there is no
significant growth in any store brands in this category. On the
contrary, pulses and cereals such as gram, rice and wheat flour offer
least utility through their advertising and thus we see a growth of
store brands in this category.

(ii) Gap between marginal and average costs is another motivating

factor for the store brand: Normally, the average cost of the national
brand is more likely to be higher than the marginal cost, due to
national level advertising. If not very high degree of economies of
scale is present in the product category, this difference between
average cost and marginal cost is an attraction to the store to launch
its private label. This cost-gap is availed by the store by getting its
brand manufactured or packed by a smaller producer, perhaps locally,
or in its own premises.
(iii) Store brands enable the retailer to differentiate the store from
other stores in the vicinity. By standing guarantee to a variety of store
brands, the retailer signals to the consumers his USP of higher
quality. When consumers face large number of stores, their
uncertainty about the outlets is high. Store labels cuts through such
uncertainty and enables their faster and frugal heuristic decision.

(b) Strategic positioning of store brand: Store brand positioning is

motivated by the aspects given below:
(i) In a situation when more than one national brand is sold in the
store, it makes profit-sense for the store to sell the store brand priced
as high as the leading brand to offer its customers the utility of
perceived quality associated with the price. Thus, though there may

16
be a temptation to sell at lower price, on par with fringe brands, the
store will be better off reaping a higher profit through a higher price.
If one thinks of a perceptual map, the perceptual positioning of the
store brand is guided primarily by the price-quality association and
therefore the pricing should be such that it is closer to the leading
national brand.
(ii) On aspects such as product packaging, pack size, design etc, it is
suggested that by positioning the store brand to mimic the leading
national brand the retailer can strengthen its bargaining position.
(c) & (d) Success of store brand and Profitability: Success of
store brands depends on the following factors:
(i) Introduction of a store brand in a category that consists of large
number of national brands increases store’s profitability. A caveat
must be added here that this is possible only in such a situation where
the competition among the national brands is low
These two aspects should be present in conjunction for the
introduction of store brand to lead to greater category-profits. The
intuitive explanation of this phenomenon is as follows: In a situation
when large number of national brands is present, the store’s
dependence in any one brand is small. Therefore, if the leading
national brand retaliates to the store brand’s introduction by stoppage
of supplies, the loss of opportunity profits to the store is minimal.
On the contrary, when the national brands compete within themselves
fiercely, the utility to the consumer about the quality of the brands is
high. In such a situation, the store brand may not be able to
effectively cause a switch from the national brand, and the cost of
promoting the store brand may prove exorbitant. Also, despite the
store’s efforts to promote the store brand, the consumers may
perceive it as a fringe brand. This means, in this situation, the profits
(after such promotional expenses) will be lower from the category.
Six factors affecting the success of the store brand. They are
 Quality of store brand relative to national brands is high.
 The quality of store brand is consistent over a period of time.
 The product category is large in absolute value terms in store’s
sales revenue.
 The percentage of gross margins in the product category is high
 The number of national players is fewer than in other categories
 National advertising expenditure in the product categories is low

Marketing Strategy against Private Label

17
(a) Product: Introduction of private labels at retail stores implies to
the national brands that the consumers have greater options
among products they buy. This means that a wider product-range
will be available. When the store competes vis-à-vis national
brands on product range, the short term inability of the national
brands to respond to the challenge is a matter to be contended
with, since (i) a large enterprise requires longer time to respond
with changes in product-strategy and (ii) the minimum quantity of
production that enables the national brands to avail the economies
of scale may not be available when it reacts to a single store.
Alternatively, if a chain store introduces a premium or economy
brand in a category, then the national brand gets the benefit of
market testing from the experience of the store brand and can thus
decide whether or not it, too, should enter that segment. Thus,
store brands offer an opportunity for national brands to know
about consumer-response to different variants of a product
category.
(b) Price: In case the store competes with the national brand on price
range, it can effectively do so, by locally promoting the price-
advantage to the price-sensitive consumers and by highlighting the
higher quality of the premium-range products to quality-conscious
consumers through its counter-salesmen. Under such conditions,
the national brand has two options: (i) it can fight the store brands
on price or (ii) it may increase its prices and highlight its higher
quality through national campaigns. Fighting is an option the
national brand can exercise when the customers’ loyalty to the
national brand is greater than the customers’ store-loyalty. The
decision to fight price-reduction in kind has both advantages and
disadvantages. The advantage is that the store brand will find it
difficult to gain acceptance among consumers, if an established
national brand is available at a similar price. The national brand
may succeed in nipping a budding store brand. For a national
brand, response to a reduction of price need not be in kind. It can
respond with special consumer-offer or discount which prevents
long term commitment as well as avoids reduction of price across
all markets or stores. The response may be confined only to the
specific store. Further, price-reduction by the national brand can
cause a setback to it in the form of price-quality association.
Therefore, the best response is to counter the threat with
promotional offers. One common tactic is to change customers’
choices and limiting price reductions to areas where the national
brand is vulnerable, thus localizing a price war. However, fighting
on price can cause vertical conflict in the distribution channel
between the company and the store, a proposition that is unhealthy
to the national brand’s success in the long run. In all, the best

18
response to a store’s introduction of a low price brand is to resist
the temptation to respond with a similar move and focus on other
aspects of marketing mix.
The common goal is to achieve transfer of utility from
manufacturer to consumer whereas the conflict is about the
sharing of costs and benefits of this transfer. Private labeling
heightens such conflicts by adding a dimension of contrary
marketing interests; that is, the national brand competes with the
private label of the retail store for shelf space and consumer-
attention. Which way the needle will tilt in this power struggle will
depend on the relative degrees of brand loyalty and store loyalty.
When the national brand enjoys greater brand loyalty than store
loyalty, the retailer is compelled to store the brand. Besides, the
national brand manufacturer may be in a position to penalize an
opposing retailer by supplying less quantity of such high-loyal
brands or withdrawal of supplies altogether, an eventuality that
may affect the image of the retailer among the public.
Manufacturers of near-monopoly brands enjoy this position, vis-à-
vis retailers. In a situation where the brand loyalty enjoyed by the
national brand is less than the store loyalty, the retailer is in a
position to dictate terms about the terms of supplies, delivery and
payment in addition to further schemes and discounts.
(d) Promotion: As is evident from the previous paragraphs,
private labels take the brand-battle to the point of sales. The
national brands compete with the private labels for store’s shelf-
space and consumers’ attention-space. With the store brands
understandably getting the best shelf space in terms of visibility at
eye level, strategic points such as entry point and shelf display,
national brands need to compete for the same facilities at higher
cost than earlier. Thus, private labeling increases transaction costs
for the national brands through higher promotion costs. However,
given an understanding that it may be difficult to beat the retail
brand in its own store through promotion, national brands may
resort to increased mass media advertising to create consumer
pull. This will prove meaningful only if the national brand faces
competition from private labels all over the country. Though
regional mass media advertising can be increased, the cost may
still prove to be supra-optimal.

We have limited our study or research work to the private labels of

FOOD BAZAAR section of the Big Bazaar.

19
We have tried to compare the private labels of FOOD BAZAAR such
as Tasty Treat, Disney, and Fresh & Pure with the National brands.
RESEARCH METHODOLOGY
 We have quizzed 98 customers randomly at FOOD BAZAAR
section of BIG BAZAAR and recorded their responses through
the means of a questionnaire.
 To further substantiate the comparisons between the
National Labels and Private Labels we conducted a Blind
Taste Test on 30 customers. We selected one of the Namkeen
variants of National Label and the same product from Private
Label.

PROBLEM
The research problem is the slackened performance of the Private
Labels of FOOD BAZAAR in terms of sales as compared to the
National Labels despite customers having awareness about the
labels.

SAMPLING PLAN
We used random sampling technique for the questionnaire round
as well as the Blind taste test round.

DATA COLLECTION TOOLS

 Questionnaire comprising 12 questions
 Blind Taste Test

ANALYSIS

20
QUESTIONNAIRE

We conducted a survey on 98 random consumers at BIG

BAZAAR and the survey tool was a questionnaire consisting of 12
questions wherein they filled their responses.
We also undertook a blind taste test in which we asked 30 random
consumers to compare one of the Namkeen variants of National Brand
with its Private Label counterpart on parameters like Taste, Freshness
and Crispness.
The following are the findings of our survey.

The first question was

Q.1.Are you aware of the Private Labels of Food Bazaar? If yes,
which of the following are the Private Labels of Food Bazaar?
a) Tasty Treat c) Fresh and Pure
b) Disney d) All of the above
e) Not aware

We began our survey from this very generic question in order to

check the awareness for the Private Labels of FOOD BAZAAR which
formed the primary step for our study of Private Label versus the
National Label perception in the minds of the customer. Lest we know
how many of the customers coming to FOOD BAZAAR actually are
aware of the private label it would be futile to proceed further. The
results were as follows

 35 consumers knew about TASTY TREAT

 2 consumers were aware about DISNEY
 31 consumers were aware about FRESH & PURE
 17 consumers were aware about all the Private brands of FOOD
BAZAAR
 22 consumers were not aware about any of the Private brands of
FOOD BAZAAR

22 Tasty Treat
35 Disney
Fresh & Pure
17
2 All of the above
31 Not aw are

21
The second question was
Q.2. Have you ever used any Private Label brand of Food
Bazaar?
a) Yes b) No
This question automatically formed the natural corollary to the first
one as after quizzing about the awareness, usage was the next
aspect.The results were as follows

 62% of the consumers have used the Private Brands of FOOD

BAZAAR
 38% of the consumers have not used the Private Brands of
FOOD BAZAAR

37, 38% a)Yes

61, 62% b)No

The third question was

Q.3. If yes, are you satisfied with the Private Label brands of
Food Bazaar?
a) Yes b) No
After finding out whether the consumers actually used the Private
Brands of FOOD BAZAAR we asked then if they were satisfied after
using the brands.
This question was asked to those who said yes in the previous
question.
The results were as follows

 92% of the Private Label users were satisfied with the products
 8% of the Private Label users were not satisfied with the
products

22
 5, 8%

a)Yes
b)No
56, 92%

The fourth question was

Q.4. At what time/occasions do you prefer to have snacks?
a) Breakfast b) Along with tea in evening
c) For children’s tiffin d) For guests only

Since we were conducting our research only for the Snacks segment
of the
FOOD BAZAAR this question formed the next step in finding more
about the consumer behavior for Snacks consumption. This question
would also give us insight into when the consumers prefer to have
snacks the most during the day.
The results were as follows

 29% consumers prefer to have Snacks for breakfast

 47% consumers prefer to have Snacks along with tea in evening
 14% consumers use it for children’s tiffin purpose
 10% consumers purchase for guests only

a)Breakfast

12, 10% b)Along with

16, 14% 34, 29%
tea in evening
c)For children's
56, 47% tiffin
d)For guest
only

The fifth question was

Q.5. How often do you purchase snacks?
a) Monthly b) Weekly

23
c) Daily c) As and when required

The question attempts to delve deeper into the consumer behavior

while they make purchases for Snacks.It tries to track down the
frequency for such purchases.The cyclicity,if it exists for such
purchases would be unveiled through this question like
monthly,weekly,daily.
The results are as follows
 28% of consumers purchase Snacks Monthly
 32% of consumers purchase Snacks Weekly
 11% of consumers purchase Snacks Daily
 29% of consumers purchase Snacks As and when required

a)Monthly

28, 29% 27, 28% b)Weekly

c)Daily
11, 11%
32, 32%
d)As and when
required

The sixth question was

Q.6. Whom do you purchase snacks for?
a) Self consumption b) Guest
c) Special occasions c) Any other

The question finds out the real purpose for which the consumers
purchase Snacks for.
Products which fall in this segment are generally bought for self
consumption and for guests but in order to find the clear distinction
between the actual usage, this question was incorporated. Sometimes
the usage is limited to certain special occasions only.There was also a
overlap of responses for this question.
The results are as follows
61% of consumers purchase it for Self consumption
21% of consumers purchase it for Guest
12% of consumers purchase it for Special occasions
6% of consumers purchase it for Any other

24
 a)Self
consumption
13, 12%7, 6% b)Guest

24, 21% 69, 61% c)Special

occasions
d)Any other

The seventh question was

Q.7.While purchasing snacks what do you keep in mind?
a) Taste b) Freshness/Crispness
c) Shelf life d) Packaging

The purpose of this question was to find out the emphasis the
consumer lays on the various attribute of the product while making a
purchase. The attributes of products which fall in this segment can be
the taste, freshness, shelf life and the packaging. The consumers
make purchase based on certain parameters or criteria that they have
in their mind for different products. The idea was to track down which
attribute of the products in the Snacks segment are most important
for the consumers. There was an overlap in the responses for this
question.
The results are as follows
44% consumers keep Taste in mind while making purchases for
Snacks
35% consumers keep Freshness/Crispiness in mind while making
purchases for Snacks
9% consumers keep Shelf life in mind while making purchases for
Snacks
12% consumers keep Packaging in mind while making purchases for
Snacks

25
 a)Taste

14, 12% b)Freshness/Cr

10, 9% ispness
51, 44%
c)Shelf life
41, 35%
d)Packaging

The eighth question was

Q.8.Does availability or non-availability of National
labels/brands affect your buying decisions?
a) Yes b) No

This is the first question regarding the National Labels and the
consumer decision associated with their availability and non-
availabilty.The consumers who place a lot of importance on the
national labels are the ones who would be sensitive to the availability
or the non-availability of the brands that they always use. It was
basically an indirect manner to find out the extent to which the
consumers exhibit their loyalty to the national brands.
The results were as follows
 56% of the consumers said Yes
 44% of the consumers said No

43, 44% a)Yes

55, 56% b)No

The ninth question was

Q.9.If yes, would you buy a Private Label substitute of the same
product?
a) Yes b) No

26
Out of the 55 people who said yes to the eighth question, we asked
this question to find out if they would switch over to a Private Label
substitute of the same product in case the National Label that they
generally purchase is not available. This question attempts to unveil
the scope for Brand Switching in the event of unavailability of
National Labels.
The results are as follows
60% of the consumers said Yes
40% of the consumers said No

22, 40% a)Yes

33, 60% b)No

The tenth question was

Q.10. Tick mark the appropriate
Disagre Indifferen Agre
e t e
a)I buy National Labels because of
their quality
The format for this question was slightly different. The question had
10 sub-parts which were simple statements to which the consumers
disagreed, agreed or were indifferent to.
This is a kind of projective technique to elicit out the true responses of
the consumers.
All the statements track the consumer behavior in context to the
National Labels and their features, benefits and advantages.

The first attribute is Quality of National Labels

27
The results were as follows
 5% Disagreed
 7% Indifferent
 88% Agreed

Quality

5, 5%7, 7%
Disagree
Indifferent
Agree
86, 88%

b)I buy National Labels because of Disagre Indifferen Agre

their value and price e t e
The second attribute is Value and Price of National Labels
The results are as follows
 8% Disagreed
 20% Indifferent
 72% Agreed

Value and Price

8, 8%
20, 20% Disagree
Indifferent

70, 72% Agree

c)I buy National Labels as they are Disagre Indifferen Agre

more prominent e t e
The third attribute is Prominence of National Labels
The results are as follows
 10% Disagreed

28
  19% Indifferent
 71% Agreed
Prominence

10, 10%
19, 19% Disagree
Indifferent
69, 71% Agree

d)I buy National Labels as their taste is Disagre Indifferen Agre

better than their Private Label e t e
counterparts
The fourth attribute is Taste of National Labels
The results are as follows
 12% Disagreed
 23% Indifferent
 65% Agreed

Taste

12, 12%
Disagree
23, 23%
Indifferent
63, 65% Agree

e)I buy National Labels as they are Disagre Indifferen Agre

readily available everywhere e t e
The fifth attribute is easy Availability of National Labels
The results are as follows
 8% Disagreed
 13% Indifferent
 79% Agreed

29
 Readily Available

8, 8%
13, 13% Disagree
Indifferent
Agree
77, 79%

f)I buy National Labels as there is an Disagre Indifferen Agre

assurance about the product from the e t e
manufacturer
The sixth attribute is the Assurance of the National Labels
The results are as follows
 5% Disagreed
 19% Indifferent
 76% Agreed

Assurance

5, 5%
19, 19% Disagree
Indifferent
Agree
74, 76%

g)I always purchase the same Disagre Indifferen Agre

brands/varieties of snacks e t e
The seventh statement is about the consumer behavior or habit of
consumers when they make purchases for snacks.It is related to the
consumer buying habit i.e. whether they purchase same varieties.
The results are as follows
 41% Disagreed
 17% Indifferent
 42% Agreed

30
 No Experiment with Variety

40, 41% Disagree

41, 42%
Indifferent
Agree
17, 17%

h)I keep on trying new brands/varieties Disagre Indifferen Agre

of snacks e t e
The eight statement is just the reverse of the seventh statement.This
has been incorporated in order to check the consistency of the
consumer responses.
The results are as follows
 37% Disagreed
 16% Indifferent
 47% Agreed

Experiment with Variety

36, 37% Disagree

46, 47%
Indifferent
Agree
16, 16%

i)I purchase same set of Disagre Indifferen Agre

brands/varieties of snacks for self e t e
consumption and for guests
The ninth statement touches upon yet another aspect of consumer
behaviour. It is quite a common fact that many people buy two sets of
snacks for their self consumption purposes and for their guests. This

31
is a very important question as this behaviour can lead to the scope of
greater sales of relatively cheaper private label products which the
consumer can use for self consumption purposes.While for the guests
the consumers can opt for the National Labels.
The results are as follows
 17% Disagreed
 13% Indifferent
 70% Agreed

Same Set for Guest and Self

17, 17%
Disagree
13, 13%
Indifferent
68, 70% Agree

j)I purchase two sets of Disagre Indifferen Agre

brands/varieties of snacks, one for self e t e
consumption and other for serving to
the guests
This statement again has been reverse coded in order to check for the
consistency in the responses of the consumers.
The results are as follows
 17% Disagreed
 13% Indifferent
 70% Agreed

32
 Two Sets for Guest and Self

17, 17%
Disagree
14, 14%
Indifferent
67, 69% Agree

The eleventh question was

Q.11.Do you read the information provided on the products?
a) Yes b) No

The question attempts to find about the awareness level of the

consumers in terms of information provided on the products. This also
will yield a result wherein we can track whether or not the consumer
pays any attention to the manufacturer and marketer of the product.
The results are as follows
100% of consumers said that they read the information

, 0%

a)Yes
b)No

98, 100%

The twelfth question was

Q.12.If yes, which of the following information do you generally
look for?
(You can tick mark more than one option)
a) Price b) Quantity
c) Manufacturing date d) Expiry date
e) Promotional offer (200+50 gms extra, 10% off)
f) Certifications(ISO-2001)

33
 g) Contents/Ingredients used
The question gave to the consumers various statutory information
provided on the products which they generally look for before making
their purchases.There was an overlap in the responses.
The results were as follows
22% look for Price
11% look for Quantity
19% look for Manufacturing date
21% look for Expiry date
9% look for Promotional offers
8% look for Certifications
10% look for Contents/Ingredients

Information on Products

27 Price
60
24 Quantity
26 Manufacturing date
Expiry date
32 Promotional offers
59 Certifications
55
Contents/Ingredients

BLIND TASTE TEST

We conducted a Blind Taste Test on 30 random consumers in FOOD

BAZAAR
on the following variants

34
  NATIONAL LABEL HALDIRAM MOONG DAAL
NAMKEEN(Brand 1)
 PRIVATE LABEL TASTY TREAT MOONG DAAL
NAMKEEN(Brand 2)

The consumers were asked to rate the variants on a scale of 5.The

parameters on which the consumers were asked to judge the variants
were
a) Taste
b) Freshness
c) Crispness
The results were as follows:

BRAND 1 BRAND 2
PRICE Rs.63 PRICE Rs.58
WEIGHT WEIGHT
500gms 500gms

TASTE 110 97

FRESHNESS 114 96

CRISPNESS 115 118

The National brand scored more points on

 TASTE
 FRESHNESS

The Private brand scored more points on

 CRISPNESS

35
 CONCLUSION

The following can be concluded after the completion of the

research study:

 Only 16% of the respondents were aware about the Private

Labels of
FOOD BAZAAR which means that the awareness is low.
 62 %( 61 customers) of respondents have used the Private Label
products of FOOD BAZAAR which reflects that the Private
Labels have been able to convince customers at some
elementary level.
 Out of these 61 respondents, 92%(56 customers) were satisfied
with the Private Label products of FOOD BAZAAR.This reflects
the number of satisfied users and also the figure is quite high. It
can be concluded that the products are capable of matching up
to the National Brands ,if they are better than them.
 47% of respondents like to have snacks along with tea in
evening which also is a majority in this case. This shows the
consumption habits. The consumers should be offered products
which are more preferred in the evening like cakes, biscuits and
namkeen.
 32% of respondents purchase snacks weekly. This indicates that
the replenishment cycle for personal consumption is quite small
and if the customers come across a value proposition that suits
their criteria they can try it out. Also, their frequency of visiting
the FOOD BAZAAR section is also high which means greater
exposure opportunity of Private Labels for the retailer.
 61% of respondents said that they purchase Snacks for personal
consumption.
 44% of respondents emphasize on taste while purchasing
Snacks which means they will not compromise on the taste
factor at all.This is a big cue to the retailer for his Private
Labels.The consumers will only shift to the Private Label if the
they find the taste of the Snacks up to the ark or coparable with
the National Labels else he will continue to patronize the
National Labels only.
 56% of respondents said that their buying decision is affected by
availability and Non-availabilty of National brands.
 Out of these 56% respondents 60% (33 customers) said that
they can buy a Private Label substitute of the National
Brand.This is a clear indication for the retailer that there is a
market for the Private Label product provided the retailer can
make use of the opportunity.

36
  National Labels most certainly was a clear winner on aspects
like
A) Quality
B) Value and Price
C) Prominence
D) Taste
E) Availability
F) Assurance
The above parameters clearly indicate or summarize the broad
factors which need to be taken care of while battling with the
National Labels. The customers have formed a certain amount of
loyalty with the National Labels and it certainly is not an easy task to
lure them towards the Private Labels. If at all retailer wants to
increase the sales for its Private Labels, it will take a lot of time to
prove itself over the National Brands and win the loyalty of customers.

 As many as 47% of respondents are open to the idea of

experimenting with new and different varieties of Snacks which
is again a favorable scenario for the retailer.
 A good number of respondents, 70% said that they buy the same
set of Snacks for their personal consumption and for their
guests.This rules out the possibility of selling low priced Snacks
for the personal consumption of the consumers.
 100% of respondents read the information provided on the
products.

37
 RECOMMENDATIONS

 The retailer should generate awareness amongst the customers

through effective marketing communication. Until or unless the
customer is aware about the products, there will not be any
purchase intention in his mind.
 The retailer will have to confer to certain standards while
managing Private Labels as the competition in question is none
other than the National Labels which will always score brownie
points due to their Brand Image. The customers have very
strong, unique and favorable brand associations for the National
Labels and it is a real challenge to diminish the strength of
these associations and form new ones for the Private Labels.
 The Private Label should maintain or remain consistent in its
quality for
a relatively long period of time.
 One aspect where the Private label can leverage out the
customer’s loyalty is on Price factor. If the customer is somehow
convinced that he is getting value for money then there is a
good possibility that he may start patronizing the Private Label.
Compete on price front.
 It is highly recommendable to the retailer that the Private
Labels should be launched only in those categories where the
competition from the
National Labels is relatively less.
 The retailer will certainly have to exercise a lot of creativity in
managing a Private Labels in terms of packaging, marketing,
pricing, promotion and display.
 Strict and stringent standards or policies regarding quality,
taste and price should be in place.
 The retailer will have to be extra cautious for the Taste factor
for the Food category as the consumers are very particular
about it and would not like to compromise on it. Even low prices
cannot offset this factor.
 Continually analyze and get intimated with your customer base.
Anticipate rather than react. By offering customers something
that they want and national labels do not offer, marketers
increase the likelihood of premium shelf space.
 Start or improve upon a loyalty program that rewards your
customers for product use.

38
 Market, market, market. Make certain that your customers
know why they should buy your product/brand over a private
label. Make customers seek out your product.
 Establish toll-free numbers, hot lines, web sites and anything
else needed to give your customers instant access to you. Make
them feel you’re right next door.

39
 BIBLIOGRAPHY

a) Introduction to retail by Levy & Weitz

b) Retail Environment and Concepts
c) Private Labels-Research Paper from Google.com

40