Big bazaar's ms


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Big bazaar's ms

  2. 2. INTRODUCTIONIndian retail sector is witnessing one of the most hectic marketing activities of alltimes. The companies are fighting for mind share and heart share which can finally beconverted to market share. There is always a ‘first mover advantage’ in an upcomingsector. In India, that advantage goes to “Big Bazaar.” It has brought about manychanges in the buying habits of people. It has created formats which provide all itemsunder one roof at low rates, or so it claims. In this project, we will study its marketingstrategies.Big Bazaar’s main competitors are other business houses which are planning to enterthe market as well as long established ‘Kirana’ stores which feel threatened by hugeretail chains. BIG BAZAAR FOR THE GREAT INDIAN MIDDLE CLASSKishore Biyani led the company’s foray into organized retail with the opening up ofthe Big Bazaar in the year 2001.It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class.It was started as a hypermarket format in Mumbai with approx. 50,000 sqft of space.Its values and missions are to be the best in Value Retailing by providing the cheapestprices and hence goes the tag-line “Is se sasta aur achcha kahin nahin”It sells variety of merchandise at affordable rates, the prices of which it claims arelowest in the city. Usually the items are clubbed together for offers as on the lines ofWal-mart and Carrefour and it also offers weekend discounts. It currently operates outof more than 100 stores and top 25 stores register a cumulative footfall of 30 lakh amonth on an average. 7P Analysis of Big Bazaar:7P Marketing Mix is more useful for services-industries and knowledge intensiveindustries. Successful marketing depends on number of key issues.The seven keys issues are explained as 2
  3. 3. Product: Big Bazaar offer a wide range of products which ranges from Apparels,food, farm products, furniture, child care, toys etc. (Exhibit-7)Products of all themajor brands are available at Big-Bazaar(Exhibit-8). Also, there are many in housebrands promoted by Big Bazaar. Big Bazaar sold over three lakh pairs of jeans,50,000 DVD players and 25,000 microwave ovens. In all, the fashion, electronicsand travel segments made up about 70% of sales. Last year, these categories made uponly about 60%.Price: The tag line is “Is se sasta aur accha aur kahin nahi”. They work on the modelof 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 thelowest available price without coupon clipping, waiting for discount promotions, orcomparison shopping.Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept ofPsychological discounting (Rs 99, 49 etc.) is used as promotional tool. Big Bazaaralso 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 Retailwhich is aggressively used by Big Bazaar.Bundling: Selling combo-packs and offering discount to customers. The combopacks add value to customer.The salient features of big bazaar are:  Well trained staff, the staff employed by Big-Bazaar are well-suitable for modern retail.  Well dressed staff improves the overall appearance of store.  Employees are motivated to think out-of-box. Retail sector is in growth stage, so staff is empowered to take innovative steps.  Employ close to 10,000 people and recruit 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 a customer friendly atmosphere.Process:  The goods dispatch and purchasing area has certain salient features which include:-  Multiple counters with trolley to carry the items purchased  Proper display/posters of the place like (DAL, SOAP etc.)  Home delivery counters also started at many places 3
  4. 4. Range of Products Available at Big Bazaar:Big Bazaar’s New Marketing Strategy:Big Bazaar has launched new marketing strategy which is based on GuerrillaMarketing. Guerrilla marketing warfare strategies are a type of marketing warfarestrategy designed to wear-down the enemy by a long series of minor attacks, usingprinciples of surprise and hit-and-run tactics. Attack, retreat, hide, then do it again,and again, until the competitor moves on to other markets. Herein guerrilla force isdivided into small groups that selectively attack the target at its weak points. In theworld of cut throat competition, corporate use extension of the same strategy inmarketing. Corporate like Coke, Pepsi, etc have been using the same for quite sometime now and the latest entrant is our very own ‘Future Group’- Big Bazaar, 4
  5. 5. Pantaloons, Future Bazaar, eZone are all part of this group and they are taking on thebiggies like Shoppers Stop, Lifestyle, and Tata’s Westside.In order to do the same, Future Group have come up with 3 catchy/cocky and cheekyad campaigns which surely do catch our eyes and surely one can’t resistappreciating the same.Keep West-aSide. Make a smart choice!Shoppers! Stop. Make a smart choice!Change Your Lifestyle. Make a smart choice!Big Bazaar: Positioning and EstablishmentBig Bazaar has established itself in the first quadrant of Organization Value andCustomer Value Matrix. The SWOT analysis of current strategy of Big Bazaarelaborates the core competencies and areas of improvement. The key features thathave shaped in establishing of Brand includesBig Bazaar ensures that no other Kirana store/ departmental store are offeringconsiderable discount compared to its own price. This helped Big Bazaar in beingthe “Value for money” store.Big Bazaar scores high on product mix as compared to Kirana store. Cheap and localproducts are heavily stocked in Big Bazaar which make it easier to attract lowermiddle class category of customers.Promotion of Kirana event is rare event but Big Bazaar used this channel efficientlyto establish itself as national brand. Customer loyalty resulting in high up sell i.e.selling to existing customers. Big Bazaar refrains from high-end locations forbusiness which reduces its rental budget and provides competitive advantage overcompetitors. Kishore Biyani has taken “early movers advantage” in many retailspaces. 5
  6. 6. Organization and customer value matrix:SWOT analysis of Big Bazaar: 6
  7. 7. Sales promotion:Big Bazaar has presence in almost all the major Indian cities. They are aggressive ontheir expansion plans. Promotion Big-Bazaar started many new and innovativeCross-sell and up-sell strategies in Indian retail market. The various promotiontechnique used at Big Bazaar include “Saal ke sabse saste teen din”, Future card( thecard offers 3% discount), Shakti Card, Brand Endorsement by M.S. Dhoni, ExchangeOffer- ‘Junk swap Offer’, Point-of-Purchase Promotions. Advertising has played acrucial role in building of the brand. Big Bazaar advertisements are seen on Printmedia, TV, Radio (FM) and Road side billboard.Brand extension:Brand Extensions actually made and future possibilities. Future Group is planningto split Big Bazaar into two entities. One will be front-end consumer oriented entityand other will be for back end operations. Back end entity may enter into jointventure with leading international cash and carry retailer. Foreign partners likeCarrefour, Metro, and Costco etc are in the race and their role will be to improveefficiency in sourcing and logistics, which will help drive down prices and boostmargins. The front end operations will be further divided in three categories, BigBazaar Express with store area less than 40000 sq ft, Standard Big Bazaar with storearea between 40,000 to 75,000 sq ft and Big Bazaar.Supercentres with store area more than 75000 sq ft (Exhibit 10). Future group is alsoplanning to distribute financial products like consumer loans and insurancethrough Big Bazaar outlets.Consumer insights & perceptions:Big Bazaar is based on 3-C theory of Kishore Biyani. The three C symbolize Change,Confidence and Consumption and according to this theory “change and confidenceis leading to rise in consumption”. They divided Indian customers in threecategories:-India One:Consuming class, constitute only 14% of Indian Population.They are upper middleclass and most of customers have substantial disposable income are the Initial focusof Big BazaarIndia Two:Serving Class which includes people like drivers, household helps , office peons ,washer man etc. For every India One, there are at least India two and have around55% of Indian population. 7
  8. 8. India Three:Struggling class, remaining population of India Cannot afford to inspire for betterliving, have hand-to-mouth existence. Needs cannot be addressed by currentbusiness models.The potential customers of Big Bazaar are India One and IndiaTwo. The customer insights were developed by close observation of the target set.The insights that came out were:-The clean and shiny environment of modern retail stores creates the perception thatsuch store are too expensive and exclusive, and are not meant for India two.India two find moves and find a lot of comfort in crowds, they are notindividualistic. They prefer to be in queues.Indian-ness is not about swadeshi , it’s about believing in Indian ways of doingthings.Indian customers prefer to purchase grains, grams etc after touching them, so it’sbetter not to sell in polythene packs. Big Bazaar has counters where you can touchwheat, rice, sugar etc. before purchasing.Advertisements about schemes and offers through local newspapers, radio in locallanguages inspires customer more than the traditional ways.The guards, salesman at the Big Bazaar outlets should not look smarter thancustomer, so they prefer not to have tie etc in their uniform.Hypermarkets in India should be situated in city unlike western countries wherethey are located away from city.Purchased Bags/goods should be sealed at checkout as customer can enter and exitmultiple times. For Indians, shopping is an entertainment; they come in groups,with families so Big Bazaar should offer something to every section of family. Thatalso led separate section for clothes, vegetables, food etc i.e . Multiple clusterswithin a bazaar.Advertising: The essential of brand building processAdvertising is an essential component of brand building. The advertisement andbrand building is done through various ways, the techniques used are:-Tag line: Big Bazaar tag lines are the key components of advertising. These tag lines aremodified according to demographic profile of customers. These catchphrasesappeared hoardings and newspapers in every city where Big Bazaar was launched.Everybody understood and connected easily with these simple one-liners. The catch 8
  9. 9. liners includes “Hindi- Chane ke bhaw kaaju”, “Bengali-Rui er dame illish”,“Hindi-Stall ke bhaw balcony” etc.Print Ads:Big Bazaar news paper advertisements are present just before launch of any newscheme. This creates aura about the Big Bazaar brand in the minds of customer.TV Ads:Kishore Biyani spends a lot amount of money in brand building exercise. BigBazaar commercials are shown on various channels in India. Presently, Fashion@Big Bazaar commercial is aired.Road side advertisements: Big Bazaar billboards are displayed on prime location in various cities as a brandbuilding exercise. They display the catchphrases and now days.Radio Ads:This technique is used at cities like Sangli (tier 1 / tier 2 cities).Now a days it isreplaced by advertisements on FM channels. This informs customers about the allnew happenings at Big Bazaar.Fashion shows: “FASHION @ BIG BAZAAR - Desh Badla, Bhesh Badlo” is thelatest invention of the Indian iconic brand. In an effort to take the Fashion to themasses, Big Bazaar, the flagship hypermarket brand of retail chain of FutureGroup,organized a three-day Fashion Show on the streets of Bandra, Mumbai.BrandEndorsement by celebrity: Big Bazaar is always associated with celebrities foradvertising and marketing of its Brand-name. The current campaign is starred byBrand Ambassador and Indian cricket ODI Captain Mahendra Singh Dhoni. EarlierHimesh Reshammiya and Sanath Jaisuriya were associated with BigBazaar. 9
  10. 10. Future Strategies of Big Bazaar:Factors that shaped Big Bazaar during its life cycle:The Big Bazaar brand name is in its growth stage (Exhibit 11). Pantaloon groupfaced various small and large scales troubles in the introductory Stage of the brand.Present years are the high growth in retail sphere as market has high potential tosustain growth. The sales are increasing, more and more firms are coming tomarkets, foreign players are entering into retail sector and pie of organized retail isincreasing in retail sector.The factors that shaped the brand during its life cycle are:-Influence of Sarvana Stores located in Theyagraya Nagar, Chennai:Many people think that Big Bazaar was inspired by Wall Mart but the truth is thatKishore Biyani and his team members are neither inspired by US ways of doingretailing nor they have been to US much. The credit for foundation and inspirationgoes to Saravana Store, a family –run 25 years old store, whose philosophy was –low margin, high turnover. In that store, food, groceries, clothes everything had aseparate section. It had around 120 people just to manage crowd. The single shopwas doing business of more than 200 crore per year. This shop was the template forBig Bazaar. 10
  11. 11. Observing customer regularly:Regular customer feedback is also an influential factor for the success of Big Bazaar.The Big Bazaar has a separate team that looks for customer’s purchasing pattern andhow they like or dislike products, how they approach to particular products. Forexample, unlike other stores where the most expensive and catchy item is placed atthe front display, Big Bazaar places the “Value for Money item” at check out point.Imbibed entrepreneurial spirit in organization:Decision making power is given to every level of employee at Big Bazaar. KB hasgiven risk-taking power, which led to entrepreneurial spirits into every employee.Everybody in big Bazaar operates with speed and confidence when it comes todecision making.Building on core values:Core values of Indian-ness, valuing and nurturing relationships and Simplicityshaped the brand. Kishore Biyani always believes in long term relationships, withcustomers, suppliers and employees. Once thinking about offering gifts toemployees close to Diwali, KB suggested giving them wallpaints to keep theirhouse clean. The paint is used in Indian culture to keep house clean and bringsfreshness. The motive behind was to keep everything clean and bring freshness inorganization.Strategic decisions taken to build the Big Bazaar brand:The strategic decisions that lead to building of Big Bazaar were:-Real Estate Game:For a retailer, location is one of the most important things. According to KB, realestate cost should be less than 5 % of total sales of store in order to providemaximum benefits to customer. The strategic decisions to secure spaces before otherretailers join in have resulted in cost-saving. Also, it has created early presence inmarket. 11
  12. 12. Nurturing relationships:KB follows strategy to develop trust and nurture relationships with suppliers. Thistrust led to strategically correct decisions most of the time. Whoever works withFuture Group, either leaves in initial deals or continues forever. Use of technology,scenario planning and story-telling Big Bazaar planning and design used advancetechnologies like scenario planning and storytelling. These techniques were mainlyused for store-design layout, store-location selection. The strategy to use user-focused, prototype-based development tool made the brand adapt to the fast-changing external environment.Design management:Design-led thinking helped Big Bazaar to achieve ‘customer-first’ objective andultimately lead to better financial performance. Big Bazaar strategy to focus ondesign led to creation of Idiom, an independent design and consultancy firm, basedin Bangalore. They are one of the few organizations in India having economist,ethnographers and sociologists working across various teams as a part of Designmanagement team. Back-end operations, supply chain Harvard Business School justdid a case study on Pantaloons supply chain and it says that Pantaloons is the mostcost-effective supply chain in the world. India may not have a modern supply chainbut it definitely has a cost-effective one. Retailers have made use of the existingsupply chain. 12
  13. 13. Life Cycle of Big Bazaar:Brand Ambassador:A brand ambassador is a celebrity (or an attractive or interesting person) used to helpadvertise a product or services.Big Bazaar, has roped in cricketer Mahendra Singh Dhoni as the Brand Ambassadorfor its new range of fashion apparel. Dhoni would feature in a series of advertisementsacross all media. Dhoni and Big Bazaar have a lot of synergies as the Indian one-dayinternational team’s captain stands for the aspirations of youths, while Big Bazaar islooked up to by millions of Indians to fulfill their aspirations. In this way, Big Bazaar make full use of the marketing mix for a new venturewhich earlier belongs to the unorganized retail sector i.e. kirana stores. Application of thebest marketing practices helps Big Bazaar in a great way.Future Expectations: 13
  14. 14. Big Bazaar is planning to have 300 hypermarkets in the country by 2010-11. Thecompany may also increase its annual turnover to Rs. 13,000 crore by 2010-11, up fromRs. 3,600 crore last fiscal on the back of its expansion.The company has also gone on record saying that it would have another 35 stores bythe end of its fiscal in June 2009 to take the total number to 135. To achieve this theyare targeting a turnover of Rs. 5,000 crore in the current fiscal year and haveformulated plans for reaching a figure of Rs. 13,000 crore by 2010-11 fiscal.For the expansion, the company would be looking at both the metros and Tier I cities,besides TierII cities & smaller cities.The marketing strategy seems to be perfectly on track as the Big Bazaar hypermarketshad a footfall of 11 crore last fiscal and the company is aiming for an increase in thenumbers up to 14 crore this year. The average size of a Big Bazaar hypermarket is 30,000sqfttoonelakhsqft. 14