Big Bazaar is an Indian retail chain that implemented several strategies to remain competitive during the 2008 recession. These included focusing on everyday low pricing of products through improved logistics and reduced waste. It also increased store effectiveness, withdrew unprofitable products, diversified its product ranges, and differentiated its promotional programs. Some promotional strategies included point-of-sale discounts and monthly product sampling events. The strategies helped Big Bazaar attract and retain customers during the economic downturn.

1. COMPETITIVE STRATEGY IN
RECESSION ECONOMY: A CASE OF BIG
BAZAAR IN INDIA
PRESENTED BY:
HARSHA.K

2. INTRODUCTION
• 2008 recession, how it affect the consumer behaviour?
• Purchasing power
• Price of the product
• Strategies for attracting customers
• Success of big bazaar

3. PORTER’S GENERIC COMPETITIVE STRATEGIES
AND RETAILER’S REACTIONS IN RECESSION
ECONOMY
Porter’s generic competitive strategies
• Low cost
• Differentiation
• Focus.
Retailer’s reactions
• In recession economy, retailers tend to exercise the low cost focus strategy Pricing is an important
strategy for retailers to maintain and getting more customers in particular recession time.
• In recession economy retailers tend to exercise the differentiation focus strategy.

4. RETAIL MARKET IN INDIA
• According to AT Kearney’s annual Global Retail Development Index (GRDI). India earned $511 billion
in the year of 2008 and drawing both local as well as global players. After 10 years it will reach in $1.3
trillion by 2018.
• India has one of the largest numbers of retail outlets in the world. Of the 12 million retail outlets present
in the country, nearly 5 million sell food and related products.
• As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls
and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping
has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in
India.
• This has also contributed to large scale investments in the real estate sector with major national and
global players investing in developing the infrastructure and construction of the retailing business. The
retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar
in large cities. When it comes to development of retail space specially the malls.
• the Tier II cities are no longer behind in the race. If development plans till 2007 is studied it shows the
projection of 220 shopping malls.

5. BIG BAZAAR
• Founded in 2001
• Future group is the parent company
• $3.1 billion is revenue
• More than 35,000 employees
• It has more than 250 stores in 115 cities of India.

6. STRATEGIES OF BIG BAZAAR
• Everyday low price products
• Improving logistics
• Reducing wastes
• Increasing effectiveness of stores
• Withdrawing unprofitable products
• Differentiating product ranges
• Differentiating promotional programs

7. EVERYDAY LOW PRICE PRODUCTS
Under fierce competitive pressure and consumers buying behaviors during economic recession, Big
Bazaar has targeted its products as low pricing products in every day. Example for this is that Big Bazaar
has kept discounting their products for longer period of time and more frequently discount certain groups of
products. The area manager commented on pricing strategy that “…prices for comparable products should
be competitively priced. However, there are several dangers in cutting prices across the board. First,
customers may resist moves by the company to reinstate prices after the recession has ended. Thus, we focus
to discount certain group of products, product packages and combinations to attract our customers keep
coming to our stores and maintain prices for other individual items…”

8. IMPROVING LOGISTICS
In order to be able to offer everyday low pricing products, Big Bazaar has to reduce its operation costs
through having better logistic systems. Big Bazaar has implemented several steps to improve its logistics
systems such as relocate logistic center, using more
• computer services
• minimizing inventory level
• using big stores as contemporary sub-center-warehouse for smaller satellite stores.

9. REDUCING WASTES
I n order to achieve low cost focus strategy, the Board of Big Bazaar has announced that “All stores and
logistic centers have to commit to reduce the waste levels” This can be achieved from reducing over-ordered
for fresh food product which leads to redundant waste products, having better sales forecast with help from
computerizing systems, better stools and equipments to handling and transporting products. In addition, all
stores must strictly utilize first in-first out displaying methods for food products so that there will not be any
cases that new products are sold first, and old products still remain unsold and have to be dumped due to
expiry.

10. INCREASING THE EFFECTIVENESS OF THE
STORES
Big Bazaar has offered several training sessions for store managers, deputy store managers and other
key personnel of the stores about how a store can increase the effectiveness of its employees. According to
Big Bazaar, the effectiveness of employees can be improved through exercise more strictly reward and
punishment systems, maximum time limit for each particular tasks, incentive and bonus program, further
education and promotion opportunity

11. WITHDRAWING UNPROFITABLE PRODUCTS
Big Bazaar has made decision to withdraw all weak items from its stores. In the recession period, Big
Bazaar focuses its product offer characteristics on economy, durability, and functionality. Undemand
products also removed from the stores.

12. DIFFERENTIATING PRODUCT RANGES
Big Bazaar has changed its products offering in its stores. The offers focus on multi-purpose goods
over specialized products. Big Bazaar also allocates extra effort to introduce new products in some key areas
of its stores to maintain its strength over its competitors. Added different types of FMCG and electronics
products.

13. DIFFERENTIATING PROMOTIONAL PROGRAMS
• Big Bazaar has also focused to allocate some of the promotion budget to points of sales (POS) promotion from which
the consumer can gain value immediately such as “buy more, pay less” in which customers gain 5% more discount if
the value of products they buy more than INR 500, and the bonus will increase to 10% of total products if they buy
more than INR 1500 and the bonus is 20% if customers buy more than INR 3000. Customers get bonus immediately
at the time they pay for their purchases as the bonus is deducted immediately from total amount.
• Big Bazaar implements is inviting the customers coming to its store and attending the lottery for winning its
products. Big Bazaar organizes also once a month sampling activities in which customers can taste its products and
buy these products with discounted price in these days of product-sampling.
• Big Bazaar increases their promotion on the internet, TV and other media. Customers can study the coming campaign
products on the company websites. They, further, can give feedback, ask questions, or give recommendations related
to products offering. Related to promotion via TV advertising, Big Bazaar now focus more on the most effective time
of week day (specially Wednesday offer). According to Big Bazaar records, people in India do more shopping at the
weekend. Thus Big Bazaar focus their TV advertising on Thursday and Saturday, and remove TV advertisements for
Monday-Wednesday.
• In every two weeks, Big Bazaar launch different product –campaign such as Healthy Products Week, Rice Week, Dal
Week, Luxury Products etc. These have created more excited to customers to come to the stores to shop despite of the
effects of economic crisis.

14. SWOT ANALYSIS
Weaknesses
• Unable to meet store opening targets on time
• General perception: ‘Low price = Low quality’
• Overcrowded during offers
• Long waiting at billing counters
• Lack of many branded products
Strengths
• High brand equity
• State of the art infrastructure
• Vast variety under one roof
• Everyday low prices
• Huge investment capacity
• Biggest value retail chain in India
• Offers a family shopping experience
• Online purchasing
• Delivery of goods
Opportunities
• Organized retail is 5% in India.
• Can expand globally.
• Increased rural penetration
• Entry to higher premium market
Threats
• Competition from other value retail chains
such as Shoprite, Reliance (Fresh and trends),
Hyper city and D mart.
• Unorganized retailers
• Changing Government policies
• International players entry to Indian market

15. CONCLUSION
• How a retailer reacts during an economic crisis and adopt different competitive strategies to take
advantage in the market.
• In particular, in recession period, retailers need to exercise a combination of competitive strategies: low
cost focus and differentiation focus strategy.
• Cost strategy: logic logistic center, increasing effectiveness of employees, and reducing wastes from
right-ordered fresh products, first in-first out food products, displaying methods
• Focus strategy: avoid unprofitable products and focus on profit-driven product selection.
• Differentiation strategy: more selective in products and more creative in their promotion strategy.

16. THANK YOU