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Ask A Question: Posted: Mar 18, 2010 - Comments: 0 - Views: 1,335 - Share
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"We have a store opening virtually every fortnight; I have lost count
now of how many I have opened."
Kishore Biyani
Big Bazaar is Indian personification of retail. It's like an Indian bazaar or mandi
or mela, the environment created by traders to give shoppers a sense of
moment. Its personality is of being an entity away from fancy or pretty and
being authentically "no-frills". Kishore Biyani never hired any foreign consultant
for Big Bazaar which is evident from Indian-specific personality of the brand. The
brand's personality is self-explanatory by its tag-line only. This statement places
Big Bazaar at the top of customer's mind. It reflects that entrepreneurship and
simplicity are the essence of character of Big Bazaar. To use predatory pricing is
not in the personality of Big Bazaar, they never sell goods below the price they
have purchased it. Big Bazaar, the "Indian Wal-Mart", is the modern Indian
family's favorite store. Big Bazaar symbolizes modern retail, the business which
isn't looked up to in our country, is now in the eyes of many multi-national
biggies. Big Bazaar has shown a robust growth in recent years (.
Value of Branding
Branding plays a crucial role for all the products and services. A successful brand
is an identifiable product or service, and buyers or users perceive values in it
which matches their needs.
• Product dies but a good brand never dies: The first car T-model is no
more but the brand 'FORD' is still alive. 'Pears' soap that was launched
somewhere in the end of 1800 is still alive although they have changed
the product. Even they are looking for line extension but basic brand
names are the same.
According to brand evolution model developed by Kunde (2000) (as the value of
brand becomes stronger and more relevant to customers, the brand becomes
more involving, and thus, managers need to make their brand values more
relevant to increase customer's involvement. This is explained by religion model
also. The model distinguishes 5 types of brands: -
Big Bazaar has established itself in the first quadrant of Organization Value and
Customer Value Matrix (Exhibit 5). The SWOT Analysis (Exhibit 6) of current
strategy of Big Bazaar elaborates the core competencies and areas of
improvement. The key features that have shaped in establishing of brand
includes: -
• Big Bazaar ensures that no other kirana store / departmental store are
offering considerable discount compared to its own price. This helped Big
Bazaar in being the "value for money" store.
• Big Bazaar scores high on product mix as compared to kirana store.
• Cheap and local products are heavily stocked in Big Bazaar which make it
easier to attract lower middle class category of customers.
• Promotion of kirana is rare event but Big Bazaar used this channel
efficiently to establish itself as national brand.
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,
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: -
Process
The goods' dispatch and purchasing area has certain salient features which
include: -
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.
The front-end operations will be further divided in three categories, Big Bazaar
Express with store area less than 40,000 sq. ft., Standard Big Bazaar with
store area between 40,000 to 75,000 sq. ft., and Big Bazaar Supercentres
with store area more than 75,000 sq. ft. . Future Group is also planning to
distribute financial products like consumer loans and insurance through Big
Bazaar outlets.
Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolize Change,
Confidence and Consumption, and according to this theory, "Change and
confidence is leading to rise in Consumption". They divided Indian customers in
three categories: -
India One
India Two
• Serving class which includes people like drivers, house-hold helps, office
peons, washer-men, etc.
• For every India One, there are at least India Two and have around 55% of
Indian population.
India Three
The potential customers of Big Bazaar are India One and India Two. 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 that such store are too expensive and exclusive, and are not
meant for India Two.
• India Two finds moves and find a lot of comfort in crowds, they are not
individualistic. They prefer to be in queues.
• Indian-ness is not about swadeshi, it's about believing in Indian ways of
doing things.
• Indian customers prefer to purchase grains, grams, etc., after touching
them, so it's better not to sell in polythene packs. Big Bazaar has counters
where you can touch wheat, rice, sugar, etc., before purchasing.
Print Ads: Big Bazaar newspaper advertisements are present just before launch
of any new scheme. This creates aura about the Big Bazaar brand in the minds
of customers.
TV Ads: Kishore Biyani spends a lot of money in brand building exercise. Big
Bazaar commercials are shown on various channels in India. Presently,
Fashion@Big Bazaar commercial is aired.
Radio Ads: This technique is used in cities like Sangli (Tier 1 / Tier 2 cities).
Now-a-days, it is replaced by advertisements on FM channels. This informs
customers about all new happenings at Big Bazaar.
Fashion Shows: "FASHION @ BIG BAZAAR - Desh Badla, Bhesh Badlo" is the
latest invention of the Indian iconic brand. In an effort to take the Fashion to the
masses, Big Bazaar, the flagship hypermarket brand of retail chain of Future
Group, organized a three-day Fashion Show on the streets of Bandra, Mumbai.
The Big Bazaar brand name is in its growth stage Pantaloon Group faced various
small and large scales troubles in the introductory stage of the brand.
Present years are the high growth years in retail sphere as market has high
potential to sustain growth. The sales are increasing, more and more firms are
coming to market, foreign players are entering into retail sector, and pie of
organized retail is increasing in retail sector.
The factors that shaped the brand during its life cycle are: -
For a retailer, location is one of the most important things. According to Kishore
Biyani, real estate cost should be less than 5% of total sales of store in order to
provide maximum benefits to customer.
The strategic decisions to secure spaces before other retailers join in have
resulted in cost-saving. Also, it has created early presence in market.
Nurturing Relationships
Kishore Biyani follows strategy to develop trust and nurture relationships with
suppliers. This trust led to strategically correct decisions most of the time.
Whoever works with Future Group, either leaves in initial deals or continues
forever.
Big Bazaar planning and design used advance technologies like scenario-planning
and story-telling. These techniques were mainly used 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
Harvard Business School just did a case study on Pantaloons' Supply Chain and it
says that Pantaloons' is the most cost-effective supply chain in the world. India
may not have a modern supply chain but it definitely has a cost-effective one.
Retailers have made use of the existing supply chain.
References