Introduction

Retailers think they do not have time to build his brand as they are too busy meeting the needs of
their customers and his business. And it is easy to see why the marriage between retailers and
brand management hasn’t always been easy. Branding was historically viewed as the “lipstick
on the pig,” a graphical veneer which added questionable value in the face of global logistics
and sourcing. But as markets have changed, so have attitudes. Differentiation is the essence of
good business in any crowded market; the ability to influence demand beyond the tangible, to go
beyond the table-stakes of convenience, quality, service, and the like, into the realms of the
unique. Brands are the way business is done; the factor that makes the service offer, the product
line-up, the culture, and of course, the language and appearance more desirable over the
competition. Retailers are perfectly placed to build truly great brands. They have many rich data
points: physical experiences involving numerous opportunities to create uniqueness, including
service, process, product mix, layout, ambience, culture, and the all important human
interaction.

The world of branding has changed data is used to build the business case for brands, to
highlight the initiatives within a strategy, and to build Return On Investment models into brand
programs, not to mention the monitoring and active management of brand value creation. This
means that brand management can live happily within the highly accountable world of retail
using data and value as the bridge between the financial and commercial streams of activity.

Retail has been deeply impacted by the economic realities of our times. Cost-cutting has
formulated the bulk of businesses reactions to the downturn, so now recognizing that demand
creation is the required antidote. Demand can be created without relying on discounting which
hinders a business, erodes margins, and places a business under increasing pressure. Demand
creation requires us to step away from the crowd, to do things differently in our quest to stand
out, and own a clear position in a market.

Retailers need to better understand how their brands drive value and what actions should be
taken to ensure that their brands are readied for the market of tomorrow, as well as the market of
today. All around us the world is changing. Consumer’s attitudes have changed and will
continue to change. Their habits and behaviors will continue to adapt to the technologies
available to them and to the truths about our lifestyles and habits exposed by the recent
economic, social, and environment events. Getting a grip on this fast changing scenario requires
a strategy that is delivered in stores and lives in customers’ heads, not well intentioned
documents and plans.

Why are people brand loyal? Why branding is so important in business? What makes the brand
successful? Finding answers to these questions leads to successful business which depends on
repeat purchasing. It goes well beyond a logo or "look and feel" and encompasses the whole
product concept - the promise of delivery, quality, and predictability. It goes beyond just letters,
words, symbols, or a combination of these.

Brand increases consumer satisfaction, loyalty and product attachments. Branding seeks to
distinguish your company, product or service from the competition and create a lasting
impression in your prospect's mind.

Brand Management is one of the applications of marketing techniques used for marketing a
product or product line. It increases the product perceived value to the customer and thereby
increase brand franchise and brand equity. Marketers see a brand as an implied promise that the
level of quality people have come to expect from a brand will continue with future purchases of
the same product.

Strategic brand management involves the design and implementation of marketing programs and
activities to build, measure, and manage brand equity. Brand Management often viewed in
organizations as a border and more strategic role than marketing.

Today branding is more important due to increasing advertisement culture, media fragmentation,
product differentiation etc. Branding creates emotional attachment to product and companies.
Branding efforts create a feeling of involvement, tangible and intangible qualities and symbol.

Branding efforts creates strategic awareness, where people easily recognise brand and their
distinct qualities. A strong brand influences on buying decision and shapes ownership
experience. Branding helps customer while making purchasing decisions. Brand attracts firm's
identity upon potential customers.

Brand Management approach can be explained as follows:

Total Approach: Brand Management starts with understanding "brand "concept. Brand
Management in retail starts with leaders of the company who define the brand and do the
management.

2. Creating Promise: This is also called as defining the brand. A good brand always should be
memorable to customers. A good brand promise evokes customers feeling. For example, Volvo
(buses in Asia) offers feeling of safety. If you hope for good success you have to go with
specific territory and make your promise unique and different from the promises of other firms.

3. Making Promise: Once you created the promise, and then inject this into the minds of
customers. This step needs advertisements and PR activities.

4. Continue the Promise: Continue the promise means delivery of good quality of products and
motivate the people.

5. Perception: A good brand gives messages to customers such that they wait to purchase the
products again and again. This happens in the perception that is created in the minds of both
intended customers and innocent bystanders. Perception comes from direct experience.
Perception is the brand as experienced. Perception is not reputation, but reputation is perception.

6. Communication: We communicate to customers and get their feedback on brands. The Brand
reputation may be viewed as socially constructed.

7. Decision: In the final analysis, the value of a brand comes in the simplification that it brings
to decision-making.

Most of the retail managers does brand management and their merchandise mix is intended to
improve overall gross margins and enhance retail brand awareness. Most of the retailers have
implemented their own brands, called private brands. The private brands decrease prices to
consumers, refer their prices with national brand prices and get profits.
A brand should be like a soul for any organization. If a human starts understanding his soul then
he is not withered by his soundings, similarly brand should be built in an organization. Keeping
pace with new developments, finding out how other companies have solved branding dilemmas
and keeping one step ahead of your competitors can play an important part in the strategies you
employ to imprint your brand firmly on the consumer - and keep it there.

Getting your product,

service or built-environment noticed by the target customer is a prime motivation of any brand
development campaign. Media marketers use electronic, print and digital media to communicate
the promise of quality, value and availability for their retail clients.

But all too often promises made in media marketing are not realised by the customer when they
enter the store, browse, or make a purchase. It is as if the staffs weren’t told about the
company’s mission or commitment to the customer.

The translation of advertising or company taglines into tangible, achievable customer-centric

attributes is one of the key objectives in using the environment as a branding tool.

Lessons to learn
Retail branding has become a much-talked about concept in recent years; an idea that is often
misunderstood and not applied very effectively. As one surveys the retail landscape, you will
find numerous situations in which the brand the store hopes to project, misses the mark. The
critical point here is that the best marketing and branding companies in the world, armed with
surveys and statistics, can do nothing to brand the store.

by Ernst and Young, contributing to the annual consumer awards issue of Chain Store Age
Executive Magazine, noted, “While companies do control the messages that they push out
regarding their brands, they cannot, in fact, control how those messages are received by
consumers.”

Personal experience within a store, and with the brands it carries, determines how the customer
will rank the associated company. For example, “I’ll only shop at … if I have lots of time,” or
“When I shop at . . . I always find something new and unusual.” Depending on what the retailer
intended to portray, these opinions are either detrimental or complementary.
Impressions last
so what do retailers want customers to say about their store upon exiting? What would we like
them to remember and what would be a disaster if they never forgot? If you’re not ready to
make a projection of what your customer likes best about you, let’s first understand the company
and what it is capable of. Ask yourself these key questions:

What segment of the market does the retailer want to own? You can’t be everything to
everybody.

How does the consumer shop for that product or service? Customers have needs which must be
fulfilled in order to make an informed buying decision.

Is the retailer prepared to commit appropriate resources toward achieving a competitive

advantage? Consistent delivery of brand-building attributes can only be assured if everyone in
the organisation understands and is dedicated to the same goal.

Once clear responses to these questions are gathered, the development process begins. With a
determination of the preferred brand personality, a dynamic environment can be created to
embody the marketing strategy, respond to shoppers’ behaviours, and effectively utilise the
company’s resources.

Translating brands
Translating marketing and branding strategies into the store environment, designers focus on
touch points; elements which have a profound effect on the experience the customer has with the
store. These include the store layout, architectural theme, color and materials, lighting, sound,
product presentation and availability, and communication, whether delivered by signage or store
personnel.

In order to assess which areas of a store need the most attention, the retailer should predetermine
a list of desired customer responses and then strive to achieve them. A well-planned strategy
will include merchandise categories, promotional activities placed in high traffic areas, painted
in dominant colours and duplicated throughout the store.

During the translation process, a useful exercise is to think like your customer and ask, “How
would I, as a customer, like it to be?” If your store intends to prioritise service as your leading
attribute to attract customers, how should a service-oriented company act, not only when a new
customer enters the store, but also when a returning customer has a complaint or wants a refund?
If low price is your strategy, how can you promote yourself as a leader, besides displaying large
banners, announcing discounts and showing comparable value with competitive pricing to other
popular brands? Consider awarding unannounced price reductions at the checkout after the
shopping trip is completed. Delighted customers will remember your store as the place to save
money, above all else.

These examples demonstrate a key principle in using the store as a branding tool: the intended
brand personality should be simple and singular, repeated consistently, but differently for every
merchandise category.

Retail branding is different from just branding because here the store has to match the branding
with performance. Thus retail branding has to deliver both tangible and intangible benefits all in
one and all at once.

Retailing and India

Consider success stories like Shopper's Stop, Subhiksha, Foodworld etc. and the following
statistics:

• Retail is India's largest industry, largest source of employment after agriculture, has the
deepest penetration in rural India, and generates more than 10% of India's GDP.
• In India the retail market is large with sales amounting to $180 billion and accounting for
10-11% of the GDP.
• India has largest retail outlet density in the world with close to 10 million outlets today

All these points together collaborate to prove that Retailing is going to go from strength to
strength in the future.

In India the retail segment is still in the growth phase. Most of the retailers are new entrants.
Most of the growth has been in the big cities and slowly the same cult will catch up in other
cities.

Important Criteria in Retail Branding

In today's customer driven economy the power has shifted from the manufacturer to the retailer.
He has gained prominence and the entire economy is becoming retailer-driven.

Supply chain management is a very important criterion for successful retail branding. It is the
core of retailing and firms like Wal-Mart have successfully used IT to improve their vendor
management

Different Branding Strategies

1. Integrated branding:
Here the retailer is in direct link with the manufacturer. He is required to possess
complete knowledge about the possible developments in the product in the future. The
retailer is involved in process beginning from idea generation to branding the product.

2. Contract Branding:
The retailer outsources from an existing supplier. The supplier is completely responsible
for the product. The participation of the retailer is limited to the specifications regarding
quantity, price and brand.

3. Independent Branding:
Here the retailer simply procures from the supplier at the lowest possible cost and the
entire branding investment is his own. The retailer is like the owner of the brand and
holds complete responsibility for it's performance. Such brands are known as 'Private
Labels'.

Private Labels

Today since retailer margins are falling all over the world, they are looking for alternative
sources of income. Private labels are one such source due to which they are gaining prominence.
In the article we have developed a checklist for what is important for successful Private
Labeling.

Different Pricing Strategies for Private Labels

1. Copycat pricing: Here the retailer simply prices his brand lower than the other existing
brands

2. Parallel pricing: Here the retailer prices his brand equal to the other competing brands
3. Premium pricing: Here the retailer prices his brand higher than the other competing brands
since he wants the brand to have a snob value attached to it

Positioning Strategies

Retailers can adopt different positioning strategies based on product, price, experience and
service.

Branding and Retail Branding:

• Brand is a product that provides functional benefits that some consumers value enough to
pay a premium price.
• Brand is a mark that represents a unique set of both tangible and intangible benefits in
the mind of the consumer.
• Brand is a name that identifies a particular product and differentiates it from its
competitors.

In case of branding, companies build the brand name on the basis of what they want to
communicate about what the brand stands for. In case of retail branding the store has to match
the branding with performance. Thus retail branding has to deliver both tangible and intangible
benefits all in one and all at once.

The development of the "whole branding view"* entails creating the store as brand and
enforcing this "retail brand" at every point of contact between the prospect and the store. The
very essence of this concept is that branding is not merely a synonym for marketing a product,
but it is rather the whole host of activities that define and deliver a purchasing experience.

Retailing and India

Let us look at the following examples of retailing in India:

• Foodworld - 190 crore business-Belonging to the RPG group

• Shopper's Stop - 180 crore business- Belonging to the Raheja's
• Crossroads - A brain child of the Piramals
• Vivek's - 150 crore, 40 yr old Chennai chain selling consumer durables
 • Pantaloons - 50 crore, into apparel retail business
• Margin Free - a discount chain in Kerala dealing in groceries and also the largest retail
chain in India
• Subhiksha - Dealing in groceries, pharmaceuticals and the second largest retail chain in
India

The above examples show the importance Retailing and Retail Branding has been gaining
importance in India. Now consider the following statistics: -

• Retail is India's largest industry, largest source of employment after agriculture, has the
deepest penetration in rural India, and generates more than 10% of India's GDP.
• In India the retail market is large with sales amounting to $180 billion and accounting for
10-11% of the GDP.
• India has largest retail outlet density in the world with close to 10 million outlets today.

All these points together collaborate to prove that Retailing is going to go from strength to
strength in the future.

The concept of Power Shift

In the Industrial age 'knowledge economy' was the focus area. Today, the economy is customer
driven. Concepts like CRM are becoming very important in the field of management. In such a
situation the manufacturers have no way but to be dependent on the retailers to provide them
with customer information. The retailers are the only people in the entire value chain that have
direct interaction with customers. They maintain databases of customer requirements,
complaints, etc. Such databases are priceless for manufacturers and so there is a clear shift of
power from the manufacturer to the retailer.

The recent surge in the number of brands available in any product line increases the options for
the retailer and simultaneously makes it more important for manufacturers that well established
retail outlets stock their products. This is an important factor, which has contributed to the
growth of the retail segment in the US. In India too, growth of retail can be assigned to the same
reason.
Future of Retail Branding in India

Retailing in India is going through a transformation. Increased consumer demand, improved

sourcing options and larger availability of real estate are creating the foundation for a significant
growth in the organised retail sector. South India, most notably Chennai and, to a lesser extent,
Bangalore and Hyderabad - have emerged as centre of organised retailing.*

This trend is going to catch up in the other cities soon. The retail industry is going to see
ownership changes, consumer spending patterns dissolving and re-forming and the emergence of
real e-commerce profits.

The evolution of the organized retail trend in India should follow the trend depicted by the PLC
in Figure

In the US retail branding has reached the third and fourth gear. Retail brands like Walmart have
efficiently used IT for the purpose of better supply chain management and outlets like Sears
have developed strong USPs. In India the segment is still in the growth phase. Most of the
retailers are new entrants. Retailers like Shoppers Stop which have build a strong presence in the
urban market based on their USP to stock products of all the big brands will have to think about
re-inventing themselves and developing new USPs by the year 2010 since the competition
would start catching up by then.

To summarize, the emerging organized retail sector in India offers unparalleled opportunities to
entrepreneurs and existing businesses seeking an entry in Retailing. The consumers are open to
change, and several USP platforms can be occupied since at present, the "canvas" is more or less
blank. The retail branding in India will take sometime and Indian retailers will need to better
their customer relations, their value chains if they want to be truly global.
2.3 SCM concepts in Retail Branding- A Case Study

One of the most well known retail brands in the world-Wal-Mart is involved in "SUPPLY-
CHAIN TYPE" relationships and it owes much of it's success to it's strategy of information
management and utilizing systems to share this information with the rest of the members of the
supply chain. The manufacturer-retailer relationship between P&G and Wal-Mart is the best
example of its SCM efforts.

Figure 2 illustrates how Wal-Mart benefits from the CFRM Model that it has developed with
P&G for better information sharing.

Figure 2 *

Under the CFRP model, P&G and Wal-Mart have collaborated to form a common team of
managers who would be heading the systems. They are responsible for kick starting the strategic
process starting from conceptualizing, developing, monitoring, executing and deriving feedback
as an effective step in creating a well-linked supply chain management initiative.

Hence, this further strengthens the point that Supply Chain Management is central to the entire
process of efficient Retail Branding.

2.4 Branding Strategies in Retail Branding in India

2.4.1 Integrated Branding

In integrated branding the retailer is in direct link with the manufacturer. He is required to
possess complete knowledge about the possible developments in the product in the future. In this
regard he practices experience based marketing and leverages the benefit of being in direct
contact with the customers. The retailer is involved in process beginning from idea generation to
branding the product. Here the retailer makes the decision regarding what kind of product he
wants. These ideas are then formulated into specifications, which are then communicated to his
agent. This agent is a turnkey agent and arranges all that is required, starting from locating the
manufacturers and arranges all the other inputs required. His job is to crystallize the ideas
generated by the retailer into a product and supply it to the retailer.

2.4.2 Contract Branding

In contract branding the retailer outsources from an existing supplier of the product and does not
play any part in product development. The participation of the retailer is limited to the
specifications regarding quantity, price and brand. Here the supplier is responsible for product
development in the future and is required to have complete knowledge about the product and has
an established link with the manufacturer. The retailer benefits from the experience and network
of the supplier.

2.4.3 Independent Branding

Here, the retailer simply procures from the supplier at the lowest possible cost and the entire
branding investment is his own. The retailer is like the owner of the brand and holds complete
responsibility for it's performance. Such brands are known as 'Private Labels'. Examples of such
brands are STOP, which belongs to Shopper's Stop, SRC which belongs to Westside etc. Such
brands are treated differently to other brands.

2.5 Private Label Brands

2.5.1 Checklist to test feasibility of Private Labeling

In order to meet the stringent price-competitive needs of the Indian consumer, retailers have to
look at alternative sources of income generation. One such source is developing Private Labels.
By doing this, the retailer increases his gross margin spread ** since in Private Labels it can
integrate backwards down the chain. Table 1 gives a list of the probable key drivers for the
success of any Private Label brand. This can act as a basic checklist before any Retailer wants to
deTable 1 *

Key Drivers for Successful Private Labeling

Retailer -

* Large Size and high Sales Volume

* Shift in mindset required from Monthly ROI to long term returns

* Should have a loyal and large customer database to leverage upon

* Sales team must be given special training to promote the brand when
customer is in the decision making process

Product -

* The product category should exhibit Brand Switching

* Retailer should have good Vendor Relations with supplier of the

Product

* Multi sourcing of the product should be done from different vendors

* Quality should be comparable to other brands stocked at outlet

* Right pricing strategy (in tune with the positioning of the Retail Outlet)
 -Ref Sec 2.4.2

Customer -

* Should be willing to experiment with different brands in the product

category

* Should trust and appreciate the retail outlet in terms of Service provided, quality of
goods, variety stocked, value added services etc.

* Should have a good post-purchase view of the brand to become a

regular customer

2.5.2 Pricing Strategies for Private label Brands

The various pricing strategies available to retailers in India are:

• Copycat: Here the retailer prices his brand lower than the competing brands. This is one
of the most popular pricing strategies. The retailer doesnot invest as much in advertising
the brand at a national or international level so it can afford to price it lower than others.

• Parallel: Here the retailer prices his brand equal to the competing brands. Some retailers
do not want their brands to be perceived of lower quality than the other brands and so
they price it at the same level. The retailer believes that the brand equity of the retail
outlet will rub off on the Private Label.

• Premium: Here the retailer prices the brand at a higher price than the competing brands.
This is generally done to attach a snob value with the Private Label. Private labels like
Ebony and Lifestyle have promoted themselves as up-market brands and to sustain this
positioning they have priced their in-house private labels at a premium.

Positioning Strategies for Retail Brands *

traditionally, the four major positioning platforms available to retailers are the following :

2.6.1 Product

This refers to the category mix, and within each category - the width and depth of merchandise
on offer, and its quality related selection. It also refers to the choice of merchandise - whether it
is on the leading edge or trailing edge of innovation or fashion. Stores like Foodworld have used
this as their USP.

2.6.2 Service

This refers to operational parameters such as "availability" of the promised merchandise at all
times - in expected sizes, shapes, colors and assortment. Service can also refer to policies such
as "returns" or "exchanges", "warranties and guarantees" and availability of qualified personnel
to assist customer queries.

2.6.3 Experience

This is a crucial intangible and can be a function of several factors like overall store ambience,
ease of shopping in terms of layout of merchandise, labeling, check-out convenience and speed,
access to the store itself including parking, customer relationship effort from the store
management etc. Lifestyle and Shoppers Stop have differentiated themselves on this attribute.

2.6.4 Price

Low price itself can be the most important parameter in some instances, but more importantly, it
can also imply the "appropriate price" as perceived by the consumer after subjectively assessing
the impact of the other three variables mentioned above. Outlets like Walmart in the US and
Margin Free in Kerala have used low prices as their USP.
 Figure 3 shows the different strategies that can be adopted for positioning of Retail
Brands.

• ANNEXURE 1 *
• 1990
Few Retail Chains
* Akbarally's, Mumbai
* Big Jo's, Delhi
* Kids Kemp, Bangalore
* Benzer, Mumbai
* Titan
* Higginbothams
* Spencers
* Vimal
* Bombay Dyeing etc.

• 1999
Many Retail Chains
Food/Grocery
* Food World
* Nanz
* Subiksha
* Nilgiris
Electronics
* Vijay Sales
* Vivek's
* Vasant & Co.
Books & Music
* Music World
* Groove
 * Planet M
* Fountainhead
* Crosswords
* Archies
Apparel
* Arrow
* Levis/ Lee
* Indus League
* Colorplus
* Benetton
* Wills Sport
* Weekender
Clothing/Home Accessories
* Shopper's Stop
* Westside
* Pyramid
* Globus
* Ebony
* Pantaloon
Home Furnishing
* Zeba
* Yamini
* FabIndia
* Jagdish Stores

The annexure shows that there are a significant number of new competitors in the Indian
retail environment.
• ANNEXURE 2
• This diagram shows that even in the worst-case scenario (US) where the sales are
actually dropping at a constant volume, still a 6% increase in the gross margin is found.

ANNEXURE 3

• The above diagram shows the importance of the 4 suggested USPs for Retail Branding
amongst the various types of retail outlets

Of Strength and Store Brands

There is a seismic shift underway in store brand names. They are much more powerful than a
decade ago, when they were rarely advertised and often packaged anonymously.

Today, store brands offer better quality, better design – and better names.

One of five items sold in U.S. stores in 2005 was store-branded. In Europe, the percentage is
slightly higher. By 2020, sales of store brands are expected to reach 30% of the worldwide
market, according to London-based M+M Planet Retail.

Two quick examples:

* Wal-Mart’s brand of dog food, Ol’ Roy (named for the founder’s pooch) has quietly passed
Purina as the world’s top-selling dog chow.

* 7-Eleven introduced its own beer, dubbed Santiago, to steal share from the Mexican import
Corona.

At the grocery goliath Kroger, there are more than 4,000 privately branded food and drink items.

At the French marketer Carrefour, a major internal branding program emphasizes quality, image
and innovation. These store brands are not designed to sell merely on the basis of price. They are
carefully named and positioned to elbow others off the shelf.

How much better is the quality?

In 2005, Consumer Reports tested 65 products in six categories (facial tissues, paper towels,
plastic bags, canned peaches, French fries and yogurt). The magazine’s conclusions: “Many
store brands are at least as good as national brands. Switching to a store brand can cut the cost of
a product by as much as half.”A blind taste test asked 300 consumers to sample 1,800 products
in 10 geographic locations. The test included store brands from Safeway, Wal-Mart, Trader
Joe’s and others, going up against brands such as Betty Crocker, Maxwell House and Minute
Maid. Overall, store brands rated just as highly as their national counterparts.

And better design? No question about it. Packaging is more attractive now, and gets more time
and attention from staff and outside designers. The overall effect: Store brands look more
authentic.
And store brand naming has taken a leap forward. Internal brand misters now weigh competitive
names against the attributes of their own brands. Their names reflect crispness, communications
platforms, and eye and ear appeal. Consider:

* Wal-Mart’s store brands, such as Great Value bleach, Sam’s Choice tuna, Spring Valley
vitamins and Equate analgesics, make up a big chunk of total store sales.

* Safeway created a signature brand of beef, Rancher’s Reserve, and has heavily promoted it
to compete with higher-priced national brands.

* Kroger offers a line of “life’s little pleasures” (macadamia nuts, Canadian maple syrup,
extra-virgin olive oil) under the Private Selection banner.

* A&P’s commitment to quality store brands goes back to 1994, when it launched America’s
Choice (everyday products in 170 categories), Master Choice (specialty items) and Health Pride
(OTC and personal care items).

* Stop & Shop Supermarkets introduced Nature’s Promise, a line of natural and organic
foods; and MiCasa, “for those with a taste for authentic Latin food.”

Bottom line: Expect more and better house-brand names.

Comments Brands

Great post, private brands are the subject of my blog and there is never any shortage of news
about them. As retailers take more power in this soft economy they have the ability to create
"real" brands and learn from the last 50 years of CPG based brand management to create brands
that truly engage the customer, all with guaranteed shelf space.

There is a considerable shift in how retailers are repositioning their brands. It's about
understanding what the customer is looking for and positioning the brand around that. I did a
post on how Kroger's is expanding their store brand into ready meals, since there is a growing
trend with the recession on what types of meals families are buying. Retailer's like Kroger's is
smart to be flexible enough to move with the trends, keeping them on top.

Twenty five years ago when "generic" brands first hit my consciousness, if not in fact the market
place, the "branding" was designed to tell the story that they were a cheap but serviceable
alternative to the real "brand name" products. The stenciled font used clearly identified them as
taking very little effort in packaging cost and offered a tremendous value and price savings. As a
young couple my wife and I made ends meet with these un-branded brands.

Today even though our household income is substantially greater house brands STILL fill our
shelves. Whenever we feel that a house brand is about equivalent to the leading brand we will
invariable pick the house brand and typically save a bundle.

I get the fact that a leading brand might deliver some level of comfort and satisfaction to a
consumer simply by having the most recognizable name. However the advance of house brands
points to a shift in consumer behavior, expecting a greater tangible value for their loyalty. The
closer a brand can effectively target products to the increasingly unique demands of the
individual consumer, the more likely they will build a loyal following including garnering a
premium price.

An Example. I wear Adidas Climacool running shoes. In my mind there isn't a pair of shoes that
compares to these on the marketplace. When I run my feet tend to overheat and that increases
the stress of running. These shoes are super ventilated and breathe like no other and they fit my
feet perfectly. As a result I've fallen in love with them and wouldn't run in anything else. When a
brand can target a product effectively, at a specific need, to a specific market segment, they will
hit a home run nearly every time. And if that same targeting spills over to their other products
that loyalty will extends to other products they offer as well.

House brands are making their stand with product categories like facial tissue, mouthwash, OTC
medications, laundry detergents, cereals and many other commodities. You'll find all these and
many more house brands on the shelf in my house. However just because the house brand exists
doesn't mean it's better. I love Kellogg's Special K with Red Berries. I've repeatedly tried to find
a house brand alternative and have failed to find anything with an equal taste profile. I will
remain loyal to Special K until someone offers me something that beats it.

Inevitably competition will drive the innovation of the value proposition and consumers will
reward house brands that raise the bar. Unfortunately in some cases that often puts the major
brands in competition with themselves and undermines their ongoing profitability. An example
of this is found in your example of Wal-Mart’s Ol’ Roy dog food. This is manufactured by Mars
Inc. who is one of the world’s largest manufacturers of pet foods including brands such as
Pedigree. I wonder if this trend worries them.

The consumer wins every time someone innovates the overall value proposition so let’s all cheer
on the innovators whom ever they may be!

We are living in the age of branding. Branding has developed from FMCGs to encompass
services, non-profit organizations, and even places. Of all the market categories, retail offers the
broadest canvas for any brand to show its true colors. From the understanding of a market that
gives birth to a strategy, from the creation of environments, to the engagement of the people that
bring the brand to life to the supply of product that puts the brand into the consumer’s hand;
Retail really does have it all.

• So how do retail brands create their value?

• What lessons can we learn from the leaders?
• How should retailers create and manage strong brands?
• How can retailers change the world in which they operate?

All this while the retail arena has been a space – the place to sell products. Its part of the
distribution mix and hence part of the place of the 4 “Ps” of marketing.

With the changing dynamics in the power of retail, branding the retail segment has become
crucial to retail success.

But….

Does the traditional models of branding apply to retail? While branding, do we take retail in a
“product” sense of in a “Place” sense?

Retailer brands are typically more multi-sensory in nature than product brands and can rely on
rich consumer experiences to impact their equity. Retailers also create their brand images in
different ways, e.g., by attaching unique associations to the quality of their service, their product
assortment and merchandising, pricing and credit policy, etc.
Again how do we measure retail brand equity?

To measure retail brand equity, we need to rely on metrics. But, developing retail brand equity
metrics is challenging for at least two reasons. First, consumer experiences form the building
blocks of retail brand equity. There is considerable variation in these experiences among
consumers, which makes it desirable to measure retail brand equity at the individual consumer
level. A second challenge to measurement is that a retailer’s brand equity is dynamic and it
accrues over time via consumer learning and decision making processes. Managers would like to
not only measure current retail brand equity but also monitor the temporal evolution of their
retail brand.

Following the American Marketing Association’s definition of a brand, a retail brand identifies
the goods and services of a retailer and differentiates them from those of competitors. A
retailer’s brand equity is exhibited in consumers responding more favorably to its actions than
they marketing do to competing retailers

1. Cross-category product/service assortment

2. Within-category brand/item assortment.

Consumer perceptions of these dimensions of retailer image can help develop strong and unique
retail brand associations in the minds of consumers. They also influence the utilitarian and
hedonic benefits that consumers feel they gain from retailer patronage and ultimately the price
premium consumers will pay the extra effort they will be willing to expend in order to shop the
retailer, and the share of trips, share of requirement, and loyalty that the retailer enjoys. By
influencing consumer preferences and shopping behavior in these ways, retailers’ image
becomes an important base for their retail brand equity.

Hence the first step would be to understand all the attributes and variables that affect retail
branding. Researchers have studied a multitude of retailer attributes that influence overall image,
e.g., the variety and quality of products, services, and brands sold; the physical store appearance;
the appearance, behavior and service quality of employees; the price levels, depth and frequency
of promotions; and so on. I consider 5 categories that seem more important.

1. Access.
2. In-store atmosphere
 3. Price & Promotion

Building Your Retail Store's Brand Equity

Only a single minded clarity of purpose will build a memorable identity for your store, and
brand equity that will earn long-term customer loyalty.

Think for a second of those larger retailers we all know and love. Wal-Mart, Home Depot, Best
Buy, Barnes & Noble. When you think of those stores, what do you think of?
You most likely have a very distinct impression of each of those stores, the products they sell,
what they do well, and what to expect when you go there. For better or for worse.

When a customer thinks of your store, what do they think of?

Your store’s identity is the sum of many critical decisions that you make, involving every aspect
of your business. It is the nexus where strategic positioning, merchandise assortments, visual
merchandising, pricing, customer service and marketing all come together to create a
comprehensive whole, more significant and compelling than the sum of the individual parts. To
create the identity that you want for your store requires a singular vision that encompasses all of
these elements.

Your objective is nothing less than to build brand equity for your store. Brand equity is not just
something that products like Pampers, Kleenex and Band-Aid have built up over the years, but
it’s also the image that stores like Wal-Mart, Home Depot, Best Buy, Barnes & Noble have built
up over time. The brand is the store, and the store is the brand.

What does it take to build your store’s identity and brand equity?

Strategic Positioning
Building your store’s identity begins by determining who the customer is that you are going to
serve, and what her needs are. What are the products and services that you excel at providing?
No retailer can be all things to all people, most surely not a smaller retailer, so who exactly are
you? What really sets you apart and what will you need to learn to do better to meet your
customer’s needs and fulfill their expectations? While you may not have ever consciously asked
yourself these questions, you know the answers, and those answers form the foundation of
building your identity.

Merchandise Assortments
As a small retailer, your success depends on carving out a niche for yourself in the marketplace.
By definition, this means that while you may carry some core items that the large chains carry,
the focus of your merchandise assortments is likely to be on related specialty items. The depth
and breadth of these assortments is a primary means of communicating to your customer who
you are and what business you are in. Carrying items or categories that are not clearly related to
your core items and categories may add marginally to sales, but detract from your focus and the
clarity of the message you are sending to your customers. The brands you carry also convey an
important message about who you are. Carrying premium products that possess their own brand
equity reinforces the brand equity you are building in your store.

Visual Merchandising
Visual merchandising encompasses everything from the layout of the store to the way
merchandise is organized and displayed to signage and color scheme. It also includes
housekeeping. It is just as much about execution as it is about the design and concept. Anything
a customer can see is a visual key. Evaluate the visual impact of your store from your
customers’ perspective. What does she see? What draws her eye? Is your store easy to navigate
and shop? Is it pleasing? Is it consistent with the identity that you are trying to create?

Pricing
Your merchandise assortments are structured to set you apart, to carve out a niche that is
uniquely yours. Don’t be afraid to charge a premium price for your premium products and
services. While you may have to be sharp on core items that the large chains also carry, don’t
fall into the trap of thinking that you have to work on short margins on every item, and have
your overall margins fall below where you need them to be. Adopting a promotional pricing
strategy or suddenly dropping your prices in an effort to simulate business is likely to be at odds
with your efforts to build a premium identity for your store in your customer’s minds.
Customer Service
Outstanding customer service begins with the mindset that your purpose is not merely to sell
merchandise but to build an enduring relationship with your customers. While this may sound
pretty high-minded and open-ended, customers will take notice when you spend the time to
answer their questions, share your knowledge, do whatever it takes to get the item they need, be
sure it’s delivered when promised and set-up or installed correctly the first time. It’s the little
extra that will turn a satisfied customer into a loyal customer, and recommends you to others.

Marketing
Your marketing consists of every single communication with your customer, from traditional
advertising to email newsletters, from in-store seminars and workshops to community
sponsorships. Creating a consistent logo and slogan is only the beginning. Every opportunity
you have to communicate with your customers must be focused on communicating a singular,
focused, and thus, memorable message.

It all must work together. Everything you do must be focused on building a brand identity for
your store, and communicating the value of your brand to your customers. There can be no
mixed messages or dual agendas. Anything that you do that is at odds or cross purposes with the
identity that you are trying to create must be changed or eliminated. Everyone working in your
store must be on the same page. Only a single minded clarity of purpose will build a memorable
identity for your store, and brand equity that will earn long-term customer loyalty.

The emergence of major retail brands is a significant new phenomenon in the Indian economic
scenario. Some of the emerging retail brands include Pantaloons, Shoppers' Stop, Crossroads,
Culture Shop, Big Bazaar and In Orbit.

Reliance could well acquire the status of one of the most well known retail brands as it forays
into retailing agricultural produce. These developments require new strategies for protection of
retail brands, which are often the most important assets of retail operators. Protection of retail
brands is necessary not only to sustain existing operations but also to generate new profit
avenues through licensing of retail brands.
Trademark protection of retail brands is crucial. Until recently, trademark registration was only
available for goods and not for service marks. This was a major disadvantage for retail brands as
retailing is essentially a rendering of services and hence no adequate protection through
registration was available for retail brands.

Now, under the Trademarks Act, 1999, apart from trademarks, it is also permissible to register
service marks. Accordingly, it is imperative to register retail brands as a service mark under the
relevant Class 35 of the Trademark Rules.

Registering brands is a skilful art requiring expert advice and a great deal of thoughtful planning
and strategising. It is no longer a routine matter. Merely registering the retail brand for `retail
services' is not good enough; and for enforceability reasons, a careful trademark expert will
advise that the registration should also specify the goods in respect of which the retail services
are to be rendered. Sometimes, the services offered under the retail brand are not limited to
retailing of goods but the retail outlet concerned also offers under one roof different kinds of
services (which may be described as `retailing of services' in contradiction to retail services
pertaining to sale of goods) and also often brings together various branded businesses under its
roof. These aspects should also be covered in the application for retail brand registration.

From the brands' point of view, several aspects of retailing need understanding. Some retail
operators may only sell or render retailing services in relation to third party branded products. In
this situation, registration of the retail brand should only be as a service mark in respect of retail
services. Many retail operators, apart from offering retailing services, place their own brand
along with the manufacturers' brand in their retail outlets. Another variant is that the retail
operators purchase unbranded products and sell them under their own brand. In the latter two
cases, registration of the retail brand must be done not only as a service mark but also as a
trademark in relation to the relevant goods to which the retail brand is applied.

There have been several Indian manufacturers who sell their wares through their own retail
outlets (for example, the well known manufacturers of clothing, Raymond and Bombay Dyeing,
jewellery manufacturers such as InterGold, Orra, Tanishq and watch manufacturers such as
Timex). Most of these manufacturers have registrations of their brands in respect of goods but
seldom register their brands for retail services rendered under that brand.
Such non-registration can cause serious difficulties. For example, in one case pertaining to
Raymond, an unauthorised retail shop was selling several brands of clothing, including
Raymond textiles. This shop had put up a `Raymond' signboard at the entrance suggesting that it
was an outlet authorised by Raymond. Raymond was not able to prevent such use — the court
ruled that the retail shop owner was entitled to use `Raymond' on its signboard as he was selling
genuine Raymond clothing too. If Raymond had a retail brand registration, i.e., registration for
Raymond for rendering retail services in respect of clothing, then it is likely that it may have
been able to prevent use of its mark on the signboard on the basis of infringement of its service
mark registration.

Foreign brands in relation to retail trading

Until the beginning of 2006, the government policy prohibited foreign investments in the retail
trade sector, the effect of which was that major international retailers were prohibited from
setting up their retail operations in India. A recent liberalisation measure with regard to foreign
direct investment in the retail trade sector is directly linked with trademarks. Now, with
government approval, foreign direct investment up to 51 per cent is permitted in retail trade of a
`single brand' product'.

The retail trade operations in ventures having foreign investment up to 51 per cent are required
to sell products under a single brand only and the same brand should be in use internationally.
Further, the product categories should be approved by the government. Finally, the products
should be branded during the manufacturing process.

But the term `single brand' is not defined. Probably, retailers such as Wal-Mart and Tesco whose
products carry different brand names of various manufacturers will not qualify as retailers
entitled to set up shop in India. On the other hand, companies like Levis, and the manufacturers
of Rolex, Omega, Parker, Mont Blanc and Chanel, which want to set up retail operations in
India would qualify for a licence for foreign direct investment. Also, it should be noted that
foreign retail companies which purchase products from various manufacturers and then brand
such purchased products (on selection basis) would not qualify for a licence for establishing
retail operations as their products would not be branded during the manufacturing process.
Big Bazaar: Brand’s Identity, Personality & Symbolism

Big Bazaar (Exhibit 1) 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
(Exhibit 2).
Demerits of Marketing a Commodity Market

Brands evolve from ‘unbranded commodities’ to references, where the name is used for
identification. This is also evident from the Goodyear’s (1996) chronological brand
categorization (Exhibit 3).

There is lack of differentiation if marketing of commodity is done. Commodities and

differentiated products are the two ends of the product spectrum. Each unit of a commodity is
exactly like every other unit. A product is a commodity when all units of production are
identical, regardless of who produces them. Commodities tend to be raw materials like corn,
wheat, copper, crude oil, etc. The stone marble is mined and sold by many companies in
Rajasthan; it’s like an unbranded commodity, where each producer is selling identical product.

People that produce commodities are referred to as "price-takers". This means that an individual
producer has no control over his/her price. On the other hand, people who are owners of brands
or differentiated products are "price-makers". Producer of a differentiated product creates a
separate market for his/her individual product.

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. There are certain advantages of branding. They are:

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.

Sales or market share: A brand generates familiarity and trust, and hence, leads to greater
sales. Branded products have an edge over unbranded products.

Premium price: Brands generate trust, a brand manager can charge extra price and people pay
for that trust.

Differentiation: Creating a brand is nothing but creating a strong association. This association
clearly differentiates the branded product from the rest.

According to brand evolution model developed by Kunde (2000) (Exhibit4), 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: -
Product Brand: Products without any form of added value connected to the generic element.

Concept Brand: Brands that are driven by emotional values - as opposed to product
characteristics.

Corporate Concept Brand: Brands that merge with the company and present themselves in a
sustained and consistent way.

Brand Culture Brand: Brands that are so strong that they - in the eyes of the consumer - have
become equated with the function they represent.

Brand Religion Brand: The ultimate brand position is that of brands that - in the eyes of the
consumer - have become a "must", a faith to which they profess.

Big Bazaar: Positioning & Establishment

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: -
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. (Exhibit 7). Products of all the major brands are available at Big
Bazaar (Exhibit 8). 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%.

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

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 (Exhibit 9). 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. Endorsement by M. S. Dhoni, Exchange Offer - ‘Junk Swap Offer’,
Point-of-Purchase Promotions

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.
• Well-dressed staff improves the overall appearance of store.
• Employees are motivated to think out-of-the-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.

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. (Exhibit
10). Future Group is also planning to distribute financial products like consumer loans and
insurance through Big Bazaar outlets.

Consumer Insights & Perceptions

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

• Struggling class, remaining population of India.

 • Cannot afford to inspire for better living, have hand-to-mouth existence.
• Needs cannot be addressed by current business models.

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.
• Advertisements about schemes and offers through local newspapers, radio in local
languages, inspires customer more than the traditional ways.
• The guards, salesman at the Big Bazaar outlets should not look smarter than customer, so
they prefer not to have tie, etc., in their uniform.
• Hypermarkets in India should be situated in city unlike western countries where they are
located away from city
• Purchased bags / goods should be sealed at check-out as customer can enter and exit
multiple times.
• For Indians, shopping is an entertainment; they come in groups, with families so Big
Bazaar should offer something for every section of family. That also led separate section
for clothes, vegetables, food, etc., that is multiple clusters within a bazaar.
• Developed a diversity tracing cell to cater local patterns, demands, festivals, as every
region

Advertising: The Essential of Brand Building Process

Advertising is an essential component of brand building. The advertisement and brand 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 are
modified according to demographic profile of customers. These catch-phrases appeared on
hoardings and newspapers in every city where Big Bazaar was launched. Everybody understood
and connected easily with these simple one-liners. The catch-liners include "Hindi - Chane ke
bhaw kaaju", "Bengali - Rui er dame illish", "Hindi - Stall ke bhaw balcony", etc.

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.

Road-side Advertisements: Big Bazaar bill-boards are displayed on prime locations in various
cities as a brand building exercise. They display the catch-phrases now-a-days.

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.

Brand Endorsement by Celebrity: Big Bazaar is always associated with celebrities for
advertising and marketing of its brand name. The current campaign is starred by Brand
Ambassador and Indian Cricket ODI Captain Mahendra Singh Dhoni. Earlier Himesh
Reshammiya and Sanath Jaisuriya were associated with Big Bazaar.

Factors that Shaped Big Bazaar During its Life Cycle

The Big Bazaar brand name is in its growth stage (Exhibit 11). 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: -

 Influence of Sarvana Stores Located in Theyagraya Nagar, Chennai

Many people think that Big Bazaar was inspired by Wall-Mart but the truth is that Kishore
Biyani and his team members are neither inspired by US ways of doing retailing nor they have
been to US much. The credit for foundation and inspiration goes 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 a separate section. It had around 120 people just to manage
crowd. The single shop was doing business of more than INR 200 Crore per year. This shop was
the template for Big Bazaar.

 Observing Customers 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 and how they like or
dislike products, how they approach particular products. For example, unlike other stores where
the most expensive and catchy item is placed at the front display, Big Bazaar places the "Value
for Money" items at check-out points.

 Imbibed Entrepreneurial Spirit in Organization

Decision making power is given to every level of employees at Big Bazaar. Kishore Biyani has
given risk-taking power, which led to exposure of entrepreneurial spirit in every employee.
Everybody in Big Bazaar operates with speed and confidence when it comes to decision making.

 Building on Core Values

Core values of Indian-ness, valuing and nurturing relationships, and simplicity shaped the brand.
Kishore Biyani always believes in long-term relationships, with customers, suppliers and
employees. Once thinking about offering gifts to employees close to Diwali, Kishore Biyani
suggested giving them wall-paints to keep their house clean. The paint is used in Indian culture
to keep house clean and brings freshness. The motive behind this was to keep everything clean
and bring freshness in organization.

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 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.

Use of Technology, Scenario-Planning & Story-Telling

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

Design-led thinking helped Big Bazaar to achieve ‘customer-first’ objective and ultimately led
to better financial performance. Big Bazaar strategy to focus on design led to creation of Idiom,
an independent design and consultancy firm, based in Bangalore. They are one of the few
organizations in India having economists, ethnographers and sociologists working across various
teams as a part of Design Management team.

Back-end Operations, Supply Chain

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.