PROJECT On BIG BAZAAR THE INDIAN WALL MART

Submitted By:VIJAYABABU.B REG NO: 77

INTRODUCTION
Indian retail sector is witnessing one of the most hectic marketing activities of all times. The companies are fighting for mind share and heart share which can finally be converted to market share. There is always a first mover advantage in an upcoming sector. In India, that advantage goes to Big Bazaar. It has brought about many changes in the buying habits of people. It has created formats which provide all items under one roof at low rates, or so it claims. In this project, we will study its marketing strategies. Big Bazaars main competitors are other business houses which are planning to enter the market as well as long established Kirana stores which feel threatened by huge retail chains.

BIG BAZAAR
FOR THE GREAT INDIAN MIDDLE CLASS
Kishore Biyani led the companys foray into organized retail with the opening up of the 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 cheapest prices 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 are lowest in the city. Usually the items are clubbed together for offers as on the lines of Wal-mart and Carrefour and it also offers weekend discounts. It currently operates out of more than 100 stores and top 25 stores register a cumulative footfall of 30 lakh a month on an average.

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 2

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 the major brands are available at BigBazaar(Exhibit-8). Also, there are many in house brands 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, 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, 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.

The salient features of big bazaar are:

Well trained staff, the staff employed by Big-Bazaar are wellsuitable 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:
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 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

Range of Products Available at Big Bazaar:

Big Bazaars New Marketing Strategy:

Big Bazaar has launched new marketing strategy which is based on Guerrilla Marketing. Guerrilla marketing warfare strategies are a type of marketing warfare strategy designed to wear-down the enemy by a long series of minor attacks, using principles of surprise and hit-and-run tactics. Attack, retreat, hide, then do it again, and again, until the competitor moves on to other 4

markets. Herein guerrilla force is divided into small groups that selectively attack the target at its weak points. In the world of cut throat competition, corporate use extension of the same strategy in marketing. Corporate like Coke, Pepsi, etc have been using the same for quite some time now and the latest entrant is our very own Future Group- Big Bazaar, Pantaloons, Future Bazaar, eZone are all part of this group and they are taking on the biggies like Shoppers Stop, Lifestyle, and Tatas Westside. In order to do the same, Future Group have come up with 3 catchy/cocky and cheeky ad campaigns which surely do catch our eyes and surely one cant resist appreciating 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 Establishment

Big Bazaar has established itself in the first quadrant of Organization Value and Customer Value Matrix. The SWOT analysis 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 event is rare event but Big Bazaar used this channel efficiently to 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 for business which reduces its rental budget and provides competitive advantage over competitors. Kishore Biyani has taken early movers advantage in many retail spaces.

Organization and customer value matrix:

SWOT analysis of Big Bazaar:

Sales promotion:
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 technique used at Big Bazaar include Saal ke sabse saste teen din, Future card( the card offers 3% discount), Shakti Card, Brand 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 on Print media, TV, Radio (FM) and Road side billboard.

Brand extension:
Brand Extensions actually made and 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 retailer. Foreign partners like Carrefour, Metro, and 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 7

further divided in three categories, Big Bazaar Express with store area less than 40000 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 75000 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 three 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: Consuming class, constitute only 14% of Indian Population.They are upper middle class and most of customers have substantial disposable income are the Initial focus of Big Bazaar India 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 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 find 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 , its about believing in Indian ways of doing things. 8

Indian customers prefer to purchase grains, grams etc after touching them, so its 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 checkout 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 to every section of family. That also led separate section for clothes, vegetables, food etc i.e . Multiple clusters within a bazaar.

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 catchphrases appeared hoardings and newspapers in every city where Big Bazaar was launched. Everybody understood and connected easily with these simple one-liners. The catch 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 new scheme. 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. Big Bazaar 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 brand building 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 is replaced by advertisements on FM channels. This informs customers about the 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 BigBazaar.

Future Strategies of Big Bazaar:

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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 in retail sphere as market has high potential to sustain growth. The sales are increasing, more and more firms are coming to markets, 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 200 crore per year. This shop was the template for Big Bazaar. Observing customer regularly: 11

Regular customer feedback is also an influential factor for the success of Big Bazaar. The Big Bazaar has a separate team that looks for customers purchasing pattern and how they like or dislike products, how they approach to 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 item at check out point.

Imbibed entrepreneurial spirit in organization: Decision making power is given to every level of employee at Big Bazaar. KB has given risk-taking power, which led to entrepreneurial spirits into 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, KB suggested giving them wallpaints to keep their house clean. The paint is used in Indian culture to keep house clean and brings freshness. The motive behind 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 KB, 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.

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Nurturing relationships: KB 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 and story-telling Big Bazaar planning and design used advance technologies like scenario planning and storytelling. 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 lead 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 economist, 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.

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Life Cycle of Big Bazaar:

Brand Ambassador:
A brand ambassador is a celebrity (or an attractive or interesting person) used to help advertise a product or services. Big Bazaar, has roped in cricketer Mahendra Singh Dhoni as the Brand Ambassador for its new range of fashion apparel. Dhoni would feature in a series of advertisements across all media. Dhoni and Big Bazaar have a lot of synergies as the Indian one-day international teams captain stands for the aspirations of youths, while Big Bazaar is looked 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 venture which earlier belongs to the unorganized retail sector i.e. kirana stores. Application of the best marketing practices helps Big Bazaar in a great way.

Future Expectations:
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Big Bazaar is planning to have 300 hypermarkets in the country by 201011. The company may also increase its annual turnover to Rs. 13,000 crore by 2010-11, up from Rs. 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 by the end of its fiscal in June 2009 to take the total number to 135. To achieve this they are targeting a turnover of Rs. 5,000 crore in the current fiscal year and have formulated 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 hypermarkets had a footfall of 11 crore last fiscal and the company is aiming for an increase in the numbers up to 14 crore this year. The average size of a Big Bazaar hypermarket is 30,000 sqfttoonelakhsqft.

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