BIG BAZAAR

The largest Hypermarket chain in India

Date: 16th October, 2010

An Article on

Submitted by Amrit Keyal (F169) MBA II 2010-2012 Faculty of Management Studies Delhi University

Contents

Contents........................................................................................................................................2 Overview - India Retail Industry........................................................................................................3 Introduction....................................................................................................................................3 Vision and Mission...........................................................................................................................5 Core Values....................................................................................................................................5 Target Audience..............................................................................................................................6 Marketing Strategy..........................................................................................................................6 Marketing Mix: 7 Ps Analysis............................................................................................................8 SWOT Analysis..............................................................................................................................13 Recommendations..........................................................................................................................14 References....................................................................................................................................14

Overview - India Retail Industry

Retailing is the worlds largest private sector contributing to 8% of the GDP and it employs one sixth of the labor force. The estimated retail trade is expected to be 7 trillion US $. As far as India is concerned, The Indian Retail Industry is the largest among all the industries, accounting for 10% of our GDP and 8% of employment which is the second largest sector next to agriculture which provides employment to more number of persons. Now according to a survey by the US-based global management consulting firm, A T Kearney in its 8th annual Global Retail Development Index (GRDI) 2009, India has been ranked as the most attractive nation for retail investment among 30 emerging markets. With the development in technology, the economic growth of people and increase in the number of nuclear family, the whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. So, developing India is gradually moving towards the organized retail marketing from the traditional unorganized retail marketing, bringing a great boom in the retail industry. Still the organized retail contributes 5% of total retail industry in India and shows the good potential of growth. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. In India, the organized retail sector presently exists in following formats Supermarkets Hypermarkets Department Stores Specialty Stores

Introduction
Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias leading business houses with multiple businesses spanning across the consumption space retailing as its core business activity. Future Group believes in developing strong insights on Indian consumers and building businesses based on Indian ideas, as espoused in the groups core value of Indianness. The groups corporate credo is, Rewrite rules, Retain values. 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, the group operates over 16 million square feet of retail space in 73 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In

the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail.

HIER
Big Bazaar is launched mainly targeting the middle class family. Saving is the key to all Indian middle class consumers. In India, when the customer needs something for home or any other purpose, a typical thought is to seek it form the bazaar. A bazaar is a place where a complete range of all the products are available and customer can get any of his choice, a complete freedom of selection and stores in bazaar would offer a large mix of products in discounted price. From this thought and belief, it was name BIG BAZAAR with the vision to make it a complete shopping complex for people of all the walk of life and avail the goods of wide variety at the cheapest price compare to outside market. Price was the basic value proposition at Big bazaar. The Big bazaar outlets sold a variety of products at prices, which were 5 to 60 percent lower than the market price. Its values and missions are to be the best in Value Retailing by providing the cheapest prices and hence go 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, offer weekend discounts and works on the same economy model as Wal-Mart and has considerable success in many Indian cities and small towns. 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. Also, with the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including Home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise you. First Food Bazaar format was added as Shop-In-Shop within Big Bazaar in the year 2002.Big Bazaar and Food Bazaar blend the look, feel and touch of Indian Bazaar with modern retail concepts of choice, convenience and quality. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping experience. Big Bazaar is now the largest hypermarket chain in India operateing out of more than 120 stores in over top 70 cities and top 25 stores register a cumulative footfall of 30 lakh a month on an average.

Vision and Mission

Group Vision:
Future Group shall deliver Everything, Everywhere, Everytime for Every Indian Consumer in the most profitable manner.

Group Mission:
It shares the vision and belief that its customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. It will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments for classes and for masses. It will infuse Indian brands with confidence and renewed ambition. It will be efficient, cost- conscious and committed to quality in whatever it does. It will ensure that its positive attitude, sincerity, humility and united determination shall be the driving force to make it successful. The tagline of Future Group is Rewrite Rules, Retain Values

Core Values

Indianness: confidence in ourselves. Leadership: to be a leader, both in thought and business. Respect & Humility: to respect every individual and be humble in our conduct. Introspection: leading to purposeful thinking. Openness: to be open and receptive to new ideas, knowledge and information. Valuing and Nurturing Relationships: to build long term relationships. Simplicity & Positivity: Simplicity and positivity in our thought, business and action. Adaptability: to be flexible and adaptable, to meet challenges. Flow: to respect and understand the universal laws of nature.

Target Audience

Higher and middle class family The large and growing young working population is preferred customer segment Big Bazaar specially targets working women and home makers who are primarily decision makers

Marketing Strategy
Big Bazaar came up with the innovative ideas to increase the footfalls in its centers which prove to be great success in making good business. The strategy which they would

adopt will have low price, high advertisements and it would offer different kind of schemes, offers, discounts, scratch cards, coupons. It would also give stress on providing the prompt services like home delivery, after sales services, guarantees and warrantees, so as to sustain in the market and to create a good reputation.It keeps continuing these strategies
every year during the same time. Sabse Sasta Teen Din ( Big Days)

On 26th, Republic Day- a National Holiday, Big Bazaar Marketing Department gave a new thought on this day in 2006 they started a new shopping festival, i.e. Sabse Saste Teen Din. Continuing its efforts to provide the best shopping deals and savings to empower Indian consumers and create abundance, Big Bazaar is all set to make every years' Republic Day weekend shopping, truly memorable, with rock bottom prices, best possible discounts and mega offers. From daily household needs of food and grocery to apparels, footwear, toys, luggage, kitchenware, bed and bath ware, home dcor, furniture, electronics and fine gold jewellery; Sabse Saste Teen Din will have an exciting array of attractive offers, deals

and discounts, ensuring something for everyone in the family, to shop for, and a maximum value for money for all customers.

The Great Exchange Offer

Big Bazaar announced The Great Exchange Offer with a Bring anything old and take anything new concept which started from the 16th of Feb 2008. Under this offer, the customers are given the exchange coupons instead of cash on the exchange of old stuffs like, paper, utensils, plastics, tyres and anything you have. These coupons were valid up to particular date. During the validity date, customer can redeem these coupons on the purchase of goods. The price range for these old products is as follows: Old utensils and plastics is Rs. 75 per kg, old clothes are Rs. 200 per kg and old newspapers are Rs. 25 per kg. Even the old tyres can be exchanged at Rs. 50 per piece. You can even exchange old furniture, luggage, footwear, home needs. Old furniture can be exchange for up Rs. 10,000 depending upon the furniture you exchange. Old pet bottles can be exchanged for Rs. 25 per kg and electronics up to Rs. 5000. Old leather goods can be exchanged at Rs. 25 per kg and any other old products can be exchanged at Rs. 25 per kg. You can use these exchange coupons to buy processed food, home care, electronic products, personal care products, and groceries if you can shop for 8 times their value. For example if you have an exchange coupon of Rs. 100 with you, you should buy products worth Rs. 800 to redeem this exchange coupon and thus getting a discount of Rs. 100 and thus you will need to pay only Rs. 700.

Wednesday Bazaar: Hafte ka sabse sasta din

In January 2007, Big Bazaar introduced a Wednesday Bazaar concept called Hafte Ka Sabse Sasta Din with the aim to give homemakers the power to save the most on this day of the week. Sabse Sasta din- the best bargain day for Shopping- this concept was started by Shoprite, one of the main retail companies in South Africa. This concept was carried in India also. But unfortunately they were not able to carry forward this successfully. This concept was then acquired by RPG groups Spencers and the Future groups Big Bazaar. On this day, , in all the outlets of Big Bazaar, there is heavy discounts in all products compared to other days. Wednesday is promoted as Hafte ka Sabse Sasta Din. The reason to choose Wednesday for best bargain day is that majority of Indians doesnt shop on this day of the week. Reports have suggested that on Wednesday there are approximately twenty five percent footfalls as compared to weekends. Being middle day of the week, working women dont visit stores. Major customers of these superstores are housewives. So if discounts are given, footfalls can be increased and that result into more sales for the store. Everyone wants to saves and

wants value for money, so customers get fascinated by these promotions and tends to shop more to save. On a single day store is able to do business of more than 70-80 lakhs. According to some customers due to this concept they able to save around Rs 3,000- Rs 4000 a month which means a big amount so they prefer to shop on this day. 5 Days Maha Bachat Like in Republics day, in the Independence Day period- Aug 15, Big Bazaar launched the 5 Days Maha Bachat scheme in all the outlets over the India. This scheme is open on 12-16 th August every year. In this scheme, there are various offers such as Buy One get One free in apparels, Flat 20-50% discounts in electronics, foods etc. Records showed that there were exceptional offers on more that 160,000 products and over 55 lakh customers visited in all the stores in the country. Guerrilla Marketing.

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 hitand-run tactics. Attack, retreat, hide, then do it again, and again, until the competitor moves on to other markets. Herein guerrilla force is divided into small groups that selectively attack the target at its weak points. Corporate like Coke, Pepsi, etc have been using the same for quite some time now and the latest entrant is 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!

Marketing Mix: 7 Ps Analysis

"Marketing" is the promotion of products, especially advertising and branding. Marketing
practice tends to be seen as a creative industry, which includes advertising, distribution and selling. Marketing mix is a deciding factor in formulating marketing techniques for the success of a particular brand, commodity or company. The components of marketing mix are: Product Price

Promotion Place People Process Physical evidence

PRODUCT: Big Bazaar offers the maximum variety for each category of product. It provides more than
2,00,000 items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationary, electronics & white goods which are sold at a discount to the maximum retail price.The product is

the same in every store in the city but the brand options are more in Big Bazaar. Also, the quantity for each product is not limited to large packs only. The same product is available in various size and different packaging. The commodities sold by the retail chain also include its own products (Private Labels). So costs are low for such products. The various categories of products available in Big Bazaar are as follows:
Apparels-formal wear, casual wear, accessories, undergarments, cut pieces, sarees etc Food- ready to eat, ready to cook, spices, tea & coffee, dry fruits etc Farm Products-vegetables, fruits, dairy products Chill Stations-soft drinks, packaged juice, milk items, frozen foods, icecream Home & Personal care-shampoo, soap, detergents, liquid wash, deodorants Electronics- TV, washing machine, oven, fridge, laptops, camera, mobiles Furniture- Living room, bedroom, dining room, bathroom, bean bags, paintings Child care- Kids wear, Toys, Stationery

PRICE:
Price is the principal value proposition at these stores. Price is the critical point in a competitive industry. Big Bazaar works on a low cost model. It considers its discounted price as its USP. There is an average discount of 5-60% on the items in respect to their MRP. Prices of products are low because it is able to secure stock directly from the manufacturer. There are huge synergies in terms of bulk purchasing, central warehousing and transportation. These all factors help this retailer to keep low prices. Various Pricing schemes offered by Big Bazaar Value Pricing(EDLP) EDLP means Every Day Low Price. Big Bazaar revises the price of few commodities such as cereals, grains, oil, vegetables etc every day depending up on the fluctuation in market and make sure that revised price is lowest in the market. Promotional Pricing Promotional pricing is typically used when new products are being introduced to the market. It can also be used to stimulate demand for products or services with lagging demand. Whenever there are more stocks of the product or when new products arrived in the store, Big Bazaar offers the following promotional pricing. o Low Interest Financing

Big Bazaar offer low or no interest financing for the purchase of furniture and electronics goods. It also provides easy EMI schemes for the purchase o Psychological Discounting In the every product, specially in the area of cereals, oils, grains, there is price list displayed with the MRP and the Current price to bring psychological impact on the customers. This creates the impulse in the customer to buy the produces looking at good amount of difference in MRP and current price. Special Event Pricing There is special discount price marking some special national or local occasion or festivals such as New year, Holi, Gudi pawa etc.

Time Pricing Big Bazaar proves special price for some commodities with the price displayed as Todays special offers. The low discounted price for every Wednesday also comes in Time Pricing scheme of Big Bazaar. Bundling The few related products are bundled together and offered in price less than the total price of all items together. This is called bundling. Big Bazaar practices bundling for sanitary items( Shampoo, liquid soap, detergents) , Packaged foods( Biscuits, noodles, Soup), Kitchen stuffs ( Tea, sugar, coffee) etc.

PLACE:
Place means the location of the business. Big Bazaar has always worked on low-cost locations. It targets semi-urban population with its placement. Its strategy is to find a cheap location and it never goes for hot spots in the city. It relied on promotional activities to make up for unattractive locations. Another strategy used by Big Bazaar to overcome location disadvantage is use of internet. It has launched a merchandise retailing website www.futurebazaar.com which targets high-end customers ready to use credit cards. The promotion of this website is done through advertisement on Google. The website is put as sponsored link.

PROMOTION:
Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to make people do bulk shopping. There are 2 types of promotional strategies of big bazaar. One is the holistic advertisement which promotes the brand and creates awareness among people. It is not targeted at promoting each store but only creates an image of Big Bazaar as low-cost shopping option. The store has advertised through TV, road shows and also started reality show-typed promotional campaign The Big Bazaar Challenge. They choose the Mahendra Singh Dholi as Brand Ambassador for its Brand endorsement. Promotions like Sabse Sasta Din and Monthly Bachat Offers are a very successful strategy to get footfall. In these products across categories such as apparels, furniture, electronics, utensils and food products at the lowest possible prices, coupled with attractive promotional schemes. Some of the most attractive offers being a 20-litre branded microwave oven with grill for Rs 2,499, jeans and trousers for Rs 199 and HCL laptops for Rs 22,990.

Offer at Monthly Bachat: Atta 10 kg worth Rs 280 for Rs 189 only Toor Dal 1 Kg worth Rs 86 for Rs 63 only Spice whole Jeera 500 gms worth Rs 125 for Rs 99 only HTM Rice 1 Kg worth Rs 30- for Rs 26 only Dhara Sunflower Oil 1 litre worth Rs 78 for Rs 54 only Surf excel Detergent 3.8 kg worth Rs 421- for Rs 356 only Other type of promotion is the particular store oriented promotion which includes speaking on the loudspeaker in nearby blocks. Leaflets are given in local newspaper. There are promotional efforts even inside the store. Buy 2 Get 1 Free types of promotions are very common. Original prices are cut down and new prices are shown, of which customer takes quick notice. There are loyalty schemes which reward regular clients. Promotion is also done through co-branded credit cards with ICICI bank. They also give some amount ( 2.5-10%) of discount on the total bill sum if it exceeds 1000 or something there is gift offer for the purchase more than Rs 1000. They have introduced the future card which has flat 3% discount. They have very good strategy of impulse selling efficiently using the POS. They displayed the various stuffs in the trays and drums on the way to POS where customers have to stand in long queue for bill payment.

People
Big Bazaar equally takes care of its employees and staffs as it does for its customers. The HR department of Big Bazaar is very dynamic. Employees are the biggest strength and asset of any organization and the HR dept realizes this very well. HR Department takes utmost care to select, train, motivate and retain all the employees. Big Bazaar has continuous developmental programmes for all the employees. Big Bazaar its employees from following four sources Consultancy Services: For top level management Walk-ins- Main Source of Employee recruitment Employee Refererrals Campus Recruitment;- For young and fresh enthusiastic employee

New employees selected will be given a 13 day induction and training program during which they will be informed about the companys business, different departments etc. and their roles, duties and responsibilities. The new employees will be on probation for a period of 6 months. After this period the HR period along with the department manager will review the performance of the employee. If the employees performance is good and encouraging, the employees services will be confirmed. Employees are give the attractive pay package along with the PF, Cashless Mediclaim, Annual bonus during diwali. Each employee is given Employee Discount Card (EDC) which gives the special discount of 20-30% on the buy of any products. There is annual performance appraisal cycle in the month of April based on which employee will get the incentive and increment as well as promotion. Future group has its own training division for all its employees, known as Future Learning & Development Limited (FLDL). All the employees are given training for 20 days in a year.

Gurukul which is a part of FLDL gives training to all the employees on various skills like team work, dedication discipline improving customer service etc to make them more knowledgeable and productive. Employees of Big Bazaar are highly motivated by following factors Feeling of Belongingness Good wages and salaries Job Security Good working condition Full appreciation of work Tactful discipline Employee Loyality to employees Interesting work Promotion and growth in the organization

Process
Big Bazaar avails various services to make help the customer and make their shopping easy and comfortable. It has the very powerful billing application which easily calculates all the discounts and bonus. The centralized database makes it possible to have the multiple billing counters in same and different floors. So Customers need not to worry about where to make the payment. He can make the whole payment in any one of counter irrespective of goods purchased. There is customer help desk which is open whole day during the business hour to help the customer in any issues. It mainly helps in making the member, distributing the discount coupons and redeem the coupons. There is continuous announcement of new offer to make the customer aware. Any message customer wants to make it announced can be done requesting at office. The trolleys of various sizes are available in plenty of numbers. So there is no need of waiting for the trolley to be free. While paying the bill, there are separate queue for cash and card counter. The sales boys are present in every corner of the stores to help the customer in any needs. The service of packing of goods is also very satisfactory in Bigbazaar. Home delivery services and Online Shopping facilities is available through the www.futurebazaar.com .

Physical Evidence
The ambience of Big Bazaar stores is good and clean. The air conditioned multi-storey store has enough space for shopping. So customer wont feel suffocated inside the complex. The space is divided into various parts as per the product category to make the customer easy for shopping. The products the product. facilitate the hospitality of appreciable. are arranged properly in the shelves considering the target group and All the most essentials and new arrival products are placed in the consumers, the price lists are displayed in boards and banners. the employee and staffs and their willingness to help the customer nature of front. To And the is highly

SWOT Analysis
Strength
Variety of products more than 2, 00,000 available under one roof. Good brands available at affordable prices. Cheap goods available to the consumers due to the absence of middlemen Many outlets all over India. It has a good customer base It is positioned to the customer as a place where the customer can shop each & everything of need Huge promotional activities to increase the footfalls Huge Infrastructure and good ambience Better understanding of customer needs and demands

Weakness:
Big Bazaar has not yet trapped the whole market Facing problems due to political environment Store unable to meet the growing consumer demand. General Perception of consumer High cost of operation due to large fixed costs Very thin margin High attrition rate of employees. Do not use the costly method of advertisement

Opportunities

Huge untapped market- only 5% is organized retail in India Lot of potential in rural penetration Can enter into the production of various of products due to its in depth understanding of customers tasted and preferences Can expand the business in smaller cities

Threats Competition from various branded organized retails such as Reliance, Spencer, wal Mart etc Competition of unorganized local retailers Government policies in tax Economic Condition and recession Lowering Margin

Recommendations
Can start a concept of HAPPY HOURS. Can initiate various Student Plans. Can look to target Rural Market.

References

http://www.futuregroup.in/corporate_profile.asp http://www.pantaloonretail.in/board_directors.asp http://bigbazaar.futurebazaar.com/indexBigBazaar.jsp http://www.scribd.com/doc/18687956/Retail-Sector-in-India-a-Case-of-Big-Bazaar http://en.wikipedia.org/wiki/Big_Bazaar