A PROJECT REPORT

ON

“LOCATIONAL STRATEGIES OF BIG BAZAAR”

MASTER OF BUSINESS ADMINISTRATION

Introduction to the Topic:

Being in the right location is a key ingredient in a business's success. Locational Strategies is a results-oriented retail real estate consulting firm providing retailers, investors, shopping center managers and institutions with fact-based, decision-making research. If a company selects the right location, it may have adequate access to customers, workers, transportation, materials, and so on. Consequently, location often plays a significant role in a company's profit and overall success. A location strategy is a plan for obtaining the optimal location for a company by identifying company needs and objectives, and searching for locations with offerings that are compatible with these needs and objectives. Generally, this means the firm will attempt to maximize opportunity while minimizing costs and risks.

A company's location strategy should confirm with, and be part of, its overall corporate strategy. Hence, if a company strives to become a global leader in retail chain, for example, it must consider establishing warehouses in regions that are consistent with its strategy and that are optimally located to serve its global customers. A company's executives and managers often develop location strategies, but they may select consultants (or economic development groups) to undertake the task of developing a location strategy, or at least to assist in the process, especially if they have little experience in selecting locations.

While research is often associated with identifying new opportunities, it is also a powerful and effective tool in the area of asset preservation. Shopping center managers benefit from proactively using research to solicit and maintain tenants, support valuation and set capital priorities. Retailers make better staffing and consolidation decisions with research. Investors and institutions make better decisions with research’s strategic perspective by minimizing the risk of their investment.

Location Strategies was established in 2005 by Greg Kerfoot and Barbara Bruce who have over 60 years of combined experience in development location research. The firm has extensive experience in a broad spectrum of services including

feasibility studies, strategic assessments for underperforming properties, acquisition analysis, risk / opportunity assessment, portfolio review and tenant solicitation.

The importance of the location decision is due to the following factors.

Location is a major cost factor because it

•Involves large capital investment

•Affects transportation costs

•Affects human resources cost, e.g., salaries, wages etc.

Location is a major revenue factor because it

•Affects the amount of customer traffic

•Affects the volume of business

The choice of a store location has a profound effect on the entire business life of a retail operation. A bad choice may all but guarantee failure, a good choice success. This aid takes up site selection criteria, such as retail compatibility and zoning, which the small store owner manager must consider after making basic economic, demographic, and traffic analyses. In picking a store site, many storeowners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of the population, about the kind of competition they'll be facing, and about traffic patterns in the area they're considering.

Introduction to the Company

Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple

retail formats in both the value and lifestyle segment of the Indian consumer

market. Headquartered in Mumbai (Bombay), the company operates over 10

million square feet of retail space, has over 1000 stores across 61 cities in India

and employs over 30,000 people.

The company’s leading formats include Pantaloons, a chain of fashion outlets, 

Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket

chain, blends the look, touch and feel of Indian bazaars with aspects of modern

retail like choice, convenience and quality and Central, a chain of seamless

destination malls. Some of its other formats include, Depot, Shoe Factory, Brand

Factory, Blue Sky, Fashion Station,Star and Sitara. The company also operates an

online portal, futurebazaar.com. A subsidiary company, Home Solutions Retail

(India) Limited, operates Home Town, a large-format home solutions store,

Collection , selling home furniture products and E-Zone focused on catering to the

consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year 2007

by the US-based National Retail Federation (NRF) and the Emerging Market

Retailer of the Year 2007 at the World Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business group

catering to the entire Indian consumption space. Pantaloon is not just an

organization - it is an institution, a centre of learning & development. We believe

that knowledge is the only weapon at our disposal and our quest for it is focused,

systematic and unwavering.

Over the years, the company has accelerated growth through its ability to lead change. A number of its pioneering concepts have now emerged as industry standards. For instance, the company integrated backwards into garment manufacturing even as it expanded its retail presence at the front end, well before any other Indian retail company attempted this. It was the first to introduce the concept of the retail departmental store for the entire family through Pantaloons in 1997. The company was the first to launch a hypermarket in India with Big Bazaar, a large discount store that it commissioned in Kolkata in October 2001. And the company introduced the country to the Food Bazaar, a unique 'bazaar' within a hypermarket, which was launched in July 2002 in Mumbai. Embracing our leadership value, the company launched all in July 2005 in Mumbai, making us the first retailer in India to open a fashion store for plus size men and women.

Today Pantaloon is the fastest growing retail company in India. The number of stores is going to increase many folds year on year along with the new formats coming up. Their courage is to dream and to turn their dreams into reality – that change people’s lives, is their biggest advantage.

Future Group

Future Group is one of the country’s leading business groups present in retail, asset management, consumer finance, insurance, retail media, retail spaces and logistics. The group’s flagship company, Pantaloon Retail (India) Limited operates over 10 million square feet of retail space, has over 1,000 stores and employs over 30,000 people. Future Group is present in 61 cities and 65 rural locations in India. Some of its leading retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar, Home Town, eZone, Depot, Future Money and online retail format, futurebazaar.com.

Future Group companies includes, Future Capital Holdings, Future Generali India Indus League Clothing and Galaxy Entertainment that manages Sports Bar, Brew Bar and Bowling Co. Future Capital Holdings, the group’s financial arm, focuses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels.

The group’s joint venture partners include Italian insurance major, Generali, French retailer ETAM group, US-based stationary products retailer, Staples Inc and UK-based Lee Cooper and India-based Talwalkar’s, Blue Foods and Liberty Shoes.Future Group’s vision is to, “deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner.” The group considers ‘Indian-ness’ as a core value and its corporate credo is- Rewrite rules, Retain values.

Mr. Kishore Biyani

Managing Director (FUTURE GROUP)

Major Milestones

1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, India’s first formal trouser brand.

1991 Launch of BARE, the Indian jeans brand.

1992 Initial public offer (IPO) was made in the month of May.

1994 The Pantaloon Shoppe – exclusive menswear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multi-brand retail outlets across the nation.

1995 John Miller – Formal shirt brand launched.

1997 Pantaloons – India’s family store launched in Kolkata.

2001 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain launched.

2002 Food Bazaar, the supermarket chain is launched.

2004 Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ - India’s first seamless mall is launched in Bangalore.

2005 Fashion Station - the popular fashion chain is launched

aLL – ‘a little larger’ - exclusive stores for plus-size individuals is launched

2006 Future Capital Holdings, the company’s financial arm launches real estate funds Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance and consumer credit.Multiple retail formats including Collection i, Furniture Bazaar, Shoe Factory, EZone, Depot and futurebazaar.com are launched across the nation.Group enters into joint venture agreements with ETAM Group and Generali.

Big BazaarBig Bazaar is a chain of department stores in India currently with 100 outlets. It is owned by Pantaloon Retail India Ltd., Future Group. It works on the same economy model as Wal-Mart and has been successful in many Indian cities and small towns. The idea was pioneered by entrepreneur Mr. Kishore Biyani, the CEO

of Future Group. Currently Big Bazaar stores are located only in India. It is the fastest growing chain of department stores and aims at having 350 stores by 2010.

GROUP VISION:

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

GROUP MISSION:

We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development.

We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses.We shall infuse Indian brands with confidence and renewed ambition.

We shall be efficient, cost- conscious and committed to quality in whatever we do.

We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful.

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.

Introduction to the Industry

Retail is India’s largest industry, accounting for over 10% of the country’s GDP and around 8% of the employment. Retail industry in India is at the cross road. It has emerged as one of the most dynamic in fast paced industry with several players entering the market. But because of the heavy initial investments required break even is difficult to achieve and many of this players have not tested success so far. However the future is promising the market is growing; the governments policies are becoming more favorable and emerging technology are facilitating operations.Retailing in India is gradually inching its way towards becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering revolution in India. Modern retail has entered India as seem in sprawling shopping centers and multistory 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. The Indian population is witnessing a significant change in demographics. A large young working population with average age of 24 years, nuclear families in urban areas, along with increasing working women population and emerging opportunities in the service sector are growing to be the key growth drivers of the organized retail sector in India.Retailing involves all activities incidental to selling to ultimate consumer for their personnel family and household use. It does this by organizing their availability on a relatively large scale and supplying them to customers on a relatively small scale. Retailer is any person/organization instrumental in reaching the goods or merchandise or services to the end users. Retailer is a must and cannot be eliminated.The Indian retailing industry is becoming intensely competitive, as more and more players are targeting for the same set of customers. The major retail players are Pantaloon Retail, Shoppers Stop, Reliance, etc.., Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in retailing in India signifies the beginning of retail revolution. India's retail market is expected to grow tremendously in next few years. According to AT

Kearney, The Windows of Opportunity shows that Retailing in India was at opening stage in 1995 and now it is in growth stage in 2008. India's retail market is expected to grow tremendously in next few years. Retail market is expected to grow 10% a year, with modern retailing just beginning.

Growth drivers in India for retail sector:

•Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. •Liberalization of the Indian economy •Increase in spending per capita Income. •Advent of dual income families also helps in the growth of retail sector. •Shift in consumer demand to foreign brands. •Consumer preference for shopping in new environs. •The Internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets. •The increasing share of young population in total population of India.•Availability of quality real estate and mall management practices •Foreign companies' attraction to India is the billion-plus population.

Challenges of Retailing in India :

In India the Retailing industry has a long way to go, and to become a truly flourishing industry, retailing needs to cross the following hurdles:

•The first challenge facing the organized retail sector is the competition from unorganized sector.•In retail sector, Automatic approval is not allowed for foreign investment.•Taxation, which favors small retail businesses.•Lack of trained work force.•Low skill level for retailing management.•Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence and low margins.•Organized retail sector has to pay huge taxes, which is negligible for small retail business.•Cost of business operations is very high in India.Recent Trends of Retail Marketing In India:

•Retailing in India is witnessing a huge revamping exercise as can be seen in below graph.•India is rated the fifth most attractive emerging retail market: a potential goldmine.•Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion.•As per a report by KPMG the annual growth of department stores is estimated at 24

Strategic Decision Support Systems :

• Store Site Location : Demographics and buying patterns of residents of an area can be used to compare various possible sites for opening new stores. Today, software packages are helping retailers not only in their locational decisions but in decisions regarding store sizing and floor-spaces as well.

• Visual Merchandising: The decision on how to place & stack items in a store is no more taken on the gut feel of the store manager. A larger number of visual merchandising tools are available to him to evaluate the impact of his stacking

options. The SPACEMAN Store Suit from AC Neilsen and ModaCAD are example of products helping in modeling a retail store design.

Major Formats of In-Store Retailing :

Format Description The Value Proposition

Branded Stores

Exclusive showrooms either owned or franchised out by a manufacturer.

Complete range available for a given brand, certified product quality

Specialty Stores

Focus on a specific consumer need, carry most of the brands available

Greater choice to the consumer, comparison between brands is possible

Department Stores

Large stores having a wide variety of products, organized into different departments such as clothing, house wares, furniture, appliances, toys, etc.

One stop shop catering to varied/ consumer needs.

Supermarkets Extremely large self-service retail outletsOne stop shop catering to varied consumer needs

Discount Stores

Stores offering discounts on the retail price through selling high volumes and reaping economies of scale

Low Prices

Hyper- martLarger than a supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city

Low prices, vast choice available including services such as cafeterias.

Convenience stores

Small self-service formats located in crowded urban areas.

Convenient location and extended operating hours.

Shopping Malls

An enclosure having different formats of in-store retailers, all under one roof.

Variety of shops available to each other.

 Indian Retail- expanding the number of formats :

In modern retailing, a key strategic choice is the format. Innovation in formats can provide an edge to retailers. Organized retailers inIndia are trying a variety of formats, ranging from discount stores to supermarkets to hypermarkets to specialty chains.

Formats Adopted by Key Players in   India:

Retailer Original formats Later Formats

RPG Retail Supermarket (Foodworld)Hypermarket (Spencer's)Specialty Store (Health and Glow)

Piramal'sDepartment Store (Piramyd Megastore)

Discount Store (TruMart)

Pantaloon Retail

Small format outlets (Shoppe) Department Store (Pantaloon)

Supermarket (Food Bazaar) Hypermarket (Big Bazaar) Mall (Central)

K Raheja Group

Department Store (shopper's stop)Specialty Store (Crossword)

Supermarket (TBA) Hypermarket (TBA)

Tata/ TrentDepartment Store (Westside)

Hypermarket (Star India Bazaar)

Landmark Group

Department Store (Lifestyle)

Hypermarket (TBA)

OthersDiscount Store (Subhiksha, Margin Free, Apna Bazaar), Supermarket (Nilgiri's), Specialty Electronics

Recent changes:

• Experimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc.

• Store design: Biggest challenge for organised retailing to create a “customer-pull” environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are upto 10-15%. Retail chains like MusicWorld, Baristas, Piramyd and Globus are laying major emphasis & investing heavily in store design.

• Emergence of discount stores: They are expected to spearhead the organised retailing revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs.• Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large cineplexes, and malls, which are backed by the corporate house such as 'Ansals' and 'PVR‘ the unorganized sector is getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.

• Raising aspirations: Value added goods sales, Food and apparel retailing key drivers of growth.

Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. More successful in cities in the south and west of India. Reasons range from differences in consumer buying behaviour to cost of real estate and taxation laws.Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumptionITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets.HLL is using its Project Shakti initiative – leveraging women self-help groups – to explore the rural market.Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets.IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying behaviour across the globe.‘e-tailing’ slowly making its presence felt.Companies using their own web portal or tie-sups with horizontal players like Rediff.com and Indiatimes.com to offer products on the web.

Opportunities in Retail Sector:

• Investment Opportunities

Potential For Investment: The total estimated Investment Opportunity in the retail sector is around US$ 5-6 Billion in the Next five years.

• Location: with modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5 years.

Sectors with High Growth Potential:

Certain segments that promise a high growth are

· Food and Grocery· Clothing· Furniture and Fixtures· Pharmacy· Durables, Footwear & Leather, Watch & Jewellery

Fastest Growing Formats:

Some of the formats that offer good growth potential are:· Speciality and Super Market· Hyper Market

THE PRODUCT – BIG BAZAAR

INTRODUCTION:

Big Bazaar is a chain of shopping malls in India currently with 29 outlets, owned by the Pantaloon Group. The idea was pioneered by entrepreneur Kishore Biyani, the head of Pantaloon Retail India Ltd. Big Bazaar stores in Metros have a gaming area and kids play area for entertainment.

Cities where stores are located:

AgraAhmedabad

AllahabadAmbalaAsansolBangaloreBhubaneswarChennaiCoimbatorePalakkadKolkataDelhiDurgapurGhaziabadGurgaonHyderabadIndoreLucknowKanpurMangaloreMumbaiNagpurNasikPanipatPuneRajkotSuratThaneThiruvananthapuramVishakhapatnam

Big Bazaar has democratized shopping in India and is so much more than a hypermarket. Here you will find over 170,000 products under one roof that cater to every need of the family, making Big Bazaar India’s favorite shopping destination. At Big Bazaar, you will get best products at the best prices, this is their guarantee. From apparel to general merchandise, like plastics, home furniture, utensils, cookery, cutlery, sports goods, car accessories , books, music, computer accessories and many more. Big Bazaar is the destination where you get products available at prices lower than the MRP , setting a new level of standard in price, convenience, and quality.

Big Bazaar is a great platform for fashion conscious buyers, who want great clothes at great prices. Leveraging on the companies inherent strength of fashion, Big Bazaar has created a strong value for money, proposition for its customer. This highlights the uniqueness of Big Bazaar as compared top traditional supermarkets, which principally revolves around food, groceries and general merchandise.

KEY FEATURES:

a. MANUFACTURER’S WARRANTIES ON ALLPRODUCTS:Big Bazaar promises to sell only the original products from the authorized dealers; so that all applicable products carry the original manufacturer’s warranty. To service any product purchased at Big Bazaar, customer can visit the authorized service centre of the manufacturer. The invoice accompanying the product is the warranty document.

b. GUARANTEED DELIVERY:Big Bazaar guarantees to deliver the exact product that has selected, without defects. In case of receiving a different product, or if the product is damaged in transit, the customer should contact it within the stipulated time period and BigBazaar will ensure that it is replaced or refunded.

c. SECURE PAYMENT:It commits to ensure that no payment misuse happens, so we work with banks and payment gateways to ensure that your information is protected. Payments are protected both by it and by the policies of customer’s bank, and the chances of fraud in these channels are actually very low. Big Bazaar openly publishes its office addresses and is part of India’s largest retail company with a presence all over India – so you know how to contact us in person, if required.d. OUR SIMPLE 15-DAY RETURN POLICY: If customer has purchased something at Future Bazaar and the product did not meet its expectations or does not fit to his needs, then it can return the product to us; no questions asked, as long as it is in its original packaging and accompanied by its invoice. We will even make the return process simple for you – just contact our customer support and we’ll arrange to pick up the product from your home. Alternately, you can drop it off at the nearest Big Bazaar.

e. PROMPT CUSTOMER SUPPORT:Our customer support is manned by dedicated call centre personnel, who can take decisions and resolve your problems. They are eager to solve your problems and are aware of the processes and means to handle them. In case they cannot solve the problem at their end, they will trigger the required action on your behalf or advise you the best possible method to a successful fulfilment of all your queries/issues. Be assured that when you call us, your call is being taken seriously.

BIG BAZAAR

15 DAYS RETURN POLICY

PROMPT CUSTOMER SUPPORT

SECURE PAYMENT

GUARANTEED DILIVERY

PRODUCT LINE

Here, one finds over 170,000 products under one roof that cater to every need of a family, making Big Bazaar India’s favourite shopping destination. Where BigBazaar scores over other stores is its value for money proposition for the Indian customers. Big Bazaar, one finds a huge variety of products to select from with a good price and quality. 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 surprisingly low prices. In recent years, Big Bazaar has adopted value pricing in which they win loyal customers by charging a fairly low price for a high – quality offering. However, consistent low price for the products is not only the universally desired characteristic.

MARKETING STRATEGY

PROCESS FOLLOWED (STP)

Segmentation, targeting, and positioning together comprise a three stage process. a. Determine which kinds of customers exist,b. Select which ones we are best off trying to serve,c. Implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

SEGMENTATION:

Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety.

MANUFACTUR-ER’S WARRANTY

In general, it holds true that “You can’t be all things to all people,” and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable. Several different kinds of variables can be used for segmentation:-

1. Demographic variables essentially refer to personal statistics such as income, gender, education, location (rural vs. urban, East vs. West), ethnicity, and family size. 2. Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd.3. Another basis for segmentation is behaviour. Some consumers are “brand loyal”—i.e. they tend to stick with their preferred brands even when a competing one is on sale. Some consumers are “heavy” users while others are “light” users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers—presumably a rather intoxicated group. It’s the well-known 20-80 rule.4. One can also segment on benefits sought, essentially by passing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while others prefer the “clean” feeling of unscented soap (the “Ivory” segment).Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breathe freshening.

TARGETING:

1. In the next step, we decide to target one or more segments.Our choice should generally depend on several factors:-

FirstHow well are existing segments served by other manufacturers? It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well.

SecondlyHow large is the segment, and how can we expect it to grow?

ThirdlyDo we have strengths as a company that will help us appeal particularly to one group of consumers?

2. Big Bazaar targets higher and upper middle class customers.3. The large and growing young working population is a preferred customer segment.4. Big Bazaar specifically targets working women and home makers who are the primary decision makers.

POSITIONING:

Positioning involves implementing our targeting. Big Bazaar has established itself in the first quadrant of Organization Value and Customer Value MatrixThe 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 includesBig 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 Value and Customer Value Matrix

SWOT analysis of Big Bazaar

MARKETING MIX

The easiest way to understand the main aspects of marketing is through its more famous synonym of "4Ps of Marketing". The classification of four Ps of marketing includes marketing strategies of product, price, placement and promotion. The following diagram is helpful in determining the main ingredients of the four Ps in a marketing mix.

PRODUCT:

In simpler terms, product includes all features and combination of goods and related services that a company offers to its customers. Product is the most important aspect of marketing mix for two main reasons. First, for manufacturers, products are the market expression of the company's productive capabilities and determine its ability to link with consumers. So product policy and strategy are of prime importance to an enterprise, and product decisions dictate the scope and direction of company activity. Moreover, the market indicators such as profits, sales, image, market share, reputation and stature are also dependent on them. Secondly, it is imperative to realize that the product of any organization is both a component and a determinant of the marketing mix as it has a great influence on the other elements of the mix: advertising, personal selling, channels of distribution, physical distribution and pricing. So without proper product policy, a company can not pursue for further elements of marketing mix.

PRICING:

Pricing is basically setting a specific price for a product or service offered. In a simplistic to the concept of price as the amount of money that customers have to pay to obtain the product. Setting a price is not something simple.

Normally it has been taken as a general law that a low price will attract more customers. It is not a valid argument as customers do not respond to price alone; they respond to value so a lower price does not necessarily mean expanded sales if the product is not fulfilling the expectation of the customers

Generally pricing strategy under marketing mix analysis is divided into two parts: price determination and price administration (ibid).

Price determination is referred to as the processes and activities employed to arrive at a price for a product including consideration of relative prices of products within the same line, and differences in price for similar products of differing grades and qualities.

Price administration is referred to as the activities involved in fitting basic prices to particular sales situations such as geographic locale, functions performed by customers, position of distribution channel members, or special sales situations.

PLACEMENT:

Placement under marketing mix involves all company activities that make the product available to the targeted customer while planning placement strategy under marketing mix analysis, companies consider six different channel decisions including choosing between direct access to customers or involving middlemen, choosing single or multiple channels of distributions, the length of the distribution channel, the types of intermediaries, the numbers of distributors, and which intermediary to use based on the quality and reputation .

PROMOTION:

Promotional strategies include all means through which a company communicates the benefits and values of its products and persuades targeted customers to buy them .The best way to understand promotion is through the concept of the marketing communication process. Promotion is the company strategy to cater for the marketing communication process that requires interaction between two or more people or groups, encompassing senders, messages, media and receivers

Limitation of Marketing Mix Analysis (4Ps of Marketing)

Despite the fact that marketing mix analysis is used as a synonym for the 4Ps of Marketing, it is criticised on the point that it caters seller's view of market analysis not customers view. To tackle this criticism, attempted to match 4 Ps of marketing with 4 Cs of marketing to address consumer views:

Product – Customer SolutionPrice – Customer CostPlacement – ConveniencePromotion – Communication

RETAIL MIX:

1. Merchandise assortment: “Main objective of the store layout is to maximize the interface between customers and merchandise” It provides easy accessibility to the customers to view the offerings of the store. Layout of the store has been strategically designed in order to make effective use of merchandise and passage to draw customers’ attention on store’s offerings.Big Bazaar has a wide range of merchandise they have both branded and unbranded products like:

Home line items: Like bed sheets, pillow covers, carpets to kitchen utility items like steel utensils and crockery and other minor utility items required in a house Electronic items: like refrigerator, T.V, vacuum cleaner, music system, vacuum cleaner, washing machine. EtcMobile Zone: A wide range of mobile phones and accessories is available at lowest possible price Furniture: All kinds of furniture are available that one may require to decorate their house.Opticians: In this section all brands and types fashion glasses are availableMen Ladies and kids wear: This section includes fashion and casuals wear for men ladies and kids both branded and unbranded.

Foot wear: In this section footwear for men women and kids is made available.Music: A wide collection of CDs DVDs is made availableToys: All kinds of toys for children is available Stationary: all kind of office stationery and stationery for school going kids is available

Location

Big bazaar is located has 31 outlets in India , big bazaar locates its outlet near the commercial area and residential complexes so that they can cover all their target customers E.g. : their outlet in Ameerpet , Hyderabad , is located near commercial areas so that the working class people can drop in and shop house hold items after office hrs.

The choice of location of Big Bazaar in many ways captures the essence of what they were doing- they adapt themselves to the habits tastes and preferences according to the location. One of the distinct feature of their location is that it is easily accessible and they try to locate their outlet in such a location where they can reach a large customer base.

Layout

People often complain that Big Bazaar outlets always look very crowded. But few realize that it is concisely designed to look just like that. When the shop looks neat and empty, the masses never walk into it. There has to be what is called the ‘button brush effect’, and an ‘organized chaos’. As Indians, we like bumping into people, chatting, gossiping and eating while we shop!

Big Bazaar layout consists of layout of long rows of parallel fixtures; with no aisles because aisles can be boring they restrict space and can’t be dramatized. At Big Bazaar, they create multiple cluster or mini-bazaars within every store. It was designed as an agglomeration of bazaars with different sections selling different categories’ “It uses space efficiently.It provides easy sitting of merchandise and linking of the product throughout the store.It allows more customers in the store at any time.Allows staff of the store to work easily alongside the customers without disturbing them.Provide self-service atmosphere

Visual merchandising

Visual merchandising supports:-a. salesb. retail strategiesc. communicates with customersd. communicates imagee. supports retailing trends.

Visual merchandising at Big Bazaar uses “Store display for promotional purpose, but as customers are becoming more sophisticated, Big Bazaar has found various techniques for effective display for providing information and communicating image of the store to the customers, helping them in taking purchase decision and creating exciting shopping environment” Big Bazaar not only uses visual merchandising for promoting their product, but they use it as a significant tool for creating appropriate store environment and influencing purchase decision of customers.

They use danglers and hoardings at the entrance of the store as this may be a deciding element in a consumer’s decision to enter a store. It uses various visual merchandising like it uses remarkable window display for creating a shopping environment as it creates initiative impression in the mind of customers as window display also sometimes become a deciding factor whether to enter the store or not .Retailers develop visual merchandising in order to relate customer’s social life with the product, arouse their personnel interest for the product. “Retailers can use

combination of elements of in store display; such as colour, texture, lighting, fixtures, graphics, signage.”

RETAIL PROMOTION MIX

1. ADVERTISING:Advertising is recognized as an indispensable tool of promotion. It has acquired a lot of significance in the national and international markets. With the advent of globalization and liberalization its imperativeness in the Indian retail sector has increased as a result of competitions, latest technologies, and the rapidly changing consumer lifestyles.

a. Objectives of Advertising:

The fundamental objective of advertising is to sell something –a product, service, or an idea.

The Major Objectives of advertising are:

1. To promote a new product.2. To warn the public against imitation of the retailer’s product.3. To manage competition in the market.

b. Benefits of Advertisements:

1. Advertisement helps in creating awareness among the customer about the existence, price, and availability of product.2. Increases the utility of existing products.3. It educates customer about new product and their diverse uses.

c. Types of advertising:

1. Informative Advertising:Purchases of durable products are generally erratic and often too expensive to buy, so the retailer spends a huge amount on informative advertising.

2. Corporate Advertising:Its main motive is to build a corporate image. Corporate Advertising builds up retailer image. It increases goodwill towards the retail organization.

3. Financial Advertising:It refers to advertisements by various financial institutions. Big Bazaar has also tied up with ICICI bank, which provide information about the investment opportunities and the risks and benefits.

4. Classified Advertising:It refers to messages, which are placed under specific headings and columns in various magazines and newspapers.

2. PROMOTION:

Promotion can be loosely classified as "above the line" and "below the line" promotion. The promotional activities carried out through mass media like television, radio, newspaper etc. is above the line promotion. The terms'below-the-line' promotion or communications refers to forms of non-media communication, even non-media advertising. Below-the-line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in fmcg products, but also for industrial goods.

1. BELOW THE LINE SALES PROMOTIONSome of the examples of BTL (below the line) promotions are by exhibitions, sponsorship activities, public relations and sales promotions like giving freebies with goods, trade discounts given to dealers and customers, reduced price offers on products, giving coupons which can be redeemed later etc.Below the line sales promotions are short-term incentives, largely aimed at consumers. With the increasing pressure on the marketing team to achieve communication objectives more efficiently in a limited budget, there has been a need to find out more effective and cost efficient ways to communicate with the target markets. This has led to a shift from the regular media based advertising.

Methods of below the line sales promotion:-

a. Price promotionsPrice promotions are also commonly known as" price discounting". These can be done in two ways:-1. A discount to the normal selling price of a product, or more of the product at the normal price.2. Price promotions however can also have a negative effect by spoiling the brand reputation or just a temporary salesboost (during the discounts).

b. CouponsCoupons are very versatile, way of offering a discount.

Following are the examples of the use of coupons:-

-On a pack to encourage repeat purchase-In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer.-A cut-out coupon as part of an advert.-On the back of till receipts.

The key objective with a coupon promotion is to maximize the redemption rate – this is the proportion of customers actually using the coupon. It must be ensured when a company uses coupons that the retailers must hold sufficient stock to avoid customer disappointment. Use of coupon promotions is often best for new products or perhaps to encourage sales of existing products that are slowing down.

c. Gift with purchase

The "gift with purchase" is a very common promotional technique. In this the customer gets something extra along with the normal good purchased.

d. Competitions and prizes

This is an important tool to increase brand awareness amongst the target consumer. It can be used to boost up sales for temporary period and ensure usage amongst first time users.

e. Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.Customers often view these schemes with some suspicion – particularly if the method of obtaining a refund looks unusual or onerous.

f. Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives.

g. Point-of-sale displays

A data collection system that electronically receives and stores bar code information derived from a sales transaction. This could the zip codes for library users, facilitating the library in determining geographic market are that users reside in. Most of the big brands are following the suit of BTL promotion because of rising prices of media based promotion, advertising clutter and increased impulse purchasing. BTL promotions are gaining popularity among all big companies nowadays considering their effectiveness because of the "individual customer promotion" at a price, which is much lesser than the normal media promotions.

• Low prices on Wednesday Low prices on Wednesday• Concept of Big Day Concept of Big Day• Promotional offers1. School Jao Khushi Khushi2. Khushi Ki Barsaat3. Happy Father’s DayE.g.Big Bazaar's `junk' swap offerBig Bazaar is launching a promotional offer fromSaturday, with the slogan, "Bring anything old and take something new".The prices fixed by Big Bazaar are: clothes (Rs 200 per kg), newspaper (Rs 25 per kg), plastics/utensils/leather goods (Rs. 75 per kg), footwear/luggage (Rs. 100 per kg), Pet/beer bottles (Rs 15 per kg), tyres (Rs 50 per kg), furniture (Rs 75 per kg) and others (Rs 20 per kg). "This offer will help the housewife clean out the junk while getting a good value for it.

2. PERSONAL SELLING:

Persuasive communication between a representative of the company and one or more prospective customers, designed to influence the person's or group's purchase decision.

3. PUBLICITY OF PRODUCT:

Publicity non-personal communication in news story form about an organization, its products or both, that is transmitted through a mass medium at no charge.

4. PUBLIC RELATION:

Public relations the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its target publics.

5. INTERNAL ATTRIBUTES:

a. Envelope: Something that envelops; a wrapping. A products wrapping affects a lot on its sale. More customers are attracted if envelope is very attractive.b. Internal layout: Methods of display•Visual merchandising

6. LOGISTICS:Logistics is the art and science of managing and controlling the flow of goods , energy, information and other resources like products, services and people from the source of production to the marketplace. It’s Important to have professional logistical support logistical. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process and finished inventories where required at the lowest cost possible.

7. SUPPLY CHAIN:Supply chain, is a coordinated system of organizations, people, activities, information and resources involved in moving a product or service in physical or virtual manner from supplier to customer. Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer.

DISTRIBUTION OF REVENUE EARNER

a. Big Bazaar is working to make fashion its largest revenue earner.

b. Big Bazaar, the value retailing chain of the Rs 4,500crore Pantaloon Retail, is strategieng to focus specially on ‘fashion retailing’ or its apparel business to boost overall revenues.

c. It has created ‘Fashion @ Big Bazaar’, a sub-brand, to position the format as much more than food or general merchandise.

d. Big Bazaar is looking at making apparel business its largest revenue generator, as much as 40 per cent in two years and 50 per cent of its overall business, in five years.

e. Currently sales of apparel make up almost 30 per cent of Big Bazaar’s revenues, which is next only to its food retailing business that makes up almost 40 per cent.

f. However, we will focus on apparel as the margin here is as high as 35 per cent compared to food retailing business where margins are probably 12 per cent. So a slight increase in apparel sales boosts the overall business. Going forward, Big Bazaar plans to rearrange its apparel and fashion merchandise section in stores in terms of design, layout and elbow space. This is expected to ensure better product display in stores keeping with consumer buying habits and convenience.

g. Future Group recently clocked over Rs 350crore of sales in five ‘Mahabachat’ days, with sales exceeding Rs 105crore on the last day.

h. During this time, the largest selling category was apparel. As many as 1lakh jeans were sold and onelakh sarees as well as some 2 lakh t-shirts.

i.Some of Big Bazaar’s private labels, like DJ&C and Knighthood, are already big revenue generators, with DJ&C projecting Rs 1,000crore in the next three years, from 600crore right now.

LOCATIONAL STRATIGIES FOR LAST 5 YEARS