Promotional Strategies of Big Bazaar Palakkad free essay sample

Indian retail sector is witnessing one of the most hectic Marketing activities of all times. The companies are fighting to win the hearts of customer. There is always a ‘first mover advantage’ in an upcoming sector. This advantage goes to â€Å"BIG BAZAAR† in India. It has brought about many changes in the buying behavior of people as Big Bazaar provides all items in one roof at low rates. The consumer’s preferences are changing amp; they are moving from shops stores to Modern Retail outlet. It’s the main challenge to the Modern retail outlets to attract the customers towards them from that of competitors. To attract more customers companies have to carry out the promotional activities in unique way. BIG BAZAAR has maintained that uniqueness amp; has succeeded in attracting customers. The promotional activity of the company, which famous as Less Price than others as it says  Ã¢â‚¬ËœNobody Sells Cheaper and Better! ’  is made its place in minds of customer. As the competition is becoming stiff in the market the activities conducted by the company are unique, that have brought fruitful result to the company. Among them sales Promotions is one of the leading activity or unique among all other activities amp; has high influence on the customer who walks-in. In this assignment, I have described its marketing strategies and promotional activities. The assignment is based on  Ã¢â‚¬Ëœthe effective marketing strategy which influences customer to purchase a product of Big Bazaar’ helps to understand the effect of   marketing strategy   which is responsible for attracting customer towards big bazaar. The research was carried out as per the steps of Marketing Research. The well supportive objectives were set for the study. To meet the objectives primary research was undertaken. The data collection approach adopted was experimental research. 1. 2 ORGANISATION PROFILE 1. 2. 1 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 7 million square feet of retail space, has over 1000 stores across 53 cities in India and employs over 25,000 people. 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 General 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. BIGBAZAAR (Is se sasta aur accha kahin nahi! ) Big Bazaar caters to every need of the customer and his/her family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. Big Bazaar promises the best products at the best prices. 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. And this is just the beginning. Big Bazaar always plans and tries to add much more to complete the shopping experience. 1. 2. 2 Company Statements: Future Group Manifesto â€Å"Future† – the word which signifies optimism, growth, achievement, strength, beauty, rewards and perfection. Future encourages us to explore areas yet unexplored, write rules yet unwritten; create new opportunities and new successes. To strive for a glorious future brings to us our strength, our ability to learn, unlearn and re-learn our ability to evolve. Rewrite rules, Retain values† Group Vision â€Å"Future Group shall deliver Every Thing, Every Where, Every Time For Every Indian Consumer in the most profitable manner†. 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. ii. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses. ii. We shall infuse Indian brands with confidence and renewed ambition. iv. We shall be efficient, cost- conscious and committed to quality in whatever we do. v. We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful. Retailing consider as sunrise industry today after InfoTech, is the most happening industry with almost all the big players vying for a share of the coveted pie. Buoyed by a strong increase in private consumption retailing is one industry that is waiting to explode. The Indian Retail sector has caught the world‘s imagination in the last few years. Topping the list of most attractive retail destination list for three years in a row, it had retail giants like Wal-Mart, Carrefour and Tesco sizing up potential partners and waiting to enter the fray. India‘s retail growth was largely driven by increasing disposable incomes, favorable demographics, changing lifestyles, growth of the middle class segment and a high potential for penetration into urban and rural markets. However, with the onset of the global financial crisis, Indian retailers have been suffering from the effects of rapid credit squeeze, high operating costs and low customer confidence. Organized retail structure Organized retailing is bound to grow tremendously provided the rights are adopted. Retail businesses have broken rank and seem poised to surge head with renewed vigor, optimism, confidence and capability. There is an incredible amount of activity in terms of creation of retail oriented space across India. As per some estimates, there are over 200 retail mall projects under construction or under active planning stage spanning over 25 cities. This may translate into over 25 million sq. ft. of new retail space in the market within this year end. Huge retail formats, with high quality ambience and very courteous and ambivalent sales staff, are regular features of retail formats in most Asian countries. However in India expect for a few big towns where modern retailing formats abound, these features are grossly missing . ETIG expects organized retailing to slowly penetrate the second rung and smaller town which will catapult the growth rate for the sector. Even though the big retail chains are concentrating on the upper segment and selling products at higher prices like crossroads, akbarallys and shoppers stop, retail stores are sprouting that cater to the needs of middle class. With a huge middle class Population the retailers like RPG, Food World are tapping this market. The market is flooded with products branded and unbranded. The customers are in a dilemma as to pick which one. Simon bell of AT Kearney says ? there is a close relation between the growth of branded and the growth of the organized retail. Companies selling branded products prefer to have big and organized retail put lets such as Hypermarkets where they can be differentiated from unbranded products. Though doubts have been cast on the future of Indian retailing it is our belief that the retail boom is yet to happen. While the industry is in the introduction stage in most geography, it has just entered the growth region in the metro cities. Today the right product mix, right sourcing strategy and the right communication are the mantras for success. Each of the retail stars has identified and settled into a feasible and sustainable model of its own†¦ * Shopper Stop: Department store format * Westside: Emulated the marks amp; Spencer‘s model of 100% private label, very good value for money merchandise for the entire family * Giant And Big Bazaar- Hypermarket/cash amp;carry stores Food World And Nilgiris Supermarket format. * Pantaloons and the Home Store- Specialty retailing. * Tanishq- Has very successfully pioneered a very quality organized retail business in fine jewelers. Future Perspective We should see fundamental shifts in the way Indians shop in the very near future. The year 2003 could well be a landmark year for organized Indians retailing. According to recent study done by ET IG the organized retail industry is expected to grow by 30 % in the next five years and is expected to touch Rs 45000cr. Thus, the growth potential for the organized retailer is enormous. Metro from Germany is a very successful and resourceful retailer and their cash amp; carry format should offer a good run for money to others. Some others will also find perfectly legitimate ways to operates in India, for example, Marks amp; Spencer‘s, Mango and ShopRite. But due to the economic downturn, the organized retail penetration, which was expected to touch 16 percent by 2012 from the current 5 percent, is likely to trace 10. 4 percent only. Changing and influencing factors Consumer Factors * Income Level * Change In Lifestyle * Demand For Global Trend * Supply Side Factor * Growing Importance Of Retailing Factor * Political And Economic Factor * Supply Constraints * Reduction In Import Duties-Offer Present Indian scenario India is the country having the most unorganized retail market. Traditionally it is a family‘s livelihood, with their shop in the front and house at the back, while they run the retail business. More than 99% retailers function in less than 500 square feet of shopping space. The Indian retail sector is estimated at around Rs 900,000crores, of which the organized sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer savvy organized retailer. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself. In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy. There is no doubt that the Indian retail scene is booming. A number of large corporate houses — Tata‘s, Raheja‘s, Piramals‘s, Goenka‘s — have already made their foray into this arena, with beauty and health stores, supermarkets, self-service music stores, NewAge book stores, every-day-low-price stores, computers and peripherals stores, office equipment stores and home/building construction stores. Today the organized players have attacked every retail category. The Indian retail scene has witnessed too many players in too short a time, crowding several categories without looking at their core competencies, or having a well thought out branding strategy. Growth of Retail Sector: Retail is one of the booming sectors of India in the present times. Retail, one of India‘s largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country‘s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry. Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life Apparel amp; Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home amp; Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. When it comes to development of retail space specially the malls, the Tier II cities are no longer behind in the race. If development plans till 2007 is studied it shows the projection of 220 shopping malls, with 139 malls in metros and the remaining 81 in the Tier II cities. The government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space; thus making NCR render to 50% of the malls in India. India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. India‘s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline. Major players Foodamp;Grocery| Fashion| Others| Food World| Shoppers Stop| Vivek’s| Subhiksha| Westside| Planet| Nilgris| Lifestyle| Music World| Adani-Rjivs| Pyramids| Crossword| Nirma-Radhey| Pantaloons| Life spring| Each of these retail stars has identified and settled into a feasible and sustainable business model of its own. Rather surprisingly, each has developed a unique model. Westside has very successfully emulated a Marks amp; Spencer model (of 100 per cent private label, very good value for money merchandise for the entire family). Spencers Daily and Nilgris have successfully shown the viability of the `supermarket format in India and its ability to co-exist with the ubiquitous Kirana store. In addition to balancing per unit income reduction against increased volume, sales promotions other than storewide markdowns balance the value of promotional offers against expected redemption rates. Loyalty programs can be a cost-effective sales promotion tool. Store membership loyalty programs can work much the same way as storewide markdowns, with the exception being that not every customer receives a discount. Members bring in lower per unit revenue while increasing sales volume. Nonmembers balance out the equation by paying full retail price and not necessarily boosting sales volume. Coupons Coupons can be even more cost efficient than loyalty programs, but coupons can have less effect on sales volume. With coupon programs, a majority of customers will pay full price for products, while only a select few who clip coupons will receive price discounts. Coupons can be effective as a supplement to other promotional strategies, allowing retailers to gain business from a select group of value-conscious consumers. The problem with coupon-clippers, however, is that retailers can find it challenging to build oyalty in this group, who are likely to defect as soon as the coupon promotion ends. Mail-In Rebates Mail-in rebates provide unique financial advantages to retailers. With a mail-in rebate, retailers collect full retail price for products sold, then reimburse customers at a later date. This can keep revenue figures up, while eating into profitability due to rebate redemption expenses. The more valuable a mail-in rebate is, the more likely consumers are to redeem it. The opposite holds true as well, creating distinct opportunities for retailers. Retailers who offer small rebates can take advantage of increased demand on the spot, while minimizing the price they have to pay for the additional sales volume. A $10 rebate on a lawn chair, for example, may be enough to convince a shopper to buy a chair but not enough to motivate the customer to go through the redemption process. Contests Contests can stir up excitement about your brands, creating memorable experiences in customers minds that they will associate with your company. Contests can take a variety of forms, but the best accrue some sort of extra benefit to the company along the way. Consider creating a cash giveaway for a randomly selected customer-service survey participant, for example, encouraging people to try your products while gathering valuable marketing research at the same time. Freebies Giving something away for free can be a powerful way to grab peoples attention and break down any resistance to change. For consumers, free samples in retail stores or free services offered via coupon can allow them to try something new without the risk of wasting money on a disappointing product. Buy-one-get-one programs can create a value proposition that causes shoppers to temporarily choose one brand over another. Freebies work in the business world, as well. Food product manufacturers, for example, can provide free samples to retail purchasing managers to give them confidence that the products will sell. Discounts Offering price discounts is at the heart of most sales promotion programs. Storewide sales mark down prices on a wide range of goods, enticing customers to visit a store and search for deals. Coupons can attract a highly value-conscious market segment that can often be persuaded to buy in bulk for the right price. Mail-in rebates help keep revenue numbers high, since customers originally pay full price for goods on promotion. In addition to this, not every customer who buys a product specifically because of a rebate will actually redeem the rebate, maximizing the value of the promotion to the company. B2B Terms of Sale Small businesses can include promotional incentives in the terms of sale for their business customers. Businesses can offer volume discounts to encourage distributors to stock up on particular products, for example. Businesses can also offer price discounts for paying off business-to-business credit accounts early. B2B Allowances Small businesses may have to use sales promotions to convince business buyers to give their products and services a try. In the retail world, it is common for companies to actually pay retailers what is called a slotting allowance to purchase and stock their products at first, reducing the risk to the buyer. Small businesses can also offer an advertising allowance, essentially a cooperative advertising agreement fully financed by the seller, to sweeten the deal for business buyers. 2. 1. 2 OBJECTIVES OF SALES PROMOTION Keep Existing Customers A sales promotion can be geared toward keeping existing customers, especially if a new competitor is opening nearby. For example, a barbershop owner can mail coupons to all of his existing customers to take attention away from a competitors grand opening event. A dry cleaner could implement a referral program where he gives existing customers a discount when they refer new customers to make a purchase, which can help build customer loyalty. Inventory Clearance A special promotion can help you clear inventory to make room for seasonal or new merchandise. If you own a clothing boutique, for example, you may need to advertise a reduced price on winter clothing to make room for spring and summer fashions. The owner of a gift shop can conduct a clearance sale on Halloween merchandise to make room for Christmas products. Reaching New Market A promotion can be a way to reach a new segment of the market. For example, if you operate a health club and youve developed a fitness plan geared toward senior citizens, you can use a mailing list with addresses of those who are age 65 and older. You can then mail a coupon or special offer to this market segment. New Product Launch A sales promotion can help you introduce a new product to the marketplace. For example, if you operate a bakery and youre unveiling a new line of pastries, you can generate a promotion to get people to come to your bakery and try them. Your promotion can offer a discounted price or the addition of a free item, such as a cup of coffee. Increased Brand Awareness A sales promotion can help increase awareness of your brand, which can ultimately lead to additional sales. For example, by sponsoring a charity, event such as a chicken barbecue or raffle, you can make people in the community aware of your company in a positive way, which can lead to them patronizing your business. . 2 MARKETING MIX OF BIG BAZAAR Product: Big Bazaar offers the maximum variety for every category of product. The product is the same in every store in the city but the brand options are more in Big Bazaar and the quantity for each product is not limited to large packs only. The commodities sold by the retail chain includes its â€Å"own products† which get a ready distribution network. The own products of Big Bazaar include My World fashion magazine which is not available anywhere else. So costs are very low for such products. Big Bazaar offers a wide range of products which range from apparels, food, farm products, furniture,  child care, toys, etc of various brands like Levis, Allen Solly, Pepsi, Coca- Cola, HUL, ITC, Pamp;G, LG, Samsung, Nokia, HP etc. Big Bazaar also promotes a number of in house brands like: * DJ amp; C * Tasty Treat * Clean Mate * Sensei * Care Mate * Koryo and 44 other brands. Pricing: 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 6-8% on all 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, transportation and central warehousing. These all factors are very helpful for the retailers to keep low prices. The pricing objective at Big Bazaar is to get â€Å"Maximum Market Share†. Pricing at Big Bazaar is based on the following techniques: * Value Pricing (EDLP – Every Day Low pricing):  Big Bazaar promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping. Promotional Pricing:  Big Bazaar offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc. ) is also used to attract customers. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja). * Differentiated Pricing:  Differentiated 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. e. g. Wednesday Bazaar Bundling: It refers to selling combo-packs and offering discount to customers. The combo-packs add value to customer and lead to increased sales. Big Bazaar lays a lot of importance on bundling. e. g. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22) 5kg oil + 5kg rice + 5kg sugar for Rs 599 Place: Place means the location of the business. Big Bazaar has always worked on cheap locations. It targets semi-urban population with its placement. Its strategy is to find a low-cost 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. The Big Bazaar stores are operational across three formats — hypermarkets spread over 40,000-45,000 sq ft, the Express format over 15,000-20,000 sq ft and the Super Centers set up over 1 lakh sq ft. Currently Big Bazaar operates in over 34 cities and towns across India with 116 stores. Apart from the Metros these stores are also doing well in the tier II cities. These stores are normally located in high traffic areas. Big Bazaar aims at starting stores in developing areas to take an early advantage before the real estate value booms. Mr. Biyani is planning to invest around Rs 350 crore over the next one year expansion of Big Bazaar. In order to gain a competitive advantage Big Bazaar has also launched a website www. futurebazaar. com, which helps customers to orders products online which will be delivered to their doorstep. This helps in saving a lot of time of its customers. 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 advertisement which promotes the brand and creates awareness towards 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 â€Å"The Big Bazaar Challenge. † Promotions like â€Å"Sabse Sasta Din†(Cheapest Day) are a very successful strategy to get good results. In these products across categories such as furniture, electronics, utensils, apparels 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 2,399, jeans and trousers for Rs 199 and HCL laptops for Rs 22,800. 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. There are multiple counters where bill can be generated for purchases made. Big Bazaar also provides delivery of products over purchases of Rs. 1000. Physical Evidence: Products in Big Bazaar are properly stacked in appropriate racks. There are different departments in the store which display similar kind of products. Throughout the store there are boards/written displays put up which help in identifying the location of a product. Moreover boards are put up above the products which give information about the products, its price and offers. Big Bazaar stores are normally ‘U shaped’ and well planned amp; designed 2. 3 BIG BAZAAR’S 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 markets. 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 Pepsi, Coke etc have been using the same for quite some time now and the latest entrant is our very own ‘Future Group’- Big Bazaar, Future Bazaar, Pantaloons, e Zone are all part of this group and they are taking on the biggies like Shoppers Stop, Lifestyle, and Tata’s Westside. In order to do the same, Future Group have come up with 3 catchy and cheeky ad campaigns which surely do catch our eyes and surely one can’t resist appreciating the same. 2. 3. 1 RETENTION STRATEGY: Big Bazaar strive to foster a feeling of well-being in their employees through care and respect, Big Bazaar have several structured processes including employee mentoring and grievance management programmers which are intended to facilitate a friendly and cohesive organization culture. Off –site activities are encouraged to improve interpersonal relationship. Big Bazaar also acknowledge the efforts exerted by their employees by organization an annual celebration called ‘Pantaloon Day’ where Big Bazaar recognize employees who have shown exceptional talent, sincerity and dedication.