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Big Bazaar: The Brand Building Challenge

"We have a store opening virtually every fortnight; I have lost count now of how many I have opened."

 

Kishore Biyani

Big Bazaar: Brand's Identity, Personality & Symbolism

Big Bazaar is Indian personification of retail. It's like an Indian bazaar or mandi or mela, the environment created by traders to give shoppers a sense of moment. Its personality is of being an entity away from fancy or pretty and being authentically "no-frills". Kishore Biyani never hired any foreign consultant for Big Bazaar which is evident from Indian-specific personality of the brand. The brand's personality is self-explanatory by its tag-line only. This statement places Big Bazaar at the top of customer's mind. It reflects that entrepreneurship and simplicity are the essence of character of Big Bazaar. To use predatory pricing is not in the personality of Big Bazaar, they never sell goods below the price they have purchased it. Big Bazaar, the "Indian Wal-Mart", is the modern Indian family's favorite store. Big Bazaar symbolizes modern retail, the business which isn't looked up to in our country, is now in the eyes of many multi-national biggies. Big Bazaar has shown a robust growth in recent years (.

Demerits of Marketing a Commodity Market

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

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

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

Value of Branding

Branding plays a crucial role for all the products and services. A successful brand is an identifiable product or service, and buyers or users perceive values in it which matches their needs.

There are certain advantages of branding. They are: -

 

• Product dies but a good brand never dies: The first car T-model is no more but the brand 'FORD' is still alive. 'Pears' soap that was launched somewhere in the end of 1800 is still alive although they have changed the product. Even they are looking for line extension but basic brand names are the same.

• Sales or market share: A brand generates familiarity and trust, and hence, leads to greater sales. Branded products have an edge over unbranded products.
• Premium price: Brands generate trust, a brand manager can charge extra price and people pay for that trust.
• Differentiation: Creating a brand is nothing but creating a strong association. This association clearly differentiates the branded product from the rest.

According to brand evolution model developed by Kunde (2000) (as the value of brand becomes stronger and more relevant to customers, the brand becomes more involving, and thus, managers need to make their brand values more relevant to increase customer's involvement. This is explained by religion model also. The model distinguishes 5 types of brands: -

• Product Brand: Products without any form of added value connected to the generic element.
• Concept Brand: Brands that are driven by emotional values - as opposed to product characteristics.
• Corporate Concept Brand: Brands that merge with the company and present themselves in a sustained and consistent way.
• Brand Culture Brand: Brands that are so strong that they - in the eyes of the consumer - have become equated with the function they represent.
• Brand Religion Brand: The ultimate brand position is that of brands that - in the eyes of the consumer - have become a "must", a faith to which they profess.

Big Bazaar: Positioning & Establishment

Big Bazaar has established itself in the first quadrant of Organization Value and Customer Value Matrix (Exhibit 5). The SWOT Analysis (Exhibit 6) of current strategy of Big Bazaar elaborates the core competencies and areas of improvement. The key features that have shaped in establishing of brand includes: -

• Big Bazaar ensures that no other kirana store / departmental store are offering considerable discount compared to its own price. This helped Big Bazaar in being the "value for money" store.
• Big Bazaar scores high on product mix as compared to kirana store.
• Cheap and local products are heavily stocked in Big Bazaar which make it easier to attract lower middle class category of customers.
• Promotion of kirana 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.

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7P Analysis of Big Bazaar

7P Marketing Mix is more useful for services industries and knowledge intensive industries. Successful marketing depends on number of key issues. The seven keys issues are explained as: -

Product

Big Bazaar offers a wide range of products which range from apparels, food, farm products, furniture, child care, toys, etc. . Products of all the major brands are available at Big Bazaar .Also, there are many in house brands promoted by Big Bazaar. Big Bazaar sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-ovens. In all, the fashion, electronics and travel segments made up about 70% of sales. Last year, these categories made up only about 60%.

Price

The tag-line is "Is se sasta aur accha aur kahin nahi". They work on the model of economics of scale. There pricing objective is to get "Maximum Market Share". The various techniques used at Big Bazaar are: -

• Value Pricing (EDLP - Every Day Low Pricing): Big Bazaar promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping.
• Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja).
• Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and non-peak hours or days of shopping is also a pricing technique used in Indian retail, which is aggressively used by Big Bazaar.
• Bundling: Selling combo-packs and offering discount to customers. The combo-packs add value to customer.

Place

• Big Bazaar stores are located in 50 cities with 75 outlets.Big Bazaar has presence in almost all the major Indian cities. They are aggressive on their expansion plans.

 

Promotion

Big Bazaar started many new and innovative cross-sell and up-sell strategies in Indian retail market. The various promotion techniques used at Big Bazaar include "saal ke sabse saste teen din", Future Card (the card offers 3% discount), Shakti Card,

 

Brand Endorsement by M. S. Dhoni, Exchange Offer - ‘Junk Swap Offer', Point-of-Purchase Promotions.

Advertising has played a crucial role in building of the brand. Big Bazaar advertisements are seen in print media, TV, Radio (FM) and road-side bill-boards.

People

They are one of the key assets for any organization. The salient features of staff of Big Bazaar are: -

• Well-trained staff, the staff employed by Big-Bazaar are well-suited for modern retail.
• Well-dressed staff improves the overall appearance of store.
• Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so staff is empowered to take innovative steps.
• Employs close to 10,000 people and recruits nearly 500 people every month.
• Use of technology like scenario planning for decision making.
• Multiple counters for payment, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere.

Process

The goods' dispatch and purchasing area has certain salient features which include: -

• Multiple counters with trolleys to carry the items purchased.
• Proper display / posters of the place like (DAL, SOAP, etc.).
• Home delivery counters also started at many places.

Physical Evidence

It deals with the final deliverable or the display of written facts. This includes the current system and available facilities.

Big Bazaar: Brand Extensions Actually Made & Future Possibilities

Future Group is planning to split Big Bazaar into two entities. One will be front-end consumer-oriented entity and other will be for back-end operations. Back-end entity may enter into joint venture with leading international cash and carry retailers. Foreign partners like Carrefour, Metro, Costco, etc., are in the race, and their role will be to improve efficiency in sourcing and logistics, which will help drive down prices and boost margins.

The front-end operations will be further divided in three categories, Big Bazaar Express with store area less than 40,000 sq. ft., Standard Big Bazaar with store area between 40,000 to 75,000 sq. ft., and Big Bazaar Supercentres with store area more than 75,000 sq. ft. . Future Group is also planning to distribute financial products like consumer loans and insurance through Big Bazaar outlets.

 

 

Consumer Insights & Perceptions

Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolize Change, Confidence and Consumption, and according to this theory, "Change and confidence is leading to rise in Consumption". They divided Indian customers in three categories: -

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India One

• Consuming class, constitutes only 14% of Indian population.
• They are upper middle class and most of customers have substantial disposable income.
• Initial focus of Big Bazaar.

India Two

• Serving class which includes people like drivers, house-hold helps, office peons, washer-men, etc.
• For every India One, there are at least India Two and have around 55% of Indian population.

India Three

• Struggling class, remaining population of India.
• Cannot afford to inspire for better living, have hand-to-mouth existence.
• Needs cannot be addressed by current business models.

The potential customers of Big Bazaar are India One and India Two. The customer insights were developed by close observation of the target set. The insights that came out were: -

• The clean and shiny environment of modern retail stores creates the perception that such store are too expensive and exclusive, and are not meant for India Two.
• India Two finds moves and find a lot of comfort in crowds, they are not individualistic. They prefer to be in queues.
• Indian-ness is not about swadeshi, it's about believing in Indian ways of doing things.
• Indian customers prefer to purchase grains, grams, etc., after touching them, so it's better not to sell in polythene packs. Big Bazaar has counters where you can touch wheat, rice, sugar, etc., before purchasing.

• Advertisements about schemes and offers through local newspapers, radio in local languages, inspires customer more than the traditional ways.
• The guards, salesman at the Big Bazaar outlets should not look smarter than customer, so they prefer not to have tie, etc., in their uniform.
• Hypermarkets in India should be situated in city unlike western countries where they are located away from city.

 

 

• Purchased bags / goods should be sealed at check-out as customer can enter and exit multiple times.
• For Indians, shopping is an entertainment; they come in groups, with families so Big Bazaar should offer something for every section of family. That also led separate section for clothes, vegetables, food, etc., that is multiple clusters within a bazaar.

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• Developed a diversity tracing cell to cater local patterns, demands, festivals, as every region of customers has unique demands.

Advertising: The Essential of Brand Building Process

Advertising is an essential component of brand building. The advertisement and brand building is done through various ways, the techniques used are: -

Tag-line: Big Bazaar tag-lines are the key components of advertising. These tag-lines are modified according to demographic profile of customers. These catch-phrases appeared on hoardings and newspapers in every city where Big Bazaar was launched. Everybody understood and connected easily with these simple one-liners. The catch-liners include "Hindi - Chane ke bhaw kaaju", "Bengali - Rui er dame illish", "Hindi - Stall ke bhaw balcony", etc.

Print Ads: Big Bazaar newspaper advertisements are present just before launch of any new scheme. This creates aura about the Big Bazaar brand in the minds of customers.

TV Ads: Kishore Biyani spends a lot of money in brand building exercise. Big Bazaar commercials are shown on various channels in India. Presently, Fashion@Big Bazaar commercial is aired.

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

Radio Ads: This technique is used in cities like Sangli (Tier 1 / Tier 2 cities). Now-a-days, it is replaced by advertisements on FM channels. This informs customers about all new happenings at Big Bazaar.

Fashion Shows: "FASHION @ BIG BAZAAR - Desh Badla, Bhesh Badlo" is the latest invention of the Indian iconic brand. In an effort to take the Fashion to the masses, Big Bazaar, the flagship hypermarket brand of retail chain of Future Group, organized a three-day Fashion Show on the streets of Bandra, Mumbai.

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

Factors that Shaped Big Bazaar During its Life Cycle

The Big Bazaar brand name is in its growth stage  Pantaloon Group faced various small and large scales troubles in the introductory stage of the brand.

 

Present years are the high growth years in retail sphere as market has high potential to sustain growth. The sales are increasing, more and more firms are coming to market, foreign players are entering into retail sector, and pie of organized retail is increasing in retail sector.

 

 

The factors that shaped the brand during its life cycle are: -

• Influence of Sarvana Stores Located in Theyagraya Nagar, Chennai
  Many people think that Big Bazaar was inspired by Wall-Mart but the truth is that Kishore Biyani and his team members are neither inspired by US ways of doing retailing nor they have been to US much. The credit for foundation and inspiration goes to Saravana Store, a family-run 25-years-old store, whose philosophy was - low margin, high turnover. In that store, food, groceries, clothes, everything had a separate section. It had around 120 people just to manage crowd. The single shop was doing business of more than INR 200 Crore per year. This shop was the template for Big Bazaar.
• Observing Customers Regularly
  Regular customer feedback is also an influential factor for the success of Big Bazaar. The Big Bazaar has a separate team that looks for customer's purchasing pattern and how they like or dislike products, how they approach particular products. For example, unlike other stores where the most expensive and catchy item is placed at the front display, Big Bazaar places the "Value for Money" items at check-out points.
• Imbibed Entrepreneurial Spirit in Organization
  Decision making power is given to every level of employees at Big Bazaar. Kishore Biyani has given risk-taking power, which led to exposure of entrepreneurial spirit in every employee. Everybody in Big Bazaar operates with speed and confidence when it comes to decision making.
• Building on Core Values
  Core values of Indian-ness, valuing and nurturing relationships, and simplicity shaped the brand. Kishore Biyani always believes in long-term relationships, with customers, suppliers and employees. Once thinking about offering gifts to employees close to Diwali, Kishore Biyani suggested giving them wall-paints to keep their house clean. The paint is used in Indian culture to keep house clean and brings freshness. The motive behind this was to keep everything clean and bring freshness in organization.

Strategic Decisions Taken to Build the Big Bazaar Brand

The strategic decisions that lead to building of Big Bazaar were: -

 

Real Estate Game

For a retailer, location is one of the most important things. According to Kishore Biyani, real estate cost should be less than 5% of total sales of store in order to provide maximum benefits to customer.

 

 

The strategic decisions to secure spaces before other retailers join in have resulted in cost-saving. Also, it has created early presence in market.

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Nurturing Relationships

Kishore Biyani follows strategy to develop trust and nurture relationships with suppliers. This trust led to strategically correct decisions most of the time. Whoever works with Future Group, either leaves in initial deals or continues forever.

Use of Technology, Scenario-Planning & Story-Telling

Big Bazaar planning and design used advance technologies like scenario-planning and story-telling. These techniques were mainly used for store-design layout, store-location selection. The strategy to use user-focused, prototype-based development tool made the brand adapt to the fast-changing external environment.

Design Management

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

Back-end Operations, Supply Chain

Harvard Business School just did a case study on Pantaloons' Supply Chain and it says that Pantaloons' is the most cost-effective supply chain in the world. India may not have a modern supply chain but it definitely has a cost-effective one. Retailers have made use of the existing supply chain.

References

• · Buyer Behavior: http://buyerbehaviour.blogspot.com/2008/01/big-bazaar-freedom-sale-change-in.html
• · Indian Retail Scenario: http://www.slideshare.net/theRedIndian/india-retail-2008-big-bazaar-scenario/
• · Wikipedia: www.wikipedia.org
• "IT Happened in India" by Inshore Biyani

 

About the Author

Mike Ness - Big Iron