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Big Bazaar: Serving The Classes

Presented by: Aakanksha Mathur Mounika Palreddy Neha Saini Nikhil Deshmukh Ravindra Pal Marwal Teena Bansal Vinay Pratap Singh
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Agenda
Introduction STP Marketing Mix Porters five force model SWOT Questions for discussion Recommendations
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Introduction
About Big Bazaar
Founded Owner Parent Group

Hyper mart Chain


2001 Kishore Biyani Future Group

Head quarter
Outlet Tag line

Mumbai
161 in 90 cities Is se Sasta Aur Accha Kahin Nahi
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STP
Segmentation
Divided Indian consumers in three Categories: India 1:
Upper Middle & Lower Middle (14 % Indian population)

India 2:
Serving Class : include people like drivers, office peons 55% of India population

India 3:
Struggling Class ( remaining 31 % population)

Targeting
Big Bazaar targeted population across India one and India two Aadhaar Wholesale is aimed to target population across India Three Big Bazaar specifically targets working women and home makers who are the primary decision makers.

Positioning
Is se sasta aur accha kahin nahi
High service

Low price

High price

Low service
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Marketing Mix
Process

Retail is Part of Service so it consist of 7 Ps in marketing mix.

Physical Evidence

Product

7 P People Price

Place

Promotion

Product Mix
Big Baazar offers a wide range of products. Product ranges are as follows:

Apparels Food items Farm Products Home & Personal Care Electronics Baazar Fashion & Jewellary Furniture Bazzar Private Labels
DJ & C Tasty Treat Clean mate, Care mate Sensei, Koryo and other 44 brands

Price Mix
The pricing objective at Big Bazaar is to get Maximum Market Share.
Pricing at Big Bazaar is based on the following techniques:

Value Pricing
Offers lowest available price

Promotional Pricing
Special festive offers Psychological Discounting

Differentiated Pricing
Difference b/w peak & non peak hrs Sabse Saste 5 Din Hafte ka sabse sasta Din

Bundling
Combo pack Buy 3 get 1 free

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Place
First Big Bazaar was opened in VIP Road, Kolkata in October2001.

Big Bazaar stores are operational across three formats:


Hypermarkets (40000 45000 sq ft) Express Format(15000 - 20000 sq ft) Super Centers ( over 1 lakh Sq ft)

Number of outlets 161 across 90 cities. Located at tier- I and tier- II cities. launched a online store www.futurebazaar.com store located at high traffic areas. Designed to look overcrowded.

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Promotion Mix
The various promotion schemes used at Big Bazaar include:

Saal ke sabse saste 5 din Hafte ka sabse sasta din Wednesday bazaar The Great Exchange Offer Future card(3% discount) Advertisement in news paper, TV. Internet partnership with Big FM 92.7 M.S. Dhoni for Brand endorsement.

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People
Staff present at the premises of Big Bazaar also help to improve efficiency.

Well trained staff at stores to help people Using dress code for staff improves the overall appearance of store. Employees close to 36000 people and recruit nearly 500 people every month. staff at store to keep baggage and security guards at every gate

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Multiple counters with available Process trolleys to carry item purchased. There are multiple counters for Big Bazaar places a billing. lot of importance on At the billing counter keep many the process right daily usage item for random from the purchase to picking. the delivery of Proper display of the posters with goods. the price at place. Staff available for guidance Home delivery counters are now opened at many place.

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Physical Evidence

Products in Big Bazaar are properly stacked in appropriate racks. Provide touch and feel concept to consumers. Written displays above the products for information Departments where similar kind of products are displayed.

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Porters Five Force Analysis


The Five Forces are :Threat of New Entrants. Threat Of Substitutes. Bargaining Power of Buyers. Bargaining Power of Suppliers. Competitive Rivalry.
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Threat of New Entrants : Moderate


High Fixed Costs. Cost of Real Estate. Efficient Supply Chain. Sustainable Business Model.

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Threat Of Substitutes : High


Unorganized Retail Sector. Other Hypermarkets and Supermarkets.

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Bargaining Power of Buyers : Moderate


Customers are Price Sensitive. Availability of Choices. Discounts or Promotional Offers are often used to pull the customer.

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Bargaining Power of Suppliers : Low


Suppliers have Low Margins. Organized retailers are big customers. Have to maintain long term relations.

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Competitive Rivalry : High


High competition for offering lowest prices. To gain price leadership so that to bargain with suppliers. To gain customers loyalty. Competition from unorganized players.

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Outcomes of Analysis
The business model should be concentrated more on volumes rather on margins. Retail industry is dominated by unorganized sector. Its a price sensitive market and retaining a customer is very difficult due to high competition. Necessary to negotiate with the suppliers to sustain in the price war.
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Contd.
Irrespective of low entry barriers It is difficult for a new player to enter in organized retail. The focus should be on gaining price leadership and customers loyalty in the long run. Attractive promotional schemes should be provided to attract new customers.

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Internal Analysis
Strengths
High brand Equity Huge display area Product diversity Promotional efforts Customer retention Low price

Weaknesses
Long lines at billing counters at special occasions General perception: Low price = Low quality

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External Analysis
Opportunities
Untapped Tier II/Tier III cities Increasing Disposable Income A lot of scope in Indian organized retail as it stands at approximately 4%

Threats
FDI in India Unorganized Sector High real estate price

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Questions for discussion


How did Big Bazaar offer the best possible deals, and discounted prices to its consumers? Biyani opined that Biz Bazaar was focused on giving the best possible deals to its customers, rather than focusing on the ambience of the store. Is ambience irrelevant for discount stores?

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Value Proposition
Bulk Purchase (Transfer of margins to the customers) Maintain long term relation with supplier SAP Implementation Efficient Supply Chain
Ware houses to outlets ( Private Labels) Local Distributers to outlets ( Branded)

Gaining margins from private labels.

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Ambience Matters.?
Indian Psyche Good Ambience ---> High Prices Initially started as:
Warehouse pattern To give the feel of Melas & Mandis. Designed to look crowded.

Present Scenario
Established brand name in organized retail. Changed Indian Psyche : Good Ambience good qualityat low price.

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Recommendations
Set additional counters at special occasions. Should concentrateTier II/ Tier III cities Should purchase land in tier II/ tier III cities to cope with increasing real estate price. Should create a promotional campaign for private labels.

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