RETAILING & FRANCHISING BIG BAZAAR

Group 7

Dheeraj Maken| 13P139

Nikhil Jain| 13P152

Pranjal Goel | 13P156

Shashank Shukla| 13P166

Siddharth Jain| 13P173

Aditya Tuknayat | 13P188

Arun Ahlawat | 13P199

Outline

Introduction Retail Landscape in India

Challenges faced by Modern Retail Big Bazaar

Retailing Strategy of Big Bazaar Service SKU’S, Types of Products Maintained and Visual Merchandising Design, Layout, Size & Location of Stores Pricing Promotional Schemes/Offers Relationship Management Programs Supply Chain Management

Improvement Areas & Recommendations

Introduction

Retail Landscape in India

• Highest number of retail outlets, 13 million, in the world, still dominated by the unorganized segment, with only 8% of the market being organized

• India’s retail industry is forecasted to touch $738 billion mark by 2016-17, while growing at a CAGR of around 15%

• Organized retail growing at a tremendous pace, major reason being the shift in customer preferences

• Huge potential for modern trade players

Challenges Faced by Modern Retail

• Lack of Retail Space• Price of Real Estate is high, affecting

profitability of the retail outlets• Shortage of Trained Manpower

• Leads to high cost in training the staff• High Turnover further aggravates the

issue• Lack of Cold Storage and Supply

Chain Issues• 40% of the fruits & vegetables get ruined

while in transit • Regulatory Environment of India

• Stringent and strict government policies to be followed and a lot of licenses required to do the business

Big Bazaar

Chain of hypermarket in India which offers a wide range of merchandize Includes fashion and apparels, food

products, general merchandise, electronics and books etc.

Vision: To deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner

Mission: Efficient, cost - conscious and committed to

quality in whatever we do Ensure that our positive attitude, sincerity,

humility and united determination shall be the driving force to make us successful

We remain trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses

Current format of Store includes Big Bazaar, Food Bazaar, Furniture & Electronic Bazaar

Store Area Around 40000+ sq. feet

SKUs 80000+

Location Standalone / Part of a Mall

Employees per store 150-300

Pricing Strategy High Low Pricing

Loyalty Schemes Profit Club

Retailing Strategy of Big Bazaar

Service

Big Bazaar’s service quality can be measured through the following five dimensions: Tangibles: What can be experienced from personnel, physical facilities and environment of the

retail stores Big Bazaar scores perfectly on this with properly dressed, easily approachable staff & a reasonably large

store area equipped with modern equipments & properly displayed products

Reliability: Staff delivering the expected or promised service dependably and accurately Here also it performs well by performing operations at designated time, changing & keeping correct

records of customers & not stacking any expired products

Responsiveness: Willingness of the company to help its customers in providing them with a good quality and fast service Big Bazaar offers time to time schemes depending on the customer requirements, to generate enough

demand for its products

Competence: Assurance of employees’ ability to convey trust and confidence through company and product knowledge All the staff selected is given proper 13 day induction and training program & also given information

about company’s business & other relevant information

Empathy: Demonstrated by providing a caring, individualized service performance for customers Over 200 trained staff in Sahara Mall store willing to help customers whenever they need

SKU’S, Types of Products Maintained & Visual Merchandising

Big Bazaar (Sahara Mall) offers 100,000 SKUs of merchandize in a wide range of categories led by fashion and food product

Apart from selling National Brands, Big Bazaar also sells around 50 private labels, which generate an additional 10% margin Some of the private labels are

Fashion & Apparel: John Miller, Bare Denims FMCG: Tasty Treat, Fresh & pure etc. Consumer Durables & Electronics: Sensei, Koryo

Visual Merchandising decisions are taken by internal staff Decisions are based on the share of cell of a

particular brand in that particular category Brand with highest selling product in a category is

displayed at extreme left and moving right with decreasing sales

In case of a new product launch, special promotional displays like standees are used to highlight the product

40%

30%

30%

Food & GroceriesFashion & ApparelsElectronics & Other Items

SKU break up (revenue contribution)

Design, Layout, Size & Location of Stores

Planogram type design, providing ample space for customers to walk and see the products on display

Stores are normally ‘U shaped’ and well planned & designed.

Stores designed like a convenience store giving street shopping experience

Different departments in store which display similar kind of products

In store boards/written displays highlighting the price of products & helping in determining product’s location

Store size is around 45,000 sq ft. (Sahara Mall) square feet providing ample space to stock large number of SKU’s Also allows customers to walk across the

store for search of products Located in high traffic area

Pricing

Big Bazaar is known as the “Indian Wal-Mart”, because they also use Every Day Low Pricing (EDLP) strategy, with a promise to save on a basket of goods.

Their pricing strategy is as follows:

Pricing decisions for all the products are taken at the Corporate Office. For only some special products like groceries, store manager’s decision is also taken into account

• Provides Lowest available price without coupon clipping, waiting for discount promotions or comparison shoppingValue Pricing

• Charges different rates for a given good or service depending on the day, month, and so on.

• E.g. Wednesday Bazaar, Sabse Sasta din etc.

Time Pricing

• Difference in rate based on peak and non-peak hours of a particular day of shopping

Differential Time Pricing

• Selling combo-packs at discounts• E.g. 3 Good Day family packs at Rs 60

(Price/pack = Rs 22)Bundling

Promotional Schemes

Below mentioned are promotional schemes employed by Big Bazaar:

Wednesday Bazaar

Sabse Sasta Din

Great Exchange Offer

Maha Bachat

Relationship Management Programs

Big Bazaar uses loyalty schemes for customer retention: Profit Club

Pay Rs. 10,000 upfront & shop for Rs. 1000 every month for an year Profit Club Rs. 5000 card was also launched with Rs. 5000 paid upfront & shopping for

Rs. 400 per month for 15 months PAYBACK

Big Bazaar has also tied up with PAYBACK, largest successful multi-partner loyalty program

With PAYBACK, customers can shop, save and get rewarded T24 Program

Provides customers with dual advantage all 24 hours of the day—”Shop More, Talk More”

Big Bazaar has tied up with Tata Teleservices Ltd. and rolled out its T24 program through which customers will be rewarded with free talk-time for every purchase at Big Bazaar stores

Supply Chain Management

Big Bazaar uses following processes to make its supply chain effective: Safety Stock

Minimum inventory of 9 days so that there does not arise the stock out situation MEQ Purchase System

Purchase order directly placed with the supplier when quantity of a product falls below a minimum level

Automated Replenishment Systems (ARS) Automatic Replenishment System generates purchase order automatically when

quantity falls below minimum level Bi-Weekly Replenishment

Local vendors replenish inventory twice a week after receiving purchase order Dedicated Distributors

Big Bazaar gets its orders fulfilled from 15-20 local distributors (for Sahara Mall) which cater specifically to the modern trade channel members, offering them deep discounts

Improvement Areas & Recommendations

Increase Awareness of Loyalty Programs• Big bazaar makes use of a 3rd party loyalty program i.e. Payback in addition to its own. The Payback

system has high awareness but this is not true for the internal loyalty program• Even the employee’s push customers towards opting for the Payback rather than big bazaar’s own

loyalty program• Need to balance internal & external loyalty programs

Crowd Management• Poor Crowd Management during high discounts period • Long queues at billing counter• Need to introduce multiple billing options for store billing during high discount periods

Improve Customer Experience• Credit Card Agents running after customers inside the store, which disturbs customers• Have dedicated kiosks for these

Prevent Stock outs after promotional schemes• Stock outs observed immediately after promotional schemes• Need to link inventory replenishment model with promotional schemes rather than just historical

sales data

Thank You

Appendix

List of persons contacted Name: Mr Anupam Mishra

Email id: anupam.mishra@futureretail.in

Designation: Assistant Store Manager, Big Bazaar (Sahara Mall)

Visit Schedule

Person/Organization Contacted Date

Mr. Anupam Mishra 05th February, 2015

Big Bazaar Sales Staff 08th February, 2015

References

www.bigbazaar.com http://en.wikipedia.org/wiki/Big_Bazaar http://www.futuregroup.in/about-us/about-group.html www.retailangle.com www.business-standard.com www.economictimes.com http://theglobaljournals.com/ijsr/file.php?val=October_2013_1380810200_e1cff_70.pdf http://rajeshthambala.blogspot.in/2013/02/indian-retail-industry-2012-2013.html Sector report, Retail – India Brand Equity Foundation, August – 2014 Global powers of retailing, 2014 – Deloitte Retailing 2020, Winning in a polarized word – PWC The Indian Kaleidoscope, Emerging trends in retail – FICCI