Introduction

Retailers think they do not have time to build his brand as they are too busy meeting the needs of

their customers and his business. And it is easy to see why the marriage between retailers and

brand management hasn’t always been easy. Branding was historically viewed as the “lipstick on

the pig,” a graphical veneer which added questionable value in the face of global logistics and

sourcing. But as markets have changed, so have attitudes. Differentiation is the essence of good

business in any crowded market; the ability to influence demand beyond the tangible, to go

beyond the table-stakes of convenience, quality, service, and the like, into the realms of the

unique. Brands are the way business is done; the factor that makes the service offer, the product

line-up, the culture, and of course, the language and appearance more desirable over the

competition. Retailers are perfectly placed to build truly great brands. They have many rich data

points: physical experiences involving numerous opportunities to create uniqueness, including

service, process, product mix, layout, ambience, culture, and the all important human interaction.

The world of branding has changed data is used to build the business case for brands, to highlight

the initiatives within a strategy, and to build Return On Investment models into brand programs,

not to mention the monitoring and active management of brand value creation. This means that

brand management can live happily within the highly accountable world of retail using data and

value as the bridge between the financial and commercial streams of activity.

Retail has been deeply impacted by the economic realities of our times. Cost-cutting has

formulated the bulk of businesses reactions to the downturn, so now recognizing that demand

creation is the required antidote. Demand can be created without relying on discounting which

hinders a business, erodes margins, and places a business under increasing pressure. Demand

creation requires us to step away from the crowd, to do things differently in our quest to stand

out, and own a clear position in a market.

Retailers need to better understand how their brands drive value and what actions should be

taken to ensure that their brands are readied for the market of tomorrow, as well as the market of

today. All around us the world is changing. Consumer’s attitudes have changed and will continue

to change. Their habits and behaviors will continue to adapt to the technologies available to them

and to the truths about our lifestyles and habits exposed by the recent economic, social, and

environment events. Getting a grip on this fast changing scenario requires a strategy that is

delivered in stores and lives in customers’ heads, not well intentioned documents and plans.

Why are people brand loyal? Why branding is so important in business? What makes the brand

successful? Finding answers to these questions leads to successful business which depends on

repeat purchasing. It goes well beyond a logo or "look and feel" and encompasses the whole

product concept - the promise of delivery, quality, and predictability. It goes beyond just letters,

words, symbols, or a combination of these.

Brand increases consumer satisfaction, loyalty and product attachments. Branding seeks to

distinguish your company, product or service from the competition and create a lasting

impression in your prospect's mind.

Brand Management is one of the applications of marketing techniques used for marketing a

product or product line. It increases the product perceived value to the customer and thereby

increase brand franchise and brand equity. Marketers see a brand as an implied promise that the

level of quality people have come to expect from a brand will continue with future purchases of

the same product.

Strategic brand management involves the design and implementation of marketing programs and

activities to build, measure, and manage brand equity. Brand Management often viewed in

organizations as a border and more strategic role than marketing.

Today branding is more important due to increasing advertisement culture, media fragmentation,

product differentiation etc. Branding creates emotional attachment to product and companies.

Branding efforts create a feeling of involvement, tangible and intangible qualities and symbol.

Branding efforts creates strategic awareness, where people easily recognise brand and their

distinct qualities. A strong brand influences on buying decision and shapes ownership

experience. Branding helps customer while making purchasing decisions. Brand attracts firm's

identity upon potential customers.

Brand Management approach can be explained as follows:

Total Approach: Brand Management starts with understanding "brand "concept. Brand

Management in retail starts with leaders of the company who define the brand and do the

management.

2. Creating Promise: This is also called as defining the brand. A good brand always should be

memorable to customers. A good brand promise evokes customers feeling. For example, Volvo

(buses in Asia) offers feeling of safety. If you hope for good success you have to go with specific

territory and make your promise unique and different from the promises of other firms.

3. Making Promise: Once you created the promise, and then inject this into the minds of

customers. This step needs advertisements and PR activities.

4. Continue the Promise: Continue the promise means delivery of good quality of products and

motivate the people.

5. Perception: A good brand gives messages to customers such that they wait to purchase the

products again and again. This happens in the perception that is created in the minds of both

intended customers and innocent bystanders. Perception comes from direct experience.

Perception is the brand as experienced. Perception is not reputation, but reputation is perception.

6. Communication: We communicate to customers and get their feedback on brands. The Brand

reputation may be viewed as socially constructed.

7. Decision: In the final analysis, the value of a brand comes in the simplification that it brings to

decision-making.

Most of the retail managers does brand management and their merchandise mix is intended to

improve overall gross margins and enhance retail brand awareness. Most of the retailers have

implemented their own brands, called private brands. The private brands decrease prices to

consumers, refer their prices with national brand prices and get profits.

A brand should be like a soul for any organization. If a human starts understanding his soul then

he is not withered by his soundings, similarly brand should be built in an organization. Keeping

pace with new developments, finding out how other companies have solved branding dilemmas

and keeping one step ahead of your competitors can play an important part in the strategies you

employ to imprint your brand firmly on the consumer - and keep it there.

Getting your product,

service or built-environment noticed by the target customer is a prime motivation of any brand

development campaign. Media marketers use electronic, print and digital media to communicate

the promise of quality, value and availability for their retail clients.

But all too often promises made in media marketing are not realised by the customer when they

enter the store, browse, or make a purchase. It is as if the staffs weren’t told about the company’s

mission or commitment to the customer.

The translation of advertising or company taglines into tangible, achievable customer-centric

attributes is one of the key objectives in using the environment as a branding tool.

Lessons to learn

Retail branding has become a much-talked about concept in recent years; an idea that is often

misunderstood and not applied very effectively. As one surveys the retail landscape, you will

find numerous situations in which the brand the store hopes to project, misses the mark. The

critical point here is that the best marketing and branding companies in the world, armed with

surveys and statistics, can do nothing to brand the store.

by Ernst and Young, contributing to the annual consumer awards issue of Chain Store Age

Executive Magazine, noted, “While companies do control the messages that they push out

regarding their brands, they cannot, in fact, control how those messages are received by

consumers.”

Personal experience within a store, and with the brands it carries, determines how the customer

will rank the associated company. For example, “I’ll only shop at … if I have lots of time,” or

“When I shop at . . . I always find something new and unusual.” Depending on what the retailer

intended to portray, these opinions are either detrimental or complementary.

Impressions last

so what do retailers want customers to say about their store upon exiting? What would we like

them to remember and what would be a disaster if they never forgot? If you’re not ready to make

a projection of what your customer likes best about you, let’s first understand the company and

what it is capable of. Ask yourself these key questions:

What segment of the market does the retailer want to own? You can’t be everything to

everybody.

How does the consumer shop for that product or service? Customers have needs which must be

fulfilled in order to make an informed buying decision.

Is the retailer prepared to commit appropriate resources toward achieving a competitive

advantage? Consistent delivery of brand-building attributes can only be assured if everyone in

the organisation understands and is dedicated to the same goal.

Once clear responses to these questions are gathered, the development process begins. With a

determination of the preferred brand personality, a dynamic environment can be created to

embody the marketing strategy, respond to shoppers’ behaviours, and effectively utilise the

company’s resources.

Translating brands

Translating marketing and branding strategies into the store environment, designers focus on

touch points; elements which have a profound effect on the experience the customer has with the

store. These include the store layout, architectural theme, color and materials, lighting, sound,

product presentation and availability, and communication, whether delivered by signage or store

personnel.

In order to assess which areas of a store need the most attention, the retailer should predetermine

a list of desired customer responses and then strive to achieve them. A well-planned strategy will

include merchandise categories, promotional activities placed in high traffic areas, painted in

dominant colours and duplicated throughout the store.

During the translation process, a useful exercise is to think like your customer and ask, “How

would I, as a customer, like it to be?” If your store intends to prioritise service as your leading

attribute to attract customers, how should a service-oriented company act, not only when a new

customer enters the store, but also when a returning customer has a complaint or wants a refund?

If low price is your strategy, how can you promote yourself as a leader, besides displaying large

banners, announcing discounts and showing comparable value with competitive pricing to other

popular brands? Consider awarding unannounced price reductions at the checkout after the

shopping trip is completed. Delighted customers will remember your store as the place to save

money, above all else.

These examples demonstrate a key principle in using the store as a branding tool: the intended

brand personality should be simple and singular, repeated consistently, but differently for every

merchandise category.

Retail branding is different from just branding because here the store has to match the branding

with performance. Thus retail branding has to deliver both tangible and intangible benefits all in

one and all at once.

Retailing and India

Consider success stories like Shopper's Stop, Subhiksha, Foodworld etc. and the following

statistics:

Retail is India's largest industry, largest source of employment after agriculture, has the

deepest penetration in rural India, and generates more than 10% of India's GDP.

In India the retail market is large with sales amounting to $180 billion and accounting for

10-11% of the GDP.

India has largest retail outlet density in the world with close to 10 million outlets today

All these points together collaborate to prove that Retailing is going to go from strength to

strength in the future.

In India the retail segment is still in the growth phase. Most of the retailers are new entrants.

Most of the growth has been in the big cities and slowly the same cult will catch up in other

cities.

Important Criteria in Retail Branding

In today's customer driven economy the power has shifted from the manufacturer to the retailer.

He has gained prominence and the entire economy is becoming retailer-driven.

Supply chain management is a very important criterion for successful retail branding. It is the

core of retailing and firms like Wal-Mart have successfully used IT to improve their vendor

management

Different Branding Strategies

1. Integrated branding:

Here the retailer is in direct link with the manufacturer. He is required to possess

complete knowledge about the possible developments in the product in the future. The

retailer is involved in process beginning from idea generation to branding the product.

2. Contract Branding:

The retailer outsources from an existing supplier. The supplier is completely responsible

for the product. The participation of the retailer is limited to the specifications regarding

quantity, price and brand.

3. Independent Branding:

Here the retailer simply procures from the supplier at the lowest possible cost and the

entire branding investment is his own. The retailer is like the owner of the brand and

holds complete responsibility for it's performance. Such brands are known as 'Private

Labels'.

Private Labels

Today since retailer margins are falling all over the world, they are looking for alternative

sources of income. Private labels are one such source due to which they are gaining prominence.

In the article we have developed a checklist for what is important for successful Private

Labeling.

Different Pricing Strategies for Private Labels

1. Copycat pricing: Here the retailer simply prices his brand lower than the other existing

brands

2. Parallel pricing: Here the retailer prices his brand equal to the other competing brands

3. Premium pricing: Here the retailer prices his brand higher than the other competing brands

since he wants the brand to have a snob value attached to it

Positioning Strategies

Retailers can adopt different positioning strategies based on product, price, experience and

service.

Branding and Retail Branding:

Brand is a product that provides functional benefits that some consumers value enough to

pay a premium price.

Brand is a mark that represents a unique set of both tangible and intangible benefits in the

mind of the consumer.

Brand is a name that identifies a particular product and differentiates it from its

competitors.

In case of branding, companies build the brand name on the basis of what they want to

communicate about what the brand stands for. In case of retail branding the store has to match

the branding with performance. Thus retail branding has to deliver both tangible and intangible

benefits all in one and all at once.

The development of the "whole branding view"* entails creating the store as brand and enforcing

this "retail brand" at every point of contact between the prospect and the store. The very essence

of this concept is that branding is not merely a synonym for marketing a product, but it is rather

the whole host of activities that define and deliver a purchasing experience.

Retailing and India

Let us look at the following examples of retailing in India:

Foodworld - 190 crore business-Belonging to the RPG group

Shopper's Stop - 180 crore business- Belonging to the Raheja's

Crossroads - A brain child of the Piramals

Vivek's - 150 crore, 40 yr old Chennai chain selling consumer durables

Pantaloons - 50 crore, into apparel retail business

Margin Free - a discount chain in Kerala dealing in groceries and also the largest retail

chain in India

Subhiksha - Dealing in groceries, pharmaceuticals and the second largest retail chain in

India

The above examples show the importance Retailing and Retail Branding has been gaining

importance in India. Now consider the following statistics: -

Retail is India's largest industry, largest source of employment after agriculture, has the

deepest penetration in rural India, and generates more than 10% of India's GDP.

In India the retail market is large with sales amounting to $180 billion and accounting for

10-11% of the GDP.

India has largest retail outlet density in the world with close to 10 million outlets today.

All these points together collaborate to prove that Retailing is going to go from strength to

strength in the future.

The concept of Power Shift

In the Industrial age 'knowledge economy' was the focus area. Today, the economy is customer

driven. Concepts like CRM are becoming very important in the field of management. In such a

situation the manufacturers have no way but to be dependent on the retailers to provide them

with customer information. The retailers are the only people in the entire value chain that have

direct interaction with customers. They maintain databases of customer requirements,

complaints, etc. Such databases are priceless for manufacturers and so there is a clear shift of

power from the manufacturer to the retailer.

The recent surge in the number of brands available in any product line increases the options for

the retailer and simultaneously makes it more important for manufacturers that well established

retail outlets stock their products. This is an important factor, which has contributed to the

growth of the retail segment in the US. In India too, growth of retail can be assigned to the same

reason.

Future of Retail Branding in India

Retailing in India is going through a transformation. Increased consumer demand, improved

sourcing options and larger availability of real estate are creating the foundation for a significant

growth in the organised retail sector. South India, most notably Chennai and, to a lesser extent,

Bangalore and Hyderabad - have emerged as centre of organised retailing.*

This trend is going to catch up in the other cities soon. The retail industry is going to see

ownership changes, consumer spending patterns dissolving and re-forming and the emergence of

real e-commerce profits.

The evolution of the organized retail trend in India should follow the trend depicted by the PLC

in Figure

In the US retail branding has reached the third and fourth gear. Retail brands like Walmart have

efficiently used IT for the purpose of better supply chain management and outlets like Sears have

developed strong USPs. In India the segment is still in the growth phase. Most of the retailers are

new entrants. Retailers like Shoppers Stop which have build a strong presence in the urban

market based on their USP to stock products of all the big brands will have to think about re-

inventing themselves and developing new USPs by the year 2010 since the competition would

start catching up by then.

To summarize, the emerging organized retail sector in India offers unparalleled opportunities to

entrepreneurs and existing businesses seeking an entry in Retailing. The consumers are open to

change, and several USP platforms can be occupied since at present, the "canvas" is more or less

blank. The retail branding in India will take sometime and Indian retailers will need to better

their customer relations, their value chains if they want to be truly global.

2.3 SCM concepts in Retail Branding- A Case Study

One of the most well known retail brands in the world-Wal-Mart is involved in "SUPPLY-

CHAIN TYPE" relationships and it owes much of it's success to it's strategy of information

management and utilizing systems to share this information with the rest of the members of the

supply chain. The manufacturer-retailer relationship between P&G and Wal-Mart is the best

example of its SCM efforts.

Figure 2 illustrates how Wal-Mart benefits from the CFRM Model that it has developed with

P&G for better information sharing.

Figure 2 *

Under the CFRP model, P&G and Wal-Mart have collaborated to form a common team of

managers who would be heading the systems. They are responsible for kick starting the strategic

process starting from conceptualizing, developing, monitoring, executing and deriving feedback

as an effective step in creating a well-linked supply chain management initiative.

Hence, this further strengthens the point that Supply Chain Management is central to the entire

process of efficient Retail Branding.

2.4 Branding Strategies in Retail Branding in India

2.4.1 Integrated Branding

In integrated branding the retailer is in direct link with the manufacturer. He is required to

possess complete knowledge about the possible developments in the product in the future. In this

regard he practices experience based marketing and leverages the benefit of being in direct

contact with the customers. The retailer is involved in process beginning from idea generation to

branding the product. Here the retailer makes the decision regarding what kind of product he

wants. These ideas are then formulated into specifications, which are then communicated to his

agent. This agent is a turnkey agent and arranges all that is required, starting from locating the

manufacturers and arranges all the other inputs required. His job is to crystallize the ideas

generated by the retailer into a product and supply it to the retailer.

2.4.2 Contract Branding

In contract branding the retailer outsources from an existing supplier of the product and does not

play any part in product development. The participation of the retailer is limited to the

specifications regarding quantity, price and brand. Here the supplier is responsible for product

development in the future and is required to have complete knowledge about the product and has

an established link with the manufacturer. The retailer benefits from the experience and network

of the supplier.

2.4.3 Independent Branding

Here, the retailer simply procures from the supplier at the lowest possible cost and the entire

branding investment is his own. The retailer is like the owner of the brand and holds complete

responsibility for it's performance. Such brands are known as 'Private Labels'. Examples of such

brands are STOP, which belongs to Shopper's Stop, SRC which belongs to Westside etc. Such

brands are treated differently to other brands.

2.5 Private Label Brands

2.5.1 Checklist to test feasibility of Private Labeling

In order to meet the stringent price-competitive needs of the Indian consumer, retailers have to

look at alternative sources of income generation. One such source is developing Private Labels.

By doing this, the retailer increases his gross margin spread ** since in Private Labels it can

integrate backwards down the chain. Table 1 gives a list of the probable key drivers for the

success of any Private Label brand. This can act as a basic checklist before any Retailer wants to

deTable 1 *

Key Drivers for Successful Private Labeling

 Retailer -

        * Large Size and high Sales Volume

        * Shift in mindset required from Monthly ROI to long term returns

        * Should have a loyal and large customer database to leverage upon

        * Sales team must be given special training to promote the brand when

           customer is in the decision making process

 Product -

        * The product category should exhibit Brand Switching

        * Retailer should have good Vendor Relations with supplier of the

           Product

        * Multi sourcing of the product should be done from different vendors

        * Quality should be comparable to other brands stocked at outlet

        * Right pricing strategy (in tune with the positioning of the Retail Outlet)

           -Ref Sec 2.4.2

 Customer -

        * Should be willing to experiment with different brands in the product

           category

        * Should trust and appreciate the retail outlet in terms of Service provided, quality of

goods, variety stocked, value added services etc.

        * Should have a good post-purchase view of the brand to become a

           regular customer

2.5.2 Pricing Strategies for Private label Brands

The various pricing strategies available to retailers in India are:

Copycat: Here the retailer prices his brand lower than the competing brands. This is one

of the most popular pricing strategies. The retailer doesnot invest as much in advertising

the brand at a national or international level so it can afford to price it lower than others.

Parallel: Here the retailer prices his brand equal to the competing brands. Some retailers

do not want their brands to be perceived of lower quality than the other brands and so

they price it at the same level. The retailer believes that the brand equity of the retail

outlet will rub off on the Private Label.

Premium: Here the retailer prices the brand at a higher price than the competing brands.

This is generally done to attach a snob value with the Private Label. Private labels like

Ebony and Lifestyle have promoted themselves as up-market brands and to sustain this

positioning they have priced their in-house private labels at a premium.

Positioning Strategies for Retail Brands *

traditionally, the four major positioning platforms available to retailers are the following :

2.6.1 Product

This refers to the category mix, and within each category - the width and depth of merchandise

on offer, and its quality related selection. It also refers to the choice of merchandise - whether it

is on the leading edge or trailing edge of innovation or fashion. Stores like Foodworld have used

this as their USP.

2.6.2 Service

This refers to operational parameters such as "availability" of the promised merchandise at all

times - in expected sizes, shapes, colors and assortment. Service can also refer to policies such as

"returns" or "exchanges", "warranties and guarantees" and availability of qualified personnel to

assist customer queries.

2.6.3 Experience

This is a crucial intangible and can be a function of several factors like overall store ambience,

ease of shopping in terms of layout of merchandise, labeling, check-out convenience and speed,

access to the store itself including parking, customer relationship effort from the store

management etc. Lifestyle and Shoppers Stop have differentiated themselves on this attribute.

2.6.4 Price

Low price itself can be the most important parameter in some instances, but more importantly, it

can also imply the "appropriate price" as perceived by the consumer after subjectively assessing

the impact of the other three variables mentioned above. Outlets like Walmart in the US and

Margin Free in Kerala have used low prices as their USP.

Figure 3 shows the different strategies that can be adopted for positioning of Retail Brands.

ANNEXURE 1 * 1990

Few Retail Chains

* Akbarally's, Mumbai

* Big Jo's, Delhi

* Kids Kemp, Bangalore

* Benzer, Mumbai

* Titan

* Higginbothams

* Spencers

* Vimal

* Bombay Dyeing etc.

1999

Many Retail Chains

Food/Grocery

* Food World

* Nanz

* Subiksha

* Nilgiris

Electronics

* Vijay Sales

* Vivek's

* Vasant & Co.

Books & Music

* Music World

* Groove

* Planet M

* Fountainhead

* Crosswords

* Archies

Apparel

* Arrow

* Levis/ Lee

* Indus League

* Colorplus

* Benetton

* Wills Sport

* Weekender

Clothing/Home Accessories

* Shopper's Stop

* Westside

* Pyramid

* Globus

* Ebony

* Pantaloon

Home Furnishing

* Zeba

* Yamini

* FabIndia

* Jagdish Stores

The annexure shows that there are a significant number of new competitors in the Indian retail environment.

ANNEXURE 2

This diagram shows that even in the worst-case scenario (US) where the sales are actually dropping at a constant volume, still a 6% increase in the gross margin is found.

ANNEXURE 3

The above diagram shows the importance of the 4 suggested USPs for Retail Branding amongst the various types of retail outlets

Of Strength and Store Brands

There is a seismic shift underway in store brand names. They are much more powerful than a

decade ago, when they were rarely advertised and often packaged anonymously.

Today, store brands offer better quality, better design – and better names.

One of five items sold in U.S. stores in 2005 was store-branded. In Europe, the percentage is

slightly higher. By 2020, sales of store brands are expected to reach 30% of the worldwide

market, according to London-based M+M Planet Retail.

Two quick examples:

    * Wal-Mart’s brand of dog food, Ol’ Roy (named for the founder’s pooch) has quietly passed

Purina as the world’s top-selling dog chow.

    * 7-Eleven introduced its own beer, dubbed Santiago, to steal share from the Mexican import

Corona.

At the grocery goliath Kroger, there are more than 4,000 privately branded food and drink items.

At the French marketer Carrefour, a major internal branding program emphasizes quality, image

and innovation. These store brands are not designed to sell merely on the basis of price. They are

carefully named and positioned to elbow others off the shelf.

How much better is the quality?

In 2005, Consumer Reports tested 65 products in six categories (facial tissues, paper towels,

plastic bags, canned peaches, French fries and yogurt). The magazine’s conclusions: “Many store

brands are at least as good as national brands. Switching to a store brand can cut the cost of a

product by as much as half.”A blind taste test asked 300 consumers to sample 1,800 products in

10 geographic locations. The test included store brands from Safeway, Wal-Mart, Trader Joe’s

and others, going up against brands such as Betty Crocker, Maxwell House and Minute Maid.

Overall, store brands rated just as highly as their national counterparts.

And better design? No question about it. Packaging is more attractive now, and gets more time

and attention from staff and outside designers. The overall effect: Store brands look more

authentic.

And store brand naming has taken a leap forward. Internal brand misters now weigh competitive

names against the attributes of their own brands. Their names reflect crispness, communications

platforms, and eye and ear appeal. Consider:

    * Wal-Mart’s store brands, such as Great Value bleach, Sam’s Choice tuna, Spring Valley

vitamins and Equate analgesics, make up a big chunk of total store sales.

    * Safeway created a signature brand of beef, Rancher’s Reserve, and has heavily promoted it

to compete with higher-priced national brands.

    * Kroger offers a line of “life’s little pleasures” (macadamia nuts, Canadian maple syrup,

extra-virgin olive oil) under the Private Selection banner.

    * A&P’s commitment to quality store brands goes back to 1994, when it launched America’s

Choice (everyday products in 170 categories), Master Choice (specialty items) and Health Pride

(OTC and personal care items).

    * Stop & Shop Supermarkets introduced Nature’s Promise, a line of natural and organic foods;

and MiCasa, “for those with a taste for authentic Latin food.”

Bottom line: Expect more and better house-brand names.

Comments Brands

Great post, private brands are the subject of my blog and there is never any shortage of news

about them. As retailers take more power in this soft economy they have the ability to create

"real" brands and learn from the last 50 years of CPG based brand management to create brands

that truly engage the customer, all with guaranteed shelf space.

There is a considerable shift in how retailers are repositioning their brands. It's about

understanding what the customer is looking for and positioning the brand around that. I did a

post on how Kroger's is expanding their store brand into ready meals, since there is a growing

trend with the recession on what types of meals families are buying. Retailer's like Kroger's is

smart to be flexible enough to move with the trends, keeping them on top.

Twenty five years ago when "generic" brands first hit my consciousness, if not in fact the market

place, the "branding" was designed to tell the story that they were a cheap but serviceable

alternative to the real "brand name" products. The stenciled font used clearly identified them as

taking very little effort in packaging cost and offered a tremendous value and price savings. As a

young couple my wife and I made ends meet with these un-branded brands.

Today even though our household income is substantially greater house brands STILL fill our

shelves. Whenever we feel that a house brand is about equivalent to the leading brand we will

invariable pick the house brand and typically save a bundle.

I get the fact that a leading brand might deliver some level of comfort and satisfaction to a

consumer simply by having the most recognizable name. However the advance of house brands

points to a shift in consumer behavior, expecting a greater tangible value for their loyalty. The

closer a brand can effectively target products to the increasingly unique demands of the

individual consumer, the more likely they will build a loyal following including garnering a

premium price.

An Example. I wear Adidas Climacool running shoes. In my mind there isn't a pair of shoes that

compares to these on the marketplace. When I run my feet tend to overheat and that increases the

stress of running. These shoes are super ventilated and breathe like no other and they fit my feet

perfectly. As a result I've fallen in love with them and wouldn't run in anything else. When a

brand can target a product effectively, at a specific need, to a specific market segment, they will

hit a home run nearly every time. And if that same targeting spills over to their other products

that loyalty will extends to other products they offer as well.

House brands are making their stand with product categories like facial tissue, mouthwash, OTC

medications, laundry detergents, cereals and many other commodities. You'll find all these and

many more house brands on the shelf in my house. However just because the house brand exists

doesn't mean it's better. I love Kellogg's Special K with Red Berries. I've repeatedly tried to find

a house brand alternative and have failed to find anything with an equal taste profile. I will

remain loyal to Special K until someone offers me something that beats it.

Inevitably competition will drive the innovation of the value proposition and consumers will

reward house brands that raise the bar. Unfortunately in some cases that often puts the major

brands in competition with themselves and undermines their ongoing profitability. An example

of this is found in your example of Wal-Mart’s Ol’ Roy dog food. This is manufactured by Mars

Inc. who is one of the world’s largest manufacturers of pet foods including brands such as

Pedigree. I wonder if this trend worries them.

The consumer wins every time someone innovates the overall value proposition so let’s all cheer

on the innovators whom ever they may be!

We are living in the age of branding. Branding has developed from FMCGs to encompass

services, non-profit organizations, and even places. Of all the market categories, retail offers the

broadest canvas for any brand to show its true colors. From the understanding of a market that

gives birth to a strategy, from the creation of environments, to the engagement of the people that

bring the brand to life to the supply of product that puts the brand into the consumer’s hand;

Retail really does have it all.

So how do retail brands create their value?

What lessons can we learn from the leaders?

How should retailers create and manage strong brands?

How can retailers change the world in which they operate?

All this while the retail arena has been a space – the place to sell products. Its part of the

distribution mix and hence part of the place of the 4 “Ps” of marketing.

With the changing dynamics in the power of retail, branding the retail segment has become

crucial to retail success.

But….

Does the traditional models of branding apply to retail? While branding, do we take retail in a

“product” sense of in a “Place” sense?

Retailer brands are typically more multi-sensory in nature than product brands and can rely on

rich consumer experiences to impact their equity. Retailers also create their brand images in

different ways, e.g., by attaching unique associations to the quality of their service, their product

assortment and merchandising, pricing and credit policy, etc.

Again how do we measure retail brand equity?

To measure retail brand equity, we need to rely on metrics. But, developing retail brand equity

metrics is challenging for at least two reasons. First, consumer experiences form the building

blocks of retail brand equity. There is considerable variation in these experiences among

consumers, which makes it desirable to measure retail brand equity at the individual consumer

level. A second challenge to measurement is that a retailer’s brand equity is dynamic and it

accrues over time via consumer learning and decision making processes. Managers would like to

not only measure current retail brand equity but also monitor the temporal evolution of their

retail brand.

Following the American Marketing Association’s definition of a brand, a retail brand identifies

the goods and services of a retailer and differentiates them from those of competitors. A retailer’s

brand equity is exhibited in consumers responding more favorably to its actions than they

marketing do to competing retailers

1. Cross-category product/service assortment

2. Within-category brand/item assortment.

Consumer perceptions of these dimensions of retailer image can help develop strong and unique

retail brand associations in the minds of consumers. They also influence the utilitarian and

hedonic benefits that consumers feel they gain from retailer patronage and ultimately the price

premium consumers will pay the extra effort they will be willing to expend in order to shop the

retailer, and the share of trips, share of requirement, and loyalty that the retailer enjoys. By

influencing consumer preferences and shopping behavior in these ways, retailers’ image

becomes an important base for their retail brand equity.

Hence the first step would be to understand all the attributes and variables that affect retail

branding. Researchers have studied a multitude of retailer attributes that influence overall image,

e.g., the variety and quality of products, services, and brands sold; the physical store appearance;

the appearance, behavior and service quality of employees; the price levels, depth and frequency

of promotions; and so on. I consider 5 categories that seem more important.

1. Access.

2. In-store atmosphere

3. Price & Promotion

Building Your Retail Store's Brand Equity

Only a single minded clarity of purpose will build a memorable identity for your store, and

brand equity that will earn long-term customer loyalty.

Think for a second of those larger retailers we all know and love. Wal-Mart, Home Depot, Best

Buy, Barnes & Noble. When you think of those stores, what do you think of?

You most likely have a very distinct impression of each of those stores, the products they sell,

what they do well, and what to expect when you go there. For better or for worse.

When a customer thinks of your store, what do they think of?

Your store’s identity is the sum of many critical decisions that you make, involving every aspect

of your business. It is the nexus where strategic positioning, merchandise assortments, visual

merchandising, pricing, customer service and marketing all come together to create a

comprehensive whole, more significant and compelling than the sum of the individual parts. To

create the identity that you want for your store requires a singular vision that encompasses all of

these elements.

Your objective is nothing less than to build brand equity for your store. Brand equity is not just

something that products like Pampers, Kleenex and Band-Aid have built up over the years, but

it’s also the image that stores like Wal-Mart, Home Depot, Best Buy, Barnes & Noble have built

up over time. The brand is the store, and the store is the brand.

 

What does it take to build your store’s identity and brand equity?

Strategic Positioning

Building your store’s identity begins by determining who the customer is that you are going to

serve, and what her needs are. What are the products and services that you excel at providing?

No retailer can be all things to all people, most surely not a smaller retailer, so who exactly are

you? What really sets you apart and what will you need to learn to do better to meet your

customer’s needs and fulfill their expectations? While you may not have ever consciously asked

yourself these questions, you know the answers, and those answers form the foundation of

building your identity.

Merchandise Assortments

As a small retailer, your success depends on carving out a niche for yourself in the marketplace.

By definition, this means that while you may carry some core items that the large chains carry,

the focus of your merchandise assortments is likely to be on related specialty items. The depth

and breadth of these assortments is a primary means of communicating to your customer who

you are and what business you are in. Carrying items or categories that are not clearly related to

your core items and categories may add marginally to sales, but detract from your focus and the

clarity of the message you are sending to your customers. The brands you carry also convey an

important message about who you are. Carrying premium products that possess their own brand

equity reinforces the brand equity you are building in your store.

Visual Merchandising

Visual merchandising encompasses everything from the layout of the store to the way

merchandise is organized and displayed to signage and color scheme. It also includes

housekeeping. It is just as much about execution as it is about the design and concept. Anything

a customer can see is a visual key. Evaluate the visual impact of your store from your customers’

perspective. What does she see? What draws her eye? Is your store easy to navigate and shop? Is

it pleasing? Is it consistent with the identity that you are trying to create?

Pricing

Your merchandise assortments are structured to set you apart, to carve out a niche that is

uniquely yours. Don’t be afraid to charge a premium price for your premium products and

services. While you may have to be sharp on core items that the large chains also carry, don’t fall

into the trap of thinking that you have to work on short margins on every item, and have your

overall margins fall below where you need them to be. Adopting a promotional pricing strategy

or suddenly dropping your prices in an effort to simulate business is likely to be at odds with

your efforts to build a premium identity for your store in your customer’s minds.

Customer Service

Outstanding customer service begins with the mindset that your purpose is not merely to sell

merchandise but to build an enduring relationship with your customers. While this may sound

pretty high-minded and open-ended, customers will take notice when you spend the time to

answer their questions, share your knowledge, do whatever it takes to get the item they need, be

sure it’s delivered when promised and set-up or installed correctly the first time. It’s the little

extra that will turn a satisfied customer into a loyal customer, and recommends you to others.

Marketing

Your marketing consists of every single communication with your customer, from traditional

advertising to email newsletters, from in-store seminars and workshops to community

sponsorships. Creating a consistent logo and slogan is only the beginning. Every opportunity you

have to communicate with your customers must be focused on communicating a singular,

focused, and thus, memorable message.

It all must work together. Everything you do must be focused on building a brand identity for

your store, and communicating the value of your brand to your customers. There can be no

mixed messages or dual agendas. Anything that you do that is at odds or cross purposes with the

identity that you are trying to create must be changed or eliminated. Everyone working in your

store must be on the same page. Only a single minded clarity of purpose will build a memorable

identity for your store, and brand equity that will earn long-term customer loyalty.

The emergence of major retail brands is a significant new phenomenon in the Indian economic

scenario. Some of the emerging retail brands include Pantaloons, Shoppers' Stop, Crossroads,

Culture Shop, Big Bazaar and In Orbit.

Reliance could well acquire the status of one of the most well known retail brands as it forays

into retailing agricultural produce. These developments require new strategies for protection of

retail brands, which are often the most important assets of retail operators. Protection of retail

brands is necessary not only to sustain existing operations but also to generate new profit

avenues through licensing of retail brands.

Trademark protection of retail brands is crucial. Until recently, trademark registration was only

available for goods and not for service marks. This was a major disadvantage for retail brands as

retailing is essentially a rendering of services and hence no adequate protection through

registration was available for retail brands.

Now, under the Trademarks Act, 1999, apart from trademarks, it is also permissible to register

service marks. Accordingly, it is imperative to register retail brands as a service mark under the

relevant Class 35 of the Trademark Rules.

Registering brands is a skilful art requiring expert advice and a great deal of thoughtful planning

and strategising. It is no longer a routine matter. Merely registering the retail brand for `retail

services' is not good enough; and for enforceability reasons, a careful trademark expert will

advise that the registration should also specify the goods in respect of which the retail services

are to be rendered. Sometimes, the services offered under the retail brand are not limited to

retailing of goods but the retail outlet concerned also offers under one roof different kinds of

services (which may be described as `retailing of services' in contradiction to retail services

pertaining to sale of goods) and also often brings together various branded businesses under its

roof. These aspects should also be covered in the application for retail brand registration.

From the brands' point of view, several aspects of retailing need understanding. Some retail

operators may only sell or render retailing services in relation to third party branded products. In

this situation, registration of the retail brand should only be as a service mark in respect of retail

services. Many retail operators, apart from offering retailing services, place their own brand

along with the manufacturers' brand in their retail outlets. Another variant is that the retail

operators purchase unbranded products and sell them under their own brand. In the latter two

cases, registration of the retail brand must be done not only as a service mark but also as a

trademark in relation to the relevant goods to which the retail brand is applied.

There have been several Indian manufacturers who sell their wares through their own retail

outlets (for example, the well known manufacturers of clothing, Raymond and Bombay Dyeing,

jewellery manufacturers such as InterGold, Orra, Tanishq and watch manufacturers such as

Timex). Most of these manufacturers have registrations of their brands in respect of goods but

seldom register their brands for retail services rendered under that brand.

Such non-registration can cause serious difficulties. For example, in one case pertaining to

Raymond, an unauthorised retail shop was selling several brands of clothing, including Raymond

textiles. This shop had put up a `Raymond' signboard at the entrance suggesting that it was an

outlet authorised by Raymond. Raymond was not able to prevent such use — the court ruled that

the retail shop owner was entitled to use `Raymond' on its signboard as he was selling genuine

Raymond clothing too. If Raymond had a retail brand registration, i.e., registration for Raymond

for rendering retail services in respect of clothing, then it is likely that it may have been able to

prevent use of its mark on the signboard on the basis of infringement of its service mark

registration.

Foreign brands in relation to retail trading

Until the beginning of 2006, the government policy prohibited foreign investments in the retail

trade sector, the effect of which was that major international retailers were prohibited from

setting up their retail operations in India. A recent liberalisation measure with regard to foreign

direct investment in the retail trade sector is directly linked with trademarks. Now, with

government approval, foreign direct investment up to 51 per cent is permitted in retail trade of a

`single brand' product'.

The retail trade operations in ventures having foreign investment up to 51 per cent are required to

sell products under a single brand only and the same brand should be in use internationally.

Further, the product categories should be approved by the government. Finally, the products

should be branded during the manufacturing process.

But the term `single brand' is not defined. Probably, retailers such as Wal-Mart and Tesco whose

products carry different brand names of various manufacturers will not qualify as retailers

entitled to set up shop in India. On the other hand, companies like Levis, and the manufacturers

of Rolex, Omega, Parker, Mont Blanc and Chanel, which want to set up retail operations in India

would qualify for a licence for foreign direct investment. Also, it should be noted that foreign

retail companies which purchase products from various manufacturers and then brand such

purchased products (on selection basis) would not qualify for a licence for establishing retail

operations as their products would not be branded during the manufacturing process.

Big Bazaar: Brand’s Identity, Personality & Symbolism

Big Bazaar (Exhibit 1) 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

(Exhibit 2).

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 (Exhibit 3).

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) (Exhibit4), 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: -

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. (Exhibit 7). Products of all the major brands are available at Big

Bazaar (Exhibit 8). 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%.

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

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 (Exhibit 9). 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. 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. (Exhibit

10). 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: -

India one

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.

Developed a diversity tracing cell to cater local patterns, demands, festivals, as every

region

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 (Exhibit 11). 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.

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.