Big Bazaar Brand Building Challenges

8/7/2019 Big Bazaar Brand Building Challenges

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Big Bazaar: The Brand Building Challenge

- by Ravi Bhatia *

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

- Kishore Biyani

Big Bazaar: Brands Identity, Personality & Symbolism

Big Bazaar(Exhibit 1) is Indian personification of retail. Its like an Indian bazaarormandiormela,the environment created by traders to give shoppers a sense of moment. Its personality is of beingan entity away from fancy or pretty and being authentically "no-frills". Kishore Biyani never hiredany foreign consultant for Big Bazaar which is evident from Indian-specific personality of the brand.The brands personality is self-explanatory by its tag-line only. This statement places Big Bazaar atthe top of customers mind. It reflects that entrepreneurship and simplicity are the essence ofcharacter 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 themodern Indian family's favorite store. Big Bazaar symbolizes modern retail, the business whichisnt looked up to in our country, is now in the eyes of many multi-national biggies. Big Bazaar hasshown 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 foridentification. This is also evident from the Goodyears (1996) chronological brand categorization(Exhibit 3).

There is lack of differentiation if marketing of commodity is done. Commodities and differentiatedproducts 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 whoproduces them. Commodities tend to be raw materials like corn, wheat, copper, crude oil, etc. Thestone marble is mined and sold by many companies in Rajasthan; its like an unbrandedcommodity, where each producer is selling identical product.

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

Value of Branding

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

There are certain advantages of branding. They are: -

y 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 alivealthough they have changed the product. Even they are looking for line extension but basic brandnames are the same.


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y Sales or market share: A brand generates familiarity and trust, and hence, leads to greater

sales. Branded products have an edge over unbranded products.

y Premium price: Brands generate trust, a brand manager can charge extra price and people payfor that trust.

y Differentiation: Creating a brand is nothing but creating a strong association. This associationclearly differentiates the branded product from the rest.

According to brand evolution model developed by Kunde (2000) (Exhibit 4), as the value of brandbecomes stronger and more relevant to customers, the brand becomes more involving, and thus,managers need to make their brand values more relevant to increase customers involvement.This is explained by religion model also. The model distinguishes 5 types of brands: -

y Product Brand: Products without any form of added value connected to the generic element.

y Concept Brand: Brands that are driven by emotional values - as opposed to product

characteristics.

y Corporate Concept Brand: Brands that merge with the company and present themselves in a

sustained and consistent way.

y Brand Culture Brand: Brands that are so strong that they - in the eyes of the consumer - have

become equated with the function they represent.

y Brand Religion Brand: The ultimate brand position is that of brands that - in the eyes of theconsumer - 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 elaboratesthe core competencies and areas of improvement. The key features that have shaped inestablishing of brand includes: -

y Big Bazaar ensures that no otherkirana store / departmental store are offering considerable

discount compared to its own price. This helped Big Bazaar in being the "value for money" store.

y Big Bazaar scores high on product mix as compared to kirana store.

y Cheap and local products are heavily stocked in Big Bazaar which make it easier to attract lowermiddle class category of customers.

y Promotion ofkirana is rare event but Big Bazaar used this channel efficiently to establish itself asnational brand.

y Customer loyalty resulting in high up sell, i.e., selling to existing customers.

y Big Bazaar refrains from high-end locations for business which reduces its rental budget andprovides competitive advantage over competitors. Kishore Biyani has taken "early moversadvantage" 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. (Exhibit 7). Products of all the major brands are available at BigBazaar(Exhibit 8). Also, there are many in house brands promoted by Big Bazaar. Big Bazaarsold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-ovens. In all, thefashion, electronics and travel segments made up about 70% of sales. Last year, these categoriesmade up only about 60%.

Price

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

y 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.

y Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept ofpsychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Big Bazaar also caterson Special Event Pricing (Close to Diwali, Gudi Padva, and Durga Pooja).

y Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and non-peak hoursor days of shopping is also a pricing technique used in Indian retail, which is aggressively used byBig Bazaar.

y Bundling: Selling combo-packs and offering discount to customers. The combo-packs add value

to customer.

Place

y 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 "saalke sa

bse saste teendin", Future Card (the card offers 3% discount), Shakti Card,

Brand Endorsement by M. S. Dhoni, Exchange Offer - Junk Swap Offer, Point-of-PurchasePromotions.

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


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People

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

y Well-trained staff, the staff employed by Big-Bazaar are well-suited for modern retail.

y Well-dressed staff improves the overall appearance of store.

y Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so staff isempowered to take innovative steps.

y Employs close to 10,000 people and recruits nearly 500 people every month.

y Use of technology like scenario planning for decision making.

y 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: -

y Multiple counters with trolleys to carry the items purchased.

y Proper display / posters of the place like (DAL, SOAP, etc.).

y 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 systemand 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 jointventure 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 storearea less than 40,000 sq. ft., Standard Big Bazaarwith 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). FutureGroup is also planning to distribute financial products like consumer loans and insurance throughBig Bazaar outlets.

Consumer Insights & Perceptions

Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolize Change,


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Confidence and Consumption, and according to this theory, "Change and confidence isleading to rise in Consumption". They divided Indian customers in three categories: -

India One

y Consuming class, constitutes only 14% of Indian population.

y They are upper middle class and most of customers have substantial disposable income.

y Initial focus of Big Bazaar.

India Two

y Serving class which includes people like drivers, house-hold helps, office peons, washer-men,etc.

y For every India One, there are at least India Two and have around 55% of Indian population.

India Three

y Struggling class, remaining population of India.

y Cannot afford to inspire for better living, have hand-to-mouth existence.

y Needs cannot be addressed by current business models.

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

y 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.

y India Two finds moves and find a lot of comfort in crowds, they are not individualistic. They preferto be in queues.

y Indian-ness is not about swadeshi, its about believing in Indian ways of doing things.

y Indian customers prefer to purchase grains, grams, etc., after touching them, so its better not tosell in polythene packs. Big Bazaar has counters where you can touch wheat, rice, sugar, etc.,before purchasing.

yAdvertisements about schemes and offers through local newspapers, radio in local languages,inspires customer more than the traditional ways.

y The guards, salesman at the Big Bazaar outlets should not look smarter than customer, so theyprefer not to have tie, etc., in their uniform.

y Hypermarkets in India should be situated in city unlike western countries where they are locatedaway from city.

y Purchased bags / goods should be sealed at check-out as customer can enter and exit multiple


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times.

y For Indians, shopping is an entertainment; they come in groups, with families so Big Bazaarshould offer something for every section of family. That also led separate section for clothes,vegetables, food, etc., that is multiple clusters within a bazaar.

y Developed a diversity tracing cell to cater local patterns, demands, festivals, as every region ofcustomers has unique demands.

Advertising: The Essential of Brand Building Process

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

Tag-line: Big Bazaar tag-lines are the key components of advertising. These tag-lines aremodified according to demographic profile of customers. These catch-phrases appeared onhoardings and newspapers in every city where Big Bazaar was launched. Everybody understoodand connected easily with these simple one-liners. The catch-liners include "Hindi - Chane kebhaw 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 isreplaced 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 ofthe Indian iconic brand. In an effort to take the Fashion to the masses, Big Bazaar, the flagshiphypermarket brand of retail chain of Future Group, organized a three-day Fashion Show on thestreets of Bandra, Mumbai.

Brand Endorsement by Celebrity: Big Bazaar is always associated with celebrities foradvertising and marketing of its brand name. The current campaign is starred by Brand

Ambassador and Indian Cricket ODI Captain Mahendra Singh Dhoni. Earlier Himesh Reshammiyaand 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 sustaingrowth. The sales are increasing, more and more firms are coming to market, foreign players areentering into retail sector, and pie of organized retail is increasing in retail sector.


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

y Influence of Sarvana Stores Located in Theyagraya Nagar, ChennaiMany people think that Big Bazaar was inspired by Wall-Mart but the truth is that Kishore Biyaniand his team members are neither inspired by US ways of doing retailing nor they have been toUS 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 singleshop was doing business of more than INR 200 Crore per year. This shop was the template for BigBazaar.

y Observing Customers RegularlyRegular customer feedback is also an influential factor for the success of Big Bazaar. The BigBazaar has a separate team that looks for customers purchasing pattern and how they like ordislike products, how they approach particular products. For example, unlike other stores wherethe most expensive and catchy item is placed at the front display, Big Bazaar places the "Value forMoney" items at check-out points.

y Imbibed Entrepreneurial Spirit in Organization

Decision making power is given to every level of employees at Big Bazaar. Kishore Biyani hasgiven 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.

y Building on Core ValuesCore values of Indian-ness, valuing and nurturing relationships, and simplicity shaped the brand.Kishore Biyani always believes in long-term relationships, with customers, suppliers andemployees. Once thinking about offering gifts to employees close to Diwali, Kishore Biyanisuggested giving them wall-paints to keep their house clean. The paint is used in Indian culture tokeep house clean and brings freshness. The motive behind this was to keep everything clean andbring 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 estatecost should be less than 5% of total sales of store in order to provide maximum benefits tocustomer.

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 trustled to strategically correct decisions most of the time. Whoever works with Future Group, eitherleaves 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-


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telling. These techniques were mainly used for store-design layout, store-location selection. Thestrategy 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 tobetter financial performance. Big Bazaar strategy to focus on design led to creation of Idiom, anindependent design and consultancy firm, based in Bangalore. They are one of the feworganizations in India having economists, ethnographers and sociologists working across variousteams 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 thatPantaloons' is the most cost-effective supply chain in the world. India may not have a modernsupply chain but it definitely has a cost-effective one. Retailers have made use of the existingsupply chain.

References

y Buyer Behavior: http://buyerbehaviour.blogspot.com/2008/01/big-bazaar-freedom-sale-change-in.html

y Indian Retail Scenario: http://www.slideshare.net/theRedIndian/india-retail-2008-big-bazaar-scenario/

y Wikipedia: www.wikipedia.org

y "IT Happened in India" by Kishore Biyani

y "From Brand Vision to Brand Evaluation: The Strategic Process of Growing and StrengtheningBrands" by Leslie de Chernatony

y Kunde Model: http://www.kunde-co.com/Default.aspx?ID=325

y Economic Times: www.economicstimes.com


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Exhibit 1: Chosen Brand: Big Bazaar


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Exhibit 2: Growth Story of Big Bazaar


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Exhibit 3: Goodyears (1996) Chronological Brand Categorization


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Exhibit 4: Kunde Model (2000)

Exhibit 5: Organization Value & Customer Value Matrix


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Exhibit 6: SWOT Analysis of Big Bazaar


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Exhibit 7: Range of Products Available at Big Bazaar


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Exhibit 8: Major Brands at Big Bazaar

Exhibit 9: Places at which Big Bazaar is Located


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Exhibit 10: Future Strategies of Big Bazaar

Exhibit 11: Life Cycle of Big Bazaar


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*Contributedby: -Ravi Bhatia is a second year student of PGDM at IIM Calcutta. He is an Engineer with honors degree from IIIT Allahabad.

He has worked for India's number one private life insurance provider and leading communication software provider, andhas authored several articles and press-releases.Article posted on January 25, 2009.

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Big Bazaar Brand Building Challenges

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