STRATEGY FOR BIGBAZAAR
Submitted by-
Deepak Kumar Deepali Mathur Honey Gupta Lalit Choudhary Sayed Fazal Husain Upendra Kumar Vindya Malviya
AGENDA(BEST PRICE&BIG BAZAAR)
Corporate profile Swot analysis Typical quotes Market penetration strategy Product/services strategy Existing supply chain Distribution strategy Pricing strategy Promotion strategy Pest analysis
AA DEKHE JARA KISME KITNA HAI DUM
WAL-MART PROFILE(BEST PRICE)
Wal-Mart Stores is an American American public corporation Founded by - Sam Walton in 1962 Slogan - "Save Money Live Better,” Head Quarter- Bentonville, Bentonville, Benton County, County, United Vision- to ordinary folk that the chance to buy b uy the same thing as rich people
SWOT ANALYSIS OF WAL-MART Strengths
Weakness
It has a reputation for value for money, convenience and a wide range of products all in one store. The company has a core competence involving its use of information technology to support its international logistics system.
Weak in some areas due to the huge span of control. Lack of focus Presence in few country
SWOT CONT… Threat
Opportunity
Expanding consumer markets. To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe. New locations and store types offer Wal-Mart opportunities to exploit market development.
Being a global retailer means that you are exposed to political problems in the countries that you operate in. Critical consumer behavior. Huge competition with Indian retailer.
BIG BAZAAR PROFILE
Type-hyper market India’s first hyper market retail market Vision-Everything ,Everywhere, Every time for every Indian consumer in the most profitable manner Industry-retail Founded by - Kishore Kishore Biyani in 2001. 2001. Headquarter - Jogeshwari, Mumbai, India. Parent group - Future Group Website - www.bigbazaar.com Tag line- “Isse sasta aur accha kahin nahin”
CORE COMPETENCY OF BIG BAZAR A choice of more than 20000 products Delivery across more than 1500 cities covering around 16000 pin codes A dedicated customer care helpline for any queries Special emphasis on apparels and life style products(27% Vs 17%) Fast delivery-tie up with world leader logistic & transportation services
SWOT ANALYSIS OF BIG BAZAAR Strengths
Weakness
High brand equity
State of art infrastructure
Pop promotion
Falling revenues/sq.ft.
Variety of stuff under single roof
Unable to meet store opening targets
General perception
SWOT Cont….. Opportunity
Threat
Organized retail (4.16%) Evolving consumer preferences In Store Experience Improvements New formats and consumption space Looking at expansion
Competitors domestic and foreign Government policies Unorganized retail Economic condition
PEST ANALYSIS POLOTICAL
ECONOMICAL
Government is stable Government policy towards investment is liberal(49%) Labor law Restriction for MNC’s
Economy is growing(7.2%) Recovery from recession Monetary policy
CONTD…. ENVIRONMENT
TECHNOLOGY
According to mckinsey report Indian consumer goods market is expected to reach $400 bl. By 2010
Rapid expansion of IT sector New trends are coming
TYPICAL QUOTES
"He doesn't realize it, but I know everything about him," says Indian retail magnate Kishore Biyani
Will Wal-Mart Succeed in India? Perhaps...But It Won't Be Easy
PRODUCT/SERVICE STRATEGY
Create positioning for FAMILY Keep more branded products More focus towards FMCG products Penetrate the RURAL market with FMCG products Divide store into two different category, turn small competitors into customers Keep north India girls for sales sales forces forces India’s first community connection outlet at maleshwaram in Bangalore
CONTD…… Understand variation of how frequently they go for shop which types of products they purchase frequently Collaboration with shopper stop to tap higher segment customers As big bazaar focusing on cultural aspects (ex- at the season of festival they keep products according to festival) so, keep focusing on this services. Full line of festival materials
PRICING STRATEGY Existing pricing strategy is right Apply market penetration strategy Promotional pricing Low interest financing Psychological pricing Special event pricing Time pricing Bundling
CUSTOMER SERVICE STRATEGY
Future card program Billing system improvement Huge variety of products Future money provide financing system Night shopping
PROMOTION STRATEGY Wednesday bazaar scheme Festive season shopping Partnership with BIG fix and BIG FM 92.7 Road show in residential colony Outdoor campaign(hoarding, banner)
MALL LOCATION AND DESIGN
Existing location strategy is right Play music according to region Keep focus where working people live and keep walking
DISTRIBUTION STRATEGY
Contract with small vendors Do not change many vendors Currently company is going to finance$830 million to its vendors
WAL-MART SUPPLY CHAIN Existing Distribution channel
Cross docking distribution
WAL-MART SUPPLY CHAIN EXISTING
Transportation of goods from distribution centre to retailers is 2 days More than 4000 own trucks Most trained drivers Cross docking distribution
PROBLEM IN INDIA
Starts supply chain from scratch Transportation, warehousing and distribution infrastructure Cold chain distribution Real estate
Himalaya ahead for Wal-Mart India has 3rd largest network in terms of (roads) with 3,38344(k.m). India has total 65,569 k.m of National Highways. State Highways total length only 137771 9(k.m) Largest National highway no-7(2369k.m) Reality check According to Goldman Sachs, India need to spend $1.7 trillion, but NHAI planned to expand $70 billion over next three year. Only 2500 (k.m)of national Highway are of international Standard. National Highway represent only 20% of total network length. Only 16%Of India’s road are 4 lane or above. Approx.quarter of India 'Highway are Congested.
C0nt.. U.S has the largest road network in the World with 6,430,366 (k.m) Number of Trucks U.S have 68,06,630.(6 tier or more) In some cases Bus Speed (30-40 k.m.ph) reduced to (19-25 k.m. ph) Goods transport from Gurgaon to the port of in Mumbai can take upto 10 days. The main roads are under huge pressure and required modernization. India has only 1% of World Vehicles. In India 1300 truck per million .
CHALLENGES OF WAL-MART(opportunity for big bazaar) How it perceived by Indian consumers According to Wharton marketing faculty- customer perception (In U.S consumer understands big store means low price and small store means high prices, Reversely in India) India has 6000 castes and sub-castes in 28 states with their own taste, with 23 languages and also it keep changing. Typical Indian consumer does not travel more than 67km for its shopping Opening new stores in big cities
MARKET PENETRATION STRATEGY
Existing targeted segment is middle class More people are coming in middle class Emerging market Jharkhand & Orissa No. Of BIG BAZAR in Jharkhand J harkhand & Orissa
STATE
PER CAPITA(in Rs.) GROWTH RATE(%)
CHANDIGRAH
9 92 62
6.3
GOA
82 9 03
6
DELHI
491 72
6.9
JHARKHAND
149 90
16.6
ORISSA
147 95
11.5
Focus to capture Nav Bharat Customer (Rural Market)
Why focus on Rural customer? 73% of population live in 6,00000 villages villag es out of Total Total population 106 billion. Minimum support price. NREGS -100 days employment. Income from farm products is Tax Tax free. Purchasing power in FMCG-$17 billion. In Durable $2.5 billion. How Big Bazaar can tap this? Core Competency in FMCG Product(32-33% in total sale). Apparel and Durable.
Cont….
Why FMCG in Rural Market? In financial year 2009-(April –March ) FMCG Rural Volume Growth is estimated to be 5 % to 12 % higher than urban market. Big Bazaar can have small Cinthol ,Godrej 50 gm packs price Rs.4. They can focus on Customization by keeping durable products like Philip India’s VARDAAN T.V Philips POWER RADIO . LG Electronics SAMPOORNA T.V
Collaboration with Shoppers Stop
Why Collaboration with Shoppers stop? Shoppers stop presence with 27 stores in 12 cities Their focus on Luxury market. They keep National as well as International Brands like Pepe, Gini, Carbon, Austin Reed (London) Connection with Youth perce centa ntage ge Age Age grou group p Why:-India is very Young India In per Source:54 Below 24 Census of India . year 35
0-14 year
19
15-24 year
Cont…
The Changing Spends on Consumption
items 2005-06 2006-07 Beverage 1.78 1.89 Clothing 5.17 5.48 &Footwea Appliance 3.43 3.86 r F ood 35.38 34.28
2007-08 1.92 5.95 4.02 33.21
2008-09 2.85 6.02 4.86 32.89
Introduced Café coffee day
Provide conducive environment.
Source:-CMIE
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