Supply Chain Management for Big Bazaar Hit or Miss

A Channel Analysis Report

As part of CIA I Component I
In
Distribution & Supply Chain Management (MBA441)

To be submitted to:
Prof. A. S. Suresh
Prepared By: Group 9
Anindya Biswas (1527605)
Arjun Thomas (1527607)
Ashwin Kumar C (1527608)
Praneet A K (1527616)
Sachin R (1527619)
Anushree Choudhary (1527634)
Shamayita Guha (1527651)

List of Contents

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Description

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Company History
Chapter 1: Products and Services
Chapter 2: Industry Eco System
Chapter 3: Type of Market
Chapter 4: Levels of Channels
Chapter 5: Strategic Partners/ Alliances/ Integration
Chapter 6: Multi-Channel, Omni Channel. Channel cost as a percentage of sales
Chapter 7: Market Coverage
Chapter 8: Commission and Pricing Strategies
Chapter 9: Credit Availability
Chapter 10: Approximation of Channel ROI
Chapter 11: Storage Requirements & Visual Merchandising at the POS
Chapter 12: Floor Stock Management
Chapter 13: Shrinkage Management
Chapter 14: Channel Promotions ATL & BTL
Chapter 15: Effectiveness of Channel
Chapter 16: Conclusion
Bibliography

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Company History
One of the most widely recognized chain of hypermarkets in India with almost 165 outlets in
existence nationally (STAFF REPORTER, 2014), is a subsidiary of the Future Retail Group. It
was established in 2001 by its managing director Mr. Kishore Biyani and is currently riding on a
profit after tax of 74.06 Crores (Future Retail, 2015). Its business model is apparently based on
the business model of the hugely successful U.S. based Wal-Mart. Let us have a lance at some of
the major milestones achieved by Indias first Hypermarket:

2001: Three Stores launched within a 22-day span in Kolkata, Bengaluru and Hyderabad.
2002: Food Bazaar beomes a part of Big Bazaar with its first store launch at High Street
Phoenix.
2003:
o Enters tier II cities with first store launch in Nagpur.
o Welcomes 10 millionth customer at the new store in Gurgaon.
2004:
o Food Bazaar & Big Bazaar awarded most admired retailer award in value
retailing and food retailing segment at the India Retail Forum.
o A day before Diwali, the store at Lower Parel, touches INR 10 million turnover in
a single day.

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2005:
o Implementation of SAP and Pilot testig of RFID at the central warehouse in
Tarapur.
o Launch of Big Bazaar Exchange Offer, Electronic Bazaar and Furniture Bazaar.

2006:
o Mohan Jadhav set a national record at Big Bazaar Sangli with a Rs 137,367
shopping bill. The Sangli farmer becomes Big Bazaars largest ever customer.
o Launch of Shakti, Indias first credit card program designed specially for
housewives.
o Launch of Shop-in-Shop Jewellry Store Navaras.

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2007:
o Launch of the 50th Big Bazaar Store in Kanpur.
o Partnership with FutureBazaar.com

2008:
o Launch of FBB (Fashion@Big Bazaar).
o Initiation of the Monthly Bachat Bazaar campaign

2009:
o Initiation of the Maha Annasantarpane program in South India an initiative to
offer meals to visitors and support local social organizations
o Launch of the Great Exchange Offer

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2010:
o Ranked at the 6th Position among the Top 50 Service Brands in India

2011:
o Enters the Wholesale and distribution business through Aadhar Wholesale store
at Kalol, Gujarat.
o Comes up with the new tagline: Naye India ka Bazaar
o Opening of the 200th Store in India.

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1. Products & Services

In terms of Products and Services Big Bazaar has a varied range of product offerings some of
which are:

Apparels
Food
Farm Products
Furniture
Electronics and Electrical Appliances
Personal Care Products
Child Care and Toys etc.

Of various brands like Levis, Allen Solly, Pepsico, Coca-Cola, Hindustan Unilver Ltd., ITC,
P&G, Samsung, LG etc. Apart from the above Big Bazaar is also known to promote severa of its
in-house brands such as, DJ & C. Tasty Treat, Clean Mate, Sensei, Care Mate, Koryo and 44
other such brands.
In termsof Services Big Bazaar makes Customer Satisfaction makes it their highest priority. As
such they made their online presence visible with the help of FutureBazaar.com, which is an
online business venture from Future Group. The website sells a wide assortment of products
ranging from fashion apparel for men and women, mobile accessories, elcetronic appliances like
home theaters, LCD TVs, Kitchen Appliances and many more. As per website statistics
evaluation website webstatvalue.com, FutureBazaar.com has around 11,660 pageviews per day
with around 2,915 unique views and has an estimated worth of around $ 17, 820.00 (which is
around INR 1,209,772.18) with a daily income of $ 33.00 ( almost INR 2240.32). Thus their
online presence has helped them to reach a greater customer base and helped to provide a better
customer retail experience
It also makes sure of customer security when they make visits to their physical stores with the
help of alarm systems as well as with the help of Electronic Article Surveillance System which
detects whether products being taken out of the store have tags attached to them or not.

2. Industry Eco System

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Big Bazaar which is typically a Hypermarket-Supermarket falls under the organized retail chain.
As per reports, the Indian Hypermarket scenario 1.99% of the organized reatil scenario and as
such ranks 5th on the global retail development index. This segment was having an estimated
worth of INR 7.28 billion as of 2005-06 growing by 37.21% over 2004-05 and would almost
grow with a CAGR of 32.8% by end of 2016(Cygnus Research, 2007, ibef.org, 2016). It is
believed that this sector which accounts for almost about 21% of the total retail space will be
almost worth $1,011 million by the end of 2017. There is also the trend of hypermarkets going
online with predictions being that the online retail will be at par with the physical stores within
the next 5 years.
The growth drivers for the organized retail sector in India are mainly: Rise in income and
purchasing power and brand consciousness leading to a favorable demographics also leading to a
change in the consumer mindset. Couple this with the easy consumer credit and the rise in
quality products.
In the hypermarket scenario, Pantaloons Retail is the market leader with 512 Big Bazaar shops
and online franchisees. HyperCITY (16 stores), Trent, Spencers (Spencers Retail), Aditya Birla
Retail and Reliance Retail are the other players in this sector. In this scenario, if we are to look at
the Future Group, their revenues increased at a rate of 2.4% during FY08-15. The hypermarket
supermarket formats have a network of nearly 319 stores having an area coverage of 10 million
square feet. Big Bazaar itself is ranked the third most trusted brand and the mot trusted retailer of
2014 for providing the most quality services. Below we have some of the major hypermarket
competitios in terms of number of stores and their parent Brands:
Table 2.1: Leading Hypermarket Chains in India

Parent Company

Hypermarket Chains

Future Group
RP-SG Group
Reliance Retail
Aditya Birla
Tata Trent
K Raheja Corp. Group

Big Bazaar
Spencer's Hyper
Reliance Mart
More Hyper
Star Bazaar
Hypercity

No. of Stores

Source: Compiled from the official websites of the parent companies

3. Type of market
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200+
36
8
15
11
13

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The retail market was at INR 23 Lakh crore in 2011-12 and organized retail comprised only 7%
of the retail market at that time. However, research says that it was supposed to grow at a CAGR
of 24% to attain 10.2% of the total retail sector by FY2016-17 (Shine.com, 2015). Even in terms
of organized retail space it has grown by 78% from 2.5 million square feet in 2012 to 4.7 million
square feet in 2013.
The retail market structure in India is widely divided into two categories: the organized retail
sector which is slowly penetrating the retail sector and has a market share of 8% and the
remaining 92% is the unorganized retail sector dominated by the mom and pop shops. In general
if we are to speak the organized Hypermarket sector is almost a collaborated market with the
majority of the market share being taken up by Big Bazaar.
The major players in the Hypermarket sceanrio in India, according to Wikipedia are as follows:

More
Big Bazaar
Spencers Hyper
HyperCITY
Lulu Hypermarket
D-Mart
Star Bazaar
Vishal Megamart
Spar Hypermarket (originally part of the Auchan group of hypermarkets)
Reliance Fresh and many other small scale players

The market structure in the hypermarket retail scenario is highly oliogopolic in nature with
almost 62% of the hypermarket scenario being captured by Big Bazaar, followed by 23% by
Spencers Hypermarket, 6% by More chain of hypermarkets and the rest 7% by other
players. The same has been shown below graphically in the foloowing page:

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Figure 3.1 Hyper Market Shares

Others ; 7%
More ; 8%
Spencer's ; 23%

Big Bazaar; 62%

Furthermore, according to the report, /Winning India Retail Sector 2011 published by
PricewaterhouseCoopers, if we are to look at the Key Success Factors of Hypermarkets in India
we can attribute the success to these 3:
Securing the right real estate
Localizing products to excite and delight the consumers
Mastering the Supply Chain to drive competitive advantage

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4. Level of Channels
The supply chain model for Big Bazaar is almost similar to what other retail shops follow,
wherein the material is procured from the manufactuers, sent to the central processing unit and
therein the product is sent to the Big Bazaar outlets. However, we shall look at these steps in
detail in terms of inventory management, the supply chain elements as well.
The basic model for the Supply chain for Big Bazaar is as follows with all the levels displayed
below:

Supplier Factory Distribution Center Retailer Customer

In Big Bazaar the supply chain starts off with the supplier providing the raw materials to the
factory manufacturer who then provides the goods to the CDC (Central Distribution Center) who
then provides the finished goods to the retailer from wherein it goes to the customers. One thing
to be noted is the fact that even if Big Bazaar is built on the lines of Wal-Mart, the primary
difference between Wal-Mart and Big Bazaar lies in the fact that the CDCs themselves act as
warehouses unlike in Wal-Mart whose CDCs act more or less like the developers for the
suppliers products.
Another point of difference between the two is in terms of order mechanism. In Big Bazaar, there
is no pull mechanism in order generation as it is largely dependent on the decisions by the
individual category managers whereas in Wal-Mart there is a daily pull mechanism in place. And
whatever sales has been made the information flows back to the CDC which helps them make
forecasts on the demand of the product for the next replenishment cycle.
The Procurement Cycle: The Supply chain management cycle in Big Bazaar is very detailed.
The warehouses in Big Bazaar are not too big as the fast moving perishable items are always
replenished on a weekly basis and the slow moving items are replenished on a bi-weekly basis.
Items such as vegetables are usually bought on a day-to-day demand basis.
What needs to be noted is that the stocks in Big Bazaar are managed by the Auto Replenishment
System (ARS) and the Central Distribution Centers are located strategically so as to facilitate
ease of access. Once the Purchase Order (PO) has been generated by the ARS, it is received by
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the vendor. Vendor then supplies the goods. Once the product reaches the warehouse, the inward
checklist is then filled appropriately. This checklist or the Inward Register Note (IRN) includes
parameters such as:

Purchase Order Number

Vendor Name
Invoice Number
Date, Quantity & Amount

For non-perishable packed items further parameters included are:

Date of Manufacturing and Expiry
Batch Number
Presence of ISI mark or not.
Post this a stock tally is done. It is done to make sure that the stock tally matches up to the
purchase made, if not a discrepancy note is generated. Otherwise, the Goods Received Note
(GRN) is generated. Post this the stock is either piled up in the ware house or send to the floor
for sale. The scenario is that suppliers who would be the local vendors (when the products
supplied are perishable items) would provide their supplies to the retail outlets of Big Bazaar at a
price less than 30% to 40% than the MRP, which when they sell to the customer at a price that is
5% to 10% less than the MRP.
The procurement at the retail outlet from the warehouse is as follows: As dependent on the
Auto Replenishment system, the reorder points are being set based on the demands of the
previous 3 months and hence the ARS generates the demand. In case of unexpected demands, the
outlets try to contact the nearby sister outlet so as to not lose out on their customers.
The modes of transportation for the purpose of logistics are mainly trucks & the railways,
however, Big Bazaar might use flights if the situation is deemed to be urgent. The transport by
Big Bazaar is mainly outsourced and the primary carriers for Big Bazaar Are Quick & Safe, Gati,
Deluxe Roadways and TNT. Apart from these the Future Group also has Future Logistics Supply
Chain created in 2009, which has under itself a fleet of around 1050+ leased trucks visiting
around 214 routes on a daily basis visiting around 13,000+ pin codes across India.

5.Strategic Partners/ Alliances/ Integration

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In an age when the organized retail players have a mandate of having an online presence in order
to maintain a sustained survival in the cut throat retail market, Big Bazaar has made strategic
alliances with Amazon, Oxigen Services, MTS Services to expand their consumer base and
thereby generate even greater revenue.
Future Group and Bharti Airtel have come together combining retail business to create one of
Indias largest business conglomerate and are planning to create a chain of around 570 stores in
243 cities pan India in the next 3-5 years (ibef.org, 2016).
Apart from all the above the future group has also tied up with Bajaj Finance Limited to enable
and empower the custoemers such that they would be able to convert all their purchases from any
Future Group Brands into easy EMIs thereby bringing in a new era of cashless and smart
transactions into the Indian retail scenario.
Apart from in the hypermarket retail scenario Future Groups sub brand Future Consumer
Enterprise Limited (FCEL) has also tied up with one of its major competitors Tata & TESCO
Enterprise venture Star Bazaar to launch a wide range of food and non-food products across the
Star Bazaar Stores. This was a strategy used by Star Bazaar as it aims to launch close to 148
SKUs across 10 FCEL brands with an intention to provide their customers with a unique value
proposition.
A major alliance was also of Big Bazaar and the now famous Patanjali Brands in Oct 09,2015
whose products are now seen in all Big Bazaar outlets with an ever increasing demand. The
demand is so much that the Big Bazaar outlets now have a specific counter for these fast moving
itmes from Patanjali.
On the online front, Big Bazaar has also tied up with MobiKwik, Indias leading mobile wallet.
With this tie-up, MobiKwik users can pay through their mobile wallet at any Big Bazaar
payment counter, by sharing their MobiKwik registered mobile number and the OTP generated
for the transaction verification. This system of cashless purchase for offline retail purchase was
set into immediate effect across 240+ Big Bazaar stores across India. It is expected to bring
around 150 million transactions annually for the parties involved.

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In terms of Technology Integration, Big Bazaar has also opened up the Big Bazaar Gen Nxt at
the DLF Mall of India, in Noida, New Delhi. It was done so as to provide the youngr generation
a more pleasant shopping experience and boasts of LED Lighting, large digital screens,
experience zones for multi sensorial experiences of food products, digital shelf-talkers as well as
energy-saving technologies that moderate and control the air-conditioning, humidity, lightning,
ambience and music levels within the store.

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6. Multi-Channel, Omni Channel. Channel Cost as a percentage of Sales

Big Bazaar has recently moved into the Omni Channel Retailing strategy with the launch of the
Big Bazaar app across multiple mobile platforms. This is quite an advantage for the company as
now it would be able to combat the rapid adoption of the growing e-commerce sector in India as
well as make an attempt to beat the online retailers with the help of their price cutting strategy.
This was something that a lot of the brick-and-mortar shops have been struggling to achieve for a
long time.
The Big Bazaar app would allow the customers to make comparison of a product by pitching the
price offered both by online as well as offline retailers thereby allowing them to make an
informed purchase decision. The Customers would have a week from the date of purchase to
make price comparisons and decide whether to keep the product or return it.
The Big Bazaar app which is currently functional in Mumbai only is an effective strategy
towards omni channel retailing considering a target crowd that is very much price sensitive. It
looks like as shown below:

Figure 6.1: The Big Bazaar App

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In the fiscal year 2015 2016, Big Bazaar had an annual revenue of 11,149.87 crores of
which approximately 4% to 5% is the cost of the channel members which is almost 446 ~
557.50 crores. This data is however variable based on the commissions as well as the late
deliveries made by the channel member and the ranking of the suppliers in the top managements
eyes and is a mere approximation.

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7. Market Coverage
In a country, where if customer wants something for his home, he/she thinks of purchasing it
from the nearest bazaar. This is because, the bazaar is a place from wherein one ould get almost
anything for his/her house at a very affordable price. This was held true not only across
Bangalore but across India as well.
Thus when the idea of Big Bazaar was concretized, the strategy was to provide the customers
with a one stop shopping destination, which would provide them with a wide range of products
at a very affordable price along with a good deph and width in teerms of product range.
Thus if we are to look at Store Location as a part of Market Coverage Strategies, it can be
considered important because:
Affects the amount of customer footfall
Affects the volume of productc sold
It is however, a major cost factor also, as
It involves a large initial cost investment
Affects transportation costs
Affects the HR costs such as hiring, wages etc.
The main concern that Big Bazaar was facing was whether the low margin of products would
help it to maintain a sustainable growth in the retail sector. Thus with this they had initially
opened the stores in Kolkata, Hyderabad and Bangalore in three different locations (in Kolkata
it was a suburban market, in Hyderabad it was in the heart of the market, in Bangalore a
market residential area) so as to be able to formulate an efficient location strategy.
What came out as a learning for the organization was that for any store a large catchment area
was required. The business model of having stores located outside the city as was with Wal-Mart
in US, would not really work in India and thus would reduce market coverage as well as
visibility. People would not want to travel far to purchase daily use products but would rather
want to buy from somewhere close. The cost of time spent on travel and cost of period in India
would actually dig deep into the savings made.

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Thus it was with this learning the stores were retained and future property deals were negotiated.
Now if we are to look at retail advertising as a means of increasing of increasing market
coverage we should first look at the components of advertising, which are:
Advertising Strategy
Creative Idea & Execution
Media Planning
What is helps to attract a larger customer response and also gives the organization an idea of the
potential areas where stores can be opened as well as it is a low cost per contract option. Not
only that it also provides multiple alternatives to the organization.
Some of the retail strategies employed by Big Bazaar and their respective Market Coverage
results are as shown below. This was keeping the price conscious middle class and the lower
middle class consumers in mind:
1. Daily Papers such as Times of India
a. Market Coverage: Entire Bengaluru
2. Direct Mail which can be controlled by the Retailers
3. Radio Ads in around the areas where stores are present to continue capturing the market.
4. Transit: So as to capture customers coming in from distant locations
5. Flyers/Circulars designed to capture immediate neighborhoods near the stores
These are some of the strategies that Big Bazaar regularly employs to continue capturing the
market from its other hypermarket competitors. What is important to be noted that the choice of
location of Big Bazaar speaks a lot of what it is trying to essentially tell the customers they can
adapt themselves to the tastes and preferences of the customers as per the location so as to get
maximum awareness. This is also portrayed through the fact that all their stores are easily
accessible to the customers.
As of now, our preliminary data has shown that in terms of market coverage though the Big
Bazaar at Hosur Road, which was the first one of its kind in Bangalore, is not doing well in terms
of revenue generation.
The Table toppers in terms of coverage as well as in terms of revenue generation, the Big Bazaar
outlets at Banashankari 3rd Stage and Mahalakshmi Layout near Iskon are the leaders in
Bangalore. This might be due to the fact that both of these areas are considered to be developing
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areas with the middle class income category density higher than the one in Hosur Road. They are
then followed by the Outlets near Malleshwaram, Kengeri and Whitefield.

8. Commissions and Pricing Strategies

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For Big Bazaar the commissions given to its suppliers mainly depends on the volume of the
products that they receive from the suppliers. On a one-to-one conversation with a Big Bazaar
employee has revealed that, for Big Bazaar if the volume is low the commissions that the
suppliers or the intermediaries in the supply chain receive is 4% - 5%, whereas if the supply is
able to meet the demand or exceed it then the supplier or intermediaries get a commission of 6%
- 7%, with 7% being the highest.
The main objective of Big Bazaar while setting its pricing in place is to get Maximum Market
Share. Some of the pricing strategies that Big Bazaar has and follows or its customers are as
follows:
1.
2.
3.
4.
5.

Value Pricing
Promotional Pricing
Differentiated Pricing
Bundle Pricing and,
Psychological Pricing

Let us look at them in a detailed format:

Value Pricing (EDLP Every Day Low Pricing) What Big Bazaar does is promising
its customer the lowest prices without coupon clipping or having to wait for the discount
promotion season or comparison shopping.
Promotional Pricing Big Bazaar offers the financing to its customers at a lowered rate
of interest. The pricing strategy is used in such a way such that it promotes the product to
the customer. Under the Promotional Pricing strategy, we have the following pricing
strategies followed:
Low Interest Financing Pricing which caters to the Isse sasta aur achcha aur
kaha which typically targets the Low Interest Financing segment of customers.
Special Event Pricing Big Bazaar also caters to special event pricing strategy to
grab more eyeballs. The organization does follows this strategy to gain more revenue
as well as footfalls, thereby reducing the gap in sales
Differentiated Pricing Big Bazaar also follows a Differentiated Pricing strategy. This
type of pricing strategy is used in the market, where the multiple customer segments exist
to avoid confusion about the different prices of the displayed products. What is unique is
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customers buying products from these type of markets cannot resell them at a higher
price in the market. However, it can also be based on the peak and the non-peak hours or
days of shopping in which case it will be known as the Time-based Differentiated
Pricing. An example of this is the Wednesday Bazaar format.
Bundle Pricing Refers to packaging together two or more complimentary products and
selling them to the customers at a price reduced the sum of the individual prices. In case
of Big Bazaar, it lays a lot of importance on this pricing strategy and examples of this are
when it tries to sell 5kg rice + 5kg oil +5kg sugar for INR 599 which is also a play on the
psychological pricing. Another example would be the 3 Good Day Family Packs at a
price of INR 60 where an individual pack comes in at INR 22 thereby effectively saving
INR 6 of the customer. This kind of pricing strategy helps to add value to the customer
and thereby increase sales for the organization.
Apart from the above as mentioned earlier, Big Bazaar also follows psychological
discounting pricing strategy wherein it offers customers products at INR 99, INR 599
and so on. The rationale behind this is that it drives greater demand than it would have if
it was expressed in rounded figures. This strategy aims to stir up feelings of prestige with
a high end item or that a thrifty note with a bargain.
Not only Pricing Policy, Big Bazaar also has a very simple 15-day return policy in place as well.
If a customer has brought a product and then he/she feels that the product is not up to the
expectations, then he/she can return the product to the store within 15 days of purchase in
undamaged condition.
Alternatively, he customer can contact the Big Bazaar Support system and have their
representative come to the customers home and have the package picked up at the customers
convenience. This simple 15-day return policy, which eases the purchase process of the customer
is also one of the reasons that the target segment come back to Big Bazaar every time.

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9. Credit Availability
Like most of its competitors, Big Bazaar gives a credit period of 30 days in general. However,
there is a slight variation when it comes to products that are perishable. For example, for the
perishable products that are placed at the Shop-in-Shop counters in Food Bazaar, the credit
period is calculated on a day to day basis whereas in general if we are to look at credit period
with the help of the product movement, then for fast moving products the credit period is on a
weekly basis, whereas for the slow moving products, the credit period is either 2 weeks or 3
weeks.

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10. Approximate ROI of the channel members

Big Bazaar provides a platform for over 15,000 small, medium and large producers and
manufacturers to sell their products to Indian consumers. If we are to look at the Approximate
ROI of these channel members, it is something that no employee of the organization is willing to
reveal as such a breakdown of the ROI was not possible and we were only able to gather an
approximation of the ROI along with the Profit margin of the channel members.
The ROI is mainly dependent on the Channel Member himself, in terms of delivery timing
adherence of the products as well as quality of the product, and the volume of the product sold to
Big Bazaar. If all the criterion is met, then the supplier has a profit margin of 7% - 8% and the
return on investment is an approximate of 20% - 22% if the product is of superior quality
elsewise it is around 17% - 18%.

11. Storage Requirements and Visual Merchandising at the Point of Sales

Indias temperature controlled logistics sector is valued at almost INR 12,000 to INR 15,000
crore with almost 90% being carried out by the regional operators. To capture this opportunity
Future Supply Chain (FSC) has launched cold storage facilities at Mehsana, Gujarat. Currently
these cold storage warehouse facilities are present in Delhi, Kashipur, Mehsana, Mumbai,
Chennai, Bengaluru and Tumkur. FSC has planned further expansion of capacities in Delhi,
Hyderabad and Mumbai. These warehouses are capable of deploying 3 lakh tonnes per month
and have an average floor space of around 3.6 million sq. feet across India. These warehouses are
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temperature controlled ranging from -30C to +25C and have the best in class equipment for
temperature monitoring and control.
The company reported income from operations of 408 crores with EBIDTA of 66 crores and
PAT of 25 crores for FY 2014-15, an increase of 23.6% in Income, 127.6% in EBIDTA and
485.1% in PAT (Future Groups, 2015).
In terms of store space Big Bazaar stores across India occupy almost 45-50,000 sq. feet of space
each of which apparel takes up about 35% which is almost 15,750 17,500 sq. feet of space wih
the rest going to Food Bazaar, Furniture Bazaar etc.
Almost 80% of our first impressions of anything is based on sight and as such it is worth a
thousand words. The base objective of visual merchandising is to attract customers to the point
of purchase in order to sell the merchandise. Visual Merchandising is offered to the customer
through the exterior as well as the interior presentation which then should be collaborated with
the companys overall theme.
Visual Merchandising comprises of the following components:
Store Design: The Store design reflects the corporate image of the organization as well as
reinforces it. For Big Bazaar the store design is mostly a planogram store design. It was
created with the thought that the customers entering the shop should feel like that they are
shopping in a local market (i.e. to give them the feel of a local convenience store).
Furthermore, for the fruits & vegetables section the store had a shop-in-shop design
which was then handled by external vendors.
Store Name: The name Bazaar is something that people associate with a commonplace
market which is one of the main reasons that the economy downfall of 2008-2009 did not
affect Big Bazaar, as Big Bazaar continued to reign in the Indian Hypermarket Scenario
with the promotional strategies of Sabse Saste Teen Din (2006), Hafte ka Sabse Sasta
Din (2007) and The Great Exchange Offer (2008).
Store Color: The Big Bazaar Logo has Orange, Blue and White which is used to invoke
the feeling of warmth, calmness and trust among its customers.

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Store Ambience: The store ambience in Food Bazaar is like a convenience store. It
follows a grid or gondola pattern to allow the customer to select their products with ease
as well as to come back to their favorite aisle to make a last minute purchase.
The ambience at Fashion @ Big Bazaar matches it tagline, Isse sasta aur achcha kahin
nahi with apparels being placed in different sections for women and men often in
different corners of the store thereby segmenting the consumers as per gender. The colors
used are pastel colors that can be used to have a soothing effect on the customers mind
and the music is also in a similar line. However, what the fashion @ Big Bazaar lacks are
enough of trial rooms that sometimes cause the consumers to return empty handed as they
are not able to try out their products due to heavy traffic. Also the music being played
sometimes becomes very repetitive with the store interior color palette being unchanged.
Space Productivity: Big Bazaar is known for its maximum utilization of the store space.
It is usually measured by sales per square feet of selling space, therefore it was from here
that we came to know that it was designed in a logical manner so as to allow ease of
consumers. To make the store more wall merchandisable, the apparels as well as nonfood products are also put on display with the help of Shelving, Hanging and Stacking.
Signage: Big Bazaar has always used signage for its promotions. The signboards are
hung at locations of high traffic where people would stop and look at the offer. It has also
been done through full page advertisements as well as ads in magazines. Inside the stores,
the use of signage at each floor entrance to show what categories of products are there at
that floor has also helped in the ease of purchase for the customers.
Thus this planogram styled store design not only shows the placement of the retail products on
the shelves, but aids in providing an aesthetic shopping experience to the customers. It also helps
in better inventory management and reduces the out of stock situation. Apart from this it aids in
improving sales as well as it assigns selling potential to every inch of the retail space and it is
considered as an effective tool for staff produced display.

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12. Floor Stock Management

In all Big Bazaar Retail Outlets, there is floor stock management which is essentially a part of
the Inventory Management Process. The Floor Stock Management in Big Bazaar is as follows:
The stocks entering the floor can only come out with a customer unless verified that is
perished or physically damaged or it is an expired product.
The stock management on the floor is automated with the help of the Auto Replenishment
System and is dependent on the footfalls on that particular section.

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The Stocks on the floor are calculated on a day-to-day basis to analyze the future
demand. If the demand or the sales of a product is deemed to be high, then the
Department Manager would request to the CDC to replenish the product.
Accordingly, the replenishment of that product occurs.

13. Shrinkage Management

In recent times the Big Bazaar Store is incurring huge losses due to shrinkage of the store
inventory. Despite high security at the store, they are facing difficulties in shrinkage management
owing to the large product portfolios available.
What the company has done now is that they have installed high range security cameras at the
high demand non-food sections of the stores as well as tying up hard tags and soft tags on the
products when if not removed can be detected by the RFID scanners at the store entrance.
Frisking at the store entrance is also done at times. Apart from this what Big Bazaar has also
done is to manually count each and every product of the store every quarter. This process is also
known as stock take.
This is done so as to continue the main objective of never allowing the customer to return empty
handed.

14. Channel Promotions Above the Line and Below the Line
Promotional Strategies are a part and parcel of this company and as such Big Bazaar has
employed both Above the Line (ATL) as well as Below the Line (BTL) promotional measures to
increase the footfall of the customers in its stores.
Some of the Above the Line promotional measures undertaken by Big Bazaar included giving
online advertisements in its corporate partner websites as well as promotional advertisements. Of
these the most recent ones are the Great Indian Kitchen Festival as well as the Crazy Weekend
Deals.

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Apart from this Big Bazaar gives advertisements in the leading dailies such as Times of India as
well as on the TV regarding discounts and purchase schemes. Also a major promotional as well
as an effective scheme was done by Big Bazaar, a decade back in 2006, when they had launched
a housewife only credit card program Shakthi.
In terms of Below the Line promotional strategies, Big Bazaar has employed countless methods
to increase store revenues. Some of these strategies include Coupons, Discounts, Buy More Save
More, Live Competitions which included Lottery draws, Money back offers, Exchange Offers
and special Occasions.
Apart from this back in 2010, Big Bazaar had also tied-up with Star India Pvt. Ltd. To launch a
new apparel brand under the name of Star Parivaar which showcased apparel worn by the
customers favorite Telly stars from Star Plus.
Some other Below the Line promotional strategies followed by Big Bazaar are as follows:
Low Prices on Wednesday (Hafte ka sabse sasta din)
Concept of Big Day
Promotional Offers such as
o School Jao Khushi Khushi
o Khushi ki Baraat
o Happy Fathers Day

15. Evaluation of the Channel Effectiveness

Big Bazaar still doesnt have the tracking information for their goods, which were delivered by
their supplier for them. They have to rely on their truck drivers only for exact position of their
goods. This made them to fall behind from their competitors. This is one area where Big Bazaar
in terms of channel effectiveness has fallen short.
Apart from this, Big Bazaar has its own transportation vehicles for transportation on road. Once
again the geographical location and how fast the goods have to be delivered are the factors for
the final selection of modes of transportation. The concept of economies of scale and economics
of distance are both take into consideration in case of larger consignment where Big Bazaar

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provides an appropriate logistical solution, which helps in reducing the overall cost for them.
And this is something that Big Bazaar has fine-tuned to a large extent.
Apart from this Big Bazaar has a fine system in place for delivery by suppliers. Any supplier
who would be delivering the supply to the warehouse by a delay of more than 1 hour than the
stipulated time would be charged a fee which would be around 10% of the amount they were to
receive. Not only this they would even be receiving a commission which would be reduced by
1% - 2% of what they normally receive.
As a result of all this Big Bazaar suppliers of raw materials who do not have very high
bargaining powers always make sure to deliver on time and as such is very effective in nature.
Also to motivate the suppliers, Big Bazaar has a ranking order of suppliers in place that is
changeable on a monthly basis. The criteria for the same is timely adherence, volume and quality
supplied and past performance. The reward for the same is an increased commission from Big
Bazaar.

16. Conclusion
In conclusion, Big Bazaar should continue with the Making India Beautiful strategy which
brought newer class of customers to the store as well as continue with the ranking system among
the suppliers so as to maintain the competitive advantage position within the industry as well as
remain the preferred company to supply the product to among the suppliers.
The Future Group has already introduced Future Logistics into the market in 2009, but with other
retail giants diversifying their portfolio, both Big Bazaar and Future Group has a long way to go.
It should definitely consider moving into the packaging, labelling and the Reverse Logistics
Services as the current transport service is only limited to and from the warehouse.
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We know, that Big Bazaar does not have a technology based product tracking system and as such
investing in technology integration to provide just in time delivery at the retail outlet is highly
necessary. Furthermore, it should follow up with the government to make sure that there is a
sound and safe policy in place that would safeguard the interest of the logistic companies and
suppliers.

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