marketing management report on future group
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A MARKETING MANAGEMENT
PROJECT ON
PREPARED BY: - GROUP A-5
Batch:- 2011-13
Name Roll no.
Nikita Bali 11004
Sunny Bhuva 11010
Chandan Pahelwani 11047
Himani Parihar 11049
Sonia Dadlani 10022
SUBMITTED TO:-
Dr. Bhavesh Vanpariya
Tolani Institute of Management Studies, Adipur
Tolani Institute of Management Studies, Adipur Page 1
DECLARATION
We Group: A-5 hereby declare that this project is the result of our
personal learning outcomes from the subject “Marketing
Management”. The analysis and data presented in the project is in
accordance with the subject Marketing Management.
The source of information collected is given in the references part at
the end of the project. We have not copied the project from any of the
internet source. This project is from our personal findings on the
company Future Group.
We are also grateful to Dr. Bhavesh Vanpariya for assisting and
guiding us throughout the project.
Tolani Institute of Management Studies, Adipur Page 2
Sr no. Title Page no.
1 INTRODUCTION OF COMPANY 4
2 PRODUCT PORTFOLIO 10
3 COMPANY ORIENTATION TOWARDS
MARKET PLACE
11
4 ANALYZING THE
MACROENVIRONMENT
16
5 CUSTOMER PERCEIVED VALUE 19
6 ANALYZING CONSUMER BEHAVIOR 22
7 BASES FOR MARKET
SEGMENTATION
24
8 FIVE PATTERNS OF TARGET
MARKET SELECTION
29
9 BRAND ELEMENTS 30
10 PRODUCT LIFE CYCLE 34
11 PRODUCT STRATEGIES 40
12 PRICING STRATEGIES 52
13 DISTRIBUTION STRATEGIES 54
14 PROMOTION MIX 56
15 PACKAGING AND LABELING 57
16 VIDEO ADVERTISEMENTS OF FUTURE
GROUP
59
17 REFERENCES 60
Tolani Institute of Management Studies, Adipur Page 3
INTRODUCTION OF COMPANY
Future Group is India’s largest retailer and one of the leading business
houses with a strong presence in retail. Its founder and Group CEO is Mr.
Kishore Biyani.
Future Group India was established in 1994 with a vision to provide
diverse services in Indian and Global markets. The business areas of Future
Group cover BPO (Business Process Outsourcing), New Media, Security
Management, and Construction. Through their strategic investment and
services, the future of Future Group shows a rising star in the business sky of
India.
Led by its flagship enterprise, Pantaloon Retail, the group operates
over 16 million square feet of retail space in 73 cities and towns and 65 rural
locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail
employs around 30,000 people and is listed on the Indian stock exchanges.
The company follows a multi-format retail strategy that captures almost the
entire consumption basket of Indian customers. In the lifestyle segment, the
group operates Pantaloons, a fashion retail chain and Central, a chain of
seamless malls. In the value segment, its marquee brand, Big Bazaar is a
hypermarket format that combines the look, touch and feel of Indian bazaars
with the choice and convenience of modern retail.
Lines of Business
The company is present across several lines of business which have various
formats (stores) operational under it. These include:
Food - Food Bazaar, Chamosa, Spoon, Brew Bar, Sports Bar & Sports Bar
Express, Cafe Bollywood.
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Fashion - Pantaloons, Central, aLL, Brand Factory, Blue Sky, Top 10,
Fashion Station, Big Bazaar, Lee Cooper (JV),
General Merchandise - Big Bazaar, Shoe Factory, Navras, Electronics
Bazaar, Furniture Bazaar, KB'S FAIR PRICE
Home & Electronics - Home Town, eZone, Collection i
E-tailing (Online Shopping) - www.futurebazaar.com
Books & Music - Depot
Leisure & Entertainment - Bowling Co., F123
Wellness - Star & Sitara, Tulsi
Telecom & IT - Gen M, M Bazaar, M-Port, ConvergeM
FUTURE RETAIL:
The retails businesses of Future Group in India are divided into three main
categories:
Retail forms the core business activity at Future Group and most of its
businesses in the consumption space are built around retail. Future Group’s
retail network touches the lives of more than 200 million Indians in 73 cities
and 65 rural locations across the country. The group currently operates
around 1,000 stores spread over 16 million square feet of retail space.
Present in the value and lifestyle segments, the group’s retail formats cater
to almost the entire consumption expenditure of a wide cross-section of
Indian consumers.
Pantaloon Retail India Limited
The leading retail formats under this include:
Pantaloons Stores -lifestyle segments and fashion segment.
Big Bazaar - a uniquely Indian hypermarket chain
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Central - a chain of seamless destination malls
Food Bazaar - a supermarket chain that blends the look, touch and feel of
Indian bazaars with aspects of modern retail like choice, convenience
and quality
Home Town - , a large-format home solutions store
E Zone - consumer electronics
Depot - consumer electronics
Health & Beauty Malls
Online retail through futurebazaar.com
Aadhaar- India’s leading rural retailing chain, that is present in over 65
locations in rural India. Aadhaar, an agri-service cum rural retail initiative,
provides a complete solution provider for the Indian farmer.
Furniture Bazaar - specialized formats for home furniture and home
furnishing
Ethnicity - India's first concept store, which recreates the experience of a
traditional ethnic market in a modern retail format,
Joint Ventures with International Brands
Indus League Clothing that owns leading apparel brands like Indigo
Nation, Scullers and Urban Yoga
Galaxy Entertainment Limited that operates Bowling Co, Sports Bar, F123
and Brew Bar
French retailer ETAM group, US-based stationary products retailer, Staples
and UK-based Lee Cooper.
Franchisee of international brands like Marks & Spencer, Next,
Debenhams and Guess in India.
Tolani Institute of Management Studies, Adipur Page 6
Indian Joint Venture Partners
Manipal Healthcare
Talwalkar's
Blue Foods
Liberty Shoes.
FUTURE CAPITAL HOLDINGS
The financial services of Future Group are taken care by Future Capital
Holdings. These include:
Asset Management and consumer credit are the prime focus financial
services. Around 1 billion USD have been invested in retail real estate and
consumer brands outlets and hotels.
Future Money - It is a financial supermarket format providing consumer
credit
Joint venture with Italian insurance major General Insurance for
providing general insurance services.
Venture Capital Funds and Private Equity Funds through
kshitijfund.com
Capital Holdings, the group’s financial arm provides investment advisory
to assets worth over $1 Billion that are being invested in consumer brands
and companies, real estate, hotels and logistics.
It also operates a consumer finance arm with branches in 150 locations.
BPO (BUSINESS PROCESS OUTSOURCING)
Future Group has made major investments in BPO industry as a venture into
the Information Technology Enabled services (ITES) industry. Future Group
has subsidiaries offering IT based solutions. These include:
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Language Services
Software Development
Content Engineering
NEW MEDIA
Future Group has invested in digital media and computer technology for
creating innovative and interactive multimedia presentations. These include:
Multimedia Production
Broadcasting
Publishing
Designing
SECURITY MANAGEMENT
Future Group is considered as a reliable tailor-made business and security
services provider. They develop their own software and machines for
security services. These include:
Access Control Systems
Time Attendance Systems
CCTV
Alarm Management Systems
Tolani Institute of Management Studies, Adipur Page 8
CONSTRUCTION
Future Group brings to you their past experience in quality construction for
building and renovating buildings for leasing to business. Future Group is
also involved in the designing, financing and legal considerations of the
project undertaken. The construction activities of Future Group in India
include:
Leasing
Landscaping
SUPPLY CHAIN
Future Supply Chain Solutions Limited (FSCS), a specialized subsidiary,
offers strategic, focused and consolidated approach to meet the group’s
large supply chain requirements as well as those of select supply and
business partners.
The Future Supply Chain Solutions team currently oversees the
operations of an existing fleet of over 600 dedicated trucks, contracted from
established regional and national transport carriers, most of which are now
equipped with GPS sets.
In addition it provides integrated end-to-end SCM, warehousing and
distribution, multi-modal transportation and container freight station.
The total consolidated warehouse space that the company intends to
have operational by 2010-11 is nearly 7.50 million square feet.
Tolani Institute of Management Studies, Adipur Page 9
PRODUCT PORTFOLIO OF FUTURE GROUP
As mentioned in the introduction of the company, Future Group’s core
business activity is retail, along with BPO (Business Process Outsourcing),
New Media, Security Management, and Construction. So here below are the
logos of their various brands.
Please see the IMPORTANT NOTE given below the brand images.
IMPORTANT NOTE:- From the various brands of the company we
have mainly focused on BIG BAZAAR in relating the marketing
management concepts.
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COMPANY ORIENTATION TOWARDS MARKET PLACE
There are mainly five concepts related to company orientation towards
market place which are:
1. The Production concept
2. The Product concept
3. The Selling concept
4. The Marketing concept
5. The Holistic marketing concept
The concept which applies to Big Bazaar is The Selling concept.
The concept says that the consumer if left alone will not buy enough. This
is true and Big Bazaar applies this concept by displaying all the product of
different brand and its private brand on the shelves.so that the customer
have a huge variety of products and can select the best out of it and
some schemes are also available which attracts the customer to buy more
and even purchase other product.
Their need to be aggressive communication with the customer. There is
sales person at the counter which helps the customer in finding out the
best product for himself. Sometimes the customer might be in confusion
whether to buy a product or not, at that time the salesperson tell them
about the product and its requirement in their lives. After communicating
all this about the product the customer then finally makes a decision of
making a purchase. So aggressive communication is required with the
customer.
This concept also says that their needs to be aggressive marketing of the
product so that buyer make a purchase.
The main purpose of this concept is to sell more and earn more.
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This concept overall means that sell what you want to instead of what the
customer want to buy.
Another concept which relates to Big Bazaar is The Marketing concept.
The concept says that “Create the best and deliver the best” and Big
Bazaar does the same through their SACH brand. They try to create the
best by the name of Sachin Tendulkar and deliver the quality product.
Next concept comes the “HOLISTIC MARKETING” which means
“Everything matters in this market”
It is an approach to recognize the scope of Marketing Activities.
These are the four major themes on which any companies' overall
position can be judged.
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Holistic Marketing
Integrated
Marketing
Relationship Marketing
Performance Marketing
Internal Marketing
This concept helps companies to have a complete approach towards
their requirement.
The integrated marketing includes all the following:
The integrated marketing includes the four P’s i.e. Product, price, Place
and Promotion. Big Bazaar takes due care of its product quality, it provide
the product lower than its cost to the customer, Big Bazaar is set up at
such a place which is convenient for the customer and for the business
and it does promotion through different media i.e. television, print etc.
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Integrated
Product
Price
Place
Promotion
Performance marketing :-
Performance includes sales revenue of Big Bazaar, Legal that is the legal
aspects of the business, ethics which they follow and environment of the
business.
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Performance
Sales Revenue
Legal
Environment
Ethics
Relationship marketing :-
Relationship:- which includes maintaining relationship with the customers,
employees, partners and the channel.
Internal marketing :-
Internal :- which means one department share profit with other departmental
of same organisation is called profit internal sharing.
Tolani Institute of Management Studies, Adipur Page 15
Relationship
Customers
Employees
Channel
Partners
Internal
Marketing Department Senior Management Other Departments
ANALYZING THE MACROENVIRONMENT
NEEDS and TRENDS
Successful companies recognize and respond profitably to needs and
trends which could not be carried out earlier.
Enterprising individuals and companies manage to create new solutions to
unmet needs. Similarly, Big Bazaar identified the need for cheap and
discounted products. They started the operation with the tag line “Is se
sasta aur accha kahin nahin” by providing best products at best price.
We distinguish among fads, trends and megatrends.
A fad is unpredictable, short-lived, and without social, economic, and
political significance. A company can cash in on a fad, but this is more a
matter of luck and good timing than anything else. E.g. Beanie Babies.
A trend is a direction or sequence of events that has some momentum
and durability. Trends are more predictable and durable than fads. A
trend reveals the shape of the future and provides many opportunities.
The percentage of people who value physical fitness and well-being has
risen steadily over the years, especially in the under-30 group, the young
women and upscale group.
Mega trends have been described as large social, economic, political
and technological changes that are slow to form, and once in place, they
influence us for some time between seven and ten years, or longer.
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From the above, study we would say that the concept of Mega Trends
applies to Big Bazaar as people of India are not used to Big Bazaar (Retail
Model). It takes time to adopt it. People are still buying the products from
the open market in traditional way.
Identifying the Major Forces
Companies and their suppliers, marketing intermediaries, customers,
competitors, publics all operate in a macro environment of forces and
trends that shape opportunities and pose threats. These forces are not
controllable but the company must monitor and respond timely to these
forces. In the economic arena, companies and consumers are increasingly
affected by global forces.
The beginning of the new century brought a series of new challenge: the
steep decline of the stock market, which affected savings, investment,
and retirement funds; increasing unemployment; corporate scandals; and
of course, the rise of terrorism. These dramatic events were accompanied
by the continuation of other, already-existing longer-term trends that
have profoundly influenced the global landscape.
Within the rapidly changing global picture, the firm must monitor six
major forces: demographic, economic, social-cultural, natural,
technological, and political-legal.
Technological:
One of the most dramatic forces shaping people’s lives is technology.
Technology has released such wonders as penicillin, open-heart surgery,
and the birth-control pill.
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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.
Social Cultural:
Society shapes our beliefs, values, and norms. People absorb, almost
unconsciously, a worldview that defines their relationship to themselves,
to others, to organizations, to society, to nature, and to the universe.
Similarly, Big Bazaar launched a campaign Des Badla Ab Vesh Badlo
(nation is changing, so change the way you dress), Sone ki Chidiya two
years ago. It also follows consumer segmentation according to social-
cultural factors. It also promotes environment friendly carry bags with
easy to dispose. It also undertakes various activities for the welfare of the
society popularly known as corporate social responsibility.
Political-Legal:
Marketing decisions are strongly affected by developments in the political
and legal environment. This environment is composed of laws,
government agencies, and pressure groups that influence and limit
various organizations and individuals. Sometimes these lows are creating
new opportunities for business.
Big bazaar is following various laws like labour law and consumer law. It
also regulates various safety measures in the store.
Big bazaar is also following various government policies, tax policies with
regularly paying tax and filling return.
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CUSTOMER PERCEIVED VALUE
Consumers are more educated and informed than ever, and they have
the tools to verify companies’ claims and seek out superior alternatives.
How then do customers ultimately make choices ? they tend to be
value maximizers, within the bounds of search costs and limited knowledge,
mobility and incomes. Customers estimate which offer will deliver the most
perceived value and act on it. Whether the offer lives up to the expectations
affects customer satisfaction and the probability that the customer will
purchase the products again.
Customer-perceived value is the difference between the
prospective customer’s evaluation of all the benefits and all the costs of an
offering and the perceived alternatives.
Total customer benefits is the perceived monetary value of the
bundle of economic, functional and psychological benefits customers expect
form a given market offering because of the products, services, personnel
and image involved.
Total customer cost is the perceived bundle of costs customers
expect to incur in evaluating, obtaining, using and disposing of the given
market offering, including monetary, time, energy and psychological costs.
CONSUMER INSIGHT AND PERCEPTION
Big Bazaar is based on 3-C theory of Kishore Biyani. The three C symbolize
Change, Confidence and Consumption and according to this theory “change
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and confidence is leading to rise in consumption”. They divided Indian
customers in three categories:-
India One
Consuming class, constitute only 14% of Indian Population
They are upper middle class and most of customers have substantial
disposable income
Initial focus of Big Bazaar
India Two
Serving Class which includes people like drivers, household helps, office
peons, washer man 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.
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India two find 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 checkout 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 to every section of family. That also led separate section for
clothes, vegetables, food etc. i.e. Multiple clusters within a bazaar.
Developed a diversity tracing.
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ANALYZING CONSUMER BEHAVIOR
Consumer behavior is the study of how individuals, groups and
organizations select, buy, use, and dispose of goods, services, ideas, or
experiences to satisfy their needs and wants.
A consumer’s buying behavior is influenced by cultural, social, and
personal factors. Cultural factors exert the broadest and deepest influence.
Factors affecting consumer behaviour :-
Cultural factors :-
Culture, subculture and social class are particularly important influences
on consumer buying behaviour.
In the case of big bazaar, the frequency of visits by the customer and the
kind of products they buy influence their buying behaviour pattern.
The cultural values of the customer also influence their visit to buy the
required products at the big bazaar.
Social factors :-
Social factors such as reference groups, family and social roles, statuses
affect our buying behaviour.
Reference groups involve family, friends and neighbours.
Customers of big bazaar might influence others persons of their reference
groups to buy products from big bazaar.
Social status of the people influences their buying behaviour.
For example, high class people go to big bazaar for shopping.
Personal factors :-
Age and stage in the life cycle are the personal factors which influence
customer buying behaviour.
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Children will buy different products from big bazaar according to their
choice and middle-aged persons and old-aged persons buy different
products.
So the products for all the groups of the family are available at big bazaar,
this influence their buying behaviour.
Lifestyles of the people also influence buying behaviour.
Some people are uneasy to go to the small kiryana shop for their
shopping.
Buying Behaviour process :-
The above chart shows the buying behaviour process of the customers.
From the total set of Big bazaar, V-mart, Star bazaar, Reliance super and
a local departmental store.
The customers are aware about Big bazaar, Reliance super, V-mart and
Star bazaar.
To buy their required products and for shopping they consider Big bazaar,
Reliance super and V-mart.
Finally customers have a choice to make either to visit Big bazaar or
Reliance super.
At last consumers take the decision to visit Big Bazaar for the shopping.
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Total setBig BazaarV-martReliance superStar BazaarLocal departmental store
Awareness setBig BazaarV-martReliance SuperStar Bazaar
Consideration setBig BazaarReliance SuperV-mart
Choice set
Big BazaarReliance Super
Decision
BIG BAZAAR
BASES FOR MARKET SEGMENTATION
1. GEOGRAPHIC SEGMENTATION:- In this segmentation company calls
for division to the market into different geographical units such as nation,
state, regions, countries, cities, or neighborhoods. As we are taking one
product of our company future group we are going to discuss various
segmentations on big bazaar.
I. City:- big bazaar is situated in different city like it is in Ahmedabad,
Vapi, Vadodara, Rajkot, Surat, Nashik, Nasik, Bharuch, Bhopal,
Hyderabad. It is most of situated in metro city where the population
is more.
II. Rural areas and Urban area:- future group has segmented its
retail into two area rural and urban area for rural area they made
aadhaar retail by this they targeted that market also those people
who all are living over there.
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Now in urban area big bazaar is there so that people can get all
things in one place by saving their precious time and by giving
attractive discount on so much durable and non-durable goods plus
they are offering service also.
These two segmentations are related with future group so that
they can target mass of people easily.
2. DEMOGRAPHIC SEGMENTATION :- Big bazaar has done full
segmentation on demographic bases they are as follows:-
Age
Family size
Gender
Income
Occupation
Tolani Institute of Management Studies, Adipur Page 25
Rural area
EXPLANATION:-
Age:-
Big bazzar has targeted there customer age wise for kids like they
have different section for kids toys, shoes, garments etc. For teenagers
they have different section they have café shops in big bazzar malls so
they that can refresh them self by doing shopping. For house wife they
give different discount or they have different type days like sabse
sastein 4 din or 5 din maha bachat. In this way they segmented it age
wise.
Family size:- big bazaar also consider family size in its segmentation
they provide all quantity of product there were 10 kgs bags are also
available and 5 kgs 1kgs bags are also available so that neutral family
can also fulfill their need and joint family people will also satisfied
there need and if customer want more quantity then they also give
different discount our they give buy one get one free offer to them.
Gender:- big bazaar fulfill the need of both gender they get things
whatever they need whether they are male or female they had also
celebrate some special days for male and female that is “sabse chikna
kaun campaign”, “ detergent mela”, “ india beverage league”, “ dal
chawl mela” etc.
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Income:- big bazaar target higher, middle and lower class people
so that all kind of people come in there segmentation in India higher
class people are less then lower class people so for them big bazaar
brings some days so that mass of people get attracted and buy
many things from there retail shop. Like sabse sastein 3 din, 5 din
maha bachat.
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Occupation:- big bazaar specifically targets working women and
home makers who are the primary decision makers. The large and
growing young working population is a preferred customer segment.
So that they get convenience goods for them easily and at one
place.
3. Psychographic:-
Lifestyle:- big bazaar enrich the life style of the people they can
fulfill needs of whole life in less price by getting different discounts
nd skims for them and they fell their status has also been increase
by doing shopping in mall.
4. Behavioral:-
Occasions
User status
EXPLANATION:-
Occasions:- big bazaar celebrates days and give special offer for the
customer like on every last week of the year the clear there stock or
they give special winter or summer offer for their customer to buy
more and spend less.
User status:- there were some user status who came to big bazaar
for first time and there were some people who go many time big
bazaar. Like they go every weekend or some go in one month.
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FIVE PATTERNS OF TARGET MARKET SELECTION
Single segment concentration
Selective specialization
Product specialization
Market specialization
Full market coverage
In big bazaar there prevails full market coverage and market
specialization. They cover full market by income, age, gender, family size.
Full Market Coverage:-
M1 M2 M3
Age
Gender
Income
Market Specialization:-
M1 M2 M3
Retail
In market specialization big bazaar has their market specialization in
retail.
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BRAND ELEMENTS
Meaning of Brand:-
“A brand is a name, term, sign, symbol or design or combination of
them, intended to identify the goods or services of one seller or group
of sellers and to differentiate them from those of competitors”.
A brand is a product which has earned a place in consumer’s life
through perception, experience and beliefs .It is the sum of how
consumers feel about a product.
Brand Elements:-
Brand elements are those trademark devices that identify and
differentiate the brand.
Brand elements are mainly brand name, slogan, character, symbols,
URL, person and logos.
Our company “FUTURE GROUP” consists of the following brand
elements which differentiate it from others.
1. Brand Slogan: ‘India Tomorrow’ and ‘Udna hai aj, abhi’ of Future Group
and ‘Is se sasta aur accha kahin nahi!, of Big bazaar.
2. Character: Future group, Big Bazaar
3. Logo: Bird
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4. Person: Cricketer M.S Dhoni and Bollywood actress Asin for Fashion at
big bazaar.
There are some private brands of future group which includes FUTURE
GROUP’s tie up with Sachin Tendulkar for the brand “SACH” and some
of its private brands.
Future Group has successfully launched a series of private brands
ranging in foods with Tasty Treat, Home and personal care range
with Clean mate & Care mate, staples with Fresh & Pure and Premium
Harvest, and Sach is a big leap for the company in the direction
building its private brands portfolio through its association with an
iconic figure like Sachin Tendulkar, will be setting the tone based on
Sachin’s values and mass appeal.
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Future Group private brands have always launched their products
keeping “Indianness” in mind through consumer insights. Launch of
Tasty Treat soups with a mug and Tasty Treat Cornflakes with a bowl
are some of the success stories in past . Past one year has seen
aggressive roll-outs from private brands with products like Sach
toothbrush, Clean mate Diapers, Tasty Treat noodles and soups with
both classic and Chinese range, Fresh and pure Desi ghee which has
helped in giving consumer quality products at great value.
Future group also have tie up with other companies which are as
follows:
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PRODUCT LIFE CYCLE
A company’s positioning and differentiation stratergy must change as the
product, market and competitors change over the Product life cycle (PLC).
Prodcut life cycle is made up of four things:
1) Products have a limited life.
2) Product sales pass through distinct stages, each posing different
challenges, opportunities and problems to the seller.
3) Profit rise and fall at different stages of the product life cycle.
4) Products require different marketing, financing, manufacturing,
purchasing and human resource stratergies in each life-cycle stage.
The life of a product passess through four different stages
mainly:-
1. INTRODUCTION STAGE:-
The seller tries to stimulate demand regarding his product.
He makes promotion campaigns to increase public awareness
regarding his product.
He tries to explain the consumers how the product is to be used and
also explains the product features, advantages and benefits (FAB).
The seller at this stage might lose money, but can expect to make
profits in the future. As the product is just introduced in the market
there are chances that it might be a failure or a winner.
Sales are low and profits are below the line because the costs incurred
by the seller on the product at this stage are greater than the amount
of money he makes after selling the product.
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The seller might have “negative” profit i.e loss. Mainly the product at
this stage faces more of loss then earning profit for as the product is
just introduced and people are unaware regarding the product.
Need to spend a lot of money on promotion. For the product which is
just introduced in the market it is impossible to compete which the
similar type of product, so it is important to make people aware of the
product by promoting it through different mediums and heavy
expenditure is incurred on promotion at this stage.
Limited Product Model
At this stage their might be penetration pricing which means low price
of the product or skimming pricing which means high price of the
product at its introduction stage.
2. GROWTH STAGE:-
Next comes the growth stage wherein the cosumers are aware of
the product, its usage, benefit, features etc.
At the growth stage the seller tries to sell a lot and he tries to sell
as much as he can to cover up his loss incurred at the introduction
stage .
As the product is well known by the consumer other competitor
companies watch it and tries to introduce a competitor product.
E.g. Men’s Cosmetic. When the company firstly introduce the
Men’s Cosmetic cream many people were not aware of it but
slowly and gradually as people became aware another company
launched the competitor product of it to capture the market.
Growth of a product continues until too many competitors are in
the market - and the market is saturated.
Tolani Institute of Management Studies, Adipur Page 35
At the end of the growth stage, profits start to decline because
when competition arises seller spends more money on promotion
to keep sales going.
Spending money on promotion cuts into your profit. As a
competitor product comes in the market its important to keep our
product sales go and for that promotion of it becomes important
which ultimately cuts our profit.
Large company may acquire small pioneering firms.
Gaining wide distribution is a key goal.At this stag it is important
that our product is available at every place, so that our consumer
don’t find any difficulty in getting it.
At this stage the product achieves sales volume which
createseconomies of scale.
3. MATURITY SATGE:-
When a product achieves the growth which includes increase profit
and sales the next stage from which it passes through is the MATURITY
STAGE.
At this stage there are many competitors who have joined and the
market is saturated.
The only way to sell the product is to lower the price and so the profits
decrease.
It is difficult to tell the difference in our product since most of the
competitor product has the same F.A.B. - Features, Advantages &
Benefits.
At this stage competition can get “Horrible” and commercials are
intense.
That is to say, we have commercials almost begging the customer to
still buy your product because you still make it just as good.
An emphasis on product style rather than function.
Tolani Institute of Management Studies, Adipur Page 36
The marketplace is approaching saturation.
4. DECLINE STAGE:-
Newer products are now more attractive - even a low-low price
does not make consumers want to buy.
Profit margin declines - and so the only way to make money is to
sell a high volume.
The rate of decline is governed by:
How rapidly consumer testes change or
How rapidly substitute product are adopted
To increase volume you try to
Increase the number of customers - get new customers
Increase the amount each customer uses
Tolani Institute of Management Studies, Adipur Page 37
The above is the chart showing the four stages of product life cycle. Big
Bazaar comes under the RETAIL head of Future Group and it is at the
maturity stage. The following points can be considered:-
1. Big Bazaar keeps many offers to attract its potential customer like
“Buy one, get one free”, ‘Best deals’ and ‘sabse saste 3 din’.
2. It does more of promotional campaigning through print media,
television media to get it customer aware regarding the offers
available by them. It also does promotion through celebrities like Dhoni
and Asin for the fashion at big bazaar which help them to increase
their sales and the other points are explained above.
Tolani Institute of Management Studies, Adipur Page 38
3. There’s an increased competition of big bazaar with its competitors.
4. Big bazaar after coming at this stage want to stabilize it profit without
making any losses.
Tolani Institute of Management Studies, Adipur Page 39
PRODUCT STRATEGIES
Product Levels: customer value Hierarchy
Product is not only an offering but it is something beyond that. Is is
something which can satisfy the wants and need, which includes
special services or goods, events, persons, etc.
Product Levels are categorized in five levels which any marketer has to
follow which adds more value to customers and these five create
customer value hierarchy.
These four are the first four levels of customer value hierarchy. Core
Benefit is what actually a customer wants. It is also known as
fundamental level. Marketers have to see themselves as benefit
providers and thus this first step is called core benefit.
Tolani Institute of Management Studies, Adipur Page 40
Augmented Product
Expected Product
Basic Product
Core Benefit
Basic Product is the job of marketer to convert core benefit into basic
requirement. Providing any service or product with more facility is the
role of basic product.
The third level is Expected Product. Wherein marketer is serving the
product with those particular conditions & expectations which
customer have when they buy any product.
At the fourth level stands Augmented Product. It is that level where it
exceeds all the expectations of the customers. On this level tough
competition starts and the main focus of marketers is to survive in this
competition and give their product a position in the market.
The fifth level is Potential Product. This stage is where a product
exceeds even augmentation. It transforms the product in the future in
such a way that customer had never expected or even thought of it.
Potential Product is a stage where companies have to continuously find
something new for the customers to be served so as to satisfy them. In
the above mentioned chart we have not shown potential product as
still many companies are trying to reach this level. Future Group’s Big
Bazaar is on the fourth level. Let us see in more detail:-
Tolani Institute of Management Studies, Adipur Page 41
Here we can see that the first level core benefit of Big Bazaar is to
provide daily needs of the people at one place. As we know that Big
Bazaar is very wide and has all products like food items, perishable
products, clothing, apparels etc.
Second is Basic Product wherein Big Bazaar tries to serve all these with
wide range of options to choose. For e.g. If a customer wants to buy a
shampoo, in Big Bazaar they will have lots of choices of all the brands
like Head & Shoulders, Pantene, Dove etc… Customer here gets wide
range of any product what they want to buy.
The third is Expected Product. Here the customer expects discounts,
allowances, additional benefits as they think that this is such a big
place wherein all the products are available, so some discounts can be
offered to them. For e.g. If a customer purchases many items of his
Tolani Institute of Management Studies, Adipur Page 42
Exceeding the expectations
Discounts & Allownaces
Serving them more widely
Providing Daily Needs
home needs and personal needs, then they will expect to get some
discounts and off on some products.
Fourth is Augmented Product. Here Big Bazaar is on the level of
serving the Augmented Product. As we know something which exceeds
customer expectations that is known as Augmented Product. Here Big
Bazaar give the facility of home delivery to the customers at their
convenient time at their home. This is something which customers of
Big Bazaar had never expected. And they are very well satisfied with
this service provided to them.
And now Potential Product, which is not shown in that diagram because
still Big Bazaar has not yet reached that level of exceeding the
Augmented service provided by them to their customers. In future they
can undergo some more transformations of their products and services
and then it can reach the fifth level.
There many companies including Big Bazaar who are trying to find
something new for the customers. Potential Product is something very
different from what they provide. Companies are still between
Expected & Augmented product level. As any company including Big
Bazaar reaches the Augmented Level that is very soon accepted by the
customers and they start expecting to get this service for the lifetime
and thus this augmented product turned into expected product. Thus
again they have to search for new Augmented product to be served to
the customers which exceed their expectation.
On this level continuous competitions is to be faced by the marketers
to sell their product and maintain their position in the market. Also
they have to maintain trust and expectations of their customers. They
cannot afford to lose their customers on this level.
Tolani Institute of Management Studies, Adipur Page 43
Product Classifications
Marketers have classified the product into different categories:-
As we can see in the above diagram that products are classified in
three categories that is Durability, Tangibility and Consumer or
Industrial. All these have an appropriate marketing strategy.
Tolani Institute of Management Studies, Adipur Page 44
Product
Durability Tangibility Consumer or Industrial
Nondurable Goods: These are tangible goods and are consumed in one
or few uses, for e.g. Soft Drinks, Juices, Soaps, Shampoos, Milk etc…
These goods are purchased more frequently and therefore marketers
decide to make them available in lots of quantity and with lots of
options available to customers. This helps customers to choose from
wide range available.
Durable:- These also are tangible and survive for many uses. Like
Refrigerator, tools, clothing etc…
Services :- These are intangible.
Big Bazaar provides all the kind of products durable and non durable.
Food items, perishable products, clothing, apparel etc…
Then use of goods that is consumer or industrial. Big Bazaar provides
goods which are Consumer goods. Convenience goods are purchased
more frequently by customers as it takes minimum effort to buy. Also it
provides shopping goods which customers buy after comparing the
price, quality, style. Then comes unsought goods which customer
knows about but they don’t think much of buying those kind of goods.
For e.g. Life Insurance.
Tolani Institute of Management Studies, Adipur Page 45
Durability
Durable Nondurable Service
Tangibility
Product Mix
A product system is a group of different but related items that function
in a compatible manner. Under this product system there is product
mix.
A Product Mix is set of all the product and items a particular seller
offers to sell. It is also called Product Assortment. A company’s product
mix has certain length, width & depth of its products.
Tolani Institute of Management Studies, Adipur Page 46
Product Mix
Length Width Depth
Firstly let us see what is length, width and depth of the product with an
example. Here we will take the example of Future Group.
As we can see in the above diagram that there are four things in width
of future group.
Tolani Institute of Management Studies, Adipur Page 47
Width of Future Group
Retail
Services
Finance
Partnership
Now let us see Length of each:-
Length of Retail:
Lifestyle includes Brand Factory, Central, Home Town, Planet Sports,
Pantaloons fresh fashion.
Value includes Big Bazaar, Food Bazaar, Fairprice.
Digital includes Future Bazaar.com. This is online shopping facility
provided to the customers to get more benefit.
Tolani Institute of Management Studies, Adipur Page 48
Lifestyle
Value
Digital
Length of Finance:-
Finance has different section that is Future capital holdings. In this
capital is provided to small companies who require finance.
Future Generali has two sectors General Insurance & Life Insurance.
Future Venture has tie ups with many other brands to make it more
popular and give customers a wide range to choose from. The most
popular venture of Future Group was with Aadhar Retailing Limited.
This was a venture for rural areas and to serve people of rural areas.
Tolani Institute of Management Studies, Adipur Page 49
Finance
Future Capital
Holdings
Future Generali
Future Venture
.
Length of Services:-
Future Group has many learning programs for the people in tie up with
IGNOU.
It has also launched India’s first owned retail channel named Future Tv
Also it has launched a magazine named My World.
It has tie up with many Brands to widen the range and give people
many options.
It has tie up with Tata Docomo and is serving T24.
Length of Partnership:- This is different types covered of future group in
which ways they carry over their partnerships.
Tolani Institute of Management Studies, Adipur Page 50
Logistics & supply
Learning & Development Media
Brands Telephony
Here they Collaborate with many service providers & other big names
of products. They join hands to build the brand and widen the range of
their product list.
Tolani Institute of Management Studies, Adipur Page 51
Collaborations
Assistnace
Brand Building
PRICING STRATEGIES
PRICE MIX:-
Value pricing
Psychological pricing
Loss leader
Explanation:-
Value pricing:- value pricing means company wants to win loyal
customers by changing a fairly low price for a high-quality offering.
Same way big bazaar do the same thing big bazaar give lots of
discount to attract the customer so that they can get good quality
product in low price.
Psychological value:- psychological value pricing means that the
seller use this to attract its customer by keeping less numerical value
so that psychologically customer thing that there they are saving some
amount then other place eg they are getting thing in 111,999,9999 or
they use that by giving high and low price of the commodity and
saying save Rs 2 or 3 there they are playing with the mind of the
customer very easily.
Tolani Institute of Management Studies, Adipur Page 52
Loss leader:- big bazaar is also applying loss leader value in loss
leader the company is bearing loss of one product for selling the
another product like big bazaar give so many time offer like buy one
get one free and they are doing this because some time they have to
clear there dead stock so that by not getting any price of the
commodity at least they get something of the commodity or product.
Tolani Institute of Management Studies, Adipur Page 53
Tolani Institute of Management Studies, Adipur Page 54
DISTRIBUTION STRATEGIES
The producer and the final customer are part of every channel. We will
use the number of intermediary levels to designate the length of a
channel. Figure illustrates several consumer-goods marketing channels of
different lengths.
A zero-level channel (also called a direct-marketing channel) consists of a
manufacturer selling directly to the final customer through Internet
selling, door-to-door sales, home parties, mail order, telemarketing, TV
selling, manufacturer-owned stores, and other methods.
A one-level channel contains one selling intermediary, such as a retailer.
A two-level channel contains two intermediaries; a three-level channel
contains three intermediaries. From the producer’s point of view,
obtaining information about end users and exercising control becomes
more difficult as the number of channel levels increases.
Big Bazaar is following one level distribution channel in which it performs
role of retailer and purchase goods directly from producer and then sell it
to the customer. Distribution channel is one of the reason why Big Bazaar
is able to sell product at lower cost. The chart given below shows the
following:-
Tolani Institute of Management Studies, Adipur Page 55
Tolani Institute of Management Studies, Adipur Page 56
PROMOTION MIX
Promotion Mix is a system wherein different types of methods are
followed to promote a product and make it popular. Future Group also
undertakes Promotion Mix for Big Bazaar. There is thin line difference
between Advertisement and Promotion. Let us see each in detail:-
For Advertisement Big Bazaar choose Television Ads, pamphlets, FM
radio in metro cities. They keep showing about new offers for the
customers. Also with the help of Internet, Brochures & Direct Mail Big
Bazaar try to attract their customers more and more.
The second is Promotion of the product. It has to be decided how to
promote the product in what ways and with different tools available.
Big Bazaar choose to promote themselves by providing its customers
discount coupons, Membership Cards, On time Home Delivery, cash
refund offers, Price Packs, Gifts, Points redeem option to get more
discount, Organizing different contest, Product warranties. All these are
opted by Big Bazaar to promote themselves.
Big Bazaar provides some or other scheme and offers for the customer
every time one after other to attract the customers and maintain their
value with them.
Promotion Mix plays a very important role for any companies
development. This helps to establish themselves and maintain their
position in the market.
Tolani Institute of Management Studies, Adipur Page 57
PACKAGING AND LABELING
PACKAGING:-
Packaging is defined as all the activities of designing and producing
the container for a product. Packages might include up to three levels of
material. Like big bazaar have their packaging of their polybag which they
give to their customer when they shop from there store and go home
packaging is also a sign of remembrance or for promotion of the shopping
centre name or product name. For some company they take packaging very
seriously and they say that packaging is very crucial part of their product.
LABELING:-
The label may be a simple tag attached to the product or an
elaborately designed graphic that is part of the package. It might carry only
the brand name, or a great deal of information. Even if the seller prefers a
simple label, the law may require more. As big bazaar has some of their
brands name sach, treat etc. They also contains label on the back side which
is shown in picture of sach toned milk label helps the customer to now that
whether the product is healthy or not and what kind of ingredients it contain.
Tolani Institute of Management Studies, Adipur Page 58
Tolani Institute of Management Studies, Adipur Page 59
REFERENCES
Search engine :- WWW.GOOGLE.COM
WEBSITES :- WWW.FUTUREGROUP.IN
HTTP://EN.WIKIPEDIA.ORG/WIKI/FUTURE_GROUP
Tolani Institute of Management Studies, Adipur Page 60
Tolani Institute of Management Studies, Adipur Page 61
Thank
You
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