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CIA- 1 COMPONEN-1

By

AMBIKA SURESH (1628151)


AISHA ASHRAF (1628024)
ARINDAM DAS (1628103)
SIDDHARTHA SEN (1628127)
TANVI MAHAJAN (1628062)

SUBMITTED TO

Prof. Suresh

Christ University, Bengaluru

Institute of Management
Question1 A)
Q1 Discuss the format strategy of shoppers stop. How does shoppers stop differentiate
itself from its competitors through its diversification strategy. Elaborate.

Shoppers Stop Limited is a chain of retailer stores in India owned by K Raheja Corp. Raheja
group is one of the leading real estate group. Shoppers Stop has 80 stores in 38 cities of India.
The store offers international and national brands across home dcor, footwear, accessories,
fragrances and huge variety of apparel.
Types of Retail Outlets

Shoppers stop is known as the Multi Brand retail outlet because of the variety of products it
offers. They offer various products like:
Apparel Shirts, skirts, dresses, jumpsuits, jackets, bottom wear, baby suits, winterwear,
pants, sportswear, swimwear, lingerie, nightwear, sarees, churidar suits, t-shirts, jeans,
cargos, trousers, blazers, shorts and kurta pyjama.
Accessories Umbrella, reading glasses, diaries, pen, travel essentials, sunglasses,
scarves, clutch, wallet, handbags, watches, belt and cufflinks
Footwear Flip-Flops, bellies, wedges, platforms, heels, flats, boots, slippers, sandals,
casuals and formal
Jewellery Fine jewellery, fashion jewellery, artificial jewellery and gold coins
Toys Dolls, infant toys, soft toys, musical instruments, board games, educational
games, cars, toy trains and blocks
Beauty products nail polish, shampoos, make-up, moisturiser, scrubs, masks, hair
colours, perfumes, deodorants, shaving products, make-up tools, soaps, serums and toners
Homeware Bedsheets, bedcovers, pillow covers, dinner set, tableware, kitchen tools,
bath towels, bathrobes, laundry baskets, curtains, rugs, doormats, dustbins, furniture,
clocks, candles, lamp shades and wall dcor
Gifts Chocolates, sweets, charms, e-gift vouchers, gift cards, corporate gifting and
premium gifting.

Brands Offered
Visual Merchandising/Store layout
Shoppers
Stop

Second Third
First Floor
Floor Floor

Personal Accessori Womens Mens


Care es Wear Wear

Reasons for such layout:


First Floor-Various products like cosmetics, watches, perfumes are kept in such a way to attract
customers to enter the store which would further help to increase the footfall and these products
also let the customers do impulsive buying.
Second Floor- Men are usually serious buyers and generally accompanied by a lady. This is the
reason womens section is before mens section to attract the women and make them purchase as
women are impulse buyers.
Competitors

Diversification Strategies
On an average stores 30000 different products.
Centralised buying for all the products except cosmetics to avoid sales tax.
Stores located at various places that could be easily reached by the customers.
Providing an overall shopping experience to the customers through high quality products
and trained sales person to help the customers.
Format and ambience of the store.
Providing various service for online buying like free makeover, style hub , buying guide
and personal shopping service.
It uses CRM which helps them to generate intelligent data of around 3 lakh customers
and provide them relevant offers. For eg if a person purchases trouser from the store ,the
customer would be informed about the new range of shirts.
Use of ERP which helps them to get information about customers online and help them in
taking decisions about the opening of new stores.
It ha streamlined the process of its supply chain and logistics which help them to have a
competitive edge. They have developed process manuals for each part of logistic chain
that helps to maintain a efficient supply chain and logistics.

Loyalty Program

The First citizen

Shoppers Stops customer loyalty program is called The First Citizen. The program offers its
members an opportunity to collect points and avail of innumerable special benefits. Currently,
Shoppers Stop has a database of over 2.5 lakh members who contribute to nearly 75% of the
total sales of Shoppers Stop.
It also offers various gift cards to customers that could be used to make purchases.

Promotional Strategy
Shoppers Stop has adopted both ATL and BTL marketing strategies to promote its brand in the
consumer market. It has also implemented Interactive as well as Guerrilla marketing to
increase brand awareness. Shoppers Stop has launched several ad campaigns and promotional
policies with help of electronic, digital, print and social media platforms.
Interactive marketing is a strategies adopted by then retailers where they allow customers to
customize the product as per their preference. This strategy is mainly followed by service
industries like hotels but Shoppers Stop is able to carve out this facility in a retail store.
The concept that has already made a debut at Shoppers Stop outlets in Mumbai, allows
customers who are referred to as guests to go through various stages of activity in creating
their own teddy bear (or other stuffed toy), including choosing a stuffed animal, stuffing it,
giving it a heart, stitching, fluffing, naming and dressing it. And though the toys are priced at a
premium level ranging between Rs 595 and Rs 1,295 for a stuffed animal and add-ons such as
sound chips, clothes and accessories coming at extra cost.
It provides Entertainment to the young customers and can also become a family affair which
helps to attract the customers.
Advertisements are shown on popular television channels, newspapers, magazines, and
hoardings, Twitter, Face book and YouTube to garner maximum exposure. Shoppers Stop also
offers periodic discounts and gift vouchers to attract further sales at regular intervals. It has been
awarded several accolades and awards including The Emerging Market Retailer of the Year
Award and The Hall of Fame. It has launched a loyalty program titled First Citizen for its regular
customers as well as Shoppers Stop Gift Card after a tie-up with Quiksilver Solutions.

Question 1b)
Retail format and business model of Big Bazaar
The retail format of Big Bazaar is a Hypermarket chain of development stores in India. It also
operates home retailing format Home Town and consumer durables chain, eZone.
A hypermarket is a superstore combining a supermarket and a department store. It is a huge retail
facility carrying a wide range of products under one roof, including full groceries lines and
general merchandise.
The business model focuses on high-volume, low-margin sales. It covers an area of 5,000 to
15,000 square metres (54,000 to 161,000 sq ft), they generally have more than 200,000 different
brands of merchandise available at any point of time.
The business model of Big Bazaar can be shown as:
Key Partners
Real estate team

C&F agents
Distributors

Government

Local farmers

Key Activities
Product sales
Customer service

Marketing and advertising

Innovative promotion
Operations management

Key Resources
Product

Management/Sales/Operations
Human resource
IT infrastructure

Value Proposition
Fixed low pricing

Personal assistance
Wide selection of products

Hassle free return policy


Dedicated parking

Recycling old products for new

Comfortable environment

Customer Segments
Middle and upper class
Family oriented

Young educated and active lifestyle


Value Oriented

Housewives

Revenue Stream
Product sales of 8% gross margin

Private label sales percentage


Additional 4% manufacturer discount and 3% distributor discount.

Question 2a)
Based on the app that you have downloaded of BigBasket and Grofers, make an in-depth
comparative analysis of BB and Grofers using atleast 5 parameters, one of which must certainly
be related to product offerings and pricing strategy in a category and one related to supply chain.

Answer:
Comparative analysis using 5 parameters are:
1) Product Offerings:
Product Categories of both the Apps are as follows:

GROFERS BIG BASKET

Fruits and Vegetables Fruits and Vegetables

Grocery and Staples Grocery and Staples

Beverages Beverages

Home and Kitchen Appliances Cookware and Pressure cooker

Household Needs Household Needs

Personal Care Personal Care

Breakfast and Dairy Bakery, Cakes and Dairy

Biscuits, Snacks and Chocolates Regional Special (Special Shops)

Noodles, Pasta and Instant Food BB In House Brands (Special Shops)

Sauces, Jams and Condiments Dry Fruit Stores (BB Speciality Category)

Baby and Kids Keep Them Comfortable (Baby Care)

Organic and Gourmet Imported and Gourmet and Organic

Pet Care Pet Care

Bakery and Sweets Bakeries (BB Speciality Category)

Meat and Seafood Egg, Meat and Fish

Flowers Flower Shops (BB Speciality Category)

Specials New Launches (Special Shops)


From the above table we can see that their product offerings are somewhat similar but they have
been grouped in a slightly different manner. The interface of Big Basket app is far more
attractive and interactive than Grofers. However, after doing an in depth analysis of both their
product offerings we have found few significant differences in their product offerings:
Grofers
Grofers have a segment called special which has giftcard system in it, which is not there in
BigBasket. It also has a segment called everyday low price where they claim that their prices are
lower than other stores.
BigBasket
BigBasket has segments like Special Shops and BB Speciality Store. In Speciality store segment
it has a very interesting category called Regional Special which has the special food offering of
that region. It also has a segment called BB in House Brands.
It has featured segments on the homepage like, Gourmet Store, Keep Them Comfortable, Just
mix it and serve it, Eat fresh every day, Go organic, Sport your new look, Party time, Big Bakery
store etc.
After doing a comparative analysis, it can be seen that, BigBasket has far superior range of
products than Grofers.
After doing an in-depth analysis we also came across that, BigBasket has its own inventory
whereas Grofers only sources products from the nearby shops and supermarkets.

2) Product Pricing
Comparative analysis of Product pricing between Big Basket and Grofers are as follows:

Product Big Basket Grofers

VEGETABLES

Potato Rs 17 (1kg) Rs 17 (1kg)

Tomato Rs 21 (1kg) Rs 13 (1kg)

Ladies Fingers Rs 19 (1kg) Rs 34 (1kg)


Carrot Rs 34 (1kg) Rs 46 (1kg)

Onion Rs 36 (1kg) Rs 33 (1kg)

FRUITS

Apple Rs 149 (4 piece) Rs 152 (4 piece)

Orange Rs 209 (1 kg) Rs 177 (1 kg)

Pomegranate Rs 79 (4 piece) Rs 116 (4 pieces)

Banana Rs 40 (6 piece) Rs 41 (6 piece)

Pine Apple Rs 49 (1 unit) Rs 45 (1 unit)

GROCERY

Basmati Rice Rs 635 (10kg) Rs 489 (10 kgs)

Atta Rs 369 (10kg) Rs 338 (10kg)

Dal Rs 99 (1kg) Rs 81 (1kg)

Refined Oil Rs 89 (1lt) Rs 83 (1lt)

Salt Rs 18 (1kg) Rs 19 (1kg)

Sugar Rs 68 (1kg) Rs 64 (1kg)

From the above table we can see that the vegetable section of big basket is cheaper than Grofers,
whereas Fruits and grocery section of Grofers has more attractive pricing.

3) Reliability
The reliability factor of big basket comes from their structured inventory status. The strong
supply chain system is possible because of structured inventory management and that is the
reason why the products we surf on their website and app is ready for delivery. The printed
receipt is a true source of reliability of order completion.
On the other hand, as compared to BigBasket, Grofers does not have its own inventory and only
has delivery straight from the tied up shops. Hence for Grofers the inventory and price
fluctuations will not be updated. The problem of products not being available is a major concern
during the time of actual delivery. The receipts are not updated in the app which leads to problem
in tracking the orders. The only way it can be done is to match items with when the products are
delivered. There are delivery boys who have a track of the missing item. As there are price
fluctuations to overcome that problem there is a refund policy for the customers who would get
the refund if MRP of the items chosen and finally placed for order is less than the listed price.
The entire process is transparent.

4) Availability and Quality of Merchandise


The product category for BigBasket has a number of options as compared to Grofers. For
example, the fruits and vegetables category has wide array of options like organic, fresh fruits,
fresh herbs and seasoning, cuts and sprouts and international fruits and vegetables. BigBasket
has more items in available categories. But the number of brands for a particular product
category is more in Grofers. The brands are those as compared to ones in supermarket. Grofers
has wide range of other option categories apart from the usual grocciers and fruits and vegetables
like kitchen appliances, electronics, and heavy appliances. The products within a category which
are chosen are usually the ones in the kirana stores locally situated.
In terms of quality it is comparable. BigBasket has a better quality control because of their own
structured inventory management system. When compared to delivery boys picking up the stuffs
from nearby stores.

5) Promptness of delivery
Delivery system has to be smooth to have customer loyalty and promptness of delivery
enables to achieve a focused approach to scheduling the delivery of products on the right
time in the right manner. In case of Grofers delivery in 90 minutes is set for each order. For
an order below 350 there are extra charges of Rs 49. In reality delivery slots of products are
mostly provided within 1.5 to 3 hrs. and delivery is scheduled as per the slots.

Big basket has a longer delivery time. For standard delivery it is the next day and has also
started the express delivery system which delivers 90 mins from the time the order is
placed. Grofers promises delivery in 90 minutes for any order. Additional charges of Rs20 is
applicable for express deliveries, but has a limited access. BigBasket has a professional
packaging techniques as compared to Grofers, but Grofers provides bright orange cloth bags
free of cost which can also be returned in bulk in exchange for discount coupons.
Question 2b)

Shah Rukh khan meets Kiran

We see a girl named Kiran (portrayed by Isha Talwar) who has won a big basket contest
standing at Shah Rukhs doorstep getting ready to meet the superstar. She is excited when
he opens the door and greets her into his house. The girl seemed surprised to know that the
star orders groceries and that is when he shows what he orders for through big basket. The
TVC features wide variety of products in a heap on the table. The girl gets all excited about it
and starts asking questions to Shah Rukh but ends up finding answers for them on her own
as she loves Big Baskets services and benefits the customer receives such as convenience,
ease of ordering, service and product quality on top of everything.

The Indian consumers to groceries are usually woman, at least up until a while ago and the
TVC might be aimed at them because women buy groceries by touching them and feeling
them to check if the produces are fresh and firm etc. Emphasizing on product quality
through the advertisement is a good way to go when an online platform for groceries might
not provide women with the confidence to buy produces online.

Through the ad we understand that Shah Rukh Khan, the Badshah of Bollywood and the
face of Indian Cinema is a big basketeer. With his large fan base, it is only a small matter of
time that his followers be persuaded to be a big basketeer as well. Celebrity endorsements
are highly effective for brands to promote the product, increase awareness or even lead to
sales generation.

Ad 1 - Shah Rukh meets Kiran

Message - The products are very fresh

Cost parameters -

1. Infrastructure costs for its 25 distribution centres located in different regions.

2. Warehousing cost

3. Cold storage costs spread across 36,000 square feet. The cold storage capacity will
increase resulting in increasing cost.

4. Logistics cost arising out of its purchase of Delyver, a delivery company based in
Bangalore.

Ad heavy lifting.

In this ad we see a couple. The female partner is easing the pain of the male partners sore
hands from all the heavy lifting he must have done carrying large number of products from
the supermarket to his home after a purchase was made. When people buy goods from a
supermarket in bulk, at times it becomes difficult for them to carry them. Big basket
provides an online supermarket type facility where the app helps you to order all the goods
you need and itll be delivered to your home. This way it provides convenience to its
customers. Therefor no heavier lifting.

The TVC features a couple, probably newly married. Seems like they are young working
professionals. This segment of the market is usually busy with work and house chores
leaving them hardly any time for leading a social life or getting themselves immersed in
recreational activities. Big Basket is a clever option for them. We can say they are targeting
the families or the corporate professionals through this TVC. Its in the minds of the
customers as Indias largest online supermarket and popular for the prices and convenience
the business delivers them.

No Heavy Lifting

Ad 3 - Shah Rukh is a Big Basketeer. Are you? (Shah Rukh Khan and the delivery boys).

Here a couple of delivery boys arrive at the stars home to make delivery of big basket order.
They are shocked when the superstar opens the door and greets them in. When the order
arrives we see Shah rukh making sure that all the products he ordered have arrived. With
variety of products like Kashmiri apples or nagpuri oranges, rice, dal etc. big basket is
making a statement that they have many categories, assortments etc. Hence Indias largest
online supermarket.

Message - Produce is sourced from various locations.

Cost parameters -

1. Distribution cost - Onions from Nasik, Apples from Himachal Pradesh and Kashmir.
Since these are sourced from different states and need to be transported to the final
customer in the same form, the question of distribution arises.

2. Employee cost - Transporting these to the final customer poses employee costs.

3. Margins to distributors

With Shah Rukh saying that hell see the delivery boys next week too we get to know that he
is a frequent and probably a loyal customer, the Indian consumer believe that shah rukh
approves of the brand. Like the previous ad the celebrity endorsement works here as well.

Through the advent of big basket there are many benefits to the customers like saving time,
efforts, not having to face the troubles of offline shopping like carrying heavy bags, standing
in lines at the billing counters, parking problems etc.

Big basket targets at woman, young working professionals, students, nuclear families and
big families.
It is important to actually deliver promises made in the advertisements. Big Basket has been
able to do so and effectively continues to do so.

The key points that Big Basket needs to keep in mind are its relationships with its farmers.
Through its Farmer Connect program, Big Basket sources 60% of its fruits and vegetables
directly from farmers. This helps it increase margins for itself by 6-7% and increases farmer
income by 10-15%.

Promising fresh veggies and fruits and delivering it is paramount to the business. It needs to
focus on customer retention by doing so because the current rate of return is only 1.5%.

To satisfy requirements, Big Basket has 22,000 SKUs which is more than what Big Bazar
stores (Hindustan Times). Big Basket also has its private labels, Fresho, Royal and Popular.
By boosting sales of these two private labels, BB can capture a larger market share.

Another major factor to consider is the rising competition. The industry is still largely
untapped and presents immense potential for new entrants. With Amazon and Snapdeal
entering the market, BB has a potential problem. With online purchases of groceries
accounting for only 0.5% of the market, delivering promises is a sureshot way of capturing a
good percentage of the 24 lakh crore market.

Shah Rukh and Big Basket