Efeectiveness of Loyalty Programs in Big Bazaar

| 2011| | MARKETING OF SERVICES TERM PAPER PRADEEP KUMAR. N(M100002MS) | [EFFECTIVENESS OF LOYALTY PROGRAMS IN BIG BAZAAR]| | Contents page no 1. About the company 03 2. Significant features of big bazaar 04 3. Promotion techniques 04 4. Sales Promotion techniques 05 5. Loyalty programs 06 6. Customer experience 08 7. Research objective 09 8. Research methodology 09 9. Hypothesis and testing 10 10. Sampling plan 10 11. Findings 11 12. Conclusion 12 ABOUT THE COMPANY Big Bazaar is a chain of hypermarket in India. Currently, there are 210 stores across 80 cities and towns in India. Big Bazaar is designed as an agglomeration of bazaars or Indian markets with clusters offering a wide range of merchandise including fashion and apparels, food products, general merchandise, furniture, electronics, books, fast food and leisure and entertainment sections. Big Bazaar is part of Future Group, which also owns the Central Hypermarket, and is owned through a wholly owned subsidiary of Pantaloon Retail India Limited that is listed on Indian stock exchanges. Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. Headquartered in Mumbai (Bombay), the company operates over 10 million square feet of retail space, has over 1000 stores across 61 cities in India and employs over 30,000 people. The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include, Depot,Shoe Factory, Brand Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara. The company also operates an online portal, futurebazaar. com. A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, Collection i, selling home furniture products and E-Zone focused on catering to the consumer electronics segment. Pantaloon Retail was recently awarded the International Retailer of the Year by the US based National Retail Federation (NRF) and the Emerging Market Retailer of the Year 2007 at the World Retail Congress held in Barcelona. Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire Indian consumption space. Pantaloon is not just an organization – it is an institution, a centre of learning & development. Over the years, the company has accelerated growth through its ability to lead change. A number of its pioneering concepts have now emerged as industry standards. For instance, the company integrated backwards into garment manufacturing even as it expanded its retail presence at the front end, well before any other Indian retail company attempted this. It was the first to introduce the concept of the retail departmental store for the entire family through Pantaloons in 1997. The company was the first to launch a hypermarket in India with Big Bazaar, a large discount store that it commissioned in Kolkata in October 2001. And the company introduced the country to the Food Bazaar, a unique ‘bazaar' within a hypermarket, which was launched in July 2002 in Mumbai. Embracing our leadership value, the company launched aLL in July 2005 in Mumbai, making us the first retailer in India to open a fashion store for plus size men and women. STRIKING FEATURES OF BIG BAZAAR * Food bazaar. Electronic bazaar. * Furniture bazaar. * FutureBazaar. com * Amusement zone. * Telecalling services PROMOTION TECHNIQUES * Big Bazaar – Isse sasta aur accha kahin nahi :- Big Bazaar has adopted value pricing in which they win loyal customers by charging a fairly low price for a high – quality offering. * Wednesday Bazaar – Hafte ka sabse sasta din :- In January 2007, Big Bazaar introduced a Wednesday Bazaar concept called â€Å"Hafte Ka Sabse Sasta Din† with the aim to give homemakers the power to save the most on this day of the week. Sabse Saste Teen Din (Big days) :- In 2006 they started a new shopping festival, i. e. Sabse Saste Teen Din on 24, 25 and 26th of January. Big bazaar throwed up to 65% of on each & every products in the store for three days. * Big Bazaar announced The Great Exchange Offer with a â€Å"Bring anything old and take anything new† concept which started from the 16th of Feb 2008 at the Landmark store. SALES PROMOTION TECHNIQUES The various promotional schemes undertaken by big bazaar are as follows: * The punch line of Big Bazaar says â€Å"IS SE SASTA AUR ACCHA KAHI NAHI†. This line gives the feeling that Big Bazaar gives merchandise which is cheapest in the market or in other words the value for money which a customer will be getting here will be more than anywhere else. * Wednesday is the cheapest day. This is done to divert some of the crowd coming on weekends to a relatively free day. Big bazaar advertises Wednesdays as the cheapest day in all the leading dailies across the capital. This offer targets housewives and encourages them to purchase groceries and vegetables because no one purchases vegetables on a weekly basis, they purchase it at least two times a week. * Big Bazaar has announced a unique exchange offer `Bring anything old and take anything new’. Under the exchange offer, old garments, utensils, furniture, plastic ware, newspapers or just about anything will be weighed and valued and customers will be given exchange coupons. There is also a direct exchange on mobile and electronic goods during the period with attractive discounts on new purchases. * Big Bazaar’s `The Great Exchange Offer’ has mobilized more than two lakh families to actually carry the junk of the house and offload it at the nearest Big Bazaar. Retail analysts say that generally February and March are dull months for consumer buying in the country and therefore this kind of a promotion campaign is needed to boost sales during the period. PANTALOON group’s hypermarkett chain, Big Bazaar, celebrated Republic Day as the Maha Savings Day, when shoppers at Big Bazaar and Food Bazaar outlets across the country, were offered merchandise at rock bottom prices. * The Maha Savings Day saw shoppers got deals they have never seen or heard before. The offers spread across categories from electronics to utensils, from apparel to furniture and also food. For example pressure cooker for Rs 299, two Ruf n Tuf Jeans for Rs 499, and a M otorola C115 for Rs 1,399. Big Bazaar usually runs a full page advertisement on Saturdays and Sundays in all the leading dailies communicating various offers. This is done to attract crowds on weekends because most of the people usually shop during weekends. * Pantaloons retail India limited provides Green card, this Green Card is passport to a whole new world of exclusive benefits and privileges. These includes: * Instant discounts for every time you shop at Pantaloons. * Exclusive shopping days to get hold of latest merchandise. Regular updates on collections and promos via catalogues, sms and email. * Special invites to the most happening events. * Extended exchange periods and complimentary drops for alterations. * Exclusive billing counters and much more. * Big bazaar in association with ICICI banks has launched loyalty cards for the customers. They are: * ICICI Bank Big Bazaar Silver Credit Card : It gives you the benefits of regular cards and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar. ICICI Bank Big Bazaar Gold Credit Card :The card brings to you more reasons to save and earn rewards on its usage. It gives you all the benefits of regular cards and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar. * Shakti Card Shakti is a credit card for housewives. You need not submit income proof. Simply show your Big Bazaar bill of more than Rs. 500 and a lifestyle proof like club membership card, health club card etc. And get your ‘Shakti’. You can use Shakti at all the Big Bazaar and Food Bazaar outlets * T24 In June 2010, Future Group in partnership with TTSL rolled out a mobile service called T24 for its customers. As part of the offer, customers were rewarded with free talk time for every purchase above Rs. 500 made at Future Group shopping outlets across all formats and locations. LOYALTY PROGRAMS * Big bazaar in association with ICICI banks has launched loyalty cards for the customers. They are: * ICICI Bank Big Bazaar Silver Credit Card : It gives you the benefits of regular cards and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar. * ICICI Bank Big Bazaar Gold Credit Card :The card brings to you more reasons to save and earn rewards on its usage. It gives you all the benefits of regular cards and additional features to make your shopping not only enjoyable but also a way to save more with Big Bazaar. * Shakti Card Shakti is a credit card for housewives. You need not submit income proof. Simply show your Big Bazaar bill of more than Rs. 500 and a lifestyle proof like club membership card, health club card etc. And get your ‘Shakti’. You can use Shakti at all the Big Bazaar and Food Bazaar outlets * T24 In June 2010, Future Group in partnership with TTSL rolled out a mobile service called T24 for its customers. As part of the offer, customers were rewarded with free talk time for every purchase above Rs. 500 made at Future Group shopping outlets across all formats and locations. CUSTOMERS EXPERIENCE The customer experience among the big bazaar customers is comprised of the following Components: POPULATING THE CUSTOMER PROFILE: To create the Ideal Customer Experience, Big Bazaar populates the Customer Profile with the relevant information . the customers who are having very similar buying patterns in the big bazaar are populated and an analysis is done so as to find the preferences of the products of these groups, including various promotion strategies and offers. DELIVERING AND RECEIVING VALUE AT EACH CUSTOMER INTERACTION: Big Bazaar views each interaction as a golden opportunity to deliver value through its products, services, and processes, as well as to receive valuable information from the Customer in the form of feedback. CUSTOMIZING THE CUSTOMER EXPERIENCE: By understanding an individual’s needs, it creates the Ideal Customer Experience by Customizing the products, services, and processes to meet the Needs of the individual customer RESEARCH OBJECTIVE * The objective of the research is to find the effectiveness of loyalty programs in BIG BAZAAR ,i. e whether loyalty programs attract customer attention or not in todays competetive scenario . * To find out the increase in customer loyalty by measuring various factors. * To find out customer’s reactions to various loyalty programs and change in their purchase decision due to these programs. To analyze customer’s expectations from retail format like convenience store in terms of offering of loyalty programs. RESEARCH METHODOLOGY Research problems:- consumer’s reactions and expectation from loyalty programs of convenience store format, Big Bazaar. †¢ Research methodology: Exploratory method †¢ Descriptive research: is a type of research conducted when we have to find out the frequency with which Something occurs. This research is guided by initial hypothesis. HYPOTHESIS AND TESTING Hypothesis testing for this report has evolved around formulating a null hypothesis and an alternative hypothesis as regards to the percentage of population availing the loyalty programs H(o) Null Hypothesis :Mostly 70% of the population would be Availing the loyalty programs carried out by Big bazaar. H(T) Alternative Hypothesis:- Less than 70% of the population Would be availing the loyalty programs carried out by Big Bazaar. At 5% level of significance I tested the above mentioned hypothesis as per the results obtained. The Chi-Square test has been taken up as the selection criteria for the above mentioned data. The Chi-Square test which shows the magnitude of discrepancy between observed and expected frequency can be expressed symbolically as X2= Summation of (O-E)2 E Where, O= Observed set of frequencies E= Expected set of frequencies SAMPLING PLAN I selected a sample size of 51 ,I gave a questionnaire and interviewed the samples in the OLD MADRAS BIG BAZAAR in BANGALORE Questionnaire Sample Methods| Random Simple Sampling| Sample size| 51| Primary data| Questionnaire| Interview Sample Units| sampling unit is Noida area. | Source of data| through primary sources| Market survey & area| | Sampling size| 51| FINDINGS * Big Bazaar has been preferred by most of the Households frequently and they use to purchase daily Requirement material from there. While still 15% of People don’t prefer to buy daily requirement items from Organized formats. The data predicts that customers at nearby locations of Big Bazaar prefer to go to there often but it is not a destination for customers every time. * 35% go there oftenly * 30% go there occasionally * 15% go everytime * 20% people go there sometimes * The ratio of customers using loyalty programs floats between 60%-62%. Educated people are giving more Attention to the loyalty card due to the awareness of its future benefits monetarily as well as in getting right information of the production. Most of the custo mers feel satisfied from the loyalty program offerings of Big Bazaar so it has been successful in fulfilling customer’s expectations. While 25% of customers still want to get some more benefits in return of their loyalty to the store. * Customers feel 55% motivated to shop from Big Bazaar due to their loyalty programs. Conclusion In my calculations: The calculated value of is more than the table value. So, the hypothesis is REJECTED i. e. less than 70% of the population is only availing the loyalty program carried out by Big Bazaar. There are maximum customers who are satisfied with the merchandising of the store and they find every product of brand in each category and shelf according to their choices. They are having some complains regarding the future cards. * Customers wait for discount loyalties provided by them but not too much. * Customers are not aware of the benefits of the card. * Many of the customers are not even using any of the loyalty Program. * Store has been a big flop at online shopping centre as people want to touch and select their items before purchase