2 REVIEW OF LITERATURE
3 FIELD STUDY
5 CONCLUSION
6 ANNEXURE
7 BIBLIOGRAPHY
CHAPTER-1
INTRODUCTION
Given the centrality of customer needs and wants in marketing, a rich understanding
of these concepts is essential
Needs: Something necessary for people to live a healthy, stable and safe life. When
needs remain unfulfilled, there is a clear adverse outcome: a dysfunction or death.
Needs can be objective and physical, such as the need for food, water, and shelter; or
subjective and psychological, such as the need to belong to a family or social group
and the need for self-esteem.
Wants: Something that is desired, wished for or aspired to. Wants are not essential
for basic survival and are often shaped by culture or peer-groups.
Demands: When needs and wants are backed by the ability to pay, they have the
potential to become economic demands.
Marketing Mix
Marketing Mix is to analyse what is the need of marketing mix in a company and how
it works. Marketing is simplistically defined as ‘putting the right product in the right
place, at the right place, at the right time.’ Though this sounds like an easy enough
proposition, a lot of hard work and research needs to go into setting this simple
definition up. And if even one element is off the mark, a promising product or service
can fail completely and end up costing the company substantially. The use of a
marketing mix is an excellent way to help ensure that ‘putting the right product in the
right place’ will happen. The marketing mix is a crucial tool to help understand what
the product or service can offer and how to plan for a successful product offering. The
marketing mix is most commonly executed through the 4 P’s of marketing: Price,
Product, Promotion, and Place. The 4P’s were formalized and developed over the
years by experts to ensure the creation and execution of a successful marketing
strategy. Through the use of this tool, the attempt is to satisfy both the customer and
the seller. When properly understood and utilized, this mix has proven to a key factor
in a product’s success. When you market, you also have to strategize about who to
target with your messages. Your primary customer group becomes the target
customers of your marketing campaign. Your product and price offer some direction
in identifying the right audience. For instance, cutting-edge mobile technology ads
often are targeted to young consumers. Identifying the media used by these
customers is also important, which brings the "promotion" P into play. Tangibly, the
promotion P addresses the actual process of creating and distributing messages about
your brand and products. Selecting the right media within television, radio,
newspapers, magazines, the Internet, billboards and other support media is another
critical part of successful promotion. In a general sense, the marketing mix allows you
to understand how to build and sell value to your customers. Ultimately, customers
buy what they perceive is the best value for their money in a purchase situation.
Implementing marketing campaigns that show off great products at fair prices gives
you an opportunity to succeed. Finding affordable marketing options also helps you
get better return on your investment from marketing. Project Work
Chapter -2 REVIEW OF LITRATURE
The main reasons the marketing mix is a powerful concept are It makes marketing
seem easy to handle, allows the separation of marketing from other activities of the
firm and the delegation of marketing tasks to specialists; and - The components of the
marketing mix can change a firm’s competitive position (Grönroos, 1994).
The marketing mix concept also has two important benefits. First, it is an important
tool used to enable one to see that the marketing manager’s job is, in a large part, a
matter of trading off the benefits of one’s competitive strengths in the marketing mix
against the benefits of others. The second benefit of the marketing mix is that it helps
to reveal another dimension of the marketing manager’s job. All managers have to
allocate available resources among various demands, and the marketing manager will
in turn allocate these available resources among the various competitive devices of
the marketing mix. In doing so, this will help to instil the marketing philosophy in the
organisation (Low and Tan, 1995).
However, Möller (2006) highlighted that the shortcomings of the 4Ps marketing mix
framework, as the pillars of the traditional marketing management have frequently
become the target of intense criticism. A number of critics even go as far as rejecting
the 4Ps altogether, proposing alternative frameworks. Since its introduction,
developments on the commercial landscape and changes in consumer and
organisational attitudes over the last few decades (1940s – 2000s) have frequently
prompted marketing thinkers to explore new theoretical approaches and expanding
the scope of the marketing mix concept. Thus, the main objective of this study is to
review the present marketing mix applies particularly to the marketing.
HISTORY Borden (1965) claims to be the first to have used the term “marketing mix”
and that it was suggested to him by Culliton’s (1948) description of a business
executive as “mixer of ingredients”. An executive is “a mixer of ingredients, who
sometimes follows a recipe as he goes along, sometimes adapts a recipe to the
ingredients immediately available, and sometimes experiments with or invents
ingredients no one else has tried” (Culliton, 1948).
The early marketing concept in a similar way to the notion of the marketing mix,
based on the idea of action parameters presented in 1930s by Stackelberg (1939).
Rasmussen (1955) then developed what became known as parameter theory. He
proposes that the four determinants of competition and sales are price, quality,
service and advertising.
Mickwitz (1959) applies this theory to the Product Life Cycle Concept. Borden’s
original marketing mix had a set of 12 elements namely: product planning; pricing;
branding; channels of distribution; personal selling; advertising; promotions;
packaging; display; servicing; physical handling; and fact finding and analysis.
Chapter – 3rd
FILED STUDY
DMart is a one-stop supermarket chain that aims to offer customers a wide range of
basic home and personal products under one roof. Each DMart store stocks home
utility products - including food, toiletries, beauty products, garments, kitchenware,
bed and bath linen, home appliances and more - available at competitive prices that
our customers appreciate. Our core objective is to offer customers good products at
great value.
DMart was started by Mr. Radhakishan Damani and his family to address the growing
needs of the Indian family. From the launch of its first store in Powai in 2002, DMart
today has a well-established presence in 168 locations across Maharashtra, Gujarat,
Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil
Nadu, Punjab and Rajasthan. With our mission to be the lowest priced retailer in the
regions we operate, our business continues to grow with new locations planned in
more cities.
The supermarket chain of DMart stores is owned and operated by Avenue Supermarts
Ltd. (ASL). The company has its headquarters in Mumbai.
* The brands D Mart, D Mart Minimax, D Mart Premia, D Homes, Dutch Harbour, etc
are brands owned by ASL
The origins of the 4 Ps can be traced to the late 1940s. The first known mention of a
mix has been attributed to a Professor of Marketing at Harvard University, Prof. James
Culliton. In 1948, Culliton published an article entitled, The Management of Marketing
Costs in which Culliton describes marketers as 'mixers of ingredients'. Some years
later, Culliton's colleague, Professor Neil Borden, published a retrospective article
detailing the early history of the marketing mix in which he claims that he was
inspired by Culliton's idea of 'mixers', and credits himself with popularising the
concept of the 'marketing mix'.] According to Borden's account, he used the term,
'marketing mix' consistently from the late 1940s. For instance, he is known to have
used the term 'marketing mix' in his presidential address given to the American
Marketing Association in 1953.
Although the idea of marketers as 'mixers of ingredients' caught on, marketers could
not reach any real consensus about what elements should be included in the mix until
the 1960s. The 4 Ps, in its modern form, was first proposed in 1960 by E. Jerome
McCarthy; who presented them within a managerial approach that
covered analysis, consumer behavior, market research, market segmentation,
and planning. Phillip Kotler, popularised this approach and helped spread the 4 Ps
model McCarthy's 4 Ps have been widely adopted by both marketing academics and
practitioners.
The prospect of extending the marketing mix first took hold at the inaugural AMA
Conference dedicated to Services Marketing in the early 1980s, and built on earlier
theoretical works pointing to many important limitations of the 4 Ps model.Taken
collectively, the papers presented at that conference indicate that service marketers
were thinking about a revision to the general marketing mix based on an
understanding that services were fundamentally different to products, and therefore
required different tools and strategies. In 1981, Booms and Bitner proposed a model
of 7 Ps, comprising the original 4 Ps extended by process, people and physical
evidence, as being more applicable for services marketing.
Since then there have been a number of different proposals for a service marketing
mix (with various numbers of Ps), most notably the 8 Ps, comprising the 7 Ps above
extended by 'performance'[5].
Opt-in e-mail advertising
Social media marketing, starting and participating in customer to customer,
customer to company interaction through social media.
The 4Ps have been the cornerstone of the managerial approach to marketing since
the 1960s
Product refers to what the business offers for sale and may include products or
services. Product decisions include the "quality, features, benefits, style, design,
branding, packaging, services, warranties, guarantees, life cycles, investments and
returns".
Price refers to decisions surrounding "list pricing, discount pricing, special offer
pricing, credit payment or credit terms". Price refers to the total cost to customer to
acquire the product, and may involve both monetary and psychological costs such as
the time and effort spended in acquisition
Place is defined as the "direct or indirect channels to market, geographical
distribution, territorial coverage, retail outlet, market location, catalogues, inventory,
logistics and order fulfilment". Place refers either to the physical location where a
business carries out business or the distribution channels used to reach markets.
Place may refer to a retail outlet, but increasingly refers to virtual stores such as "a
mail order catalogue, a telephone call centre or a website".
Promotion refers to "the marketing communication used to make the offer known to
potential customers and persuade them to investigate it further".[24] Promotion
elements include "advertising, public relations, direct selling and sales promotions.
Modified and expanded marketing mix: 7 Ps
See also: Services marketing, Service blueprint, and Servicescape
By the 1980s, a number of theorists were calling for an expanded and modified
framework that would be more useful to service marketers. The prospect of
expanding or modifying the marketing mix for services was a core discussion topic at
the inaugural AMA Conference dedicated to Services Marketing in the early 1980s,
and built on earlier theoretical works pointing to many important problems and
limitations of the 4 Ps model.[19] Taken collectively, the papers presented at that
conference indicate that service marketers were thinking about a revision to the
general marketing mix based on an understanding that services were fundamentally
different to products, and therefore required different tools and strategies. In 1981,
Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps plus process,
people and physical evidence, as being more applicable for services marketing.[20][25]
Table 2: Outline of the Modified and Expanded Marketing Mix
Process design
Standardization vs
customization decisions
Preparation of operations
manuals
People are essential in the marketing of any product or service. Personnel stand for
the service. In the professional, financial or hospitality service industry, people are not
producers, but rather the products themselves.[30] When people are the product, they
impact public perception of an organization as much as any tangible consumer goods.
From a marketing management perspective, it is important to ensure that employees
represent the company in alignment with broader messaging strategies.[31] This is
easier to ensure when people feel as though they have been treated fairly and earn
wages sufficient to support their daily lives.
Process refers to a "set of activities that results in delivery of the product benefits". A
process could be a sequential order of tasks that an employee undertakes as a part of
their job. It can represent sequential steps taken by a number of various employees
while attempting to complete a task. Some people are responsible for managing
multiple processes at once. For example, a restaurant manager should monitor the
performance of employees, ensuring that processes are followed. They are also
expected to supervise while customers are promptly greeted, seated, fed, and led out
so that the next customer can begin this process.[31]
Lauterborn's 4 Cs (1990)[edit]
4 Ps 4 Cs Definition
After Koichi Shimizu proposed a 4 Cs classification in 1973, it was expanded to the 7Cs
Compass Model to provide a more complete picture of the nature of marketing in
1979. The 7Cs Compass Model is a framework of co-marketing (commensal marketing
or Symbiotic marketing). Also the Co-creative marketing of a company and consumers
are contained in the co-marketing. Co-marketing (collaborate marketing) is a
marketing practice where two companies cooperate with separate distribution
channels, sometimes including profit sharing. It is frequently confused with co-
promotion. Also commensal (symbiotic) marketing is a marketing on which both
corporation and a corporation, a corporation and a consumer, country and a country,
human and nature can live.
The 7Cs Compass Model comprises:
Product → Commodity
Price → Cost
Promotion → Communication
Place → Channel
"P"
"C" category
category "C" definition
(broad)
(narrow)
The factors related to consumers can be explained by the first character of four
directions marked on the compass model. These can be remembered by the cardinal
directions, hence the name compass model:
N = Needs
S = Security
W = Wants
E = Economic
W = Weather
These can also be remembered by the cardinal directions marked on a compass. The 7
Cs Compass Model is a framework in co-marketing (symbiotic marketing). It has been
criticized for being little more than the 4 Ps with different points of emphasis. In
particular, the 7 Cs inclusion of consumers in the marketing mix is criticized, since they
are a target of marketing, while the other elements of the marketing mix are tactics.
The 7 Cs also include numerous strategies for product development, distribution, and
pricing, while assuming that consumers want two-way communications with
companies.
An alternative approach has been suggested in a book called 'Service 7' by Australian
Author, Peter Bowman. Bowman suggests a values based approach to service
marketing activities. Bowman suggests implementing seven service marketing
principles which include value, business development, reputation, customer service
and service design. Service 7 has been widely distributed within Australia.
Product
Thanks to the interaction and connection of the Internet, Product has been redefined
as 'virtual product' in the digital marketing aspect, which is regarded as the
combination of tangibility and intangibility. Through the form of digital, a product can
be directly sent from manufacturers to customers.[46] For example, customers could
buy music in the form of an MP3 rather than buy it in the form of a physical CD. As a
result, when a company is making strategy for Internet marketing, it is necessary to
understand how to vary their products in the online environment. Here are some
indications of adapt the product element on the Internet.
Modifying the core product: In this case, it particularly refers to the products that can
be remodeled into digital forms including movies, music, books and other publishing
etc. Take Netflix as an example. The wide use of Internet has changed its form of
products from selling and renting DVDs through retail stores into selling and renting
video online.
Providing digital products: In order to gain market shares in the Internet, companies
need to widen its product range. For example, a psychological counseling could offer
online consultation via video calls.
Building the whole product: Apart from selling products online, Amazon.com also
provides a paid subscription service called Amazon Prime, with which customers
could enjoy free delivery and videos on Amazon.
Conducting online research: The Internet offers a low-cost and convenient way of
making marketing researches, which is helpful for companies to find out what
products or services do customers prefer.
Price
Price concerns about the pricing policies or pricing models from a company. Due to
the widely use of the Internet, many applications could be found in both consumer's
and producer's perspective. From consumers' side, the Internet enables people to
make a comparison to a real-time prices before they make a consumption decision,
which is time-saving and effort-saving for the consumers.[47] As for the suppliers, they
can adjust prices in the real-time and provide higher degree of price transparency
with customers. Besides, the Internet is more likely to ease the pressure on price
because online-producers do not have to put budget on renting a physical
store.[45] Hence, making new or adjusting pricing strategies is essential for the
company that wants to enter the Internet market.
Place
With the application of the Internet, place is playing an increasingly important role in
promoting consumption since the Internet and the physical channels become
virtual.[44] The major contribution from the Internet to the business is not only making
it possible to selling products online, but also enabling companies to build
relationships with customers.[48]Furthermore, since the convenience of navigating
from one site to another, place from the digital marketing perspective is always linked
with promotion, which means retailers often uses third-party websites such as Google
search engine to guide customers to visit their websites.[45]
Promotion
Promotion refers to select the target markets, locate and integrate various
communications tools in the marketing mix. Unlike the traditional marketing
communication tools, tools in digital marketing aim at engaging audiences by putting
advertisements and contents on the social media, including display ads, pay-per-click
(PPC), search engine optimisation (SEO) etc. In order to help in making online
marketing campaign, Chaffey and Smith suggested that they can be separated into six
groups.[49]
Online PR, enlarging good comments on one's products or services while reducing
negative comments.
adverse comments.
Interactive advertisingn installments"; etc.), the attributes of the products sold by the
other producers, and the attributes each producer can give to its products, the
problem of deciding the attributes of our product to maximize the number of
customers who will prefer it is Poly-APX-complete. This implies that, under the
standard computational assumptions, no efficient algorithm can guarantee that the
ratio between the number of customers preferring the product returned by the
algorithm and the number of customers that would prefer the actual optimal product
will always reach some constant, for any constant. Moreover, the problem of finding a
strategy such that, for any strategy of the other producers, our product will always
reach some minimum average number of customers over some period of time is
an EXPTIME-complete problem, meaning that it cannot be efficiently solved.
However, heuristic (sub-optimal) solutions to these problems can be found by means
of genetic algorithms, particle swarm optimization methods, or minimax algorithms.
D-Mart is a private company and is associated with the retail industry. It was launched
in the year 2002 in the month of May by its esteemed founder R. K. Damani. It is a
chain of supermarkets and hypermarkets established in India. It is designed for
providing maximum customer convenience and offers a diversified choice at
affordable rates. Some of its competitors are as follows-
Big Bazaar
Reliance Fresh
D-Mart is a one-stop outlet that offers a wide range of choice in home and
personal products to its customers. It believes in mass commodities and therefore its
products are available in different sizes and colours. Apparels are displayed in a
systematic manner in accordance with their size options.
Retail price, actual discount and offer price are displayed on the tags for the
convenience of customers. Area of the outlet is divided in accord with products as
every product has a separate section from which a customer can easily make a choice.
Each D-Mart outlet has following products in its portfolio-
Beauty products and personal care including soap, shampoo, cleanser, toner
D-Mart has a reach in most of the important cities in India including Ahmedabad,
Surat, Rajkot, and Bhuj in Gujarat, Tirupathi in Andhra Pradesh, Hyderabad in
Telangana, and Bangalore in Karnataka, Mumbai and Kolhapur in Maharashtra. It is
able to provide its products through a network of one hundred and ten stores and has
its headquarters base in Mumbai, India. D-Mart has set up its stores at very strategic
points to gain maximum advantage from its locations because easy accessibility and
proper transportation facilities are very important for the survival of any outlet.
Exceptional service is not the vital factor for such outlets. They have reliable and
trained employees to help customers in hours of need but the consumers are
generally self-sufficient and are likely to pick up items from various shelves
themselves in a walking trolley basket and take it to billing counter for payment.
D-Mart is a departmental store and believes in levying an economic pricing policy for
its products. The company has taken a low-cost approach to target that group which
is price sensitive. As mass merchandise is its mantra it has kept prices at reasonable
and economic rates so that a customer can easily purchase it. D-Mart has adopted a
simple strategy of garnering huge sales through affordable prices and keeping price
range within reach of customers is its top priority.
It offers a 5% of minimum discount on MRP at any given time on all items except
fruits, grocery, vegetables and medicines. D-Mart has also adopted a discount pricing
policy and it periodically offers its customers various incentives and lucrative
discounts, especially during festival seasons. Customers at such times buy in bulk
quantities resulting in a huge volume of sales. This is the reason why such stores are
able to earn greater revenues.
D-Mart is one of the largest multi-brands in India and to maintain its position as one
of the best, company has adopted several promotional activities. It offers gift coupons
to reward its employees and during certain periods to boost its sales, coupons are
also allotted to customers when they meet certain standards of bulk purchase.
Discounts are offered during festive seasons, for example, there was a 10% off on
prices of Cadbury products during Raksha Bandhan. D-Mart also
creates brand awareness and visibility through hoardings. Latest offers and schemes
can be easily known through its promotional activities that are published in
newspapers.
D-Mart
As the competition is getting stiffer and stiffer, product innovativeness and product
modification becomes the backbone in sustaining and attracting new customers. To
do this systematically, market requirements and knowledge of rivals plays a pivotal
role. For this study the four major marketing variables such as product, price,
promotion, and place are being considered as major parameters of innovativeness
which could bring about customer satisfaction, customer loyalty and helps to a great
extent in customer acquisition. This study focuses on the enquiry of the magnitude of
adoption of innovative marketing strategies by retailing giants Viz., Big Bazaar and D-
Mart. With the intention to know the wide range of marketing elements which play
important role to get competitive advantage in retail sector and to identify the
importance of four marketing strategies namely product, price, place, promotion. This
has been explored in the Indian retail context. This study makes an attempt to
compare in terms of revenue they generates by adopting innovative means of
marketing strategies. The retailers will be done. By this study it is identified that 4
marketing elements namely product, price, place, promotion greatly influence
modern marketing and customer satisfaction. Keywords: Marketing Strategies,
Product, Price, Place, Promotion, Retailing
.RESEARCH OBJECTIVES
To understand the wide range of marketing elements, which play important role to
get competitive advantage in retail sector. To identify the importance of four
marketing strategies namely product, price, place, promotion. This has been explored
in the Indian retail context. A Study On Innovative Marketing Strategies In Retailing
Giants Big Bazar &D-Mart
RESEARCH METHODOLOGY
To achieve foresaid objectives the following methodology has been adopted. The
information for this report has been collected through the secondary source.
SECONDARY SOURCE This is already existing data which collected by sources such as
internet, text books and various published national and international marketing
journals. .
1)Product in the Marketing Mix of BIGBAZAR: Big Bazaar offers the maximum variety
for every category of product. The product is the same in every store in the city but
the brand options are more in Big Bazaar and the quantity for each product is not
limited to large packs only. The commodities sold by the retail chain includes its "own
products" which get a ready distribution network. The own products of Big Bazaar
include My World fashion magazine which is not available anywhere else. So costs are
very low for such products.
2)Price in the Marketing Mix of BIGBAZAR: Price is the critical point in a competitive
industry. Big Bazaar works on a low cost model. It considers its discounted price as its
USP. There is an average discount of 6-8% on all items in respect to their MRP. Prices
of products are low because it is able to secure stock directly from the manufacturer.
There are huge synergies in terms of bulk purchasing, transportation and central
warehousing. These all factors are very helpful for the retailers to keep low
pricesTable Styles.
3)Place in the Marketing Mix of BIGBAZAR: Place means the location of the business.
Big Bazaar has always worked on cheap locations. It targets semi-urban population
with its placement. Its strategy is to find a lowcost location and it never goes for hot
spots in the city. It relied on promotional activities to make up for unattractive
locations. Another strategy used by Big Bazaar to overcome location disadvantage is
use of internet. It has launched a merchandise retailing website
www.futurebazaar.com which targets high-end customers ready to use credit cards.
The promotion of this website is done through advertisement on Google. The website
is put as sponsored link.
4)Promotion in the Marketing Mix of BIGBAZAR: Big Bazaar has huge promotion
budgets. The biggest idea behind all advertisements is to make people do bulk
shopping. There are 2 types of promotional strategies of big bazaar. One is the
advertisement which promotes the brand and creates awareness towards people. It is
not targeted at promoting each store but only creates an image of Big Bazaar as low-
cost shopping option. The store has advertised through TV, road shows and also
started reality show-typed promotional campaign "The Big Bazaar Challenge."
Promotions like "Sabse Sasta Din"(Cheapest Day) are a very successful strategy to get
good results. In these products across categories such as furniture, electronics,
utensils, apparels and food products at the lowest possible prices, coupled with
attractive promotional schemes. Some of the most attractive offers being a 20-litre
branded microwave oven with grill for Rs 2,399, jeans and trousers for Rs 199 and HCL
laptops for Rs 22,800. Buy 2 Get 1 Free types of promotions are very common.
Original prices are cut down and new prices are shown, of which customer takes quick
notice. There are loyalty schemes which reward regular clients.
5)Product in the Marketing Mix of D-Mart: D-Mart is a one-stop outlet that offers a
wide range of choice in home and personal products to its customers. It believes in
mass commodities and therefore its products are available in different sizes and
colours. Apparels are displayed in a systematic manner in accordance with their size
options. Retail price, actual discount and offer price are displayed on the tags for the
convenience of customers. Area of the outlet is divided in accord with products as
every product has a separate section from which a customer can easily make a choice.
A Study On Innovative Marketing Strategies In Retailing Giants Big Bazar &D-Mart.
• Beauty products and personal care including soap, shampoo, cleanser, toner
• Kitchenware including crockery, utensils, plastic containers • Toys and games for
children
• Home appliances like iron, mixer grinder, grill toaster
6)Place in the Marketing Mix of D-Mart : D-Mart has a reach in most of the
important cities in India including Ahmedabad, Surat, Rajkot, and Bhuj in Gujarat,
Tirupathi in Andhra Pradesh, Hyderabad in Telangana, and Bangalore in Karnataka,
Mumbai and Kolhapur in Maharashtra. It is able to provide its products through a
network of one hundred and ten stores and has its headquarters base in Mumbai,
India. D-Mart has set up its stores at very strategic points to gain maximum advantage
from its locations because easy accessibility and proper transportation facilities are
very important for the survival of any outlet. Exceptional service is not the vital factor
for such outlets. They have reliable and trained employees to help customers in hours
of need but the consumers are generally self-sufficient and are likely to pick up items
from various shelves themselves in a walking trolley basket and take it to billing
counter for payment.
7)Price in the Marketing Mix of D-Mart: D-Mart is a departmental store and believes
in levying an economic pricing policy for its products. The company has taken a low-
cost approach to target that group which is price sensitive. As mass merchandise is its
mantra it has kept prices at reasonable and economic rates so that a customer can
easily purchase it. D-Mart has adopted a simple strategy of garnering huge sales
through affordable prices and keeping price range within reach of customers is its top
priority.It offers a 5% of minimum discount on MRP at any given time on all items
except fruits, grocery, vegetables and medicines. D-Mart has also adopted a discount
pricing policy and it periodically offers its customers various incentives and lucrative
discounts, especially during festival seasons. Customers at such times buy in bulk
quantities resulting in a huge volume of sales. This is the reason why such stores are
able to earn greater revenues.
Series 1 Series 2
300%
6000
250%
5000
200%
4000
150%
3000 Series 2
Series 1 100%
2000
50%
1000
0%
0 Bigbazaar Dmart
Bigbazaar Dmart
VI. CONCLUSION From this study it can be concluded that innovativeness and
modification is very essential especially in sectors like retailing. The major retailers viz
Big Bazaar and D-Mart striving hard to increase their market share by adopting
innovative means of attracting and luring customers. This study focuses on the
innovativeness in marketing strategies by the retailing giants and the tug of war
between them, the innovative marketing strategies have been identified with the help
of four major marketing variables each retailer is implementing and succeeding to pull
the customers towards them, and the outcome of adoption of innovative marketing
strategies has been measured in terms of the revenue generated by them disciplines
(consumer marketing, relationship marketing, services marketing, retail marketing
and industrial marketing) and an emerging marketing (E-Commerce). Most of
researchers and writers reviewed in these domains express serious doubts as to the
role of the Mix as marketing management tool in its original form, proposing
alternative approaches, which is adding new parameters to the original Mix or
replacing it with alternative frameworks altogether.
THE 7 P’s
The marketing mix is the tactical or operational part of a marketing plan. The
marketing mix is also called the 4Ps and the 7Ps. The 4Ps are price, place, product and
promotion. The services marketing mix is also called the 7Ps and includes the addition
of process, people and physical evidence. The marketing mix is the set of controllable
tactical marketing tools – product, price, place, and promotion – that the firm blends
to produce the response it wants in the target market. - Kotler and Armstrong (2010).
PRICE Price is the amount the consumer must exchange to receive the offering. -
Solomon et al (2009). Pricing is one of the most important elements of the marketing
mix, as it is the only mix, which generates a turnover for the organisation. The
remaining 3p’s are the variable cost for the organisation. Price must support these
elements of the mix. Pricing is difficult and must reflect supply and demand
relationship. Pricing a product too high or too low could mean a loss of sales for the
organisation. Pricing Factors Pricing should take into account the following factors
into account: 1. Fixed and variable costs. 2. Competition 3. Company objectives 4.
Proposed positioning strategies. 5. Target group and willingness to pay An
organisation can adopt a number of pricing strategies, the pricing strategy will usually
be based on corporate objectives Types of Pricing Strategy
1. Pricing Strategy Definition Example Penetration Pricing Here the organisation sets a
low price to increase sales and market share. Once market share has been captured
the firm may well then increase their price. A television satellite company sets a low
price to get subscribers then increases the price as their customer base increases.
Skimming Pricing The organisation sets an initial high price and then slowly lowers the
price to make the product available to a wider market. The objective is to skim profits
of the market layer by layer. A games console company reduces the price of their
console over 5 years, charging a premium at launch and lowest price near the end of
its life cycle. Competition Pricing Setting a price in comparison with competitors.
Really a firm has three options and these are to price lower, price the same or price
higher Some firms offer a price matching service to match what their competitors are
offering. Product Line Pricing Pricing different products within the same product range
at different price points. An example would be a DVD manufacturer offering different
DVD recorders with different features at different prices eg A HD and non HD version..
The greater the features and the benefit obtained the greater the consumer will pay.
This form of price discrimination assists the company in maximising turnover and
profits. Bundle Pricing The organisation bundles a group of products at a reduced
price. Common methods are buy one and get one free promotions or BOGOF's as they
are now known. Within the UK some firms are now moving into the realms of buy one
get two free can we call this BOGTF I wonder? This strategy is very popular with
supermarkets who often offer BOGOF strategies. Psychological Pricing The seller here
will consider the psychology of price and the positioning of price within the market
place The seller will therefore charge 99p instead £1 or $199 instead of $200. The
reason why this methods work, is because buyers will still say they purchased their
product under £200 pounds or dollars, even thought it was a pound or dollar away.
My favourite pricing strategy. Premium The price set is high to reflect the An example
of products using this strategy would be Project W ork
13. Pricing exclusiveness of the product. Harrods, first class airline services, Porsche
etc. Optional Pricing The organisation sells optional extras along with the product to
maximise its turnover. This strategy is used commonly within the car industry as i
found out when purchasing my car. Cost Based Pricing The firms takes into account
the cost of production and distribution, they then decide on a mark up which they
would like for profit to come to their final pricing decision. If a firm operates in a very
volatile industry, where costs are changing regularly no set price can be set, therefore
the firm will decide on their mark up to confirm their pricing decision. Cost Plus
Pricing Here the firm add a percentage to costs as profit margin to come to their final
pricing decisions. For example it may cost £100 to produce a widget and the firm add
20% as a profit margin so the selling price would be £120.00 PLACE Place includes
company activities that make the product available to target consumers. -Kotler and
Armstrong (2010). Place is also known as channel, distribution or intermediary. It is
the mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer. The organisation must
distribute the product to the user at the right place at the right time. Efficient and
effective distribution is important if the organisation is to meet its overall marketing
objectives. If an organisation underestimate demand and customers cannot purchase
products because of it, profitability will be affected. Which Distribution Channel To
Use? Two types of channel of distribution methods are available. Indirect distribution
involves distributing your product by the use of an intermediary for example a
manufacturer selling to a wholesaler and then on to the retailer. Direct distribution
involves distributing direct from a manufacturer to the consumer. For example, Dell
Computers providing directly to its target customers. The advantage of direct
distribution is that it gives a manufacturer complete control over their product.
14. Above Indirect Distribution (left) and Direct Distribution (right). Distribution
Strategies Depending on the type of product being distributed there are three
common distribution strategies available: 1. Intensive distribution Used commonly to
distribute low priced or impulse purchase products eg chocolates, soft drinks. 2.
Exclusive distribution Involves limiting distribution to a single outlet. The product is
usually highly priced, and requires the intermediary to place much detail in its sell. An
example of would be the sale of vehicles through exclusive dealers. 3. Selective
Distribution A small number of retail outlets are chosen to distribute the product.
Selective distribution is common with products such as computers, televisions
household appliances, where consumers are willing to shop around and where
manufacturers want a large geographical spread. If a manufacturer decides to adopt
an exclusive or selective strategy they should select a intermediary which has
experience of handling similar products, credible and is known by the target audience.
PRODUCT Product means the goods-and-services combination the company offers to
the target market. -Kotler and Armstrong (2010).
15. For many a product is simply the tangible, physical item that we buy or sell. You
can also think of the product as intangible i.e. a service. In order to actively explore
the nature of a product further, let’s consider it as three different products – the
CORE product, the ACTUAL product, and finally the AUGMENTED product. The
Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is
planted (introduction); it begins to sprout (growth); it shoots out leaves and puts
down roots as it becomes an adult (maturity); after a long period as an adult the plant
begins to shrink and die out (decline). The Customer Life Cycle (CLC) has obvious
similarities with the Product Life Cycle (PLC). However, CLC focuses upon the creation
and delivery of lifetime value to the customer i.e. looks at the products or services
that customers NEED throughout their lives.
PROMOTION
Promotion includes all of the activities marketers undertake to inform consumers
about their products and to encourage potential customers to buy these products. -
Solomon et al (2009). Promotion includes all of the tools available to the marketer for
marketing communication. As with Neil H. Borden’s marketing mix, marketing
communications has its own promotions mix. Whilst there is no absolute agreement
on the specific content of a marketing communications mix, there are many
promotions elements that are often included such as sales, advertising, sales
promotion, public relations, direct marketing, online communications and personal
selling. PHYSICAL EVIDENCE Physical evidence is the environment in which the service
is delivered, and where the firm and customer interact, and any tangible components
that facilitate performance or communication of the service. -Zeithaml et al (2008)
Physical Evidence is the material part of a service. Strictly speaking there are no
physical attributes to a service, so a consumer tends to rely on material cues. There
are many examples of physical evidence, including some of the following buildings,
equipment, signs and logos, annual accounts and business reports, brochures, your
website, and even your business cards. PEOPLE People are all human actors who play
a part in service delivery and thus influence the buyers’ perceptions; namely, the
firm’s personnel, the customer, and other customers in the service environment.
PROCESS
Process is the actual procedures, mechanisms, and flow of activities by which the
service is delivered – this service delivery and operating systems. -Zeithaml et al
(2008). There are a number of perceptions of the concept of process within the
business and marketing literature. Some see processes as a means to achieve an
outcome, for example – to achieve a 30% market share a company implements a
marketing planning process. However in reality it is more about the customer
interface between the business and consumer and how they deal with each other in a
series of steps in stages, i.e. throughout the process. KEY FEATURES OF MARKETING
MIX Interdependent variables The marketing mix is made up of four unique variables.
These four variables are interdependent and need to be planned in conjunction with
one another to ensure that the action plans within all four are complimentary and
aligned. Help Achieve Marketing Targets Through the use of this set of variables, the
company can achieve its marketing targets such as sales, profits, and customer
retention and satisfaction.
Flexible Concept
The marketing mix is a fluid and flexible concept and the focus on any one variable
may be increased or decreased given unique marketing conditions and customer
requirements. Constant Monitoring It is vital to keep an eye on changing trends and
requirements, within the company as well as in the market to ensure that the
elements in marketing mix stays relevant and updated. Role of Marketing Manager A
mature, intelligent and innovative marketing manager needs to be at the helm of the
marketing mix. This pivotal role means that this manager is responsible for achieving
desired results through the skill manipulation of these variables. Customer as a focal
point A vital feature of the marketing mix is that the customer is the focal point of the
activity. The value of the product is determined by customer perceptions and the goal
is to achieve a satisfied and loyal customer. DEVELOPING A MARKETING MIX Intuition
and creative thinking are essential job requirements for a marketing manager. But
relying on just these can lead to inaccurate assumptions that may not end up
delivering results. To ensure a marketing mix that is based in research and combines
facts with innovation, a manager should go through the following systematic process:
Step 1 The first item on the marketing manager’s agenda should be to define what the
product has to offer or its unique selling proposition (USP). Through customer surveys
or focus groups, there needs to be an identification of how important this USP is to
the consumer and whether they are intrigued by the offering. It needs to be clearly
understood what the key features and benefits of the product are and whether they
will help ensure sales. Step 2 The second step is to understand the consumer. The
product can be focused by identifying who will purchase it. All other elements of the
marketing mix follow from this understanding.
18. Who is the customer? What do they need? What is the value of the product to
them? This understanding will ensure that the product offering is relevant and
targeted. Step 3 The next step is to understand the competition. The prices and
related benefits such as discounts, warranties and special offers need to be assessed.
An understanding of the subjective value of the product and a comparison with its
actual manufacturing distribution cost will help set a realistic price point. Step 4 At
this point the marketing manager needs to evaluate placement options to understand
where the customer is most likely to make a purchase and what are the costs
associated with using this channel. Multiple channels may help target a wider
customer base and ensure east of access. On the other hand, if the product serves a
niche market then it may make good business sense to concentrate distribution to a
specific area or channel. The perceived value of the product is closely tied in with how
it is made available. Step 5 Based on the audience identified and the price points
established, the marketing communication strategy can now be developed. Whatever
promotional methods are finalized need to appeal to the intended customers and
ensure that the key features and benefits of the product are clearly understood and
highlighted. Step 6 A step back needs to be taken at this point to see how all the
elements identified and planned for relate to each other. All marketing mix variables
are interdependent and rely on each other for a strong strategy. Do the proposed
selling channels reinforce the perceived value of the product? Is the promotional
material in keeping with the distribution channels proposed? The marketing plan can
be finalized once it is ensured that all four elements are in harmony and there are no
conflicting messages, either implicit or explicit.
STRATEGIES
D-Mart has adopted Cost Leadership strategy under Generic strategy as its primary
strategy to target that group which is price sensitive. It has also adopted Expansion
strategy under the umbrella of Grand strategy in order to grow and spread its
presence. D-Mart has set up its stores at very strategic points to gain maximum
advantage from its locations because easy accessibility and proper transportation
facilities are very important for the survival of any outlet. D-Mart never planned of
opening a store in a mall sticks to what it knows best. It uses one of two formats of
stores whose size is calculated based on location and shopper density. This strategy
pays off for the company. D-Mart has also consistently followed the ownership model
strategy, owning most of the stores or having them on 30-year long-term leases. Since
real estate leasing usually eats up 4-6 % of revenues, the ownership model has kept
costs low.
A WINNING FORMULA Making products available at Every Day Low Price (EDLP) is D-
Mart‟s winning formula in value retailing. For EDLP, the company focuses on Every
Day Low Cost (EDLC), the key ingredients of which are:
1) Right product assortment: D-Mart focuses on the most popular SKU‟s (from the
perspective of its target customers monthly purchase basket) in each product
category. This helps to improve sales velocity, lower pilferage and ensure fresh
products on the shelf. D-Mart enjoys revenue per square foot of Rs. 29,019 against
less than Rs.17,500 (FY16 data) for peers.
2) Owned stores model: Its strategy of expanding through owned stores ensures
savings in rent costs (5-6% for peers) and protects it from escalation in rentals. D-Mart
presently owns 85% of its total outlets which helps it to keep well capitalised and
debt-light, while its operations generate spare cash. All the money that is saved using
this
5) Lower employee cost: D-Mart works on a variable employee model, which ensures
low employee costs – below 2% of sales. Only around 4,200 employees are on its
direct payroll.
6) Input metric focus: D-Mart rates its managers based on number of idle cash
counters, empty shelves (especially when stocks exist in warehouses), and level of
pilferage. It allots ESOPs to deserving employees, creating a sense of ownership
amongst employees.
DILEMMA
Also, the future of retail does not seem to be the brick-and-mortar retail & D-Mart‟s
slow and steady pace enterprise is a dilemma as against the fast evolving technology.
People in cities especially are highly lethargic about leaving their homes and prefer to
shop online today. Hence, D-Mart experiences the dilemma of survival in future of
technology.
SWOT ANALYSIS D-Mart has positioned itself as a one-stop retail store chain,
catering to value seeking retail customers, largely from the lower-middle, middle
and aspiring upper middle income segments. It has gained its own strength and
has some areas to improve as follows: Strengths of D-Mart Strengths are defined
as what each business does best in its gamut of operations which can give it an
upper hand over its competitors. The following are the strengths of D-Mart:
2) Slow scaling up: D-Mart started off on a very low key note and slowly took its
time to move up the ladder. This gave the company a better control and deeper
understanding of its supply chain and also helped it manage the bottom line
better.
4) Discount Policy: One factor that delineates D-Mart from its competitors is its
huge discount policy. The retailer sells essential goods at a flat discount price
which most competitors cannot match and this helped it penetrate the market.
5) Clear price based differentiation: D-Mart never followed the trends set by
other competing retail brands but believed in setting their own trends. They
captured the market through a clear price based differentiation and priced their
goods at significantly lower prices than competitors.
Weaknesses of D-Mart Weaknesses refer to the areas where the business or the
brand needs improvement. Some of the key weaknesses of D Mart
1) Focus on certain places: Quite unlike their competitors, who are present
everywhere, D-Mart has focused more on the Western States and has a very low
presence in the South. This has restricted them from gaining market prominence.
2) Sustainability of low pricing: The company has a zero credit policy and thus
vendors and suppliers give them at much better price which is how the company
is able to afford the low prices that the competitors cannot imagine.
3) No frills: D-Mart follows a no-frills approach where the focus is to cut costs
wherever possible. Their facilities are basic and lack the frills of most upmarket
retailers. The customers who come here essentially look at the low prices of
products on offer. So thus the sustainability of this differentiator is questionable.
1) Online retailers: People in cities especially are highly lethargic about leaving
their homes and prefer to shop online today. Companies like Amazon and Flipkart
thus become major threats to most retailers.
Vendors: Vendor relationship is the second pillar of the model. Since he comes
from a trader background, his vendor relationships have been his biggest
strength. The FMCG industry has a payment norm of 30-60 days, but D-Mart pays
its vendors on 11th day itself. This helps it stay in the good books of the vendors
and avoids stock outs. Other than that, D-Mart also receives a good amount of
discount by 2-3% from the vendors for quick payments. Since D-Mart buys in bulk
and pays its vendors well in time, they also get to earn higher margins.
money, flexibility, empowerment, and relaxed & efficient work culture. They
prefer hiring raw talent, and then invest heavily in training, to mould them as per
their requirement. Employees are just told once about the value system and
policies at D-Mart and then are empowered by giving them the freedom to
operate without somebody constantly looking over at them. There is absolute
clarity on what needs to be achieved & need not to fear targets. DATA FACTS
When most retail chains are struggling to make profit, D-Mart has impressed the
market with its stellar performance. In a market where most recognized and
larger counterparts such as Spencer‟s, Reliance Retail, Future Retail, Star Bazaar
and Hypercity too are struggling for earning profit, D-Mart has successfully
managed to crack the code in just about a decade.
The prices that D-Mart offers are 6-7% lower than its competitors.
D-Mart saves a huge chunk of money in lease and rental which is main cost
in retail industry as already they run on paper thin margin so saving on
lease helps D-Mart to maintain margin with giving heavy discounts on
products.
Out of the all the stores it runs, D-Mart owns majority of the properties,
which helps them to save a huge chunk of money on rent which could
increase its operating cost on average 5.68%.
Chapter – 5
CONCLUSION
The we can conclude that Marketing research, conducted for the purpose of new
product development or product improvement, is often concerned with
identifying the consumer's unmet needs. Customer needs are central to market
segmentation which is concerned with dividing markets into distinct groups of
buyers on the basis of "distinct needs, characteristics, or behaviors who might
require separate products or marketing mixes." Needs-based segmentation (also
known as benefit segmentation) "places the customers' desires at the forefront of
how a company designs and markets products or services." Although needs-
based segmentation is difficult to do in practice, it has been proved to be one of
the most effective ways to segment a market. In addition, a great deal of
advertising and promotion is designed to show how a given product's benefits
meet the customer's needs, wants or expectations in a unique way.
https://marketingmixx.com/marketing-mix-of-d-mart/
https://thewire.in/business/indian-walmart-making-explains-d-mart-success
https://en.wikipedia.org/wiki/Marketing_mix