Saturday, August 06, 2005

Umeed se dugna

Whats the power of a brand? The ability to sell anything under its name.
Whats the power of a branded store? The ability to sell anything even if its a non brand.

Big Bazaar seems to have mastered this art. That Big Bazaar sells cheap is known to everybody. It is Walmart here before walmart arrives and perhaps (we wont know until Walmart arrives), a localised model better suited to India as well. Todays paper has an "umeed se dugna" (yup, thats what KBC2 says too) offer. A simple strategy. Buy a pair of bedsheets for 500 rupees and buy a second pair at 99. Thats 20% of the first pair. Buy a knife for 12, buy the second for an unbelievable 3 rupees.

Certain items are said to be branded as per the newspaper advert, but those "brands" are not the brands you would have heard of. The bedsheet wont be a Bombay Dyeing nor would the knife be a Fiskar. It would have some name stuck on it. But Big Bazaar has its takers. This, to me, goes against conventional marketing wisdom, but I guess Big Bazaar knows what it is doing and does it well.


Kaps said...

Supermarkets like Walmart make lot of money from housebrands (in-store brands). the margins on these are generally higher. Foodworld has also started doing this. I think Westside sells only in-store brands. The way forward for Big Bazaar would be to increase the popularity of their housebrands so that the bargaining power shifts from the FMCG firms to the retailer. the main reason behind the P&G Gillette merger seems to be increased bargaining power against the supermarkets like Walmart.

Neelakantan said...

Abroad in store brands are big. Here, I havent seen quality in most in store brands. Again, Big Bazaar is not about in store brands (some of it is), it is about selling unknown brands. But yes, increased margins are a simple answer. As of date, perhaps Big Bazaar cannot get a great deal out of TTK (Prestige cookers) than it can get out of say Tempo pressure cookers.

Online Dating Insider said...

People have an inherent psychological tendency to buy from the "big company" even if it's illogical.