As part of the retail course we were supposed to study two different formats of retail in the food segment. we chose Big Bazaar and Spar both located in Bangalore which share a similar format.
Both the stores are located in the same trading area consisting of many corporate offices and residential houses with individuals having enough disposable income.
A Retail format has different offering and a value proposition, this value proposition is based on the format type, whether its a convenience store,discount store or a category specialist. depending on this value proposition the process of segmentation is carried.
Ex: If you are a high value retailer offering high discounts then the segment you would be catering would be the value conscious customer who wants to spend his hard earnings but looks for discounts as he buys.Retailer/marketers looks for finding unique characteristics of the target segment to better understand these customers, and this is done by knowing their demographics(personal information like age income,sex,marital status etc) the other way of segmenting is by classifying customers according to their behavior pattern(how they shop,behave,lifestyle etc)
one interesting observation which we made today was that the segments which Big Bazaar and Spar were targeting were completely different. we could identify this by the behavior and lifestyle pattern of the individuals visiting the store.
Spar had customers who were looking for value, now value for a spar customer would be huge variety,availability of national and international brands. and value for big bazaar customer would be the best prices and high saving deals and big bazaar was able to do so with the retail mix it had a collection of in-house brands and minimal services which helped Big Bazaar to push down its costs and pass it on to the customer.
segmentation can be done by studying any similar pattern among the group of customers, we tried segmentation on the basis of their ownership of vehicle. It helped me to understand the customer lifestyle and spending pattern. now if you are wondering what am i saying ? think why a person own's an SUV(huge in size)??? as it enhances his image or helps him project the image of a powerful person. At the spar hypermarket were the powerful sedans and Muscular SUV's zooming in and out contrast to it in the big Bazaar parking there were hatchbacks, the entry level segment cars mainly from the Maruti stable. these are the customers who would be looking for value deals and this could be concluded from their choice of cars. It would be justified saying that both of them cater and satisfy their customer needs and are able to deliver their value proposition
