GRAND PROJECT ON RETAIL MANAGEMENT

Submitted to: Prof. Roopa Rao 1) Submitted by: Jiten khandor Roll no. 17 (PGP-

Table of Contents
I. II. III. IV. Chapter-1 1.1 1.2 1.3 1.4 1.5 Chapter-2 2.1 2.2 2.3 2.4 Chapter-3 3.1 3.2 3.3 3.4 3.5 Chapter-4 Chapter-5 Chapter-6 Executive summary objective variables Research methodology Indian Retail Industry introduction Scope of retail Major retailers Growth of retail sector Retailing formats Reliance Industries Limited Introduction Reliance retail limited Corporate social responsibility Loyalty programs Reliance Fresh Introduction Products Locations of the store Customer feedback Positive and negative points Conclusion Further scope for study Bibliography 3 3 3 4 4 4 5 6 7 8 9 10 11 12 13 14 15 29

Executive summary
The Project Report is all about to check the customer satisfaction level, by acknowledging them, knowing the different problems they are facing in Reliance Fresh and to find out the solutions. At first, brief study of retail sector in India and brief study of reliance industries limited was done. Then I visited the reliance fresh stores and made a questionnaire to take the customers feedback. It was for taking personal feedbacks which is related with the Reliance Freshs move to diagnose consumer behavior. This method provided relevant information about customers mind set and their opinion about Reliance Fresh on a personal level. Lots of interesting facts came out during this survey. Then I had done the observations on the basis of customer feedback and found out the various problems faced by the customers and complaints made by them and found the positive and negative sides of the Reliance fresh stores and provided the recommendations to improve their business.

OBJECTIVE : To study retail management by studying locations of the stores and consumer satisfaction with it considering Reliance fresh

VARIABLES :

Brief study of retail sector in India Brief study of Reliance retail limited Are people satisfied with the store location in terms of convenience of
access?

Do people find the store ambience good? Are people satisfied with the store cleanliness and hygiene? Are desired products available? Are the products easy to access? Are people satisfied with the quality and freshness of vegetable &
fruits, staples, dairy products being offered?

 Do people get different brands of products? Promotional schemes of reliance fresh behavior of the staff at the store billing

RESEARCH METHODOLOGY :
Primary study: Reliance fresh and feedback from customers Secondary study: internet and library

INDIAN RETAIL INDUSTRY

Retailing in India is the largest employer after agriculture. It employs almost 7% of the total work force in India and has a contribution of 14% to the national GDP. In the year 2004 , the size of Indian organized retail industry was Rs 28000 Crore, which was only 3% of the total retailing market. Organized retailing is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1,00,000 Crore by 2010. The contribution of organized retail is expected to rise from 3% to 9% by the end of the decade.

Though with a population of a billion and a middle class of 300 million (upper middle class= 40, Middle class =150 & lower middle class = 110), organized retailing is still at its infancy in India. The great Indian middle class is estimated to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. It is projected that by the year 2010, 65% of the Indian population will be in the age group of 10-49 years, which makes the scenario even more attractive. India has the largest retail network with 1.2 Crore outlets but only 4% of them are larger than 500 sq. feet in size. USA on the other hand has 9 Lakh outlets catering to more than 13 times the total retail market size of India. Thus India

has the highest number of outlets per capita in the world with a widely spread retail network but with the lowest per capita retail space (@ 2 sq.ft. per person).

The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof.

SCOPE OF RETAIL IN INDIA The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The organized retailing sector in India is only 3% and is expected to rise to 25- 30% by the year 2010. There are under construction at present around 325 departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a tremendous scope for growth in the Indian retail market. The growth of scope in the Indian retail market is mainly due to the change in the consumers behavior. For the new generation have preference towards luxury commodities which have been due to the strong increase in income, changing lifestyle, and demographic patterns which are favorable. The scope of the Indian retail market is very vast. And for it to reach its full potential the government and the Indian retailers will have to make a determined effort

The scope for growth in the Indian retail market is seen mainly in the following cities: Mumbai Delhi Pune Ahmadabad Bangalore Hyderabad Kolkata Chennai

Major Retailers in India

 Pantaloons Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket Big Bazaar. It has the following retail segments: Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005. Trent owns over 4 lac sq. ft retail space across the country.

RPG Group RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and beauty care outlets Health & Glow.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach Rs. 90,000 crores by 2010.

AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of retail. It will invest Rs. 8000-9000 crores by 2010.

GROWTH OF RETAIL SECTOR IN INDIA

As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are :

-Low share of organized retailing -Falling real estate prices -Increase in disposable income and customer aspiration -Increase in expenditure for luxury items

RETAILING FORMATS

Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, and Pantaloon. Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors. Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ nonperishable goods. Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop. Hyper marts/Supermarkets: Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales. Convenience Stores: These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium MBO: Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

 INTRODUCTION
Reliance Industries Limited is India's largest private sector conglomerate company by market value, with an annual turnover of US$ 44.6 billion and profit of US$ 3.6 billion for the fiscal year ending in March 2010 making it one of the largest India's private sector companies, being ranked at 264th position in the Fortune Global 500 (2009) and at the 126th position in the Forbes Global 2000 list (2010). Reliance was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a pioneer in introducing financial instruments like fully convertible debentures to the Indian stock markets. Ambani was one of the first entrepreneurs to draw retail investors to the stock markets. Critics allege that the rise of Reliance Industries to the top slot in terms of market capitalization is largely due to Dhirubhai's ability to manipulate the levers of a controlled economy to his advantage. Though the company's oil-related operations form the core of its business, it has diversified its operations in recent years. After severe differences between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided between them in 2006. In September 2008, Reliance Industries was the only Indian firm featured in the Forbes's list of "world's 100 most respected companies". The Group's activities span exploration and production of oil and gas, refining and marketing, petrochemicals, textiles, financial services and insurance, power, telecom and infocom initiatives. The Group exports its products to more than 100 countries the world over. It includes: Reliance Industries Limited, Reliance Capital Limited, Reliance Industrial Infrastructure Limited, Reliance Telecom Limited, Reliance Infocomm Limited, Reliance General Insurance Company Limited, Indian Petrochemicals Corporation Ltd. and Reliance Energy Limited.

RELIANCE RETAIL LIMITED

Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, Reliance is aggressively working on introducing a pan-India network of retail outlets in multiple formats.

A world class shopping environment, state of art technology, a seamless supply chain infrastructure, a host of unique value-added services and above all, unmatched customer experience, is what this initiative is all about. Ensuring better returns to Indian farmers and manufacturers and greater value for the Indian consumer, both in quality and quantity, will be an integral feature of this project. By creating value at all levels, the project boasts of a seamless supply chain infrastructure, unprecedented even by world standards. Through multiple formats and a wide range of categories, Reliance is aiming to touch almost every Indian customer and supplier.

RIL's Retail Project will be through the following companies: o Reliance Fresh
o o o o o

Reliance Footprint Reliance Time-Out Reliance Digital Reliance Wellness Reliance Trendz

o Reliance Autozone
o o

Reliance Super Reliance Mart

o Reliance i-store o Reliance jewel

o

Reliance home kitchens

CORPORATE SOCIAL RESPONSIBILITY

Today when most of the companies are busy in making profits by any means, there are few Ones who are focused to return this society, a part of what they have earned through this society. Reliance retail is one of them. Following efforts of reliance retail are aimed at benefiting the society making reliance socially responsible. Reliance Retail aims at recruiting people from the underprivileged community in society. Hence, they are planning to train students from corporation schools and schools run by NGOs. And, they consider this as a part of the corporate social responsibility. The company is planning to charge a "small fee" from those who want to join the course as they want to bring in some discipline and regularity among the students, and will reimburse that once they are inducted into service. Farming in India is highly fragmented and subject to harsh climatic conditions once harvested, it is very difficult to keep fruits and vegetables fresh. To secure high quality, Reliance Retail is directly sourcing fresh agricultural produce from thousands of farmers from villages through Collection Centers. With this concept, Reliance has built a business model generating shared value that links the company supply chain more closely to poor farmers in Indian villages. Reliance is providing a guaranteed market for the farmers produce, reducing transaction costs and training the farmers in better and sustainable farming practices. This initiative results in higher income and upgrading of skills for the farmers, and reduced spoilage of produce (up to 35 percent) and better quality products f or Reliance retail stores. Reliance retail has adopted farm to fork theory which means it is procuring directly from the farmers thus offering them quite reasonable prices for their produce as now no intermediaries are involved. In return Reliance is giving farmers information about how can farmers improve their productivity. They have centers in villages who apart from providing information make farmers aware of market rates of different crops so that farmers can choose crops they want to sow to become profitable. Farmers are provided technical help as well like information about quality of seeds and fertilizers FARM TO FORK The Reliance retail company sources say it is setting aside Rs 50,000 crore to build its farm-tofork linkage. Reliance has drawn up plans for a presence in 784 towns and 6,000 mandi (wholesale market) towns with 1,600 rural business hubs to service these. It has already rolled out 177 Reliance Fresh stores across major towns in 11 states. According to a company report, RIL is targeting a turnover of Rs 40,000 crore in the next few years.

 Loyalty Programs
Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior behavior which is potentially of benefit to the firm. So loyalty programs are run to attract more and more customers and to increase the loyalty of the store. According to these programs all the customers were informed about the benefits of different loyalty program. They were encouraged to use relianceone membership program in which they are allotted a membership card. .The points on the membership card are earned on every purchase ,the value of 1point is .70 paise,thus a customer can collect more and more points on his card and at last all the points can b redeemed. Some of the main features of RelianceOne Membership Program about which customers were made aware were like that RelianceOne Membership Programwas a Loyalty & privilege program by Reliance Retail with no registration fees.It allows huge benefits on shopping with RR. And it is present across India, even in small towns & talukas .

The customer having membership card also enjoys other benefits some of the benefits are: Earn RelianceOne Points across participating Reliance Retail stores Customized offers based on purchase history

 Redemption across participating Stores in the Reliance Retail Network Advance information on new products and services

RELIANCE FRESH

Reliance Fresh a convenient store format, is governed by the Mukesh Ambani and is the most important part of Reliance Industries retail Business. Reliance Ltd. has planned to invest more than Rs. 25000 crores in the retail division. It also comprises more than 560 reliance fresh stores all over the country. The outlet sells fresh fruits, staples, dairy products, fresh juice bars, groceries and vegetables. A distinctive Reliance Fresh outlet is around 3000 to 4000 sq. feet and accommodates catchment area of one to three Kilometers.

HISTORY OF RELIANCE FRESH

The Reliance Retail had to face various difficulties before the launch of Reliance fresh, because of the various circumstances prevailing in Orissa, West Bengal and UP, along with the news focusing on the dearth of vegetables and fruits stocks. The retail business of Reliance then minimized its exposure in vegetable and fruit business, as a result established Reliance fresh positioning a pure super market play focusing on various categories like IT, consumer durables, home, FMCG and food. The retail company of Reliance may not supply the vegetables and fruits in a few states, the Reliance Fresh decided to not to race with local wholesalers partly because of the political reasons as well as its incapability to maintain a healthy supply chain.

SUPPLY CHAIN MODEL OF RELIANCE FRESH Reliance started its retail operations of reliance fresh stores with following supply chain model. Procuring directly from the farmers and operating with moderate margin but mass selling was key to reliance fresh operations for first few months. The following figure depicts the reliance fresh model

PRODUCT RANGE OF RELIANCE FRESH

Vegetables and fruits: this is the specialty of the store as they provide fresh fruits and vegetables at a rate lower than the market price. Households Items: In the stores we can get items which are at slight premium rate than market price, but usually of high quality. Food and Beverages: This area of the product line they stock all the premier brands and also their private label. Groceries: In this sector reliance is promoting its private label as they are promoting their own brands and they do the packaging of the product and then label it privately and then sell it at premium as compared it to the loose items. Dairy Products: The dairy products in some locations are procured from the farmers themselves and some places they procure it from the manufacturers. Refrigerated products: This product line is dominated by the brands available in market and very less private labeling is done. Non food items: Here we get many petty non food items at a premium than market price.

LOCATIONS OF THE STORE

In Ahmedabad reliance fresh stores are located at : Memnagar Nyay Marg Aditya Plaza, Jodhpur Gam Road, Satellite Area 1 TO 8, Near Rto Circle, Ganga Rachna Complex, Ashram Road, Navrangpura Hirabag Society Ground Floor, DeepShanti, Paldi

 Bopal-Ghuma Road/ State Highway, Bopal G-3, Kundlini Complex, Nehrupark, Opposite Fountain, Vastrapur "Kundlini Complex Shop #G-3. Vastrapur Naroda Industrial Estate Dakshini Society "Reliance fresh Ahmedabad , bhavna soc,isanpur Mithakhali six roads

Reliance Fresh Store Customer Voices

About store a. Are you satisfied with the Store Location in terms of Convenience of Access?

Fig: 6a

b. Do you find the store ambience good?

c) Are you satisfied with the store cleanliness and hygiene?

d) Do you find the parking facility convenient?

Observations about store

 Normally all the Reliance stores are easily accessible. Only few customers are not satisfied with the location There are only few stores where store ambience & store cleanliness are not up to the mark. Stores in paldi have very nice ambience and cleanliness. Parking facility for cars is a very common problem faced by customers. There are around 70% stores of total stores where there is no parking facility.

2. Product Availability a) Were desired product available?

b) Did the shelves look full?

c) Were the products easy to access?

d) Were products of same group placed together?

Observations about Product Availability Most of the customers are satisfied with the product availability and the shelves are also full. All the products are easily accessible and the products of the same group are placed together.

3. Product Quality/ Freshness A .fruits and vegetables

Are you satisfied with the quality & freshness of vegetables & fruits being offered?

 Do you find the price of vegetables and fruits appt.?

Observations about Quality of Fruits and Vegetables

Half of the customers are not satisfied with the quality and freshness of fruits and vegetables being offered.

Customers are also not fully satisfied with the availability of fruits. 70% of the customers complained about pricing of Fruits & Vegetables. They found the prices are too high.

B .Staples

Are you satisfied with the quality & availability of different staples being offered?

Do you find the price of different staples appt.?

Do you prefer our private label staples over others?

 Did you get more than one choice of pack size?

Observations about staples Most of the customers are satisfied with quality and availability of different staples. 36% of the customers complained about high prices of the staples. One out of two customers prefers their private labeled staples. Customers also get different choices of pack size.

C .Processed Food

Are you satisfied with the quality & availability of different Processed Food being offered?

 Do you find the price of different Processed Food apt?

Did you get more than one choice of pack size?

Observations about Staples and Processed food Most of the customers are satisfied with the quality & availability of different processed food (80% of customer) 60% of customers feel that pricing of processed food is appropriate. 40% of customers complained regarding pricing of processed food. Customers are satisfied with different pack size of processed food being offered.

D. Dairy products

Are you satisfied with the quality and freshness of different dairy products being offered?

 Do you find the price of different dairy products appt?

Do you get more than one choice of pack size?

Observations about Dairy Products : Around 75% people are satisfied with the quality of dairy products being offered. More than half people are satisfied with the pricing of dairy products. 67% customers said that different brands and pack size of dairy products are available.

E. Non Food FMCG

Do you get different brands of products over here?

Did you get more than one choice of pack size?

Observations about Non Food FMCG :

Most of the people are satisfied with the availability of different brands under one roof.

 Also there are many different brands of FMCG products available.

Promotions

Do you get attracted by different promotional schemes being offered?

Were the promotions well displayed?

Was the promotion easy to understand?

Observations about Promotions: 50% customers get attracted by different promotions and offers. Many customers find schemes at other stores more attractive. Customers complained that many times the schemes are not properly displayed , even staff doesnt inform them about running offers. There needs to be proper interaction between the management, the staff and the customers. The promotional schemes are easy to understand

STAFF

Were all staff members courteous and helpful?

Did at least one employee proactively inform you of ongoing promotions and offers?

Did at least one employee make suggestions to cross sell / up sell?

Observations about Staff:

One thing which is very dissatisfying is staff of Reliance stores. Most of the staff members at all stores are not courteous and helpful. There is a lack of staff at many stores. Staff needs to be trained and properly informed about various schemes so that proper information can be passed on to customers.

BILLING

Do you find the cash counter hassle free?

 Did the cashier have loose changes?

Are you satisfied with benefits of Reliance membership card?

Observations about Membership Card: Most of the customers are satisfied with the billing systems. There is no heavy rush at the stores. So, cash counters remains hassle free. In the morning time there is some rush for the purchase of fruits and vegetables. Exactly half of the customers are satisfied with the membership card Many customers even dont know anything about the Reliance membership card.

POSITIVE POINTS :

They have a wide range of products from fruits & vegetables to FMCG products. Also the products of many different brands are available there. The main benefit is the locations of the store because all the stores are situated at the places where there is mass population or where the more people passes through that roads. Products are placed properly and the products of the same group are placed together so that the customer can easily find the product of their choice and he/she can have a choice of different brands. Atmosphere of the stores is very good and stores are found clean and hygienic. Billing problems are very less because the stores dont have a heavy rush.

NEGATIVE POINTS :

They claim that they have the more fresh vegetables & fruits as compared to others which is actually not true. Many times fruits & vegetables are not fresh. They dont provide the facility of exchange of goods

 They charge a higher price for all the products in comparison to others. They charge at MRP rate for many products. Most of the customers found prices are too high so they dont prefer to purchase from Reliance fresh stores Many a times the cashier dont have the loose changes Promotions are not properly advertised, so many customers even dont know the promotional schemes that they offer. Also the promotional schemes are not much attractive. There is a lack of staff at most of the stores Parking problem is the main problem found at the Reliance fresh stores. Most of the stores dont have the parking facility Staff is not co-operative and they also dont greet customers entering the stores. The staff is not courteous and helpful and they even dont make any efforts to cross sell or up sell.

Many customers dont prefer their private label products over others