A Dissertation Report Titled “A Study on Measuring Customer

Satisfaction at ‘Reliance Fresh’ Retail Outlets in Bangalore”

Submitted in Partial Fulfillment of the Requirements of

Bangalore University for the Award of the Degree of

Master of Business Administration

Submitted By

Ranjan Kumar

Reg. No: 09SKCMA059

Under the Guidance of

Prof. K. Ranganathan

EMPOWERING MINDS

Acharya Institute of Management & Sciences

1st Cross, 1st Stage, Peenya Industrial Area

Bangalore – 560058

2009 – 2011

1

Declaration

I, Ranjan Kumar hereby declare that this dissertation titled, “A study on measuring

customer satisfaction at ‘Reliance Fresh’ retail outlets in Bangalore.” is record of

original and independent study carried out by me under the guidance of Prof. K.

Ranganathan, Acharya Institute of Management and Sciences, Bangalore, submitted in

the partial fulfillment of the requirement of the Bangalore University, for the award of

degree of Masters of Business Administration.

I further declare that this report prepared is the original study conducted by me and has not

been submitted earlier for the award of any other Degree / Diploma by Bangalore University

or any other University.

Place: Bangalore Ranjan Kumar

Date:

2

EMPOWERING MINDS

Acharya Institute of Management & Sciences

Peenya, Bangalore – 560058

Certificate from the Guide

Certified that this dissertation titled, “A study on measuring customer satisfaction at

‘Reliance Fresh’ retail outlets in Bangalore” is record of original and independent study

carried out by Ranjan Kumar of 4th Semester MBA under my guidance.

This report prepared by him is original and has not formed a basis for the award of any other

Degree / Diploma by Bangalore University or any other University.

Place: Bangalore Prof. K. Ranganathan

Date:

3

EMPOWERING MINDS

Acharya Institute of Management & Sciences

Peenya, Bangalore – 560058

Certificate

Certified that this dissertation titled, “A study on measuring customer satisfaction at

‘Reliance Fresh’ retail outlets in Bangalore” is record of original and independent study

carried out by Ranjan Kumar of 4th Semester MBA under the guidance of Prof. K.

Ranganathan.

This report prepared by him is original and has not formed a basis for the award of any other

Degree / Diploma by Bangalore University or any other University.

Prof. K. Ranganathan Dr. Kerron G ReddyDepartment of MBA Principal and CEOPlace: Bangalore Place: BangaloreDate: Date:

4

Certificate of Approval

This dissertation report of Ranjan Kumar titled “A study on measuring customer

satisfaction at ‘Reliance Fresh’ retail outlets in Bangalore” is approved in quality and

form an has been found to be fit for the Partial Fulfillment of the Requirements of Bangalore

University for the Award of Degree of Master of Business Administration.

Internal Guide External Examiners

Name: Prof. K. Ranganathan 01) Name:

Signature: Signature:

Date: Date:

02) Name:

Signature:

Date:

5

Acknowledgement

The toughest of endeavors in the world is not possible without the support of a helping hand

which guides and motivates a person to take on any challenge head on. Inputs from such

helping hands are always like very essential because more often or not certain mistakes

which go unnoticed from our eyes.

I am thankful to Dr. Kerron Reddy, Principal and CEO of Acharya Institute of

Management and Sciences, who had provided all the required facilities to carry out the

dissertation project work and nurturing my skills to execute the requirements.

I am heartily thankful to my guide Prof. K. Ranganathan, Acharya Institute of

Management and Sciences, whose encouragement, guidance and support from the initial to

the final level enabled me to develop an understanding of the subject. I offer my regards and

blessings to all my Professors of AIMS and all the people who supported me in any respect

during the completion of the dissertation project.

Last but not the least I thank my dear parents, teachers and friends who have been source of

support, strength, inspiration and encouragement for whatever I am today.

Ranjan Kumar

Date:

6

Chapter 01

Introduction

7

Topic: “A study on measuring customer satisfaction at ‘Reliance Fresh’

retail outlet in Bangalore”

1.1 INTRODUCTION

Customer satisfaction is a measure of how product and services supplied a company can meet

the customer expectations. Customer satisfaction is still one of the single strongest predictors

of customer retention. It’s considerably more expensive to attract new customers than it is to

keep old once happy. In a climate of decreasing brand loyalties, understanding customer

service and measuring customer satisfaction are very crucial. There is obviously a strong link

between customer satisfaction and customer retention. Customer perception of service and

quality of product will determine the success of the product or service in the market.

With better understanding of customer perceptions, companies can determine the customers

need e actions required to meet the can customer’s needs. They can identify their own

strengths and weaknesses, where they stand in comparison to their competitors, chart out

path future progress and improvement. Customer satisfaction measurement helps to promote

an increased focus on customer outcomes and stimulate improvements in the work practices

and processes used within the company.

In a sharp contrast to the retail sector in developed economies, retailing in India – though

large in terms of size - is highly fragmented and unorganized. With close to 12 million retail

outlets the country has one of the highest retail densities worldwide. Retailing like rest of the

world retailing is one of the largest industries in India with sales amounting to about $350

billion, but organized retail is estimated at only US$ 8 billion. It is country’s largest source of

employment after agriculture, has deepest penetration into rural India and accounts to about

10-11 % of’ India’s GDP and around 8%of the employment.

Inefficiency in the existing supply chains presents further opportunity for organized players

to draw on this large market even as lack of consumer culture and low purchasing power

restricted the development of modern formats. Migration from unorganized to organized

retail has been visible with economic development in most countries

8

The Indian retail industry is the fifth largest in the world. Comprising of organized and

unorganized sectors, India retail industry is one of the fastest growing industries in India,

especially over the last few years. Though initially, the retail industry in India was mostly

unorganized, however with the change of tastes and preferences of the consumers, the

industry is getting more popular these days and getting organized as well. With growing

market demand, the industry is expected to grow at a pace of 25-30% annually. The India

retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by

the year 2010.

1.2 Retail Meaning and Definition

To distribute in small portions or at second hand; to tell again or to many (what has

been told or done); to report; as, to retail slander.

The sale of commodities in small quantities or parcels; -- opposed to wholesale;

Sometimes, the sale of commodities at second hand.

Done at retail; engaged in retailing commodities; as a retail trade; a retail grocer.

To sell in small quantities, as by the single yard, pound, gallon, etc.; to sell directly to

the consumer; as, to retail cloth or groceries.

1.3 Importance of Retail Marketing

The retail landscape is in a constant state of change. As retail marketing is one of the most

dynamic and exciting areas of growth in the global economy so, to beat the competition,

stand out in a saturated marketplace and succeed despite tightening margins, savvy retailers

are focusing on customer-centric service, personalization and loyalty programs to attract and

retain customers.

A successful retail organization understands their market, their customers, and the

importance of strategic location. Because competition in the retail industry can be fierce,

such organizations need the best micro marketing tools available to analyze where to place

new stores, establish customer profiles, and determine best marketing practices in order to

9

find new customers. The trick in retailing, therefore, is to find things that you can do for

customers that will modify their behavior in profitable ways.

As retailers strive to touch consumers at every step of the purchase cycle, retail marketing

has evolved to become a mosaic of mass media branding, tactics for driving store traffic, in-

store experience, and loyalty programs.

1.4 Definition of research

Research is a more systematic activity directed towards discovery and development of an

organized body of knowledge.

It is directed towards aiming at a solution to a problem.

It emphasizes development of general principles of theories helpful in predicting in

future occurrence.

Based on observed experience or empirical evidence.

It involves gathering new data from primary or firsthand sources and using the

existing data for the new purpose.

1.5 Principles of sampling

The idea behind principle of sampling is that we seek knowledge about the total units by

observing a few units and extend our inference about the sample to the entire population.

1.6 Questionnaire

This method of data collection is quite popular in case of big enquiries. A questionnaire

consists of a number of questions printed or typed in a defined order on a set of forms. The

questionnaire is mailed to respondents who are expected to read and understand the questions

and write down the reply on the space meant for the purpose in the questionnaire itself.

1.7 Need for the study

Over the years, research has been done in different service sectors, even in retail services, to

find out the drivers of customer satisfaction with respect to service quality and service

features of Reliance Fresh products. To survive in competitive market and make the

10

necessary improvements in the service quality and feature trend and comparison on is a need

for study.

Chapter 02

Research Methodology

11

2.1 Introduction

India’s service sector has matured considerably during the last few years and has been

globally recognized for its high growth and development. The Indian retail market, which is

the fifth largest retail destination globally, has been ranked as the most attractive emerging

market for investment in the retail sector by AT Kearney's eighth annual Global Retail

Development Index (GRDI), in 2009. As per a study conducted by the Indian Council for

Research on International Economic Relations (ICRIER), the retail sector is expected to

contribute to 22 per cent of India's GDP by 2010.

In today’s complex business environment, it has become very crucial for companies to attain

high customer satisfaction for long term sustainable growth and like companies of the other

business domains. Retail also considers their customers as the most important asset, is not

just a theory but also an economic fact. Therefore in the current scenario, the research on

customer satisfaction on business domain of retail sector is quite important and critical for

understanding of customer satisfaction and retention, it is very crucial for any company to

learn what actually differentiates the satisfied customers from the unsatisfied ones.

In a sharp contrast to the retail sector in developed economies, retailing in India - though

large in terms of size - is highly fragmented and unorganized. With close to 12 million retail

outlets the country has one of the highest retail densities worldwide. Retailing like rest of the

world retailing is one of the largest industries in India with sales amounting to about $350

billion, but organized retail is estimated at only US$ 8 billion.

It is country’s largest source of employment after agriculture, has deepest penetration into

rural India and accounts to about 10-11 % of’ India’s GDP and around 8%of the

employment. Inefficiency in the existing supply chains presents further opportunity for

organized players to draw on this large market even as lack of consumer culture and low

purchasing power restricted the development of modern formats. Migration from

12

unorganized to organized retail has been visible with economic development in most

countries.

Thus the study is conducted to understand the satisfaction level of consumer that may be

influenced by the Price, Quality, and Service Convenience of the products. The project

reveals satisfaction level of the customers on ‘Reliance Fresh’ products, comparison between

Kirana shop and the retail outlets, Future trend of retail sector in India. Customers are

moving towards the new trend of retail shopping in shopping malls. Most of the competitors

are existing in the market in that ‘Reliance Fresh’ is trying occupying market share it shows a

good market potential.

2.2 Statement of the problem

Indian organized retailing is under transition today, bringing a lot of changes in format of

retailing. In this regard measuring customer satisfaction in organized ‘Reliance Fresh’ outlets

in Bangalore, preferences and experiences will be of use to shape the retail out lets and their

offerings. The changing attitude of consumers led them to step forward from unorganized

Kirana stores to the organized retailing formats.

2.3 Literature review

India has been rather slow in joining the organized retail revolution that was rapidly

transforming the economics in the other Asian tigers. The food retailing outlets in India are

growing at a very fast rate in the every city. The food retailing outlets in the recent years

have shown tremendous impact in buying decision of the consumers. Retailing is one of the

largest in the global economy, is going through a transition phase in India. The need of

catering the shopping experience has been fulfilled by the shopping malls. They let

customers experience their freedom of choice. They not only offer variety but also executive

transparent pricing.

Technical, in its “retail outlook October 2007” reports that the total retail market will grow

from $336 billion in 2006 to $590 billion dollar in 2011, which translated to an annual

13

growth rate to 12%. Even while the share of modern retailing to four-fold from 4% in 2006 to

16% in 2011 and further to 2016, traditional retail will still grow in absolute terms from $324

billion dollar in 2006 to $493 billion dollar in 2011.

A study by McKinsey point out that the Indian market for consumer goods is expected to

reach $400 billion by 2010.Indian market is one of the five largest markets in the world.

Liberalization of economy in the 1990’s and the entry of large players in the retail business

have bought the retail industry in spot light.

India's retail industry is the second largest sector, after agriculture, which provides

According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the

retail sector will create 50,000 jobs in next few years.

2.4 Objectives of the study

To study the latest trends of retailing in India

To study customer satisfaction in organized retail outlets towards branded retailing

To compare branded retailing shops and Kirana stores on the basis of consumer

perception and satisfaction

Level of satisfaction of ‘Reliance Fresh’ outlet users

Reasons for dissatisfaction

2.5 Research Methodology

Research is the systematic process of collecting and analyzing information (data) in order to

increase our understanding of the phenomenon about which we are concerned or interested.

Research is a common parlance refers to a search for knowledge. The urge of understand

things may be rightly termed as research, in other words we can also refer research as a

scientific and systematic search of pertinent information of specific topic. The concept of

research is thus closely linked with human endeavor for better understanding of his

evolution, environment and growth through diverse stages of human history.

14

Research therefore, has been an integral part of academic pursuits in the past. It has served

two fold purpose, intellectual sharpening and evolving new theories to explain diverse

phenomenon through which mankind survived with the progress of modern era. Human

curiosity has leads to understand his environment in different angles. This process of

studying this awareness of man manifested in a process known as research

2.6 Research Design

Descriptive Research

Descriptive Research is a fact finding investigation which is aimed at describing the

characteristics of individual, situation or a group (or) describing the state of affairs as it exists

at present. The type of research method used is descriptive. The aim of descriptive research is

to verify formulated hypotheses that refer to the present situation in order to elucidate it.

Descriptive research is used because the research is primarily concerned with describing the

nature and conditions and degree in detail of the present situation

A descriptive research is conducted using 100 respondents, where in the detailed analysis of

preference of shopping, preference on organized and unorganized outlets, latest trend

towards branded retail outlets especially on ‘Reliance Fresh’ .Satisfaction level of customers

towards more retail outlets. Where in the detailed analysis of the quality of the service is

analyzed with respect to various variables and compared with the competitors to arrive at a

conclusion on the basis of finding and suggestions, which would help the company to

provide greater service and make necessary improvements in the service quality.

2.7 Tools of Data Collection

In present study both primary as well as secondary data will be used, which will helps in

identifying the customer satisfaction towards ‘Reliance Fresh’ retail outlets and towards the

‘KIRANA’ shops and the latest trends of retailing in India.

Data Sources

In present study both primary as well as secondary data is used, which helps in identifying

the customer satisfaction towards ‘Reliance Fresh’ retail outlets and towards the ‘KIRANA’

shops and the latest trends of retailing in India.

15

Primary Data

The primary data for the study will be collected by means of structured questionnaire and

will be distributed personally to the 100 respondents to get their responses.

Secondary data

The secondary data will be collected from company websites, lounge books, referrals,

internet browsing, Journals.

Design of Questionnaire

The questionnaire will be designed to collect the data to keep in view the objective of the

study. It will be mostly closed ended and open ended short questions for the convenience of

respondents.

2.8 Sampling Plan

Sampling is that part of statistical practice concerned with the selection of a subset of

individual observations within a population of individuals intended to yield some knowledge

about the population of concern, especially for the purposes of making predictions based

on statistical inference.

Sampling Method: Convenience Sampling

Convenience sampling procedure was adopted for selecting respondents; the respondents will

be mainly from Bangalore city, where the company has its retail outlets. Samples will be

collected by survey method and the response of 100 respondents will be considered for

analysis of data & interpretation.

Sampling Unit: The sampling unit will be customers who will shop in the retail store or the

similar store.

Sample Size: Sample size will be taken as 100 respondents with respondents from inside and

outside the similar retail outlet.

2.9 Planning and Analysis

The primary data will be collected by means of structured questionnaire from 100

respondents and the secondary data will be collected from websites, company reports,

16

magazines, referrals and lounge books. The data collected from the study will be analyzed

and will be represented by simple graph, tables, and charts and will be interpreted for

providing relevant recommendation.

Field work

The data is collected from the people doing shopping in Bangalore city (Aiyappa temple near

Jalahalli cross, Kodigehalli, Ramaiah Layout, Malleshwaram) where the company has

outlets.

Data presentation and analysis

The primary data was collected by means of structured questionnaire from 100 respondents

the secondary data was collected from websites, company reports, magazines, referrals and

lounge books. The data collected from the study is analyzed by simple graph, tables, and

charts and interpreted for providing relevant recommendation.

2.10 Limitation of the Study

This study is restricted to Bangalore city only and therefore, the results obtained out

of this study cannot be generalized to other parts and rural area of the country.

Due to time constraints the sample size is restricted to 100 customers.

The analysis will be based on the current data; as such it may lose its relevance in the

future.

The response of the respondents may be biased.

2.11 Scope of the Project

The project aims to reveal the market status & competition for ‘Reliance Fresh’

It helps the company in strategy formulation and planning for further improvements.

The study aims to reveal the customer satisfaction towards organized retail outlets.

To know where ‘Reliance Fresh’ is facing problems and where it is having new

opportunities in retail sector.

To compare with organized retail outlets and unorganized retailers and to study the

latest trends of retailing in India.

17

2.12 Chapter Scheme

Chapter 1: Introduction

It provides an insight and Introduction about the broad area of the topic chosen and also the

theoretical background of the study.

Chapter 2: Research Methodology

It consists of detailed coverage of the manner in which the report is prepared. Research

methodology helps to understand the practical steps adopted to reach the data and methods of

analysis and interpreting the response. It also includes Need for study, Statement of Problem,

Objective, Research Design, Source of Data, Tools of Analysis, Scope and Limitation of

Study, Literature review.

Chapter 3: Industry Profile

The chapter is concerned with the introduction and the background of Retail Industry with

reference to Reliance Fresh as a whole which gives detailed information about the origin,

growth, development and its future.

Chapter 4: Data Analysis and Interpretation

The data collected from the study will be presented and analyzed using appropriate statistical

tools for interpretation and providing relevant suggestions.

Chapter 5: Summary of Findings

The summary of findings is based on analysis and interpretation of primary and secondary

data collected for this study with respect to the objectives.

Chapter 6: Suggestions & Conclusion

The suggestions are based on findings of the study and conclusion is made.

s

18

Chapter 03

Industry and Company Profile

19

3.1 INDUSTRY PROFILE

A retailer or retail store is any business enterprise whose sales volume comes primarily from

retailing. Retail organizations exhibit great variety and new forms keep emerging. There are

store retailers, non store retailers, and retail organizations. Consumers today can shop for

goods and services in a wide variety of stores. The best-known type of retailer is the

department store. Japanese department stores such as Takashimaya and Mitsukoshi attract

millions of shoppers each year. These stores feature art galleries, cooking classes, and

children’s playgrounds. A retailer is at the end of the distributive channel.

He provides goods and service to the ultimate consumers. This he does through his small

organization, with the help of a few personnel. In an individual retail store there is not much

scope for organization except in the sense that the shopkeeper has to organize apportions his

time and resources. The need for organization becomes essential as soon as he hires people o

enters into partnership or takes the help of members of his family in running his store. A

retailer deals in an assortment of goods to cater to the needs of consumers. His objective is to

make maximum profit out of his enterprise.

With that end in view he has to pursue a policy to achieve his objective. This policy is called

retailing mix. A retailing mix is the package of goods and services that store offers to the

customers for sale. It is the combination of all efforts planned by the retailer and embodies

the adjustment of the retail store to the market environment. Retailing mix a communication

mix and a distribution mix. The maximum satisfaction to the customers is achieved by a

proper blend of all three.

The success of the retail stores, therefore, depends on customers’ reaction to the retailing mix

which influences the profits of the store, its volume of turnover, its share of the market, its

image and status and finally its survival.

3.1.1 Retailing

Retailing is the set of business activities that adds value to the products and services sold to

the consumer for their personal or family use. A "retailer" buys goods or products in large

quantities from manufacturers or importers, either directly or through a wholesaler, and then

sells smaller quantities to the end-user. Retail establishments are often called shops or stores.

Retailers are at the end of the supply chain. Manufacturing marketers see the process of

20

retailing as a necessary part of their overall distribution strategy. The term "retailer" is also

applied where a service provider services the needs of a large number of individuals, such

as a public utility, like electric power.

Retailing is an important institution in our society,

Retailing provides considerable value to consumers while giving people opportunities

for

Rewarding and challenging careers.

Retail formats and companies are now major factors in the industry.

The key to successful retailing is offering the right product, at the right price, in the

right

Place, at the right time, and making a profit.

Retailers must understand what customers want and what competitors are offering

now and in the future.

3.1.2. The World of Organized Retailing

Retailers are using sophisticated communications and information systems to manage

their business. The use of new technologies helps retailers reduce their operations

costs, while better serving their customers.

To compete against non-store retailers, stores are now becoming more than just

places to buy products. They are offering entertaining and educational experiences for

their customers.

In this dynamic environment, entrepreneurs are launching new companies and

concepts and becoming industry leaders, while traditional firms have had to rethink

their business.

Retail managers today must make complex decisions on selecting target markets and

Retail locations, determining what merchandise and services to offer, negotiating with

Supplier and distributing merchandise to stores, training and motivating sales

associates, and deciding how to price, promote and present merchandise.

21

3.1.3. Retail mix.

The retail mix is the combination of factors retail used to satisfied customer needs and

influences their purchase decision. Its include the type of merchandise and services offered,

merchandise pricing, advertising, promotional programs store design merchandise display,

assistance to customer provided by salespeople, and convenience of the store’s location.

Retail mix is the term used to describe the various elements and methods required

to formulate and execute retail marketing strategy.

Retail managers must determine the optimum mix of retailing activities and

coordinate the elements of the mix.

While many elements may make up a firm’s retail mix, the essential elements may

include:

Store location,

Merchandise assortments

Store ambience,

customer service,

price,

Communication with customer

Personal selling

Store image

Store design

Sales incentives

People

Process

Physical evidence

3.1.4. Composition of retail mix

Place

Product

Price

Promotion

22

People

Process

Physical Environment

Key element

1) Place (store location)

2) Product (merchandise)

Target market Product development

Channel structure Product management

Channel management Product features and benefits

Retailer image Branding

Retail logistics Packaging

Retail distribution

3) Price

4) Promotion

Costs developing promotional mixes

Profitability Advertising management

Value for money Sales promotion

Competitiveness Sales management

Incentives Public relations

Quality Direct marketing

Status

After-sales services

5) People element

6) Process element

Staff capability Order processing

Efficiency Database management

Availability Service delivery

Effectiveness queuing system

Customer interaction Standardization

23

3.2. RETAIL INDUSTRY IN INDIA

Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and

around 8 per cent of the employment. Retail sector is one of India's fastest growing sectors

with a 5 percent compounded annual growth rate. India's huge middle class base and its

untapped retail industries are key attractions for global retail giants planning to enter newer

markets. Driven by changing lifestyles, strong income growth and favorable demographic

Patterns, Indian retail are expected to grow 25 per cent annually. It is expected that retail in

India could be worth US$ 175-200 billion by 2016.

The organized retail industry in India had not evolved till the early 1990s. Until then, the

Industry was dominated by the un-organized sector. It was a seller’s market, with a limited

Number of brands and little choice available to customers. Lack of trained manpower, tax

Laws and government regulations all discouraged the growth of organized retailing in India

During that period. Lack of consumer awareness and restrictions over entry of foreign

players into the sector also contributed to the delay in the growth of organized retailing.

Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails

India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business

giants such as Reliance, Bharti, Birla and others are now entering into retail sector. A number

of factors are driving India's retail market. These include: increase in the young working

population, hefty pay packets, nuclear families in urban areas, increasing workingwomen

population, increase in disposable income and customer aspiration, increase in expenditure

for luxury items, and low share of organized retailing.

India's retail boom is manifested in sprawling shopping centers, multiplex- malls and huge

complexes that offer shopping, entertainment and food all under one roof. But there is a flip

side to the boom in the retail sector. It is feared that the entry of global Business giants into

organized retail would make redundant the neighborhood Kirana stores resulting in

dislocation in traditional economic structure. Also, the growth path for organized retail in

India is not hurdle free. The taxation system still favors small retail business. With the

intrinsic complexities of retailing such as rapid price changes, constant threat of product

obsolescence and low margins there is always a threat that the venture may turn out to be a

loss making one.

24

A perfect business model for retail is still in evolutionary stage. Procurement is very vital cog

in the retail wheel. The retailer has to fight issues like fragmented sourcing, unpredictable

availability, unsorted food provisions and daily fluctuating prices as against consumer

expectations of round-the-year steady prices, sorted and cleaned food and fresh stock at all

Times.

The Indian retail industry is the fifth largest in the world. Comprising of organized and

unorganized sectors, India retail industry is one of the fastest growing industries in India,

especially over the last few years. Though initially, the retail industry in India was mostly

unorganized, however with the change of tastes and preferences of the consumers, the

industry is getting more popular these days and getting organized as well. With growing

market demand, the industry is expected to grow at a pace of 25-30% annually. The India

retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore

Fig 3.1

25

3.2.1. Present Indian Retail Industry Scenario

The retail industry is divided into organized and unorganized sectors. Over 12 million outlets

operate in the country and only 4% of them being larger than 500 sq ft (46 m²) in size.

Organized retailing refers to trading activities undertaken by licensed retailers, that is, those

who are registered for sales tax, income tax, etc. These include the corporate-backed

hypermarkets and retail chains, and also the privately owned large retail businesses.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost

retailing, for example, the local kirana shops, owner manned general stores, paan/beedi

shops, convenience stores, hand cart and pavement vendors, etc.

Unorganized market: Rs. 583,000 cores

Organized market: Rs.5, 000 cores

5X growth in organized retailing between 2005-2012

Over 4,000 new modern Outlets in the last 3 years

Over 5,000,000 sq. ft. of mall space under development

The top 3 modern retailers control over 750,000 sq. ft. of retail space

Over 400,000 shoppers walk through their doors every week

47 global fortune companies & 25 of Asia's top 200 companies are retailers

Biggest player in India is Pantaloon Retail India Limited.

Growth in organized retailing on par with expectations and projections of the last 5

Years on

Course to touch Rs. 35,000 corers (US$ 7 Billion) or more by 2005-06The growth

factors of

3.2.2. Scope of the Indian Retail Market

The scope of the Indian retail market is immense for this sector is poised for the highest

growth in the next 5 years. The India retail industry contributes 10% of the countries GDP

and its current growth rate is 8.5%. In the Indian retail market the scope for growth can be

seen from the fact that it is expected to rise to US$ 608.9 billion in 2009 from US$ 394

billion in 2005. 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

26

for growth in the Indian retail market. The growth of scope in the Indian retail market is

mainly due to the change in the consumer’s 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 has been seen by many retail giants and that’s the reason that many new

players are entering the India retail industry.

3.2.3. The Future Indian Retail Scenario

The retail industry in India is currently growing at a great pace and is expected to go up to

US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year

2018 at a CAGR of 10%. As the country has got a high growth rates, the consumer spending

has also gone up and is also expected to go up further in the future. In the last four year, the

consumer spending in India climbed up to 75%. As a result, the India retail industry is

expected to grow further in the future days.

By the year 2013, the organized The retail sector in India is witnessing a huge revamping

exercise as traditional markets make way for new formats such as departmental stores,

hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing

in metros and second-rung cities alike introducing the Indian consumer to a shopping

experience like never before.

The sector is at an inflexion point where the growth of organized retailing and growth in the

consumption by the Indian population is going to take a higher growth trajectory. The Indian

population is witnessing a significant change in its demographics. Organized retail is on all

time high in India. The growth is boosted by various factors such as availability of

professional practices, media proliferation, various brands which are gaining value thereby

enhancing industry growth, availability of various funding options, regulations like VAT

implementation to make processes simple, sea change in demographics of country and

international exposure.

This report is structured into three major parts. First part comprises of Executive Summary

and highlights of the retail sector. Second part consists of 12 chapters which includes an

introduction and discusses vital topics in retail industry like A Brief Overview of Global

Retail Industry, Indian Retail Industry, Organized Retail Formats in Indian retail, Food Retail

27

in India, Apparel Retail in India, Growth Drivers of Indian Retail, Technology implications,

Issues & Challenges faced by the sector, Critical Success Factors, Regulations and Policies

and Future Outlook of the industry.

The third and final part consists of supporting literature in the form of Annexure. This report

will be useful to entrepreneurs interested in getting insights of retail industry for doing direct

and indirect business in the sector, management consultants, banks evaluating retail sector

growth trajectory. The Indian population is witnessing a significant change in its

demographics. Organized retail is on all time high in India. The growth is boosted by various

factors such as availability of professional proposals, investors who are interested in this

sunrise sector, retail professionals for getting larger picture of the sector. Last but not the

least this report can also be useful for educational institutions imparting courses in retail

sector is also expected to grow at a CAGR of 40%.

The retail sector in India is witnessing a huge revamping exercise as traditional markets make

way for new formats such as departmental stores, hypermarkets, supermarkets and specialty

stores. Western-style malls have begun appearing in metros and second-rung cities alike

introducing the Indian consumer to a shopping experience like never before.

The sector is at an inflexion point where the growth of organized retailing and growth in the

consumption by the Indian population is going to take a higher practices, media proliferation,

various brands which are gaining value thereby enhancing industry growth, availability of

various funding options, regulations like VAT implementation to make processes simple, sea

change in demographics of country and international exposure.

This report is structured into three major parts. First part comprises of Executive Summary

and highlights of the retail sector. Second part consists of 12 chapters which includes an

introduction and discusses vital topics in retail industry like A Brief Overview of Global

Retail Industry, Indian Retail Industry, Organized Retail Formats in Indian retail, Food Retail

in India, Apparel Retail in India, Growth Drivers of Indian Retail, Technology implications,

Issues & Challenges faced by the sector, Critical Success Factors, Regulations and Policies

and Future Outlook of the industry. The third and final part consists of supporting literature

in the form of Annexure. This report will be useful to entrepreneurs interested in getting

insights of retail industry for doing direct and indirect business in the sector, management

consultants, banks evaluating retail sector proposals, investors who are interested in this

28

sunrise sector, retail professionals for getting larger picture of the sector. Last but not the

least this report can also be useful for educational institutions imparting courses in retail

management.

3.2.4. The opportunities in Indian organized retail

The opportunities in Indian organized retail sector are many for this sector is witnessing a

boom. The retail industry in India amounted to US$ 200 billion in 2006, and out of this

amount the Indian organized retail sector amounted to US$ 6.4 billion. The opportunities in

India organized retail sector can be judged from the fact that by 2010 it is expected to rise to

US$ 23 billion. The various opportunities in the organized retail sector in India are mainly

there for the Indian consumers behavior pattern has changed.

Now the Indian consumer gets more hefty pay- packages, is younger, a large number of

women are working, western influences, and more disposable income have opened a lot of

opportunities in Indian organized retail sector. The Indian consumer wants to shop, eat and

get entertainment in one place and is having also given Indian organized retail sector an

opportunity to grow.

The Indian government in 2005 allowed foreign direct investment (FDI) in single brand retail

to 51%. This has opened up a lot of opportunities in India organized retail sector. In fact 325

departmental stores, 300 new malls, and 1500 supermarkets are being built which shows the

tremendous opportunities in the organized retail sector in India. Many Indian companies

seeing the various opportunities in organized retail sector in India have entered it.

Pantaloons have decided to increase its retail space to 30 million square feet with an

investment of US$ 1 billion. Reliance Industries Limited is targeting for annual sales of US$

25 billion by 2011. It is planning to invest US$ 6 billion in order to open 1,500 supermarkets

and 1000 hypermarkets. Bharti Telecoms is planning a joint venture with Telco a global

retail giant worth £ 750 million. The opportunities in the organized retail sector in India have

also increased with the desire of many global retail giants to set up shop here. The global

retail giants who are entering the Indian organized retail sector are:

29

Tesco, Wal- Mart , Metro AG , Carrefour SA

The opportunities in Indian organized retail sector are varied and it must be fully exploited

by the Indian retailers.

3.2.5. Growth of Indian Retail

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India

retail industry is the most promising emerging market for investment. In 2007, the retail trade

in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country.

According to a report by Northbride Capita, the India retail industry is expected to grow to

US$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total

market share. It can be mentioned here that, the share of organized sector in 2007 was 7.5%

of the total retail market.

Growth of Retail Companies in India

Growth of Retail Companies in India exhibits the boom in the retail industry in India over the

years. The increase in the purchasing power of the Indian middle classes and the influx of the

foreign investments has been encouraging in the Growth of Retail Companies in India.

Growth of Retail Companies in India:

Overview

Growth of Retail Companies in India is still not yet in a matured stage with great potentials

within this sector still to be explored. Apart from the retail company like Nilgiri's of

Bangalore, most of the retail companies are sections of other industries that have stepped in

the retail sector for a better business. The Growth of Retail Companies in India is most

pronounced in the metro cities of India, however the smaller towns are also not lagging

behind in this. The retail companies are not only targeting the four metros in India but also is

considering the second graded upcoming cities like Ahmedabad, Baroda, Chandigarh,

Coimbatore, Cochin, Ludhiana, Pune, Trivandrum, Simla, Gurgaon, and others. The South

Indian zone have adopted the process of shopping in the supermarkets for their daily

30

requirements and this has also been influencing other cities as well where many

hypermarkets are coming up day to day.

Reasons for the fast Growth of Retail Companies in India:

The retail companies are found to be rising in India at a remarkable speed with the years and

this has brought a revolutionary change in the shopping attitude of the Indian customers. The

Growth of Retail Companies in India is facilitated by certain factors like - existing Indian

middle classes with an increased purchasing power rise of upcoming business sectors like the

IT and engineering firms change in the taste and attitude of the Indians effect of globalization

heavy influx of FDI in the retail sectors in India.

3.2.6. The Emerging Trends in the Indian Organized Retail Sector

The emerging trends in the Indian organized retail sector would help the economic growth in

India. There is a fantastic rise in the Indian organized retail sector in a very short period of

time between 2001 and 2006. Eventually, out of the shadows of the unorganized retail sector,

India has a chance of tremendous economic growth, both in India and abroad. The emerging

trends in the Indian organized retail sector are also adding up to the development of the

Indian organized retail sector. The relaxation by the government on regulatory controls on

foreign direct investments has added to the process of the growth of the Indian organized

retail sector.

The infrastructure of the retail sector will evolve radically in the recent future. The

emergence of shopping malls is increasing at a steady pace in the metros and there are further

plans of expansion which would lead to 150 new ones coming up in India by 2008. As the

count of super markets is going up much faster than rate of growth in retail sector, it is taking

the lions share in food trade. The growth of the Indian organized retail sector is anticipated to

be heavier than the growth of the gross domestic product. Alterations in people's lifestyle,

growth in income levels, and encouraging conventions of demography are proving favorable

for the new emerging trends in the Indian organized retail sector. The success of this retail

sector would also lie in the degree of penetration into the lower income strata to tap the

possible customers in the lowest levels of society.

31

The demands of the buyers would also be enhanced by more access to credit facilities. With

the arrival of the Transnational Companies (TNC), the Indian retail sector will undergo a

transformation. At present the Foreign Direct Investments (FDI) is not encouraged in the

Indian organized retail sector but once the TNC'S get in they inevitably try to oust their

Indian counterparts. This would be challenging to the retail sector in India.

3.2.7. Challenges facing the Indian Organized Retail sector

The challenges facing the Indian organized retail sector are various and these are stopping the

Indian retail industry from reaching its full potential. The behavior pattern of the Indian

consumer has undergone a major change. This has happened for the Indian consumer is

earning more now, western influences, women working force is increasing, desire for luxury

items and better quality. He now wants to eat, shop, and get entertained under the same roof.

All these have lead the Indian organized retail sector to give more in order to satisfy the

Indian customer.

The biggest challenge facing the Indian organized retail sector is the lack of retail space.

With real estate prices escalating due to increase in demand from the Indian organized retail

sector, it is posing a challenge to its growth. With Indian retailers having to shell out more

for retail space it is affecting their overall profitability in retail. Trained manpower shortage

is a challenge facing the organized retail sector in India.

The Indian retailers have difficulty in finding trained person and also have to pay more in

order to retain them. This again brings down the Indian Retailers profit levels. The Indian

government has allowed 51% foreign direct investment (FDI) in the India retail sector to one

brand shops only.

This has made the entry of global retail giants to organized retail sector in India difficult.

This is a challenge being faced by the Indian organized retail sector. But the global retail

giants like Tesco, Wal-Mart, and Metro AG are entering the organized retail sector in India

indirectly through franchisee agreement and cash and Carry wholesale trading. Many Indian

companies are also entering the Indian organized retail sector like Reliance Industries

Limited, Pantaloons, and Bharti Telecoms. But they are facing stiff competition from these

global retail giants. As a result discounting is Indian becoming an accepted practice.

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3.3 Indian unorganized retail sector & its challenge

India is the only one country having the highest shop density in the world, with 11 outlets per

1000 people (12 million retail shops for about 209 million households). Rather we can see

the democratic scenario in Indian Retail (because of low level of centralization, low capital

input and due to a good number of self organized retail).

India started its Retail Journey since ancient time. In Ancient India there was a concept of

weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a

pretty long times to & step to shape the modern retail. In between these two concepts (i.e.

between ancient retail concept & the modern one there exist modern kirana/ mom and pop

shops or Baniya ki Dukan. Still it is predominating in India so the Indian retail industry is

divided into two sectors- organized and unorganized.

Organized retail sector refers to the sectors undertaken by licensed retailers, that is, those

who are registered for sales tax, income tax, etc. These include the corporate retail formats of

the exclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping

malls.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost

retailing, for example, hand cart and pavement vendors, & mobile vendors, the local kirana

shops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop at

the corner of your street selling everything from bathroom fittings to paints and small

construction tools; or the slightly more organized medical store and a host of other small

retail businesses in apparel, electronics, food etc.

3.3.1. Characteristics of unorganized retail

Small-store (kirana) retailing has been one of the easiest ways to generate self-employment,

as it requires limited investment in land, capital and labor. It is generally family run

business, lack of standardization and the retailers who are running this store they are lacking

of education, experience and exposure. This is one of the reasons why productivity of this

sector is approximately 4% that of the U.S. retail industry. Unorganized retail sector is still

predominating over organized sector in India, unorganized retail sector constituting 98%

(twelve million) of total trade, while organized trade accounts only for 2%.

33

3.3.2 The reasons for resistance to organized retail:

In smaller towns and urban areas, there are many families who are traditionally using

these kirana shops/ 'mom and pop' stores offering a wide range of merchandise mix.

Generally these kirana shops are the family business of these small retailers which

they are running for more than one generation.

These kirana shops are having their own efficient management system and with this

they are efficiently fulfilling the needs of the customer. This is one of the good

reasons why the customer doesn’t want to change their old loyal kirana shop.

A large number of working class in India is working as daily wage basis, at the end of

the day when they get their wage, they come to this small retail shop to purchase

wheat flour, rice etc for their supper. For them this the only place to have those food

items because purchase quantity is so small that no big retail store would entertain

this.

Similarly there is another consumer class who are the seasonal worker. During their

unemployment period they use to purchase from this kirana store in credit and when

they get their salary they clear their dues. Now this type of credit facility is not

available in corporate retail store, so this kirana stores are the only place for them to

fulfill their needs.

Another reason might be the proximity of the store. It is the convenience store for the

customer. In every corner the street an unorganized retail shop can be found that is

hardly a walking distance from the customer’s house. Many times customers prefer to

shop from the nearby kirana shop rather than to drive a long distance organized retail

stores.

3.4 Retail formats in India

34

Hypermarkets/supermarkets: large self-servicing outlets offering products from a

variety of categories.

Mom-and-pop stores: they are family owned business catering to small sections;

they are individually handled retail outlets and have a personal touch.

Departmental stores: are general retail merchandisers offering quality products and

services.

Convenience stores: are located in residential areas with slightly higher prices goods

due to the convenience offered.

Shopping malls: the biggest form of retail in India, malls offers customers a mix of

all types of products and services including entertainment and food under a single

roof.

E-trailers: are retailers providing online buying and selling of products and services.

Discount stores: these are factory outlets that give discount on the MRP.

Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and

other small items can be bought via vending machine.

Category killers: small specialty stores that offer a variety of categories. They are

known as category killers as they focus on specific categories, such as electronics and

sporting goods. This is also known as Multi Brand Outlets or MBO's.

Specialty stores: are retail chains dealing in specific categories and provide deep

assortment. Mumbai's Crossword Book Store and RPG's Music World is a couple of

examples.

3.4.1. Evolution and Trends in Organized Retailing Formats and Retail

Outlets in India

Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the modern

Indian shopper.

Merchandise: food grocery to clothing to spots goods to books to stationery.

Space occupied: 50000 Square feet. And above.

SKUs: (Stock keeping Unit) 20000-30000.

Example: Pantaloon retail’s Big Bazaar, RPG’s Spencer’s (Giant), Vishal mega mart.

35

Supermarket: A subdued version of a hypermarket.

Merchandise: Almost similar to that of a hypermarket but in relatively smaller proposition.

Space occupied: 5000 Sq. ft. or more.

SKUs: (Stock keeping units) Around 10000.

Example: Nilgiris, Apna Bazaar, Trinethra/more.

Convenience store: A subdued version of a supermarket.

Merchandise: Groceries are predominantly sold.

Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.

Example: stores located at the corners of the streets, Reliance Retail’s fresh, More Retail

Department store: A retail establishment which specializes in selling a wide range of

A product without single prominent merchandise line and is usually

a part of a retail chain.

Merchandise: Apparel, household accessories, cosmetics, gifts etc.

Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

Example: Landmark Group’s Lifestyle, Trent India Ltd.’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and higher

volumes.

Merchandise: A variety of perishable/ non perishable goods.

Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.

Specialty store: It consists of a narrow product line with deep assortment.

Merchandise: Depends on the stores

Example: Bata store deals only with footwear, RPG’s Music World, Crossword.

MBO’s: (Multi Brand outlets), also known as Category Killers. These usually do well in

busy market places and Metros.

Merchandise: Offers several brads across a single product category.

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Kirana stores: The smallest retail formats which are the highest in number (15 million

approx.) in India.

Merchandise: Mostly food and groceries.

Space occupied: 50 sq ft and even smaller ones exist.

Malls: The largest form of organized retailing today located mainly in metro cities, in

Proximity to urban outskirts.

Merchandise: They lend an ideal shopping experience with an amalgamation of product,

Service and entertainment, all under a common roof.

Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.

Example: Pantaloon Retail’s Central, Mumbai’s Iorbit.

3.5 COMPANY PROFILE

37

"Growth has no limit at Reliance. I keep revising my vision. Only when you can dream it, you can do it." Dhirubhai H. Ambani

3.5.1 Overview

Reliance Industries Limited (RIL) is India's largest private sector company on all major

financial parameters with turnover of Rs1,18,354 crore (US$ 27.23 billion), cash profit of

Rs17,678 crore (US$ 4.07 billion), net profit of Rs11,943 crore (US$ 2.75 billion) and net

worth of Rs63, 967 crore (US$ 14.72 billion) as of March 31, 2007.RILis the first and only

private sector company from India to feature in the Fortune Global 500 list of 'World's

Largest Corporations' and ranks amongst the world's Top 200 companies in terms of profits.

RIL is amongst the 25 fastest climbers ranked by Fortune. RIL also features in the Forbes

Global list of world's 400 best big companies and in FT Global 500 list of world's largest

companies

Reliance Industries Limited (RIL) is India's largest private sector company on all major

financial parameters with turnover of Rs. 73,164 crore (US $ 16.7 billion), cash profit of Rs.

12,087 crore (US $ 2.8 billion), net profit of Rs. 7,572 crore (US $ 1.7 billion), net worth of

Rs. 40,403 crore (US $ 9.2 billion), and total assets of Rs. 80,586 crore (US $ 18.4 billion).

RIL is the first and only private sector from India to feature in 2005 Fortune Global 500 list

of 'World's Largest Corporations' and ranks amongst the world's Top 200 companies in terms

of profits. Reliance in now putting up a completely export oriented unit with 30 MMPTA

capacity under Special Economic Zone (SEZ) at Jamnagar. Construction will commence very

shortly and the project is schedule to go into operation by March 2008.

RIL group is about to establish yet another industrial landmark by putting up the world's

largest grass root refinery totally dedicated for exports with an outlay of over Rs. 27,000

crores. RIL group, as a corporate citizen, has always believed in creating "employability"

apart from providing employment. Towards this, it is process of establishing a World Class

38

Craft Training Institute This world class facility will have latest generation equipments and

machineries imported from best of class manufacturers and will be located at Jamnagar. The

Scheme We will bring in thousands of youngsters - skilled / semi skilled / partially skilled /

unskilled from all over the country and provided temporary barracks - labour accommodation

with full facilities through contractors. The institute will train them in respective trades with

proper process for "Certification". Current estimate warrants training of (assuming 50% will

be Certified): Welders - 8000, Carpenters - 5000, Pipe Fitters - 5000, Grinders - 5500, Mill

Wright Fitters - 2000 Immediately on certification, they will be absorbed by our contractors

and be deployed on our world scale project at Jamnagar for a period of approx. of 2 years.

Thereafter, Reliance is confident that these skills, which are badly required, will have an

unlimited market and therefore, offer a great earning future prospect to these youngsters

around the globe.

Reliance Fresh falls under Reliance Industries. It is the first retail venture of the Group. The

company offers fresh fruits and vegetables, staples, groceries, fresh juice bars, FMCG

products and dairy products and non-vegetarian items. Reliance Industries has invested

nearly Rs. 3,000 crores to expand the Reliance Fresh stores. Reliance Fresh directly buys

stock from the farmers to cut down on the wastage. The stores work on The Ranger Format

which means selling of fresh vegetables to the road sellers. Reliance Retail has signed a pact

with Apple for the establishment of a chain of Apple Specialty Stores branded as iStore,

starting with Bangalore.

Reliance Fresh is the convenience store format which forms part of the retail business

of Reliance Industries of India which is headed by Mukesh Ambani. Reliance plans to invest

in excess of Rs 25000 crores in the next 4 years in their retail division. The company already

has in excess of 560 reliance fresh outlets across the country. These stores sell fresh fruits

and vegetables, staples, groceries, fresh juice bars and dairy products.

A typical Reliance Fresh store is approximately 3000-4000 square feet and caters to a

catchment area of 2–3 km.

3.5.2 The Reliance Empire

39

Reliance being the all encompassing company has entered into all the sectors, retail being

their latest.

Reliance Industries Limited

Chairman and Managing Director: Mukesh Ambani

Market Capitalization: INR 39,609,150,020 (Sept, 2006)

Total Shares Outstanding: 22,405,900 (Sept, 2006)

Closely Held Shares: 11,365,943

Sales: INR 10,512,963,000

According to the company website "1 out of every 4 investors in India is a Reliance

shareholder. RIL is ranked at 342 in the 2006 Fortune Global 500 list among the world’s

largest corporations.

3.5.3 Company History

Post launch, in a dramatic shift in its positioning and mainly due to the circumstances

prevailing in UP, West Bengal and Orissa, it was mentioned recently in news dailies that,

Reliance Retail is moving out of stocking fruits and vegetables. Reliance Retail has decided

to minimize its exposure in the fruit and vegetable business and position Reliance Fresh as a

pure play super market focusing on categories like food, FMCG, home, consumer durables,

IT and wellness, with food accounting for the bulk of the business.

The company may not stock fruit and vegetables in some states. Though Reliance Fresh is

not exiting the fruit and vegetable business altogether, it has decided not to compete with

local vendors partly due to political reasons, and partly due to its inability to create a robust

supply chain. This is quite different from what the firm had originally planned.

When the first Reliance Fresh store opened in Hyderabad last October, not only did the

company said the store’s main focus would be fresh produce like fruits and vegetables at a

much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the

company spoke about was to source from farmers and sell directly to the consumer removing

middlemen out of the way.

40

Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint,

Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various

formats that Reliance has rolled out.

In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of

Apple Specialty Stores branded as I Store, starting with Bangalore.

Reliance Fresh, the $20 billion Reliance Industries' brand for its grocery outlets, Monday

opened nine new stores in the national capital region (NCR) with an investment of about Rs.8

billion ($180 million).The stores have been opened in Ghaziabad, Faridabad, Noida, Greater

Noida and Gurgaon covering a total area of 19,000 sq ft. Mukesh Ambani's Reliance

Industries Ltd. entered the retail trade last year with an investment of $5.6 billion and has

plans to expand its footprint in the NCR in multiple formats of hypermarkets, supermarkets

and convenience stores. 'We plan to have a pan-India presence and achieve a target of Rs.10

billion revenue by 2010 by which time we hope to complete Phase I,' Raghu Pillai, president

and chief executive of Reliance Retail, said at a press conference here.

'In the first phase we have plans to employ 500,000 people. We are following an all-inclusive

model giving the right affordability across all income groups,' Pillai added. According to

him, Reliance will open 100 stores in the NCR by the quarter ending in June 2007.'We are

aggressively partnering farmers by following a farm-to-fork strategy in our supply chain

management model and ensure that we deliver fresh fruits and vegetables at affordable prices

to our consumers.' Currently, Reliance Fresh has 49 stores across the country covering an

area of 109,000 sq ft. Reliance Fresh also offers a membership and loyalty program –

Reliance One - to deliver customized benefits to frequent shoppers. Currently, it has 200,000

loyalty customers across Hyderabad, Jaipur and Chennai.  With a vision to generate inclusive

growth and prosperity for farmers, vendor partners, small shopkeepers and consumers,

Reliance Retail Limited (RRL), a subsidiary of RIL, was set up to lead Reliance Group’s

foray into organized retail.

Since its inception in 2006, Reliance Retail Limited (RRL) has grown into an organization

that caters to millions of customers, thousands of farmers and vendors. Based on its core

growth strategy of backward integration, RRL has made rapid progress towards building an

entire value chain starting from the farmers to the end consumers.

41

In the last year, Reliance Retail Limited (RRL) continued to fulfill its commitment of

enriching Indian consumer’s shopping experience and providing quality merchandise at an

attractive value proposition. More than 3 years into operation, RRL has now expanded its

presence in more than 85 cities across 14 states in India. RRL forged ahead with its

expansion plans and rolled out stores across the country. RRL’s footprint now spans a

network of more than 1,000 stores.

RRL operates several ‘value’ & ‘specialty’ formats. The ‘value’ formats that RRL operates

are: ‘Reliance Fresh’, a neighborhood concept, ‘Reliance Mart’, an all under one roof

supermarket concept & ‘Reliance Super’, a mini-mart concept. The ‘value’ formats offer a

wide range and assortment of products required for daily household needs. The ‘specialty’

formats are: ‘Reliance Digital’, a consumer durables & information technology concept,

‘Reliance Trends’, an apparel & accessories concept, ‘Reliance Wellness’, a health, wellness

& beauty concept, ‘I Store by Reliance Digital’, an exclusive Apple products concept,

‘Reliance Footprint’, a footwear concept, ‘Reliance Jewels’, a jewelers concept, ‘Reliance

Time Out’, a books, music & entertainment concept, ‘Reliance AutoZone’, an automotive

products & services concept and ‘Reliance Living’, a home ware, furniture, modular

kitchens, furnishings concept.

RRL rapidly expanded the stores network it operates through strategic partnerships with

world-class companies such as Marks & Spencer and Pearl Europe. RRL also entered into an

exclusive distribution arrangement with Asics Corporation Japan to market Asics brands of

shoes. and accessories in India. RRL has recently opened its flagship store under its franchise

agreement with Hamleys and plans to expand the store network in the coming year. RRL has

also expanded its presence in business-to business office supplies through its joint venture

with Office Depot.

Through ‘Reliance One’, RRL’s loyalty membership program, RRL enjoys the patronage of

over 5.5 million customers. In the coming year, RRL will continue on its mission to delight

the customers every visit. RRL will continue to provide unprecedented value to customers

across all its formats and stores.

42

3.5.4 Controversy

Recently their stores in Jharkand faced the ire of mobs comprising of local vegetable

vendors. They vandalised and attacked the stores claiming that they were stealing their

livelihoods.

In August 2007, Uttar Pradesh Chief Minister Mayawati ordered to close 10 new stores

keeping view of Law & order situation. In November 2007, Reliance Fresh stores are

attacked by Bharatiya Janshakti Party supporters headed by Uma Bharti.

‘Suicide’ squad against Reliance Fresh outlets

Bhubaneswar/Cuttack: Traders and roadside vendors opposing the opening of Reliance Fresh

outlets in Orissa on Saturday formed a “suicide” squad.

“As many as 100 youth today joined the squad as they prefer to die while fighting rather than

facing starvation,” All-Orissa Roadside Vendors and Small Shop Owners Association

president Pratap Sahu said.

Reports said the vendors formed the squad soon after a meeting. — PTI

But some vegetable vendors don't want a job at Reliance, if offered one, because they want to

be their own boss.

3.5.5 Key Executives

Management Team Mukesh D. Ambani - Chairman & Managing Director 

Nikhil R. Meswani - Executive Director 

Hital R. Meswani - Executive Director 

H.S.Kohli - Executive Director 

Ramniklal H. Ambani 

Mansingh L. Bhakta 

Yogendra P. Trivedi 

Dr. D. V. Kapur 

43

M. P. Modi 

S. Venkitaramanan 

Prof. Ashok Misra 

Prof. Dipak C Jain 

Dr. Raghunath Anant Mashelkar

3.5.6 Future Planning:

Company plans to have a pan-India presence by opening stores in 784cities and 600 small

towns and achieve a target of Rs.10 billion revenue by 2010 by which time it hopes to

complete Phase 1. In the first phase company plans to employ 500,000 people. It is following

an all-inclusive model giving the right affordability across all income groups. Company is

aggressively partnering farmers by following a farm-to-fork strategy in its supply chain

management model and ensures that it delivers fresh fruits and vegetables at affordable

prices to consumers. Currently, Reliance Fresh has over 100 stores across the country.

Reliance Fresh also offers a membership and loyalty programmed -Reliance One - to deliver

customized benefits to frequent shoppers. Currently, it has 200,000 loyalty customers across

Hyderabad, Jaipur and Chennai.

Reliance Retail, the 100% subsidiary of Reliance Industries, on October 28 unveiled Reliance

Fresh, the first of its multi-format retail foray involving an investment of Rs 25,000 crore.

Reliance Fresh is the company’s brand for neighborhood fresh-food outlets. It will also sell

kitchen equipment and other edibles. Besides, it has planned hypermarkets, supermarkets,

discount stores, department stores, convenience stores and specialty stores, to be unveiled

shortly.

The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add

more stores across different geographies, and eventually have a pan-India footprint by year

2011.

The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and

dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian

products.

44

Currently, selling through company-owned stores currently totals just$8 billion in India.

Industry estimates say that the country’s retail industry is worth $300 billion, that is about Rs

13, 50,000 crore. This stands a chance to blossom to $427 billion in the next four years.

3.5.7 Farm to Fork Model of Reliance Retail

The Reliance retail company sources say it is setting aside Rs 50,000 crore to buildits farm-

to-fork linkage. Reliance has drawn up plans for a presence in 784 towns and6,000 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 11states. According to a company

report, RIL is targeting a turnover of Rs 40,000 crore in the next few years.

TRADITIONAL MODEL OF RETAIL RELIANCE FARM TO FORK

45

3.5.8 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:

1) Reliance Retail aims at recruiting people from the under privileged community in society.

"Hence, we are planning to train students from corporation schools and schools run by

NGOs. And, we consider this as a part of our corporate social responsibility, "he said. Asked

whether the company will take students on an employment basis and pay them a stipend

during the course period, he said that actually, it is planning to charge a "small fee" from

those who want to join the course "as we want to bring in some discipline and regularity

among the students", and will reimburse that once they are inducted into service

2) 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 to35 percent) and better quality products f or Reliance retail

stores.

3) 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 improves 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.

46

Chapter 04

Data Analysis and Interpretation

47

Data Analysis

Data collection is the systematic recording of information; data analysis involves working to

uncover patterns and trends in data sets; data interpretation involves explaining those patterns

and trends.

Analyzing survey data is an important and exciting step in the survey process. It is the time

that you may reveal important facts about your customers, uncover trends that you might not

otherwise have known existed, or provide irrefutable facts to support your plans. By doing

in-depth data comparisons, you can begin to identify relationships between various data that

will help you understand more about your respondents, and guide you towards better

decisions. Here data collected on the basis of questionnaire survey on customer satisfaction

on organized retail outlets is on Reliance in Bangalore.

Walter H De vries, Zeithaml and Berryand Cronin and Taylor (2001). They conducted a

study on Quality of services by considering its various dimensions like reliability,

availability, performance, serviceability, reputation, competent staff, responsiveness and

courtesy, technical facilities, operational facilities, technical procedure and communication.

In contrast “Universal dimensions determining” the quality of services as received by

customers is tangibility, responsiveness, assurance and empathy

Cronin and Taylor (1992) the conceptualization of service quality as a gap between

expectations and performance is inadequate. The research point out the confusion is

pertaining literature over the relationship between service quality and customer satisfaction.

According to that research, the concept of service quality should be customer’s attitude

towards the service, since the concept of satisfaction is defined as a gap between expectations

and performance or disconfirmations of expectations.

48

Table 4.1 Age of respondents

Age Group No of respondents Percentage

18-28 58 58%

29-39 22 22%

40-50 12 12%

51-60 8 8%

> 60 0 0%

Total 100 100%

0102030405060

No of Respondents

18-28 29-39 40-50 51-60 > 60

Age Group

Age of respondents

No of respondents

Percentage

Fig 4.1

Analysis

From the above graph and table presented above it is evident that majority of the respondents

are of age in between 18-28 years.

Inference

The above figure shows that most of respondents belong to age group between 18-28 years.

49

Table 4.2 Gender of the Respondents (Gender ratio)

Gender No of

respondents

Percentage

Male 68 68%

Female 32 32%

Total 100 100%

0

20

40

60

80

No of respondent

Male Female

Gender

Gender Ratio

No ofrespondents

Percentage

Fig 4.2

Inference

From the table and bar graph presented above, the distribution of the shoppers is evident.

This question was aimed to identify the distribution between the two genders. It can be

deducted that male respondents are more as compared to female respondents.

Table 4.3 Income of respondents

Income Ratio No of Respondents Percentage

< 10,000 34 34%

10000-20000 40 40%

21000-30000 18 18%

>30000 8 8%

Total 100 100%

50

Income Level

0

10

20

30

40

50

< 10,000 10000-20000 21000-30000 >30000

Income

No o

f re

spon

dent

sNo ofRespondents

Percentage

Fig 4.3

Inference

From the above graph it is evident that most of respondents are having income level in

between 10000-20000.

Table 4.4 Shopping frequency

Particulars No of Respondents Percentage

Daily 10 10%

Weekly 40 40%

Monthly 44 44%

Occasionally 6 6%

Total 100 100%

51

Fig 4.4

Analysis

From the above graph frequency of shopping is evident. Of the 100 respondents it shows that

10% of the respondents do shopping daily, 40% of the respondents do shopping weekly, 44%

of the respondents do shopping monthly and 6% of the respondents shop occasionally.

Inference

The above figure shows that most of the respondents do shopping weekly and monthly. It can

be deduced that people who visit once a month and weekly are those people who visits

various stores for their regular needs and also may be because of the benefits by the stores

such as discounts and offers.

Table 4.5 Preference of respondents towards branded retail outlets and Kirana Shop.

Branded

outlets

No of respondents Percentage

Reliance Fresh 44 44%

More 16 16%

Smart 16 16%

Big Bazar 8 8%

Nilgiris 6 6%

Others 4 4%

Kirana shop 6 6%

Total 100 100%

52

Frequency of Shopping

10%

40%44%

6%Daily

Weekly

Monthly

Occasionally

Fig 4.5

Analysis

From the above graph it is evident that 94% of respondents prefer branded retail outlets in

which Reliance Fresh has a maximum share of 44% which is followed by 16% of More, 16%

of Smart and rest belongs to other stores.

Inference

The above figure shows that most of the respondents prefer shopping in branded retail

outlets. Maximum number of people does shopping in branded retail stores for their regular

needs and also may be because of the benefits by the stores such as discounts and offers.

Table 4.6 Service of Retail outlets

Particulars No of

Respondents

Percentage

Excellent 18 18 %

Good 56 56 %

Satisfactory 20 20 %

Not Satisfactory 6 6 %

Total 100 100

53

0

10

20

30

40

50

No of respondents Percentage

More

Reliance Fresh

Nilgiris

Big Bazar

Smart

Others

Kirana shop

Fig 4.6

Analysis

From the above table and graph the satisfaction level respondents is evident with respect to

services provided by the retail outlets. Of the 100 respondents 18% of the respondents are

agreed with excellent rating service. 56% of the respondents agreed with good rating service.

20% of the respondents agreed with satisfactory rating service and 6% of the respondents

agreed with not satisfactory rating service.

Inference

From the responses it can be inferred that most of the respondents are happy with the service

provided by the retail outlets and there are very less people who are not satisfied with the

services provided by retail outlets.

Table 4.7 Expectation of Gifts and discounts From Company

Preference No of Respondents % Respondents

Yes 86 86 %

No 14 14 %

Total 100 100%

54

Service of retail outlets

20%

56%

18% 6%ExcellentGood SatisfactoryNot Satisfactory

Fig 4.7

Analysis

From the above table and graph the expectation of respondents is evident. Of the 100

respondents it shows that 86% of the respondents except to receive free gifts and discounts

offered by the retail outlets and 14% of the respondents do not expect any free gifts and

discounts.

Inference

Majority of shoppers expect free gifts and discounts from the retail outlets. It can be deduced

that free gifts and discounts attracts more number of customers.

Table 4.8 Perception about ‘Reliance Fresh’ Products

Perception NO of

respondents

Percentage of

respondents

Excellent 8 8 %

Good 58 58 %

Satisfactory 28 28 %

Not Satisfactory 6 6 %

Total 100 100%

55

86%

14%

YesNo

Fig 4.8

Analysis

From the above graph the perception of respondents towards “Reliance Fresh” products is

evident. Of the 100 respondents 8% respondents has excellent perception about ‘Reliance

Fresh’ products, 58% of respondents’ has good perception about ‘Reliance Fresh’ products,

28% of respondent’s has satisfaction about ‘Reliance Fresh’ products and 6% of respondents

not satisfaction about ‘Reliance Fresh’ products.

Inference

Majority of respondents are satisfied with the products available in Reliance Fresh because of

features like price, quality, variety and brand.

Table 4.9 Factors Influence Purchase of Reliance Fresh Products

  Number of respondents

Factors

Ve

ry

Im

p % Imp %

Nor

mal %

Lea

st

im

p %

N

ot

I

m

p

%

Tota

l No

of

resp

onde

nts

Tot

al

%

Price 76 76 12 12 6 6 3 3 3 3 100

100

Quality 84 84 10 10 2 2 2 2 2 2 100

100

56

Convenie

nce 22 22 66 66 6 6 3 3 3 3 100

100

Availabil

ity 38 38 54 54 2 2 3 3 3 3 100

100

Brand 34 34 42 42 16 16 4 4 4 4 100

100

Freshnes

s 80 80 12 12 2 2 3 3 3 3 100

100

Image 14 14 52 52 22 22 6 6 6 6 100

100

FIG 4.9

Analysis

From the above graph it shows that factors affecting on purchase of more products

57

Price Factor

76% respondents have rated price very important, 12% rated important, 3% rated least

important, and 3% not important.

Quality factor

84% respondents have rated quality as very important, 10% rated important, 2% rated

normal, 2% rated least important and 2% not important.

Convenience Factor

22% respondents have rated convenience as very important, 66% rated as important, 6%

rated as Normal, 3%rated as least and 3% as not important.

Availability Factor

38% respondents have rated availability as very important, 54% rated as important, 2% rated

as normal, 2% rated least important and 2% not important.

Brand Factor

34% of the respondents have rated brand as very important, 42% rated as important, 16%

rated as normal, 4% rated as least important and 4% not important.

Freshness Factor

80% of the respondents have rated freshness as very important, 12% rated as important, 2%

rated as normal, 3% rated as least important and 3% rated as not important.

Image factor

14% of the respondents have rated image as very important, 52% rated as important, 22%

rated as normal, 6% rated as least important and 6% rated as not important.

Inference

Majority of the customers prefer quality with lesser price along with availability of product.

The other factors which influence the buying behavior of customers are brand, convenience

of the store, freshness and image. The influencing factors differ for different customers

according to their taste and preferences.

58

Table 4.10 Employees Behavior

Behavior No. of respondents Percentage

Strongly agree 16 16 %

Agree 72 72 %

Somewhat agree 6 6 %

Disagree 6 6 %

Total 100 100 %

Fig 4.10

Analysis

From the above table and graph the employee behavior towards customers in “Reliance

Fresh” is evident. Of the 100 respondents 72% respondents agree that employees in store are

polite and friendly, 16% have strongly agreed, 6% have somewhat agreed and only 6%

respondents have disagreed about the employee behavior.

Inference

Maximum number of customers that is 72% are happy with behavior of employees in the

Reliance Fresh retail outlets.

59

Table 4.11Factors Influencing purchase

Factors No. of respondents Percentage

Advertisement 11 11 %

Brand ambassador 4 4 %

Product display 42 42%

Suggestion from

friends & relatives

27 27 %

Others 16 16 %

Total 100 100%

Fig 4.11

Analysis

From the table and graph presented above the affect of media towards the purchase of

products is evident. Of the 100 respondents 8% of the respondents are influenced by

advertisement, 4% of the respondents are influenced by brand ambassador, 42% of the

respondents are influenced by product display, 27% of the respondents are influenced by

suggestion from friends and relatives and 17% of the respondents are influenced by other

media.

60

11%4%

27%

42%

16%

Advertisement

Brand ambassador

Suggestion ave said thatdents aareinps. 38nced by display of the product and then it is followed by suggestion from friends and relatives,

Product DisplayOthers

Inference

The purchase of products is mainly influenced by display of the product and then it is

followed by suggestion from friends and relatives and advertising.

Table 4.12 Price Comparison

Price Range No. of respondents percentage

High 38 38 %

Low 22 22 %

Average 40 40 %

Total 100 100%

Fig 4.12

Analysis

The above table and graph shows comparison of Price of Reliance Fresh products with other

retail outlets and Kirana shops. 40% of the respondents have said that price of Reliance Fresh

products is high. 22% of the respondents said that price of Reliance Fresh products is low

and 40% of the respondents have said that price of Reliance Fresh products is Average.

Inference

Analyzing the responses from customers and above table and graph it can be said that price

of the Reliance Fresh products are average as compared to other similar retail stores.

61

0

10

20

30

40

High Low Average

No.of Respondents

Table 4.13 Satisfaction parameters on Reliance Fresh outlets

Factors

V.

satis

% Satis % Unsatis % V

Unsati

%

T

resp

Total

%

Overall

Quality

29 29 53 53 12 12 6 6 100 100

Value for

money

52 52 42 42 3 3 3 3 100 100

No.of cash

counters

38 38 54 54 6 6 2 2 100 100

Complaint

handling

8 8 68 68 20 20 4 4 100 100

Assortment 26 26 68 68 3 3 3 3 100 100

Credit

facility

0 0 10 10 30 30 60 60 100 100

Fig 4.13

By analysis of above graph and table we come to know that

Overall quality

From the 100 respondents 29% are very satisfied, 53% are satisfied, 12% are unsatisfied

remaining and 6% are very unsatisfied.

62

Value for money

Out of 100 respondents 52% are very satisfied, 42% are satisfied, 3% are unsatisfied and 3%

are very unsatisfied.

No of cash counters

Of the 100 respondents 38% are very satisfied, 54% are satisfied, 7% are unsatisfied and 2%

are very unsatisfied.

Complaint Handling

Out of 100 respondents 8% of respondents are very satisfied, 68% of respondents are

satisfied, 20% are unsatisfied, and 4% are very unsatisfied.

Assortment

Of the 100 respondents 26% respondents are very satisfied, 68% are satisfied, 3% are

unsatisfied and 3% are very unsatisfied.

Credit facility

Out of 100 respondents 0% respondents very satisfied, 10% are satisfied, 30% are unsatisfied

and 70% are very unsatisfied.

Inference

Above data shows that most of the respondents are satisfied with quality of the product,

service, and value for money, number of cash counters and assortment of the product in store.

Customers are very unsatisfied with the credit facility provided by retail outlets.

Table 4.14 Satisfaction level

Rating No. of

respondents

Percentage

Very satisfied 12 12 %

Satisfied 70 74 %

Not sure 11 11 %

Unsatisfied 7 7 %

Total 100 100%

63

Fig 4.14

Analysis

The above graph shows overall satisfaction level of Reliance Fresh products. 12% of the

respondents are very much satisfied with Reliance Fresh products, 70% of the respondents

are satisfied with the Reliance Fresh products, 11% of the respondents are not sure and 7% of

the respondents are unsatisfied with the Reliance Fresh products.

Inference

Analyzing the responses from customers and above table and graph it can be said that

maximum number of customers are satisfied with the ‘Reliance Fresh’ products.

Table 4.15 Service Rate of Kirana shops

Rate No. of respondents Percentage

Excellent 5 5 %

Good 17 17 %

Satisfactory 28 28 %

Not Satisfactory 50 50 %

Total 100 100 %

64

Satisfaction level

Very satisfiedSatisfiedNot sureUnsatisfied

Fig 4.15

Analysis

The above figure shows the satisfaction level of customers with respect to services provided

by the Kirana shop. Of the 100 respondents 5% rated excellent, 17% rated as good, 28%

rated as satisfactory and 50% respondents rated as not satisfactory.

Inference

From this analysis we come to know that most of the customers are moving towards retails

stores rather than Kirana shops. Service provided by the stores is better than Kirana shop.

Table 4.16 Price differentiation

Price Range No of respondents % of respondents

High 58 58 %

Low 7 7 %

Average 35 35 %

Total 100 100 %

Fig 4.16

65

Analysis

The above graph shows the price differentiation between ‘Reliance Fresh’ retail outlets and

Kirana shops. Of the 100 respondents 58% of respondents rated as high, 35% rated as

average and only 7% respondents rated as low.

Inference

From this analysis we come to know that price of retail outlets is more as compared to kirana

stores because of variety, quality and brand availability.

Table 4.17 Future trend in retail sector

Rating No of respondents % of respondents

Strongly agree 41 41%

Agree 44 44%

Somewhat agree 10 10%

Disagree 5 0%

Strongly disagree 0 0%

Total 100 100%

Future trend in retail

Strongly agree

Agree

Some whatagree

Disagree

Stronglydisagree

Fig 4.17

66

Analysis

From the graph and table presented above future aspect of retail outlets is evident. Of the 100

respondents 41% of the respondents strongly agree with the future trend, 44% are agreed,

10% are somewhat agree, 5% disagrees and 0% strongly disagrees with the future trend.

Inference

Future trend about retail shopping is very high.

Table 4.18: Recommendation of Stores

Stores Respondents Percentage

Reliance Fresh 33 33 %

Nilgiris 14 14 %

Big Bazar 20 20 %

More 24 24 %

Smart 9 9 %

Figure4.18

Analysis

From the above table and chart it is evident that how many respondents are satisfied with the

store and are willing to recommend the various stores to their friends and relatives for

shopping. Of the 100 respondents 33% recommended Reliance Fresh, 24% recommended

67

More, 20% recommended Big Bazar, 14% recommended Nilgiris and 9% respondents

recommended Smart for shopping.

Inference

Shoppers visit to many different stores to get more effective price, quality, varieties and other

benefit provided by the stores such as discounts and offers which plays an important role to

provide satisfaction. But they recommend the store when they get the full satisfaction. The

mostly recommended store for shopping is listed in the following descending order: Reliance

Fresh, More, Big Bazar, Nilgiris and Smart.

68

Chapter 05

Findings

69

5.1 Findings

In the survey, interviews and study conducted above, I came across many factors that

influence the consumers’ satisfaction on organized Reliance Fresh retail store and their

subsequent shopping and buying decisions. Here, I present the findings gathered and the

suggestions I offer to companies based on the data gathered and analyzed.

The number of male respondents was more that is 68% as compared to the female

respondents that was only 38%.

40% of respondents fall under the income category of 10000 to 20000.

70% of the shoppers who visit retail outlets regularly are the youth between the ages

of 18 to 39 years.

The survey indicates that the 44% of the respondents visit the retail store once a

month and 40% of the respondents visit weekly.

The most preferred store by respondents is Reliance Fresh that is 44%.

Compared to competitors Reliance Fresh is the most visited store to shop.

Due to competition respondents have different favourite stores according to their taste

and preferences.

The highest number of response is attributed to Reliance Fresh for attracting people

of many income groups.

Mostly customers are satisfied with the service provided by the retail stores.

Stores performing well in attracting the customers.

Reliance Fresh provides better shopping experience.

86% of the respondents are expecting huge discounts and offers from Reliance Fresh

stores.

Cleanliness and hygiene maintained in the store is up to the mark.

Majority of customers prefer retail outlets for shopping.

Forty four percent of customer prefer to purchase products on Reliance Fresh retail

outlets that indicates customers are attracted towards Reliance Fresh outlets it

indicates it has a good market potential in future.

70

Majority of the respondents are happy with the behaviour of the employees towards

customer service.

Service provided by the retail stores is very good as compared to the Kirana stores.

The majority of customers are aware about Reliance Fresh advertisements, product

display, suggestion from friends and relatives and there is a lot of scope to promote

through print media.

The main parameters for purchase in preferred store are price, quality and variety.

Many of the people go for unplanned shopping.

Most customers prefer shopping at retail outlet due to the wide assortment of

products available.

Giving gifts, offers and discounts have more effect on consumer buying decisions.

The study reveals that the employees in the retail stores are not pressurizing

customers to purchase.

It is evident that majority of the respondents are more concerned with quality and

price of the products provided in the retail stores.

Satisfaction towards retail stores is highly dependent on price & quality of product.

Giving gifts, offers and discounts have more effect on consumer buying decisions.

Maximum number of the respondents are shopping in retail outlets it shows that

future trend and growth of retail sector is very high.

Satisfaction level of respondents on Reliance products shows that Reliance Fresh has

good quality products.

Customer Service provided by the Kirana stores is satisfactory but most of the

respondents are willing to visit the retail outlet.

Reliance Fresh is the most recommended store by the respondents to their friends and

relatives for shopping.

71

Chapter 06

Suggestions and Conclusion

72

6.1 Suggestions

Create awareness & manage home delivery services properly.

There should be proper assortment of various product categories.

Cleanliness and hygiene should be maintained regularly.

Proper training should be provided to sales person so that they can deal with the

customer efficiently and demonstrate about the products.

Various schemes and festival offers, cash discounts on bulk purchase can be provided

to attract new customers.

Providing credit facility to loyal customers it increases sales volume.

Most of the customers are expecting gifts, discounts, offers so Reliance Fresh has to

introduce special benefits on huge purchase.

Reliance Fresh has to improve promotion strategy.

Selecting the store location is very important. It may includes parking space for

vehicles, lighting and fixtures arrangement of merchandise, location of billing

counters

Quality and variety of the products should be up to the mark, in Retail stores so that it

attracts more number of customers.

Different advertising medium should be adopted to bring awareness in shoppers about

the retail store and its product.

There should be proper assortment of various product categories.

In an era of hyper competition retailers could adopt E- retailing which would benefit

to deliver better services, assortments, products information, speed, price and so on.

International brands could be made available in retail stores.

The no. of cash counters need to be increased, keeping in view the customer traffic

intensity.

6.2 Conclusion

73

The study is an attempt to measure customer’s satisfaction at Reliance Fresh outlets in

Bangalore. The customers are the main asset for any organization, without satisfying them no

organization can be run well. Customer satisfaction towards retail stores is affected by

various factors. This survey was meant to identify the customer satisfaction level towards

Reliance Fresh retail stores. Findings of this research suggest that the level of customer

satisfaction is highly affected by the quality and price of the products, wide range of products

and location and conveyance are more attracting customers to visit the retail outlet.

It is found that most of the customers of Reliance Fresh retail store Bangalore are satisfied by

the quality of service, convenience, complaint handling, and employee’s behaviour

availability of products, branded products. But the customers are not satisfied with the credit

facility, high price and lesser number of outlets. The analysis shows that Reliance Fresh

outlets have been fairly successful with their marketing strategies and customer retention, but

they still have to upgrade services like more efficient billing, better parking facilities and

wider range of product availability to meet the competition.

The store should concentrate more on the F & V (fruits and vegetables) section .As it is

perishable in nature and has a short shelf life, it require more concentration. Store should take

care of indent because proper indent can solve half of the problem and the rest can be

handled by following various practices like reducing wastage by the means of proper

handling of F&V (fruits and vegetables). This includes treatment of green vegetables, proper

cleaning etc. and last but not the least by increasing the sales not only of F&V. But also for

other products which is only possible by retaining our customers by the way of promotions.

From the study and research survey I can conclude that the Reliance Fresh is a good retail

outlet for shopping comparing to other retail outlets such as More, Big Bazar, Smart, Nilgiris

etc.

The strategy of Reliance fresh is very effective as they know very well how to attract

customers, which is reflected in the vast custom they enjoy in relation to others. A good and

friendly behaviour of sales personnel’s in the store is also a reason for increase in sales. Due

to the upsurge of the retail sector, unorganised sectors are perishing because of their old

concepts, poor service, non - competitive pricing etc. Therefore they have to upgrade their

performance in order to compete with the big leagues.

74

To conclude it can be said that most of the Reliance Fresh customers are happy with the

service received. More, Nilgiris, Total, Smart, Big Bazaar are tough competitors of Reliance

Fresh even though Reliance Fresh is trying hard to attract the customers by introducing new

offers schemes etc to capture the market share. According to customer there is huge potential

for increasing market share of supermarket. Findings of this research suggest that the level of

customer satisfaction is highly dependent on various parameters such as price, brand,

customer service, quality and variety of the products. Hence it is very much important for the

retail stores to consider all those parameters to enhance the level of customer satisfaction.

75

Bibliography

Books:

Schiffman Leon.Gand Leslie Lazar Kanuk; Consumer Behavior; Pearson Education;

7th edition;2002

Levy Michael;Retailing Management;Tata McGraw-Hill, New Delhi,5th edition;2004

Kothari.C.R;Research Methodology;New Age International(P) Ltd. New Delhi,2nd

edition;2009

Zeithamil Valarie,A,Service Marketing;Newyork McGraw-Hill

Websites:

http://www.wikipedia.com

http://www.researchindia.com

http://www.slideshare.net/jas.bhatia/reliancefresh

http://corporate.reliance.com/home.aspx

http://retail.about.com/od/location/a/selecting_site_2.htm

Magazines & Journal:

1. Indian journal of marketing

2. Retail Magazine by Abijit Ghosh

3. Business line (catalyst)

4. Economic Times(Brand Equity)

5. Business World

Annexure

76

Questionnaire

Dear Sir/ MadamI am Ranjan Kumar, student of MBA IV Sem, Acharya institute of management and sciences Peenya Bangalore. I am undertaking a dissertation project work as a part of my academics doing this survey in order to a study measuring customer satisfaction in Reliance Fresh outlets in Bangalore. I kindly request you to co-operate with me for few minutes and respond to the following questions and I assure that the information provided by you will be kept confidential and will use only for academics purpose. Ranjan Kumar (09SKCMA059)Personal dataName :Age :Sex :Contact details :Occupation :Income :1) How often do you do your shopping? i) Daily □ ii) Weekly □ iii) Monthly □ iv) Occasionally □2) Which one do you prefer more A) Branded retail outlets, if yes specify a)Reliance fresh □ b)More □ c) Nilgiris □ d)Big market □ e) Smart □ f) Other □ B)Kirana shops If yes then go to Q.No 12 & 13

3) Service provided by retail outlets is i) Excellent ii) Good iii) satisfactory iv) Not satisfactory 4) Do you expect gifts, discounts etc from the company i) Yes ii) No 5) What is your perception about ‘Reliance Fresh’ products i) Excellent ii) Good iii) satisfactory iv) Not satisfactory 6) How much importance do you give to the following factors, when you purchase a “Reliance Fresh ’’retail products. Factors

VeryImportant

important Normal Least important

Not Important

PriceQualityConvenienceAvailabilityBrandFreshnessImage

7) The employees at the store are polite and friendly i) Strongly agree ii) Agree iii) Somewhat agree iv) Disagree □8) Which of these factors affect your purchase? i) Advertisement □ ii) Brand ambassador □ iii) Product display □ iv) Suggestion from friends & relatives □ v) Others □

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9) How is the price of ‘Reliance Fresh’ products as compared to the other retail outlets and kirana shops i) High ii) Low iii) Average 10) How do satisfied with following parameters of Reliance Fresh outletsParticulars Very

satisfiedSatisfied Unsatisfied Very

UnsatisfiedOverallQualityValuefor moneyNo. of cashCountersComplaint handlingAssortment(Variety& Choice )Credit facility

11) Overall how you are satisfied with ‘Reliance Fresh’ outletsi) Very satisfied □ ii) Satisfied □ iii) Not sure □ iv) Unsatisfied □

12) Service provided by kirana shop isi) Excellent ii) Good iii) satisfactory iv) Not satisfactory □

13) How is the price of Kirana products as compared to the ‘Reliance Fresh’ retail outlets.

i) High □ ii) Low □ iii) Average □14) Do you think the future trend – the market share of organized retail will increase

i) Strongly agree □ ii) Agree □ iii) Somewhat agree □ iv) Disagree □ v) Strongly disagree □

15) Refer the Retail Store. a)Reliance fresh □ b)More □ c) Nilgiris □ d)Big market □ e) Smart □16) If any additional comments on Reliance products regarding customer satisfaction ………………………………………………………………………………………………………………………………………………………………………………………………………………

Thanking you

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