Jitendra

Virahyas

JVIRAHYAS@GMAIL.COM

1

A

Project Study Report

On

“Effectiveness on loyalty sales programme in reliance fresh

stores, Jaipur”

Submitted in partial fulfilment for the

Award of degree of

Master of Business Administration

Deepshikha College of Technical Education

Jaipur

Submitted By: - Submitted To:-

Xxx xxx Dr xxx

MBA IV SEM HOD

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2009-2011

Preface

“Effectiveness on loyalty sales programme in reliance fresh

stores, Jaipur”

This project is related with the retail industry. Retail according to concise oxford

English dictionary,

is “the sale of goods to the public for use and consumption rather than resale.”

The founder chairman of reliance group was Dhirubhai H. Ambani.the managing

director is Mr. Mukesh Ambani.

Reliance retail limited is concern with “growth through value creation” the reliance

industry firstly

opened their retail as named “reliance fresh” in Hyderabad.

The aim of this project is to analyse the percentage of loyalty programme of reliance

fresh among the customers. The loyalty is one of the important factors which gives

birth to retention of customers in stores, the frequency in the purchase and faith in the

customer. The project study is not only restricted

in store but also it is opened its wings for outside world.

For starting the project the questionnaire is to be prepared and than this will be filled

by respondents. The sample size will be taken as 200 respondent as convenience.

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The data will be analysed based on suitable tables by using mathematical technique.

The project is mainly analysed by using bar charts

Acknowledgement

As Per the curriculum of 4th semester of MBA, we have to undergone

through a detailed project study. I wish to express my gratitude to

Rajasthan Technical University for giving me an opportunity to be a part of

such kind of learning experience, which will surely enhance my knowledge

and skills.

I am grateful to Mr. J. Virahyas for their invaluable guidance and

cooperation during the course of the project. They provided me with their

assistance and support whenever needed that has been instrumental in

completion of this project.

The project has been a great experience, the learning and the exposure I got

through this project was immense and will surely help me in my future

pursuits.

I would like to show my gratitude towards the management and staff for

taking time to help me and for their suggestion and comment, which helped

me a lot throughout the project.

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Xxx xxx

MBA IV Sem.

Executive Summery

Problem & issues

Problem & issues in various retail industries vary according to geographic and

demographic reason. This project study is mainly concern with the loyalty of the

customers in their buying patterns. I am doing this project study on student

preference towards various reliance fresh stores in Jaipur.the major issues of project

are:

1. How loyalty programme benefited to employees?

2. How loyalty programme is benefited to consumers?

3. How can make loyalty prog. More effective?

4. How many percent customers using loyalty membership card?

Objective

The primary objective of this project study is to know the loyalty in customers about

their product and their brands. Some other objectives are:

1. To study & analyse the loyalty among customers?

2. To know how frequently the customers buy the products from reliance fresh.

3. To know the different types of loyalty sales programme used by company?

4. To know how many customers are benefited from loyalty sales programme.

5. To know how much amount the company expand on the loyalty programme?

6. To compare the effectiveness of loyalty sales programme in different

geographical areas?

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7. To know in which product category the stores get maximum profits through

loyalty sales programme?

Innovativeness & usefulness

This project study is innovative in its field because retaining the customers in the

stores is major and difficult task. The project is also useful for both customers as well

as company because of:

1. To see the percent of customer loyalty in store.

The report is also beneficial for the store for further improvement.

2. To analyze the customer behaviour on loyalty programme.

Current status of development & market potential

The current status of this project study is that I am preparing a questionnaire for the

customers and for the workforce working in the reliance fresh stores in Jaipur.

The project has great potential as a profit point of view because once the company

know its SWOT analysis; it’s become easy for the company to work on that.

Market potential:

1. first mover advantage

2. easily approachable

3. strong financial back up

4. regular discounts on product

5. repetitive advertising on local news paper

Research methodology

Research design

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Descriptive research design

Sample plan and sample size:

The sample plan is Continuance sampling, which is non probability in nature.

The sample of 150 people will be taken randomly according to the comfort.

Research period

The research work will only carried out for 1 month.

Data collection

The data, which will be collected for the purpose of study, is divided into 2

Bases:

Primary Source: The primary data comprises information survey. The data will be

collected directly from respondent with the help of structured questionnaires.

Secondary Source: The secondary data will be collected from internet and

references from Library.

Data analysis: The data will be analysed based on suitable tables by using

mathematical technique. The project is mainly analysed by using bar charts.

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CONTENTS

1. Introduction of the industry

2. introduction of the organization

3. research methodology

title of the study duration of the project objective of the study type of research sample size and method of selecting sample scope of study limitation of study

4. analysis and interpretation

5. facts and findings

6. analysis and interpretation

7. SWOT analysis

8. conclusion

9. recommendation and suggestion

10. Appendix

11. Bibliography

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INTRODUCTION

OF

THE

INDUSTRY

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1. INTRODUCTION OF THE INDUSTRY

Evolution of Retail

Retail, according to Concise Oxford English Dictionary, is “the sale of goods to the

public for use or consumption rather than for resale”.The barter system was first

known retail form; then the currency changed hands; we had the handcart vendor

selling goods in the streets; of late we have a pop & mom stores which compliment

the neighbourhoods stores.The first retailer in India includes Bata, Pantaloon,

Bombay Dyeing, Spencer’s, and Nilgiris & Higginbotham. The current retail scenario

is controlled by the likes of Shoppers’ Stop, Brand Outlets, Big Bazaars etc.The top 4

world players include Wal-Mart, Carrefour, Tosco and Metro.The opportunities as

mentioned are aplenty with close to 15000000 sq.feet of retail space is under

construction for various malls & shopping centres across the country.

Retailing consists of the sale of goods or merchandise, from a fixed location such as

a department store or kiosk, in small or individual lots for direct consumption by the

purchaser. Retailing may include subordinated services, such as delivery. Purchasers

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may be individuals or businesses. In commerce, 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 retailing as a necessary part of their

overall distribution strategy.

What is retailing

The sale of goods or commodities in small quantities directly to consumers.

Buy, Sell & Move

Buy, Move & Sell

Having gone through some of the terminologies in retail and having seen a broad

outline of retail now let’s look into the 3 basic things, which govern the retail market.

1. Buy

Buying would involve the following activities, which would

mean setting the guiding principles for all the merchandise

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decisions that a retailer makes. It should reflect target market

desires, retailer’s institutional type, market place positioning,

defined value chain, supplier capabilities, costs, competitors &

product trends.

2. Move

It can be easily said but the processes that are involved in the “move” part are

complex but simple. From the product stage through the processing stage to the

packed ones the move stage would continue.

Various levels that involves in “move” part are:

The buyer shortlists the product, places the order.

The vendors receives the order, process the same, packs and send it to the

distribution centre from where it reaches the store for the customer to buy.

One of the fast picking up aspects of the logistic in India is the COLD CHAIN. More

and more organizations are looking for various aspects of cold chain to ensure that

the products where temperature plays a vital role is maintained and sustained till such

time the sale happens.

The Merchandising and Category management is another important function of the

retail industry. In this we have to opt for right product, place, quantity, quality, mix,

price and time. Each of the stores would operate on certain basic business projection

and all others will follow a typical pattern. For this pattern to be arrived, the

merchandise management plays a big role. The merchandise can make or break an

organization of its profitability.

When we say category management, it would amply the assortments of products the

customer sees as reasonable substitutes for each other with similar characteristics. It

also covers the process of managing merchandise in a retail business with the

objective of maximizing sales and profits of a category. The category manager is also

responsible for developing assortment plans for the entire category, buying pricing

and coordinating promotion.

3. Sell

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Finally of the Buy, Move & Sell comes the selling part of it which involves a running of

a retail stores. Operations as it is known are the crucial functions, which derive its

strength from various other faculties.

The beginning of the day is done with the store being opened by the competent

person. The first activity to happen will be the housekeeping activities followed by the

staff scheduling. The morning’s meetings happen chaired by the head of the store.

The stock outs are established and the replenishments happen as the day

progresses, though it is suggested that replenishments of the stock should always

happen when the customer is not there. The head of the store usually inspects any

one or all the departments of the store, which is otherwise called the “FLOOR WALK”.

The cashier would ensure that all the cashiers have enough and correct float cash,

whether the POS role, card swap machine and pen is in place or not. In starting of the

day head cashier gives all cashiers a sum of Rs.1500 as loan. Having set everything

in place, the store would then be opened for the customers.

The department’s heads in turn would brief their team on the achievements of the

previous day and set target of the day. During this brief any incidents worth mention

would also be discussed and the promotion offers, which are current, will also be

taken up. Orders will be placed for all the stock out SKU follows up will also be done

for those articles, which are delivered during the day. Cleaning of the self and also

ensuring that the stocks are kept as per the planogram are checked. It’s just not the

duties mentioned above but selling also happen simultaneously.

At the end of day the process of concluding the activities is called the “END OF THE

DAY” activities. As the person who is in charge of closing the store goes around

checking whether the locks are in place or not; the high value merchandise counters

are properly secured; check for any person hidden in the change rooms or cloaks

rooms; the cashier would ensure that all the money that has been given as float

tallies apart from the money that need to be submitted by the respective cashiers.

There will be a checklist that needs to sign off together by the security as well as the

in charge for having checked for conformity at the end of the day

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1.1 PROJECT INTRODUCTION

The project was done at Reliance Fresh convenience store of Reliance Retail

situated at various stores located in Jaipur.

This project is all about to increase the Loyalty Sales Percentage of the individual

stores.

What is Loyalty?

The degree to which customers are predisposed to stay with one company and resist

competitive offers.

Building Customer Loyalty

1. SERVICE NETWORK: The mantra for marketing professionals is service, service

and more service! That’s right! One of the best ways of ensuring your customers keep

coming back to you is providing impeccable service. This includes everything from

service at the point of sale to after-sales service, which builds a lasting relationship

with the customer. Most manufacturers of white goods understand relationship

marketing like no one else. The peculiarity lies in the product itself, where it might

need to be serviced long after it is bought. Moreover, the purchase might have taken

place somewhere different from where the service is required. Companies like Eureka

Forbes and Whirlpool pride themselves on superb customer service satisfaction

levels. They manufacture a wide range of durables which can be serviced at various

locations throughout the country. Remember, the customer is smart. He will judge

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your company even on small things like whether the salesperson reached in time. If

he is late, the customer will never trust any claims of “zero error” quality made by you.

So, watch out for service, the buzzword of the industry.

2. QUALITY CONTROL:” You never get a second chance to make a first

impression” was the tagline for ‘Head and Shoulders’ shampoo years ago.

Impeccable service too cannot save you if you do not deliver a good quality product

each and every time. This is true especially for restaurants, where the food served

has to be of the same quality time and again to keep customers coming back to you.

Here, quality is conveyed via word-of-mouth. One bad experience is enough to ruin

the impression forever.

Another good way of assuring customers value the quality of your product is to get an

outside agency or someone else to endorse the results. For instance, Colgate

Toothpaste continually reminds the customer that it is endorsed by IDA, the Indian

Dental Association and it is the brand trusted by most dentists. HLL gets customers to

talk about their “Pond’s Age Miracle” range of Cosmetics and Dove soaps in their

television ads, to endorse the quality of their products. That is also the psyche behind

prompting a customer to try out the product. If a Vim Bar is a good dishwashing bar

for Mrs X, a housewife, it has to be good for you too! If others say that your product is

good, it’s got to be good!

3. CONSTANT INNOVATION:” Once a customer, always a customer”, is no longer

true in these days of fluctuating brand usage. Customers now have more choices

than before and are more willing to try out new brands. This fickle-minded buying

warrants a constant focus on the changing mindset of the customer. The brand too

has to change with customer tastes. Nestle India does it best with its brand of Maggi

food products. They now have variants for their instant noodles like ‘Dal Atta Noodles’

and ‘Rice Noodle Mania’. Their competitors in the food segment, HLL (Hindustan

Lever Limited, now called Hindustan Unilever Limited) tickled the Indian palate by

making multiple variants of the traditional Tomato Ketchup in flavours like mint,

tamarind and chilli. Amul, which has a strong presence in the ice-cream segment,

sensed the need to keep the health-conscious customer in its kitty by adding the new

Probiotic range of sugar free ice-creams! Kellogg’s Chocos are now available in a

new flavour – Chocos Toffee to keep the children happy and dedicated! Innovation is

the name of the game and timing is everything!

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4. DIVERSIFICATION INTO SIMILAR PRODUCT LINES: If a customer feels that

Dove Soap is the best for her skin, why not make her think the same way about

shampoos as well? That’s exactly why the brand name has now been extended to

shampoos in the Indian market. Stretch the loyalty and benefits associated with a

brand to include other similar products.

Lotus Herbals, for instance, makes chemical-free skincare products like creams,

lotions and sunscreens. It has a strong base of happy customers because of its USP

- ‘herbal ingredients’. Now, it has also launched its ‘herbal’ range of cosmetics on the

shelves. So the same customers have a choice of using herbal preparations for their

lipsticks and eye shadows as well. Chances are, they will be only too eager to try

them out! Even when it comes to food products, brand loyalties can be stretched

further. Knorr Soups, manufactured by HLL, extended their “instant soup powder”

mixes to include “instant make-a-meal” powders for Chinese recipes. They now offer

instant Chinese Manchurian, Hot & Sour, Chilli and other preparations for a quick

meal at home.

5. STRONG DISTRIBUTION CHAINS: If I want to buy a product, it must simply be

available. For fast moving consumer items, it means availability at the nearest grocer.

From personal experience, I can tell you how important this is. I like Nestlé’s Munch

chocolate a lot, but many a time I end up coming home with a Cadbury’s Perk in

hand, due to unavailability of the other brand. Perk tastes just as good, and pretty

soon I ended up asking for Perk at the local grocery shop instead of Munch. This

shows how just availability or lack of it can affect the customer’s brand choices

forever. For a

long period Amul faced a similar problem with its products. Originating from Gujarat,

the availability of its products was restricted to the home state and a few neighbouring

ones. Consciously, after a lot of effort Amul successfully expanded its distribution

chains throughout the country. An effective media campaign helped pass this

advantage on to the customers. If you want people to keep buying your brands, make

sure the grocery store around the corner stocks it.

6. REINFORCE THE DECISION: Lastly, after people have tried your product, tell

them that they have made the right decision. What better example to give you than

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the Pepsi ad which said, “Yehi hee hai right choice baby, aha!” You will have

customers hanging on to you forever. The human mind looks for signals to reinforce

the decision made by it, to tell itself that yes, you were correct! It’s no wonder then

that the L’Oreal ad shows Aishwarya Rai spouting the phrase “Because you’re worth

it!

Customer loyalty towards your brand can give you the advantage of decreased cost

of advertising. You can also increase the price of your brand to capitalize on the

same. So, go ahead and take the plunge into the world of brand loyalty!

Benefits:

•Customer loyalty towards your brand can give you the advantage of decreased cost

of advertising.

•You can also increase the price of your brand to capitalize on the same.

Loyalty Sales % = Sales through the Loyalty Card X 100

Total Sales

Customer Loyalty programs need to stay fresh is easy to administer, and tightly

integrate with the central price file and all the customer touch points. Successful

Loyalty programs pinpoint value to a specific group of consumers. The continuous

change in programs keeps consumers engaged and avoids the attitude of

entitlement.

The Retalix customer loyalty application suite, however, is not your run-of-the-mill

solution. It is comprehensive, easy to administer, and effective.

Retalix Loyalty is a real time, online, centralized system that manages the Loyalty and

Promotional marketing campaigns for Grocery and Convenience Store Retailers.

Coupled with the Retalix 1-to-1 Targeted Marketing Analysis tool, a retailer can easily

reward customers according to their specific taste and loyalty level via a multitude of

reward programs to keep it fresh and fun. Moreover, through a tight integration with

the Price book, POS and Fuel Pumps, electronic rewards can be fulfilled for the

consumer right at their purchase location.

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Retail Loyalty includes:

Integrated POS and Pump interface to collect data, print Loyalty program information

on the receipt, display messages to the cashier and customer, discount items, and

redeem e-gift certificates, tender credits, and loyalty points

Net-based online communications architecture

Multiple set of basic programs (Charity, Continuity, Sweepstakes, e-Coupons,

Points)

Tiered pricing rewards (electronic discounts) including fuel, according to

loyalty levels

Reports to measure loyalty not only by gross spending but also by gross profit

Reports to measure program participation by store and chain

Net-based Centralized Management System

Retalix 1-to-1, Targeted MarketingWhy the card is not being used?Customer

forgets their card.

Customer doesn’t know the benefits of card.

Quality of temporary card is very poor.

Cashier forgets to ask about the card.

Many unwanted details are to be filled in form by

customer.EVOLUTION OF RETAILING IN INDIA In the early

eighties “retailing “in India was synonymous with peddlers,

vegetable vendors, neighborhood kirana stores (small

grocery stores) or sole clothing and consumer durable

stores in a nearby town. These retailers operated in a

highly unstructured and fragmented market. Very few

retailers operated in more than one city. Before 1990, organized retailing in

India was led by few manufacturer owned retail outlets, mainly from the textile

industry, for example, Bombay Dyeing, Raymond’s, S Kumar’s, and Grasim.

But, the Indian retail scenario started changing in the nineties. This was further

augmented by the changing profile of the Indian consumers, who were being

greatly influenced by western lifestyles. Increasing wages of the employees

working in Greenfield sectors gave rise to a completely new group of buyers

with higher purchasing power.Moreover, the entry of multinational brands also

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generated considerable enthusiasm and interest among domestic retailers. This

encouraged setting up of retail chains by domestic retailers like Cotton World

(Mumbai), Nirula’s (Delhi) and the Viveks and Nilgiris in the south.THE

CONCEPT OF RETAILING Retailing is the interface between the producer and

the individual consumer, buying for personal consumption. This excludes direct

interface between the manufacturer and institutional buyers such as the

government and other bulk customers. The distribution of consumer products

begins with the producer and ends at the ultimate consumer. Between the

producer and the consumer there is a middleman---the retailer, who links the

producers and the ultimate consumers. A retailer is one who stocks the

producer’s goods and is involved in the act of selling it to the individual

consumer, at a margin of profit. As such, retailing is the last link that connects

the individual consumer with the manufacturing and distribution chain.Retailing

is defined as a conclusive set of activities or steps used to sell a product or a

service to consumers for their personal or family use. It is responsible for

matching the demands of individual consumers with supplies of all the

manufacturers. A retailer is a person, agent, agency, company, or organization

which is instrumental in reaching the goods, merchandise, or services to the

ultimate consumer. Retailers perform specific activities such as anticipating

customer’s wants, developing assortments of products, acquiring market

information, and financing. A common assumption is that retailing involves only

the sale of products available in stores. But, it also includes the sale of services

like those offered at a restaurant, parlour, or by car rental agencies. The selling

need not necessarily take place through a store. Retailing encompasses selling

through mail, the Internet, door-to- door visits; any channel that could be used to

approach the consumer. Retailing has become such an intrinsic part of our

everyday lives that it is often taken for granted. The nations that have enjoyed

the greatest economic and social progress have been those with a strong retail

sector. Why has retailing become such a popular method of conducting

business? The answer lies in the benefits a vibrant retailing sector has to offer –

an easier access to a variety of products, freedom of choice and higher levels of

customer service. To enter retailing is easy and to fail is even easier.

Therefore, in order to survive in retailing, a firm must do a satisfactory job in its

primary role i.e., catering to customers. Retailers’ cost and profit vary depending

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on their type of operation and major product line. Their profit is usually a small

fraction of sales and is generally about 9-10%. Retail stores of different sizes

face distinct challenges and their sales volume influences business

opportunities, merchandise purchase policies, nature or promotion and expense

control measures. In today’s competitive environment retailers have redefined

their role in general, and in the value chain in particular. Retailers act as

gatekeepers who decide on which new products should find their way to the

shelves of their stores. As a result, they have a strong say in the success of the

product or service launched by a business firm. A product manager of

household appliances claimed, ‘Marketers have to sell a new product several

times, first within the company, then to the retailer and finally to the user of the

product.’ It is a well-established fact that manufacturers need to sell their

products through retail formats that are compatible with their business strategy,

brand image, and market profile in order to ensure a competitive edge. The role

of retailers in the present competitive environment has gained attention from

manufacturers because external parties such as market intermediaries and

supplying partners are becoming increasingly powerful. It is necessary for

marketers of consumer products to identify the need and motivations of their

partners in the marketing channel. This is especially true in the case of new

products. The increasing numbers of product categories followed by multiple

brands in each category complicate decision-making for both manufacturers and

market intermediaries. Retailers want to optimize sales within the limited shelf

space, governed by their individual sales philosophy. They undertake risk in

selecting a portfolio of products or brands to offer to their customers. Retailers

have to make optimum selection of goods to be sold given the following major

concerns :Selling space available is relatively fixed and must return maximum

profits. If such space is occupied by merchandise that is not moving, it will not

result in profit. The retailer may have to resort to substantial price reductions in

order to get rid of the unsold stock.

There is always the risk of non-performance in terms of quality, supplies

etc., which in turn harms the image of the retail outlet.

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Retailing is a dynamic industry---constantly changing due to shifts in the needs of

the consumers and the growth of technology. Retail formats and companies that

were unknown three decades ago are now major forces in the economy.

Therefore, the challenges for retail managers the world over are increasing---they

must take decisions ranging from setting the price of a bag of rice to setting up

multimillion dollar stores in malls. Selecting target markets, determining what

merchandise and services to offer, negotiating with suppliers, training

salespeople---these are just a few of the many functions that a retail manager has

to perform on a perpetual basis. The world over retail business is dominated by

smaller family run chain stores and regionally targeted stores but gradually more

and more markets in the western world are being taken over by billion dollar

multinational conglomerates, such as Wal-Mart, Sears, McDonald’s, Marks and

Spencer. The larger retailers have managed to set up huge supply/distribution

chains, inventory management systems, financing pacts and wide-scale

marketing plans.

In the backdrop of globalization, liberalization and highly aware customers, a

retailer is required to make a conscious effort to position himself distinctively to

face the competition. This is determined to a great extent by the retail mix strategy

followed by a company to sell its products.

CHARACTERISTICS OF RETAILING

Retailing can be distinguished in various ways from other businesses such as

manufacturing.

Retailing differs from manufacturing in the following ways:

There is direct end-user interaction in retailing.

It is the only point in the value chain to provide a platform for promotions.

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Sales at the retail level are generally in smaller unit sizes.

Location is a critical factor in retail business.

In most retail businesses services are as important as core products.

There are a larger number of retail units compared to other members of

the value chain. This occurs primarily to meet the requirements of

geographical coverage and population density.

Direct Interaction with Customers

Retail businesses have a direct interaction with end-users of goods or services in

the value chain. They act as intermediaries between end-users and suppliers

such as wholesalers or manufacturers. Therefore, they are in a position to

effectively communicate the response and changing preferences of the

consumers to the suppliers or sales persons of the company. This helps the

manufacturers and markets to redefine their product and change the components

of its marketing strategy accordingly. Manufacturers require a strong retail

network both for reach of the product and to obtain a powerful platform for

promotions and point-of-purchase advertising. Realizing the importance of

retailing in the entire value chain, many manufacturers have entered into retail

business by setting up exclusive stores for their brands. This has not only

provided direct contact with customers, but has also acted as advertisement for

the companies and has provided the manufacturers with bargaining power with

respect to other retailers who stock their product. Retailing provides extensive

sales people support for products which are information intensive, such as in the

case of consumer durables.

Lower Average Amount of Sales Transaction

The average amount of sales transaction at retail point is much less in

comparison to the other partners in the value chain. Many consumers buy

products in small quantities for household consumption. Due to lower disposable

incomes, some consumer segments in India even buy grocery items on a daily

basis rather than a weekly or a monthly basis. Inventory management becomes a

challenge for retailers as a result of the many minor transactions with a large

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number of customers. Hence, retailers must take care of determining average

levels of stock, order levels and keep a tight control on costs associated with each

transaction in the selling process. Credit verification, employment of personnel,

value-added activities like bagging, gift-wrapping and promotional incentives all

add up to the costs. One way to resolve this is for the retail outlets to be able to

attract the maximum possible number of shoppers.

Point-of-purchase Display and Promotions

A significant relevant chunk of retail sales comes from unplanned or impulse

purchases. Studies have shown that shoppers often do not carry a fixed shopping

list and pick up merchandise based on impulsive or situational appeal. Many do

not look at ads before shopping. Since a lot of retail products are low involvement

in nature, impulse purchases of the shopper is a vital area that every retailer must

tap into. Therefore, display, point-of-purchase merchandise, store layout and

catalogues become important. Impulse goods like chocolates, snack foods and

magazines can sell much more quickly if they are placed in a high visibility and

high traffic location.

FUNCTIONS IN RETAILING PROCESS

Retailers play a significant role as a conduit between manufacturers, wholesalers,

suppliers and consumers. In this context, they perform various functions like

sorting, breaking bulk, holding stock, as a channel of communication, storage,

advertising and certain additional services.

SORTING

Manufacturers usually make one or a variety of products and would like to sell

their entire inventory to a few buyers to reduce costs. Final consumers, in

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contrast, prefer a large variety of goods and services to choose from and usually

buy them in small quantities. Retailers are able to balance the demands of both

sides, by collecting an assortment of goods from different sources, buying them in

sufficiently large quantities and selling them to consumers in small units.

The above process is referred to as the sorting process. Through this process,

retailers undertake activities and perform functions that add to the value of the

products and services sold to the consumer. Supermarkets in the US offer, on

and average, 15,000 different items from 500 companies. Customers are able to

choose from a wide range of designs, sizes and brands at just one location. If

each manufacturer had a separate store for its own products, customers would

have to visit several stores to complete their shopping. While all retailers offer an

assortment, they specialize in types of assortment offered and the market to

which the offering is made. Westside provides clothing and accessories, while a

chain like Nilgiris specializes in food and bakery items. Shoppers’ Stop targets the

elite urban class, while Pantaloons is targeted at the middle class.

BREAKING BULK

Breaking bulk is another function performed as part of retailing. The word retailing

is derived from the French word retailler, meaning ‘to cut a piece off’. To reduce

transportation costs, manufacturers and wholesalers typically ship large cartons of

the product, which are then tailored by the retailers into smaller quantities to meet

individual consumption needs

HOLDING STOCK

Retailers also offer the service of holding stock for the manufacturers. They

maintain an inventory that allows for instant availability of the product to the

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consumers. It helps to keep prices stable and enables the manufacturer to

regulate production. Consumers can keep a small stock of products at home as

they know that this can be replenished by the retailer and can save on inventory

carrying costs.

ADDITIONAL SERVICES

Retailers ease the process of change in ownership of merchandise by providing

services that make it convenient to buy and use products. Providing product

guarantees, after-sales service and dealing with consumer complaints are some

of the services that add value to the actual product at the retailers’ end. Retailers

also offer credit and hire-purchase facilities to the customers to enable them to

buy a product and pay for it later. Retailers fill orders, promptly process, deliver

and install products. Sales people are also employed by retailers to answer

queries and provide additional information about the displayed products. The

display itself allows the consumer to see and test products before actual

purchase. Retail essentially completes transactions with customers.

CHANNEL OF COMMUNICATION

Retailers also act as the channel of communication and information between the

wholesalers or suppliers and the consumers. From advertisements, salespeople

and display, shoppers learn about the characteristics and features of a product or

services offered. Manufacturers, in turn, learn of sales forecasts, delivery delays,

and customer complaints. The manufacturer can then modify defective or

unsatisfactory merchandise and services.

TRANSPORT AND ADVERTISING FUNCTIONS

Small manufacturers can use retailers to provide assistance with transport,

storage, advertising and pre-payment of merchandise. This also works the other

way round in case the number of retailers is small.

25

CLASSIFICATIONS OF RETAIL FORMATS

A.

26

B.

27

TRENDS IN RETAIL FORMATS

On account of liberalization, globalization and consumer preferences the retail

industry is continuously going through changes. While multinational retail chains

28

are looking for new markets, manufacturers are identifying, redefining, or evolving

new retail formats. The existing retail houses are also gearing up to face the

emerging competition from the organized sector and the changing outlook of the

consumers. For example, consumer spending is shifting from goods to services.

Accordingly the retailers too are fast adjusting to the changing consumer

preferences.

Consumers are not only looking for the core products or functional benefits from

the retailers but also the non-functional benefits, which need to be compatible with

their lifestyles. For example, most of the traditional eating joints in India such as

Haldiram, Bikaner and Sagar Ratna have revised their product offerings and

atmospherics on the lines of the multinational chains to compete with them and to

serve better, the changed expectations of the consumers.

Retailers can be classified according to their selling processes as store based

retailers or non-store retailers.

1. Store Based Retailers :

Store based retailers operate at fixed point-of-sale locations. Their stores are

located and designed to attract a high volume of walk-in customers. In general,

store based retailers offer a wide variety of merchandise and use mass-media

advertising to attract customers. They typically sell merchandise for personal or

household consumption, but sometimes they also serve business and institutional

clients.

Store based retailers can be further classified on the basis of various parameters

like:

(A) Ownership

(B) Strategy mix

(C) Service vs. Goods retail mix

1.2 RETAIL IN DETAIL

29

The Indian Retail market is worth a whooping 930000 crores. If one has to divide

between the organized and unorganized sectors the major contribution comes from

the unorganized sector, which contributes close to 98% of the total retail market. The

balance of 2% amounts anywhere between 18-2000 cores.

The difference between organized and unorganized sectors in the US & some of the

Far East Asian countries are pretty low unlike in India. With the advent of seasoned

players in the field of retail in India, the gap is likely to be abridged in the coming

years.

The difference between them is 85:15 in favour of organized sector in the US and

81:19 in the favour of the organized sector in Taiwan.

The employment opportunities in retail are pretty high. But again the ratio of

organized and unorganized is skewed towards the unorganized sector. While the

organized retail sectors deploys 500000 people & the unorganized sector deploys

close to 80 times the workforce.

Factors that influence the growth in retail:

The DINK/HINK families, working women, working parents and the rising disposable

income has contributed to the growth of Retail across. The middle-income group is

the fastest growing segment in the country today. Further the electronic media is also

aiding the growth of the Retail industry.

To summarize the top 6 factors that drive the growth of the retail industry in India

would be as follows:

The Demographics

Lifestyles

Needs and Desires

Shopping Attitudes and Behaviour

Retailers action

Environmental Factor

These six factors clubbed with a co-coordinated logistics make the sale happen. As in

any industry there is a social commitment also to be fulfilled. These can be

recapitulated as under:

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Quality products

Competitive prices

Wide range to choose from

Employment opportunities that are created

The economy would experience sea of change and

Would mean a WIN - WIN situation to everyone.

Support Functions:

The entire operation is possible with the help of a support team. This support team

consists of the following:

Human Relation-Involves itself in recruitment, training and welfare apart from their

regular activities

Good Receiving-This department is responsible not just for the receipt of goods but

also checking for their conformity and returns goods to the suppliers as need arises.

Maintenance-The entire stores furniture and fixtures are taken care of by the

maintenance team

Accounts-the department, which receives all the cash, charge slips and other types

of tenders; keeps a tag on the local store expenditure and also monitors any deviation

in the transactions.

Housekeeping- Mostly it’s an outsourced agency, which does the work. They keep

the premises clean and tidy at all levels.

Security-They are responsible for safeguarding men and material of the organization.

VM-This department maintains the displays and the signage across the stores.

CSD-Otherwise known as the customer service desk takes care of the customer

complaints and issuance of merchandise credit and taking care of the loyalty.

1.3 RETAIL TERMINOLOGIES

31

Alike any other industry the retail industry also has a wide range of terminologies,

which are in use on a day-to-day basis. Few samples of them would include the

following:

Till - The cash point

Tender - The type of payment the customer is making

SKU - Stock keeping unit

Merchandise Credit - Credit note

Assortment - Range of products and so forth

Maximum Bay Quantity - It is the maximum quantity of each product, which can be

placed on each shelf.

Maximum Display Quantity – It is the number of SKUs, which can be directly seen

by the customer in the front side.

Retail types

There are three major types of retailing. The first is the market, a physical location

where buyers and sellers converge. Usually this is done on town squares, sidewalks

or designated streets and may involve the construction of temporary structures

(market stalls). The second form is shop or store trading. Some shops use counter-

service, where goods are out of reach of buyers, and must be obtained from the

seller. This type of retail is common for small expensive itms (e.g. jewelry) and

controlled items like medicine and liquor. Self-service, where goods may be handled

and examined prior to purchase, has become more common since the Twentieth

Century. A third form of retail is virtual retail, where products are ordered via mail,

telephone or online without having been examined physically but instead in a catalog,

on television or on a website. Sometimes this kind of retailing replicates existing retail

types such as online shops or virtual marketplaces such as eBay or Amazon.

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Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding

a markup amount (or percentage) to the retailers cost. Another common technique is

suggested retail pricing. This simply involves charging the amount suggested by the

manufacturer and usually printed on the product by the manufacturer.

In Western countries, retail prices are often so-called psychological prices or odd

prices: a little less than a round number, e.g. $6.95. In Chinese societies, prices are

generally either a round number or sometimes a lucky number. This creates price

points.

Often prices are fixed and displayed on signs or labels. Alternatively, there can be

price discrimination for a variety of reasons. The retailer charges higher prices to

some customers and lower prices to others. For example, a customer may have to

pay more if the seller determines that he or she is willing to. The retailer may

conclude this due to the customer's wealth, carelessness, lack of knowledge, or

eagerness to buy. Price discrimination can lead to a bargaining situation often called

haggling — a negotiation about the price. Economists see this as determining how

the transaction's total surplus will be divided into consumer and producer surplus.

Neither party has a clear advantage, because the threat of no sale exists, whence the

surplus vanishes for both.

Retailers who are overstocked, or need to raise cash to renew stocks may resort to

"Sales", where prices are "marked down", often by advertised percentages - "50%

off" for example.” Sales" are often held at fixed times of the year, for example January

sales, or end-of-season sales, or Blue Cross Sale.

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Top Retailer Worldwide

Rank Retailer Home Country

1 Wal-Mart Stores, Inc. U.S.A.

2 Carrefour Group France

3 The Kroger Co. U.S.A.

4 The Home Depot, Inc. U.S.A.

5 Metro Germany

1.4 RETAIL SECTOR IN INDIA

34

As the corporate – the Piramals, the Tatas, the Rahejas, ITC Ltd, S.Kumar’s, RPG

Enterprises, Shopper’s Stop, Pantaloons, Reliance Retail, Vishal Mega Mart, Aditya

Birla Group, Landmark Group, True Mart race to revolutionize the retailing sector,

retail as an industry in India is coming alive.

Across the country, retail sales in real terms are predicted to rise more rapidly than

consumer expenditure during 2003-08. The forecast growth in real retail sales during

2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure.

Modernization of the Indian retail sector will be reflected in rapid growth in sales of

supermarkets, departmental stores and hyper marts. Sales from these large-format

stores are to expand at growth rates ranging from 24% to 49% per year during 2003-

2008, according to a latest report by Euro monitor International, a leading provider of

global consumer-market intelligence.

A. T. Kearney Inc. places India 6th on a global retail development index. The country

has the highest per capita outlets in the world - 5.5 outlets per 1000 population.

Around 7% of the population in India is engaged in retailing, as compared to 20% in

the USA.

The factors responsible for the development of the retail sector in India can be

broadly summarized as follows:

Rising incomes and improvements in infrastructure are enlarging consumer

markets and accelerating the convergence of consumer tastes.

Looking at income classification, the National Council of Applied Economic

Research (NCAER) classified approximately 50% of the Indian population as

low income in 1994-95; this has declined to 17.8% in 2006-07.

Liberalization of the Indian economy which has led to the opening up of the

market for consumer goods has helped the MNC brands like Kellogg,

Unilever, Nestle, etc. to make significant inroads into the vast consumer

market by offering a wide range of choices to the Indian consumers.

Shift in consumer demand to foreign brands like McDonalds, Sony,

Panasonic, etc.

The internet revolution is making the Indian consumer more accessible to the growing

influences of domestic and foreign retail chains. Reach of satellite T.V. channels is

35

helping in creating awareness about global products for local markets. About 47% of

India’s population is under the age of 25; and this will increase to 55% by 2015.

This young population, which is technology-savvy, watch more than 50 TV satellite

channels, and display the highest propensity to spend, will immensely contribute to

the growth of the retail sector in the country. As India continues to get strongly

integrated with the world economy riding the waves of globalization, the retail sector

is bound to take big leaps in the years to come.

The Indian retail sector is estimated to have a market size of about $ 180 billion; but

the organized sector represents only 3% share of this market. Most of the organized

retailing in the country has just started recently, and has been concentrated mainly in

the metro cities.

India is the last large Asian economy to liberalize its retail sector. In Thailand, more

than 40% of all consumer goods are sold through the super markets and

departmental stores. A similar phenomenon has swept through all other Asian

countries. Organized retailing in India has a huge scope because of the vast market

and the growing consciousness of the consumer about product quality and services.

A study conducted by Fitch, expects the organized retail industry to continue to grow

rapidly, especially through increased levels of penetration in larger towns and metros

and also as it begins to spread to smaller cities and B class towns. Fuelling this

growth is the growth in development of the retail-specific properties and malls.

According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is

being developed and will be available for occupation over the next 36-48 months.

Fitch expects organized retail to capture 15%-20% market share by 2010.

A McKinsey report on India says organized retailing would increase the efficiency and

productivity of entire gamut of economic activities, and would help in achieving higher

GDP growth. At 6%, the share of employment of retail in India is low, even when

compared to Brazil (14%), and Poland (12%).

1.5 RETAILING FORMATS IN INDIA

36

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

proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above.

They lend an ideal shopping experience with an amalgamation of product, service

and entertainment, all under a common roof. Examples include Shoppers Stop,

Pyramid, and Pantaloon.

Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai

books retailer Crossword, RPG's Music World and the Times Group's music chain

Planet M, are focusing on specific market segments and have established

themselves strongly in their sectors.

Discount Stores: As the name suggests, discount stores or factory outlets, offer

discounts on the MRP through selling in bulk reaching economies of scale or excess

stock left over at the season. The product category can range from a variety of

perishable/ non perishable goods.

Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a

variety of consumer needs. Further classified into localized departments such as

clothing, toys, home, groceries, etc.

Department Stores: Departmental Stores are expected to take over the apparel

business from exclusive brand showrooms. Among these, the biggest success is K

Raheja's Shoppers Stop, which started in Mumbai and now has more than seven

large stores (over 30,000 sq. ft) across India and even has its own in store brand for

clothes called Stop!.

Hyper marts/Supermarkets: Large self service outlets, catering to varied shopper

needs are termed as Supermarkets. These are located in or near residential high

streets. These stores today contribute to 30% of all food & grocery organized retail

sales. Super Markets can further be classified in to mini supermarkets typically 1,000

sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft.

having a strong focus on food & grocery and personal sales.

37

INTRODUCTION

OF

ORGNIZATION

2. INTRODUCTION TO THE ORGNIZATION

2.1 reliance group

38

Founder Chairman of Reliance Group

"Growth has no limit at Reliance. I keep revising my vision. Only when you can dream

it, you can do it."

Dhirubhai H.Ambani

Founder Chairman Reliance Group

December 28, 1932 - July 6, 2002

Shri Dhirubhai Ambani was an exceptional human being and an outstanding leader.

He dared to dream on a scale unimaginable before in Indian industry. His life and

achievements prove that backed by confidence, courage and conviction, man can

achieve the impossible. From a humble beginning, he went on to create an enviable

business empire within a span of just 25 years. The US$ 54 billion Reliance Group is

a living testimony to his indomitable will, single-minded dedication and an unrelenting

commitment to his goals.

The Group's track record of consistent growth is unparalleled in Indian industry and

perhaps internationally too. Today, the Group's turnover represents nearly 3 percent

of India's GDP.

The corporate philosophy he followed was short, simple and succinct - "Think big.

Think differently. Think fast. Think ahead. Aim for the best". He inspired the Reliance

team to do better than the best - not only in India but in the world. He was probably

the first Indian businessman to recognize the strategic significance of investors and

39

discover the vast untapped potential of the capital markets and canalise it for the

growth and development of industry. He was supremely confident that finance

would never be a constraint in executing his projects because, as he said proudly,

Indian investors would provide him with the necessary resources. For him, his people

were his most important asset.

He scouted around for the best and most talented professionals, nurtured them and

continuously propelled them to aim for still higher goals. These highly motivated

people comprise the core of what he named: "The Reliance Family".

Shri Dhirubhai Ambani visualized the growth of Reliance as an integral part of his

grand vision for India. He was convinced that India could become an economic

superpower within a short period of time and wanted Reliance to play an important

role in realizing this goal.

The Bhagavad-Gita states, "The actions of a great man are an inspiration for others.

Whatever he does becomes a standard for others to follow." This certainly applies to

Shri Dhirubhai Ambani.

The Reliance Group is India's largest private sector enterprise, with businesses in the

energy and materials value chain. Group's annual revenues are in excess of USD 22

billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500

company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of

Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of

backward vertical integration - in polyester, fibber intermediates, plastics,

petrochemicals, petroleum refining and oil and gas exploration and production - to be

fully integrated along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum

refining and marketing, petrochemicals (polyester, fibber intermediates, plastics and

chemicals), textiles and retail.

40

Reliance enjoys global leadership in its businesses, being the largest polyester yarn

and fibber producer in the world and among the top five to ten producers in the world

in major petrochemical products.

The Group exports products in excess of USD 7 billion to more than 100 countries in

the world. There are more than 25,000 employees on the rolls of Group Companies.

Major Group Companies are Reliance Industries Limited (including main subsidiaries

Reliance Petroleum Limited and Reliance Retail limited), Indian Petrochemicals

Corporation Limited and Reliance Industrial Infrastructure Limited.

Mr. Mukesh Ambani

Chairman & Managing Director

Mr. Mukesh D. Ambani, age 49, is a Chemical Engineer from the University of

Bombay and pursued MBA from Stanford University, USA. He is the son of Mr.

Dhirubhai H. Ambani, Founder Chairman of the Company

Mukesh Ambani is the chairman, managing director and the largest shareholder of

Reliance Industries, India's largest private sector company and a Fortune 500

Company. His personal stake in Reliance Industries is 48%. His wealth is US$ 20.1

billion as of March 2007, making him the world's 14th richest person and the second

richest person in India. Mukesh and younger brother Anil are sons of the late founder

of Reliance Industries.

Mukesh Ambani joined Reliance in 1981 and initiated Reliance's backward integration

from textiles into polyester fibers and further into petrochemicals. In this process, he

41

directed the creation of 60 new, world-class manufacturing facilities involving diverse

technologies that have raised Reliance's manufacturing capacities from less than a

million tones to twelve million tones per year.

Mukesh Ambani is also steering Reliance's initiatives in a world scale, offshore, deep

water oil and gas exploration and production program, a pan-India petroleum retail

network involving 5,800 outlets and a research-led life sciences initiative covering

medical, plant and industrial biotechnology.

Mr. Mukesh D. Ambani joined Reliance in 1981, initiated Reliance’s backward

integration from textiles into polyester fibbers, and further into petrochemicals. In this

process, he directed the creation of several new and large world-class manufacturing

facilities involving diverse technologies that have raised Reliance's petrochemicals

manufacturing capacities from less than a million tones to over thirteen million tones

per year. He directed and led the creation of the world's largest grassroots petroleum

refinery at Jamnagar, India, with a present capacity of 660,000 barrels per day

(33 million tones per year) integrated with petrochemicals, power generation and port

and related infrastructure. He had set up the Reliance's communications technology

initiative that is the largest and most complex information and communications

technology initiative in the world.

Mr. Ambani is steering Reliance's initiatives in a world scale, offshore and onshore oil

and gas exploration and production program, creation of a pan-India petroleum retail

network and setting up of a new export oriented refinery through RIL's subsidiary

Reliance Petroleum Limited (RPL) with a capacity of approximately 580,000 barrels

per stream day integrated with a 0.9 MMTPA polypropylene plant.

Mr. Ambani's Achievements include:

Conferred 'ET Business Leader of the Year' Award by The Economic Times

(India) in the year 2006.Had the distinction and honor of being the co-chair at

the World Economic Forum Annual Meeting 2006 in Davos, Switzerland.

Ranked 42nd among the 'World's Most Respected Business Leaders' and

second among the four Indian CEOs featured in a survey conducted by

42

Pricewaterhouse Coopers and published in Financial Times, London,

November 2004.

Conferred the World Communication Award for the 'Most Influential Person in

Telecommunications in 2004' by Total Telecom, October 2004.

Chosen 'Telecom Man of the Year 2004' by Voice and Data magazine,

September 2004.

Ranked 13th in Asia's Power 25 list of 'The Most Powerful People in Business'

published by Fortune magazine, August 2004. 30 Growth is Life

Conferred the 'Asia Society Leadership Award' by the Asia Society,

Washington D.C., USA, May 2004.

Ranked No.1 for the second consecutive year, in The Power List 2004

published by India Today, March 2004.

Mr. Mukesh D. Ambani is the Chairman of Indian Petrochemicals Corporation

Limited, Reliance Petroleum Limited and Reliance Retail Limited. He is

member of the Shareholders'/ Investors' Grievance Committee of the

Company.

Major Subsidiaries & Associates:-

43

The Reliance Industries Limited is the flagship company of Reliance Group which has

ownership interest in the following subsidiaries & associates

Major Subsidiaries

Reliance Petroleum Limited

Reliance Netherlands BV (including Trevira)

Reliance Retail Limited

Ranger Farms Private Limited

Retail Concepts and Services Private Limited

Reliance Retail Insurance Broking Limited

Reliance Dairy Foods Limited

Reliance Retail Finance Limited

RESQ Limited

Reliance digital Retail Limited

Reliance Service Solutions Limited

Reliance Jamnagar Infrastructure Limited

Reliance Haryana SEZ Limited

Reliance Industrial Investment & Holdings Limited

Reliance Ventures Limited

Reliance Strategic Investments Limited

Reliance Exploration & Production - DMCC

Reliance Industries (Middle East) DMCC

44

RELIANCE RETAIL LIMITED

Growth through Value Creation

Reliance is gearing up to revolutionize the retailing industry in India. Towards this

end, they are aggressively working on introducing a pan-India network of retail outlets

in multiple formats. A world class shopping environment, state of art technology, a

seamless supply chain infrastructure, a host of unique value-added services and

above all, unmatched customer experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in size and spread and make

India proud. Ensuring better returns to Indian farmers and manufacturers and greater

value for the Indian consumer, both in quality and quantity, will be an integral feature

of this project. By creating value at all levels they will actively endeavour to contribute

to India's growth.

The project will boast of a seamless supply chain infrastructure, unprecedented even

by world standards. Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer and supplier.

The magnitude and strategy of RIL's retail foray is sure to have far reaching social

and economic implications by directly influencing the lifestyles of hundreds of millions

of consumers, besides indirectly impacting the livelihood of tens of millions. This

indirect impact will be on those engaged in a wide range of economic activities

including farming, consumer goods manufacturing, and a host of myriad other

services that bring hundreds of categories of goods and services from the producers

to the final consumers.

Business analysts feel that Mukesh Ambani's advantage is his huge financial strength

coupled with a track record of implementing mega projects in record time, at globally

competitive capital costs. Mukesh Ambani has learned to dream big from his great

45

visionary father, the late Dhirubhai H Ambani, who is acknowledged as one of India's

tallest, most ambitious and successful business leaders for his sharp business

acumen and skilled people management ability.

The announced retail project is any indication; Mukesh Ambani has indeed inherited

all these skills from his father. Re-writing the rules of business has been the forte of

Dhirubhai and Mukesh is attempting the same in retail.

Quite clearly, RIL is now all set and ready to conquer the organized retail domain.

The Indian retail scene is now going to witness some real fast-paced action, with the

consumer – as always – having the best deal.

So, as they say, let the action begin!

Reliance Digital: Mukesh Ambani's Reliance Industries Ltd launched a second group

of retail stores called RELIANCE DIGITAL, which will sell consumer electronics and

other household appliances. Reliance Digital Store has been launched five months

after the company first introduced its fresh food format outlets, Reliance Fresh, that

stock its own label of groceries under the brand, Reliance Staple.

The first of the stores was unveiled at the Shipra Mall at Indirapuram in Ghaziabad on

the outskirts of the national capital New Delhi April 24 Reliance Retail Ltd, the mega

retail venture from the Mukesh Ambani stable, marked its foray into speciality retail

with the launch of its first consumer durable outlet, Reliance Digital, in the NCR

region.

Reliance is planning to open a total of 150 Reliance Digital stores across 70 cities

with investment of Rs 1,000 crore over the next three to four years.

One-stop shops: The stores size approx 15,000-30,000 sq. ft, will function as one-

stop shops for all technological solutions in the consume durables and IT

telecommunications segment to cater to the tastes and requirement of customers.

Reliance Digital stores would sell everything from TV sets, home theatres,

refrigerators, cooking ranges, dishwashers to computers and mobile phones from

across brands. Each store would be set up at an investment of Rs4 to Rs7 crore and

also provide after-sales services

46

On private labels, RELIANCE DIGITAL has on offer of more than 4,000 products from

over 150 brands. As part of their overall business strategy they will have their own

consumer durable private labels, but not immediately. With its own labels in the

consumer durables segment, Reliance Retail will be fighting for a share of the $5.6-

billion domestic market, which is dominated by South Korean brands LG and

Samsung and Japan's Sony.

The domestic consumer electronics market is growing by 10 per cent annually and is

split between imported South Korean brands such LG and Samsung and Japan’s

Sony on the one hand and Indian market leaders like Videocon and BPL.

The prices being offered at the Reliance Digital stores will be most competitive and if

any consumer finds a cheaper product in the market within 30 days they will not

hesitate to match the offer.

Besides, the stores will also provide pre- and post sales services through its in-house

RelianceresQ vertical.

The stores will also offer finance schemes for consumers for which the retail majors

are in talks for tie-ups with several financial institutions, Citi Financial being one of

them.

47

Reliance Industries launched its first retail format called Reliance Fresh in

Hyderabad. Spread over 2,000-5,000 sq ft, 11 such Reliance Fresh neighbourhood

convenience stores were come up in the city. These stores sell fresh fruit and

vegetables besides staples (dal, atta, rice) as well the company’s in-house brand

Reliance Select and Reliance Value.

Reliance is gearing up to revolutionize the retailing industry in India. Towards this

end, we are aggressively working on introducing a pan-India network of retail outlets

in multiple formats. A world class shopping environment, state of art technology, a

seamless supply chain infrastructure, a host of unique value-added services and

above all, unmatched customer experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in size and spread and make

India proud. Ensuring better returns to Indian farmers and manufacturers and greater

value for the Indian consumer, both in quality and quantity, will be an integral feature

of this project. By creating value at all levels, we will actively endeavour to contribute

to India's growth.

The project will boast of a seamless supply chain infrastructure, unprecedented even

by world standards. Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer and supplier.

The Fresh stores at Hyderabad are part of a pilot project, which will help company

understand customer needs. The pilot for this format will be taken too many other

48

cities over the next few months. Next on the company’s list are bigger cities including

Delhi and Mumbai.

RIL intends to invest close to Rs 25,000 crore over the next five years in the retail

business. The company plans to establish 4,000 retail outlets across various formats

by then, and is eyeing sales of Rs 1, 00,000 crore over the 5-year period from the

retail business.

Besides Reliance Fresh, the company also plans to launch larger format stores called

“Feel Fresh Plus” which will be spread over 10,000-15,000 sq ft. The Fresh Plus

stores will stock fruit and vegetables as

Well as apparel, consumer electronics, FMCG items and even medicines. From

Hyderabad, these stores will travel to Mumbai and Delhi where Reliance has

identified up to 80 locations each.

But even as the retail debut kicks off with fruit and vegetables, it seems the company

is doing a rethink on whether to get into the larger formats such as hypermarkets and

supermarkets. These two formats require over 1 lakh sq ft of space and may not

come up at prime city locations. Instead, Reliance is contemplating tapping alterative

sites such as the SEZs for opening hypermarket.

The strategy is to open one Reliance Fresh store in a radius of three to four km to

serve 1,000-2,000 families. This means about 30-40 stores in the major metros.

Reliance Fresh is selling vegetables and fruits sourced from farmers through the

company’s agri hubs.

Reliance Fresh would carry fresh fruits and vegetables, staples, top-up grocery, non-

food items and dairy products and a whole lot of other categories at very competitive

prices. All the stores opened have an average area of about 1,800 sq ft and an

average of about 20 sales associates attending to customers in each store open from

8 a.m. to 10 p.m. on all seven days of the week.

A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010 with a planned

investment of Rs 30,000 crore over the next five years – that's the retail vision of

49

Mukesh Ambani and his RIL retail team. RIL's retail venture seems all set to achieve

the status of being the flag-bearer of India Retail Inc, and that too in record time!

Culling information from all possible sources, Images F&R Research attempts to put

the Reliance Retail jigsaw in order and see how the concept and strategy

differentiates from the existing competition, how it impacts the intermediaries and

consumers, and more interestingly, how will it stand up to the real competition from

global retail powerhouses like Wal-Mart, Carrefour, Target, Metro, Sears and Tesco

that are eager to enter the Indian retail arena once the FDI barrier is lifted. Read on

for the full story…

It's been in the news for quite some time now. Earlier, about a year ago, it was only

whispered in

close industry circles. Slowly the whispers become louder, and the word gained

ground that India's largest private sector company, Reliance Industries Limited (RIL),

is entering the Indian retail sector in a real big way.

But with virtually nothing coming from anyone in the know inside RIL about their retail

plans, this has to be one of the most closely guarded secrets of India's corporate

story.

Amidst all sorts of speculations in the media circles about RIL's intended retail foray,

the word finally came out on January 23, 2006, when the Mukesh Ambani-controlled

Reliance Industries Limited presented the mega retail initiative plans to its board of

directors who subsequently gave their consent to

pursue the retail business through a wholly-owned subsidiary of the company – likely

to be christened Reliance Retail Limited.

The Reliance Retail blueprint envisages nation-wide chains of hypermarkets,

supermarkets, discount stores, department stores, convenience stores and specialty

stores, in about 800-odd cities and towns across the length and breadth of India. The

RIL board of directors approved the initial phase of the retail foray at an estimated

cost of Rs 3,350 crore (US$ 750 million).

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That was big news for both the national and international media, which went all agog

again with intense speculation. Giving full respect to the importance of this

announcement, more than one leading international daily – chiefly, The Financial

Times – gave this news a front-page treatment, speculating (like many others) that

this investment could just be an initial trance of a much larger commitment from

Reliance Industries towards the retail project.

Just how big and grand this investment is for the Indian retail sector can be gauged

by the simple fact that the entire Indian retail sector is estimated to be at Rs 1050,000

crore (US$ 233 billion) – growing at five per cent annually – and the estimated share

of organised retail is only Rs 36,000 crore (US$ 8 billion), at present, albeit growing at

over 30 per cent every year.

That makes Reliance Retail's proposed investments equivalent to about 10 per cent

of India's organised retail market – such a level of investment in the Indian retail

arena has been unprecedented in the country's most promising sunrise industry –

retail.

So much so, projections by the Images-KSA India Retail Report 2005 of an organised

retail market of Rs 100,000 crore (US$ 22 billion) by 2010 now appears conservative,

likely to be achieved much earlier than 2010.

If Indian retail was lacking a whole-hearted and full-blooded thrust from a big and

large corporate house (apart from the lukewarm investments made by the Tatas and

ITC), it is now all set to change. Mukesh Ambani, who has been nourishing retail

ambitions for quite some time now, has clearly positioned himself in to the role of

redefining the entire landscape of Indian retail.

RIL Set To Become World's Largest Real Estate Property Owner.

What is even more interesting is that Reliance Industries Limited will far out-surpass

the Catholic Church in becoming the world's largest owner of real-estate property by

virtue of its mega Retail and Satellite Township plans, in the next two to three years!

Now what exactly does this mega retail plan portend for the Indian retail sector? In

fact, what exactly are RIL's plans, in terms of retail strategy? How will RIL

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differentiate its stores and concept from existing players who have already moved

into the retail space earlier, and have already established a good foothold? How will

this impact the existing retail majors – the likes of Pantaloon Retail, Trent India,

Shoppers' Stop, RPG, etc? How will the consumer benefit from RIL's venture and

how will intermediaries like traders, suppliers and farmers all along the supply chain

network benefit? What will be the USP of Reliance Retail?

And, more significantly, how will this impact the major international retailers who plan

to enter the Indian retail market? Reliance Retail is in fact giving India for the first time

a real feel of the scale at which these global retail powerhouses actually operate, it is

preparing India to stand up to the ensuing competition and in the process, allow

consumers the full benefits of modern retail.

Retail Will Become Core Business of RIL

Reliance Industries Limited is the largest and one of the fastest growing private sector

companies in India, with business activities encompassing almost all major growth

sectors of the Indian economy. The company manufactures and markets a wide

range of products with market Leadership in almost all its businesses.

All of Reliance Group production and services ventures have one common feature –

global scale operations employing state-of-the-art technology in all fields. The

company is truly emerging as a well diversified conglomerate with global competence

in technology, management and financial capabilities to meet the needs of a rapidly

growing Indian market.

With domestic market shares ranging from 40-80 per cent, RIL is also ranked among

the top 10 producers globally, for all its major product segments. It is one of India's

largest business

conglomerates with total revenues of Rs 1, 00,650 crore (US$ 22.6 billion).

It is being speculated within the industry that the ROIs made by RIL in the retail space

will far out-shadow its existing core flagship businesses – and very soon retail will

become the core business for the Mukesh Ambani-controlled Reliance Empire.

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Future Planning:-

Company plans to have a pan-India presence by opening stores in 784 cities 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 programme - 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 neighbourhood 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.

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. Organized retail accounts for just over Rs 35,000 crore. Reliance

Fresh bids to tap the potential for organized retail in the country.

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Point of Sale Software System

Retalix Shoreline is an open-standards, fully integrated and cross-functional Point of

Sale (POS) and store management software system. Its uniqueness is in the

functionality, world-wide install base, and hardware independence.

Multi-Concept Functionality that delivers a fully integrated POS solution to meet all

of your business needs

Open by Design supports industry standards and is hardware independent plus

integration with other third-party retail applications is straightforward, affordable and

low risk

Advanced Promotion Features enable a single point of update for pricing and

promotions across all retail formats

Graphical , Easy to Use flexible intuitive user interface, touch-screen capabilities and

even graphical customer screens, means that cashier training is minimal and

customer interaction is effortless

Quick Service Deli, provides a powerful method of managing fresh-made

sandwiches and deli items

Fuel provides full support for operating an onsite fuel station, supporting a full range

of fuel station and supermarket services

Retalix BackOffice is tightly integrated with Retalix Store Line, and offers POS item

management and reporting, DSD receiving, label and sign printing, handheld RF

communications, host communications and in-store ordering

Retalix Pocket Office is a mobile platform that enables users to manage store

operations anywhere in the store, taking the application to the business decision

point, while on the sales floor or receiving dock.

Retalix Store Line is installed in more than 250,000 POS terminals worldwide, and is

the selected POS solution of top-tier retailers such as Tesco, Publix, Sainsbury's,

Woolworths Australia, Delhaize Group, Hy-Vee, and the A.S. Watson Group.

54

Supply Chain Management

A supply chain is a network of facilities and distribution options that performs the

functions of procurement of materials, transformation of these materials into

intermediate and finished products, and the distribution of these finished products to

customers. Supply chains exist in both service and manufacturing organizations,

although the complexity of the chain may vary greatly from industry to industry and

firm to firm.

FarmersCollection centre

Distribution centreReliance Fresh

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2.2 Reliance Fresh Loyalty Programme

Nowadays it is important to earn loyalty of investors, employees and customers. The

essence of customer loyalty, dimensions of customer loyalty, mission, goals, tasks of

customer loyalty as well as disputes a process of developing customer loyalty

programmed: choice of a target group, grounding the structure implementing

customer loyalty programmed, registration of participants and type of the

programmed, collection of information about customers and

Storing, ways to communicate with customers, establishment of privileges to

participants of the loyalty programmed and evaluation of the programmed success.

Introduction

Loyalty demonstrates person’s disposition to brand of goods (service), supermarket,

category of goods, a certain activity. An enterprise seeks loyalty of investors,

employees and customers in order to consolidate its position in the market.

There is a linkage between these participants of the business. The growth of

revenues and share of the market enables to attract potential customers or customers

of competitors. The growth of the market share stimulates more rapid expansion of

the enterprise and its competitive advantage. It makes attracting of investors easier.

A prosperous enterprise can offer personnel good pays for their job and create

conditions for their career. It helps to keep the best employees who affect the results

of reducing costs, improving quality, and increasing productivity. The higher

productivity is one of the conditions to pay larger salaries to the employees, to

bankroll trainings or other programmers stimulating loyalty of employees.

Enterprises create loyalty programmers in order to develop loyalty and to reward.

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It is effective marketing instrument helping to create such a situation where all

interested sides win. Customer loyalty programmers are more frequent.Loyalty

programmes allow enterprises to understand Their customers better as well as to

satisfy their needs and expectations.

Customer loyalty programmes relate enterprise and customers, initiate permanent

dialogue between them, and increase satisfaction of customers also they are a

source of different information about customers, they mitigate potential shift of the

best customers to competitors, and help to cooperate with partners and to keep terms

with competitors .

The studies of loyalty programmes got activated in Western countries in the last

decade of the XX century. Effect of loyalty programmes and factors of success were

analyzed in fields of automobile, packer goods, finance, airlines, retail, and

telecommunication services.

In Lithuania there are not many scientific publications related with methodology of

developing loyalty programmes, their application advantages, and arising problems

yet. We can pontifically assume that practice of developing loyalty programmes is

more advanced than theory. Therefore, it is necessary to find an answer to the

question how Customer loyalty programme should be developing that it will be useful

for both enterprise and customer.

Dimensions of customer loyalty

Customer loyalty means the trust that enterprise gains making and developing mutual

useful

Relationships with customer. Referring to Lovelock and Wright (1999), loyalty is

customer’s voluntary decision to maintain long-term relations with the enterprise.

Successful long-term relations that lead to loyalty help to reduce a risk and

uncertainty arising from the consumption that nowadays gets more and more

complex. Customer will be loyal if he or she gains more benefit than other enterprise

can offer.If enterprise, its goods or services disappoint customer or suggestion of

other enterprise is more valuable to customer, the probability that customer will give

preference to competitor of the enterprise will increase. Discussions on different

customer loyalty dimensions bringing influence on its management take place in the

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scientific literature. The source of loyalty studies was a form of customer behaviour

Hard-core loyalty is distinguished for devotion to the enterprise, repeated purchase

probability, staying with the current provider and recommendations for the enterprise

to friends, colleagues, family members, etc.

By now some scientists accept such approach to loyalty. But scientists more often

accent attitudinal loyalty as other dimension of the loyalty now. Customer’s loyal

attitude shows a conscious effort to evaluate competing brands, customer’s

preferences and willingness to purchase goods or services. Lee, distinguish

customer’s responsibility and preferences to brand as the features of loyal attitude.

Loyal behaviour and loyal attitude influence the enterprise in different ways.

Loyalty based on customer attitude could be more vulnerable when loyalty is based

on behaviour. According to them, it is necessary to estimate that behaviour and

attitude are changing over time, so loyalty is changing, too. Without above-mentioned

dimensions of the behaviour and the attitude, accent cognitive loyalty emphasizing

complexity of the loyalty. Calls cognition-based or cognitive loyalty as rational

because customer makes decisions recognizing the processes in the enterprise,

thinking, handling information, estimating the technology, etc.

The scientist points other important dimension of loyalty – emotional loyalty. It is a

result of customer feelings, expectations, and interpersonal relationships with

employees. Distinguish the importance of expectations and experience, but

distinguish the importance of customer interpersonal relationships with employees.

Interpersonal relationship and mutual trust determine social comfort, greater

attention, and sometimes growth into friendship. It becomes switching barriers to

other provider of goods or services. What determines customer loyalty? Scientists

often point customer satisfaction assume that different level of satisfaction matches

up to different level of loyalty.

The scientists classify customers into four groups considering satisfaction and loyalty

relation: loyalist/apostle (high satisfaction -high loyalty), defector/terrorist (low

satisfaction - low loyalty), mercenary (high satisfaction - low loyalty), and hostage (low

satisfaction - high loyalty). Do not deny dependence between customer satisfaction

and loyalty. But they notice that low customer satisfaction (sometimes even

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dissatisfaction) not always become the reason of making a break of relations with

enterprise. It happens when enterprise has a dominant position in the market; its

brand of goods (services) is well-known, offering goods (services) is a bit different, it

is high switching costs to other provider, etc.

Mission, goals and tasks of loyalty programme

Loyalty programmes are especially popular in the end customer market. Nowadays it

is difficult to imagine the activity of supermarkets, gas stations, airlines, insurance

companies and other companies without them. For example, in USA 70% of

households, in Holland 80% of households have at least one loyalty card. The goals

of loyalty programmes can be different. Distinguishes mission, goals, main and

secondary tasks. Every loyalty programme is created in order to strengthen the

positions of the enterprise in the market – increase of market share, income and

profitability of activity. In order to implement the goal of the loyalty programme, the

enterprise should deal with five key tasks as following:

1) To develop and strengthen loyalty of present customers. The enterprise seeks this

by undertaking to meet customers needs better than other participants of the market

during all period of relationship with customers;

2) To attract new customers. The enterprise can seek it in two different costly ways,

namely:

1) Suggesting attractive privileges stimulating to become a participant of the

loyalty programme, and

2) attracting these who have heard good responses of participating in the

loyalty programme. In our opinion, in the first case the enterprise needs

more effort and resources. When participants of loyalty programme

advertise the programme, it depends on how the enterprise reminds them

about the loyalty programme and its objectives, benefit for participants,

how they value receivable benefit, etc.;

3) To create a database of customers. Without the database customer relationship

management is Impossible. In the database not only demographical data of

customers should be, but also information about their behaviour should be stored, for

example, preferences of consumption, acceptance of brands, periodicity and quantity

of purchase, the change of the brand, etc.

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4) To provide maintenance to departments of the enterprise implementing functions

of development and Research of goods (services). The data about customers help to

communicate with them directly and to find out difficulties of consumption, what

attributes of goods (services) should be improved, to get ideas for creating new

goods (services). The obtained information of qualitative research does not reflect the

opinion of all consumers. But referring to consumer’s live word is essential in

preparing to comprehensive quantitative research of the market;

5) To provide possibilities to communicate between participants of the programme. It

will help Service provider or agent, who initiates or controls the process of

communication, to communicate withCustomers regularly and directly.

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The process of loyalty programme development

The developing of loyalty programme requires the following sequence:

1) To identify a target group of the loyalty programme,

2) To decide what kind of structure will implement the programme,

3) To decide how customers will be registered and what kind of the programme it will be,

4) To decide how data about customers will be got and stored,

5) To chose in what way it will be communicated with participants of the programme,

6) To decide what privileges will be as a reward for customer loyalty,

7) To evaluate a success of the programme.

Target group of loyalty programme. Before developing loyalty programme the enterprise

should find out

What customer is good? The value of different segments of customers is not the same to

enterprise. So it is required to define what kind of customers the enterprise wants to

attract and what their behaviour is desired. The enterprise needs to divide customers into

categories and determine what basis of loyalty is: rationality or emotions.

The most attracting group is customers who often purchase goods and/or services or

continually retain relations with enterprise. The customers who seldom purchase goods

and/or services are less attractive but they consider the enterprise as their own. An active

part of the customers can join the loyalty programme. Besides, they are willing to

recommend the enterprise to members of referent groups they are belonging to. Casual

customers rarely purchase goods and/or service of the enterprise; their decision is

affected by offered benefit. Analysis of disposable information helps to distinguish

features of good customers. They can be emotionally devoted, important to the enterprise

very much; they can value brand of goods (services), etc.

According to the scientists, it is important to determine the customers who will be

valuable in the future and seek for their loyalty. Structure implementing loyalty

programme. From the point of organizational view the difficult structure, consisting of

employees, participants and external partners, implements loyalty programme. Plenty

and variety of tasks of loyalty programmes obligate enterprise to decide how the

programme will be organized and implemented – by its own resources or by help of

specialized service provider. the key tasks should be implemented by enterprise itself but

secondary tasks should be given to specialized service providers.

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Mission of loyalty programme:

1. To establish a stable turnover basis; it means that customer loyalty is like assumption

of future profit.

So it is counted in the value that will be gained in the future;

2. To calculate lifetime-value indicators;

3. To increase the customer’s value, notably through additional sales;

4. To write off costs of investing in the customer’s acquisition;

5. To cut transactional operational costs, for example, loyal customers more than others

understand their Responsibilities and functions are more tolerant to failures, etc.

6. To attract new customers through positive responds of loyal customers.

We have considered two points of view to mission and tasks of loyalty programme. We

can claim that

The goal of the loyalty programme is the same but tasks realizing the mission are

different and changing. They depend on activity, size, popularity, strategy of the

enterprise and other factors. Despite diversity of loyalty programmes, they deal with tasks

of getting and storing information, marketing efficiency, brand acceptance, service

development and tasks helping to improve internal processes.

The enterprise can use different means to implement the tasks of loyalty programme. In

our opinion, they can be divided into groups of organizational (e.g., providing toll-free

telephone access and automated attendant telephone answering non-business hours,

publishing home telephone number on business cards, providing an e-mail address of

customers, providing right, clear and easy-to-read bills, providing additional service and

offering a guarantee, etc.), communicational (e.g., preparing answers to FAQs,

communication with customers continually, promising only what can be really implement,

listening customers, individualizing communication with customers, etc.) and composite

(e.g., awarding for customer loyalty in many ways, responding quickly to needs, requests

and complaints of customers, distinguishing from other enterprises offering similar goods

(services), introducing customers to something new, making suggestions how to save

money, etc.) means. Some of the means is labelled as strategic means (e.g., identifying

long-term customers, distinguishing from other enterprises offering similar goods

(services), offering a guarantee, etc.)

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Why Is Loyalty Important For retail sector?

Hyper competitive environment.

Low differentiation due to standard sku

Leading to low customer stickiness

Increasing awareness about the brand

Some Public Facts about Loyalty Programs

76% of US retailers and 75% of US shoppers are engaged in loyalty

programs

Shopper ’s Stop claims more than 60% of

sales from loyalty members

Subhiksha claims 80% of sales comes from loyalty members

How Can a Loyalty Program Benefit retail?

Build a long lasting relationship with the customer

Go beyond product satisfaction to overall brand experience

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1. What is Loyalty Membership?

Loyalty Membership is a program devised by Reliance Industries Limited for Reliance

Fresh to retain the customers visiting their stores. It is a program by which Reliance Fresh

store issues a Loyalty Membership Card to its customers to encourage them to shop at

the store regularly. Each time they buy something they collect points which will allow them

to redeem cash vouchers to shop at store in future. Followings are the features of the

program:--

An electronic method of identifying customer purchases and translating that

information to reward customers based on their shopping habits.

There is a reward point system by which customers receive reward points on every

purchase made at the store.

For every purchase of Hundred Rupees customer will receive one reward point.

Customer should accumulate minimum of 25 points to get a reward voucher by

which he can make purchase at the store equivalent to Rupees 25.

Customers can also retain these points and receive reward voucher whenever they

want.

Members will also receive accidental insurance of Rupees 50,000 under this

program.

Customer will be issued a permanent membership card after 180 days of issuing of

temporary card.

2. How Loyalty Membership Program benefit retailers?

The program data help retailers to adjust their product assortment to customer

demands.

Retailers remove or cut back slow-moving items and devote more

shelf space to the products that program members buy.

Identify their most loyal customers.

Learn more about their best customers buying habits.

Offer the products and services according to their best customers

demand.

3. How do Loyalty-Membership Program works?

To enrol, customers typically complete an application form asking for their Name,

address, gender, phone number, e-mail address, income etc.

Each time cardholders make a purchase; the store scans their membership card,

tracks the sale and converts this data into useful information.

Loyalty Membership programs give customers points that accrue with their

purchases and can be redeemed for rewards.

4. How can food retailers help consumers and manage operations with the data

they collect?

Analyze shopping habits, refine marketing programs and fine-tune the product mix at the

chain or individual store level.

Stores use data gleaned from loyalty-marketing programs to:

Identify the promotions that appeal most to various customer groups, e.g.,

discounts or rebates for price-conscious shoppers; home delivery services for busy

shoppers.

Reduce the shelf space devoted to slow-moving items in order to stock the

products that customers prefer.

Reveal when products were sold and whether they were sold on or off promotion,

and the profit margin on each sale.

Improve speed-to-shelf and decrease out-of-stocks.

Determine how product deletions affect their best customers, and take steps to

keep those customers from taking their business elsewhere.

5. What are the advantages of this Loyalty?

Following are the advantages of Loyalty Program:

Loyalty Program gives customers the sense that the retailer values them

personally and respects them.

This program has an inbuilt system of giving discount over the competitive prices

of the goods, if compared from general retailers.

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Besides this it also offers an accidental insurance of rupees 50,000.

6. How we can make Loyalty Program more effective?

We can make it effective by introducing various types of schemes which can

attract customers.

We can issue prepaid cards in different denominations to our customers and

provide additional discounts and offers in addition to our normal reward point

system.

We can also categories the cards as Platinum, Gold and Silver based on

purchasing capacity/trend of different segments of customers. The advantages can

be increased with the upgraded membership.

Card can be made attractive by issuing a plastic or a laminated card in place of the

present paper card so that it can be retained for a long time.

Increase level of personalized service/interactive approach with the customers.

Through interaction and personalize service the front line staff should ensure to

make the customers feel that they are the valued clients.

Cashier should request and enlighten the customers to use their cards.

Regular announcement should be made to encourage customers to use their

loyalty cards to redeem reward points.

There can be additional rewards depending on the frequency of usage of card or

can be based on their visit to the store.

The Loyalty Program form can be bilingual and should be of one page so that

customers find it easy to fill.

The form at present is very lengthy and it becomes irritating for the customer when

too much information is being asked. Therefore, it is suggested that the form

should be made simple and some irrelevant questions, if any, may be removed.

If need be in order to facilitate the customers, a separate person may be assigned

the task for filling up the forms.

Customers need instant answers to their queries. So store staff can

be trained about this Loyalty Program so that they can also assist customers.

The FDM should ensure optimum utilization of available manpower.

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7. Can Loyalty be bought?

Yes, it can be bought by winning the faithfulness of the customers by giving them

quality services without interruption. Meeting the changing expectations of the

customers will help strengthen a lasting relationship and ensure that the customers

no longer feel like going elsewhere.

8. What is the percentage of customers using loyalty card?

On an average every Reliance Fresh is issuing 80-120 loyalty cards per day.

The ratio of customers using this card floats between 50%-60%.

Educated people are giving more attention to the loyalty card.

9. How many customers are having more then one card and why?

Customers are not able to retain existing paper card for a long time so customers

can be issued a new card with the same number if the exiting card cannot be

scanned by machine properly.

10% cards cannot be scanned as these are paper cards and get distorted.

10. How we can build our product awareness?

The advantages of a customer card must be actively conveyed from the

management to the customer via the staff.

We can utilize the time of customers by making them aware about the reward

program when they are waiting for billing.

Regular announcements can be made by the MSR’s regarding the benefits of the

Loyalty Card and asking customers to use the benefits of the program.

Clippings about the product may be flashed through the electronic media.

Details of the Loyalty Program may also be circulated through pamphlets in

newspapers.

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11. What are the problems being faced by customers? How can work on it?

Token system should be introduced; as yet customers are facing problems as their

belongings are not safe outside the store.

Customers have to wait for a long time for billing so we can introduce a system of

separate queues for ladies and senior citizens and can also increase number of

cash counters.

Customer is coming in Reliance Fresh due to a brand name and thinking its

product would be of good quality, but sometimes there are rotten fruits and

vegetables with the bunch of fresh ones this leads to a wrong impression on

customers. So, there should be proper sorting to maintain the consistency in there

quality.

Proper availability of stock should be maintained to cater to the needs of

customers.

Sometimes store staff are ignorant and don’t pay much attention to customers and

this frustrates the customers. So store staff should be trained to assist the

customers in a proper way.

Facility of drinking water should be provided at the store which is not available at

present

Toilets for customers should be made available.

There should be counting of items purchased by a customer at the billing point to

prevent misplacement.

12. How to increase efficiency of employees?

Providing refreshments like tea, coffee at least in two intervals so that the

employees feel energetic and work more efficiently.

Orientation program can be conducted for the employees to make them aware of

the targets to be achieved.

The employees should be kept in high state of morale. This could be achieved by

the effective leadership.

Career progression of the employees should be chalked out.

2.3 RELIANCEONE MEMBERSHIP CARD

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This is a card which was given to the customer at free of cost. This card helps to increase

the loyalty sales percentage of the store. Benefits of this card are:

Customer will get 1% point of his purchasing amount added to his\her membership card.

When these points will become 25, it means that 25 points is equivalent to 25/-. He\she

will be able to redeem his\her points & get a discount of 25/-With this card customer will

get “Accidental Death Insurance” of 50000/- by default.

If customer will recharge their Hutch, Reliance, Airtel & Idea mobile from CSD then also

15 point of the amount he recharge will be added to his card.

In starting customer will get temporary card, which is valid for 180 days. Within 180 days

customer will get permanent card, which is look like plastic card at postal address given

by the customer in the form for issuing of Reliance One Membership Card. Conditions for

eligibility of permanent card are as follows:

Customers have to do a purchasing of 1500/- with the help of card within 3 months from

the issuing date OR he have to scan his card at least 10 times.

If above criteria is not fulfil then in next 2 months customers have to do a purchasing of

600/- with the help of card OR he have to scan his card at least 6 times.

CUSTOMER INFORMATION CHANGE REQUEST

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If customer wants to change his Postal address, Telephone Number or Email ID then

customer have to fill the “Customer Information Change request”.

Process to be followed for change of Customer Information:--

Take a printout of the Customer Information Change Request form.

The customer has fill up all the required details mentioning his

Reliance One Membership card number.

The customer has to sign the request form and hand it over to the

MSR.

The MSR checks for the following on the form

Reliance One membership number

First Name

Last Name

Information regarding change request

Date

Customer Signature

The MSR then fills up the information in the “FOR OFFICE USE”

space.

The format for request ID is store code- date in DDMYY- serial

number stating from 0001.

The MSR fills up the MSR code and signs in the space provided.

This entire request should be filled separately and kept at the store

under lock and key.

Once the system for making these changes is live, all these forms

have to be sent to the data entry centre for the processing. The data

for dispatch will be notified later.

The format of Customer Change Request Form is:

Customer Information Change request

Please incorporate the following changes in my Reliance One

membership details

(Please tick the appropriate box)

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The format of Customer Change Request Form is:

Customer Information Change request

Please incorporate the following changes in my Reliance One membership details

(Please tick the appropriate box)

Reliance One Membership No.

First Name

Last Name

I have moved to a new house. Please send all communication to my new address

given below

Address Line 1*

Address Line 2

Landmark

City\ Taluka*

Pin code*

My Phone Number has changed

Std Code Phone (Res)

Mobile

Std Code Phone (Off)

I have a new email address

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Email

Date D D M M Y Y Y Y Signature

FOR OFFICE USE ONLY

Store Code

Request ID: CIC - D D M M Y Y -

Store code Date Serial No

MSR Code

MSR Signature

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Replacement Card Request:--

If the card of the customer is damaged or lost then he has to fill a “Application Form for

Request for Replacement Card”.

Process to be followed for Request for Replacement Card

1. Take a printout of the Application form for request for Replacement Card.

2. The customer has fill up all the required details mentioning his RelianceOne

Membership card number, first name and last name.

3. The MSR has to handover the new temporary card to the customer and fill up the

new card number in the space provided. The MSR has to destroy the

corresponding application form by tearing it.

4. The customer has to sign the request form and hand it over to the MSR.

5. The MSR checks for the following on the form

a. RelianceOne membership number

b. First Name

c. Last Name

d. If the card is damaged, the MSR has to collect the damaged card and tick the

appropriate option on the application form. If the card is lost, then the appropriate

option is ticked.

e. Date

f. Customer Signature

6. The MSR has to inform the customer that he\she will not be able to earn points

using the old card since it will be deactivated.

7. The MSR should inform the customer that he\she would be able to use the new

card with immediate effect. However, the customer can start redeeming only after

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a period of 21 working days, which are required for processing the replacement

request.

8. The MSR then fills up the information in the “FOR OFFICE USE” space.

9. The format for request ID is store code- date in DDMYY- serial number stating

from 0001.

10. The MSR fills up the MSR code and signs in the space provided.

11. All these damaged cards and application for replacement cards should be filled

separately and kept at store under lock and key.

12. Once the system for making these changes is live, all these forms have to be sent

to the data entry centre for the processing. The data for dispatch will be notified

later.

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The format of Application Form for Request for Replacement:

Application Form for Request for Replacement Card

RelianceOne Membership No.

First Name

Last Name

This is to inform you that my RelianceOne membership card is lost/ damaged. I have

been issued a replacement card with card number

I request you to deactivate my old card and transfer all the points to my new card number

mentioned above. I understand that I would not earn any points on usage of

my old card.

I declare that I have surrendered the damaged card at the customer service desk

I declare that I will destroy the lost card if found.

Date D D M M Y Y Y Y Signature

FOR OFFICE USE ONLY

Store Code

Request ID: RRC - D D M M Y Y -

Store code Date Serial No

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2.4 UNDERSTANDING PLANOGRAM

A planogram is a diagram of fixtures and products that illustrates how and where retail

products should be displayed, usually on a store shelf in order to increase customer

purchases. It is an arrangement of different products in the most appropriate order with

optimum utilization of available space. It also shows the exact quantity of each product in

the store as well as its position on a particular bay & shelf.

They may also be referred to as plannograms, plano's, plano-grams, plan-o-grams,

schematics (archaic) or POGs. A planogram is often received before a product reaches a

store, and is useful when a retailer wants multiple store displays to have the same look

and feel. Often a consumer packaged goods manufacturer will release a new suggested

planogram with their new product, to show how it relates to existing products in said

category.

Planograms differ significantly by retail sector. Fast-moving consumer goods

organizations and supermarkets largely use text and box based planograms that optimize

shelf space, inventory turns, and profit margins. Apparel brands and retailers are more

focused on presentation and use pictorial planograms that illustrate "the look" and also

identify each product.

Since the purpose of a planogram is to communicate how to set the merchandise to

increase customer purchases, much research often goes into the layout of a planogram.

Attention is given to adjusting the visibility, appearance and presence of products to make

them look more desirable, or to ensure sufficient inventory levels on the shelf or display.

There are some consulting firms which specialize in retail space layout and Plano

ramming. Some chain stores and wholesalers also create and maintain planograms for

their stores.

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Scope

To study and re-engineer the existing Planogram.

P`urpose

• To communicate how to set the merchandise.

• To increase customer purchases.

• To adjusting the visibility, appearance and presence of products

• To make them look more desirable.

• To ensure sufficient inventory levels on the shelf or display.

• To use space effectively whether floor, page or virtual.

• To optimize short- and long-term returns on investment into retail space.

• To provide a logical, convenient and inspiring product-customer interface.

• To make right selection of products available.

• To facilitate communication of retailer’s brand identity.

• To maximize profit per centimeter of shelf space.

• Understand the relationship between space, sales and profit

Merchandising

Merchandising refers to the methods, practices and operations conducted to promote and

sustain certain categories of commercial activity.

Visual Merchandising (VM ) is the art of presentation, which puts the merchandise in

focus.  It educates the customers, creates desire and finally augments the selling process.

Visual Merchandising helps in:

Educating the customers about the product/service in an effective and creative

way.

Establishing a creative medium to present merchandise in 3D environment,

thereby enabling long lasting impact and recall value.

Setting the company apart in an exclusive position.

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Establishing linkage between fashion, product design and marketing by keeping

the product in prime focus.

Combining the creative, technical and operational aspects of a product and the

business.

PROCEDURE OF REPLENISHMENT OF STOCK

The whole system of RELIANCE FRESH is connected through an ERP SOFTWARE i.e.

SAP and the replenishment procedure is based on auto indenting & manual indenting.

Auto Indenting

MBQ of each SKU is already stored in the system of DISTRIBUTION CENTRE. (D.C. is

the place from where the required quantity of stock is sent to the respective stores.)

As & when sales of a particular SKU takes place it is automatically recorded in the

system.

Within 3 days D.C. dispatches the required quantity of each SKU to the store, to maintain

the MBQ level of each shelf

Manual Indenting

Before closing the store daily CSA of each category identify the requirement of each SKU

and communicate it to supervisor and finally it is feed to SAP or mailed to Distribution

Centre (D.C.) to maintain the required level of inventory.

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RESEARCH

METHODOLOGY

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RESEARCH METHODOLOGY

Title of the study

The title of the project study is “effectiveness of loyalty programme in reliance fresh store

in Jaipur”.this project report shows the effectiveness of loyalty programme on the

customers which is conducted by store to improve the sales or profits. Now a day

maintain loyalty is the important issue for each organization.

Duration of the project

The duration of the project report is of 1 month. The project work starts with the

preparation of abstract and summary of the project. The next step is the preparation of

questionnaire and filled them by the employees of reliance fresh at different location. The

next step is analysing the findings and interpretation of research work.

Objective of the study

The primary objective of this project study is to know the loyalty in customers about their

product and their brands. Some other objectives are:

To study & analyse the loyalty among customers?

To know how frequently the customers buy the products from

reliance fresh.

To study different loyalty sales programme used by company?

Know study many customers are benefited from loyalty sales

programme.

To know how much amount the company expand on the loyalty

programme?

To compare the effectiveness of loyalty sales programme in

different geographical areas?

To study in which product category the stores get maximum

profits through loyalty sales programme.

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Type of research

Descriptive research design

Sample size & method of selecting sample

The sample plan is Continuance sampling, which is non probability in nature.

The sample of 200 people will be taken randomly according to the comfort.

Scope of the study

The scope of this project is not restricted in particular area or industry but it’s open for all

the different kind of sectors like FMCG, RETAIL, PHARMA, TELICOMME etc. because

the loyalty for the product is a way by which a customer repurchase the product and retain

themselves with the product or brand.

Limitation of study

The study was restricted to theoretical ground only so it was difficult

to draw the true interpretations of the study.

The conclusion arrived at are based on vary less experience of

researcher in this field.

The time duration of complete the project is less (1 month).

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RESEARCH METHODOLOGY

Step 1: Per day sales of each SKU was obtained. The SKUs list of Reliance Fresh

which contains approximately 6000 SKUs/products of all different categories (Fruits &

Vegetables, Staples, Process Food, Non-Food Fast Moving Consumer Goods, House

wares, Beverages, Dairy, Backery, Frozen, etc.) is provided by the head office. With the

help of this list, at store, daily sales of each SKU was obtained from CSAs by interviewing

them in depth. The probable demand of those SKUs which were not in the Planogram of

the store were also obtained so that these could also be introduced if found appropriate.

Step 2: Per day sales was then multiplied by 3 so as to maintain the required stock

level for 3 days. After getting the daily sales of each SKU, it was then multiplied by 3.

Since, the supply of SKUs other than Fruits & vegetables and Dairy from Distribution

Center is made after every 3 days and in order to maintain the required MBQ level the

sales figure is multiplied by 3.

For example, the daily sales of Parle Krackjack 75-gram biscuit were 5 units

approximately told by the CSA. This projection of MBQ level was totally based on the

judgments of CSAs and on the previous month’s sales report. Therefore, its required MBQ

level should be 5x3, i.e., 15 units in the store. This approach was applied for all SKUs of

each category in order to adjust the MBQ level of all SKUs of Planogram.

Step 3: Figure obtained in step 2 was then compared with MBQ figure of current

planogram for each SKU. The figure so obtained for all the SKUs, by applying the same

approach, was then compared with the actual MBQ level of respective SKUs in the

Planogram. By this comparison the difference between actual and obtained MBQ level

was found. This difference was then used to adjust the MBQ level.

For example, the MBQ level as per current Planogram of FORTUNE SOYA OIL 1 LT

POLY PACK was 56 units but actual per day sales of this were 32 units, therefore,

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according to this sales figure MBQ level should be 96 units. But this figure is more then

actual MBQ level, therefore, its MBQ level was increased to 96 units by providing it single

facing and double vertical stacking.

Step 4: MBQ level of each SKU was adjusted by either increasing or decreasing its

quantity. Similarly the MBQ level of each SKU was adjusted by either increasing or

decreasing its quantity which was required for the optimum utilization of available bay

space and better inventory management. This approach helped in better visibility of the

SKUs and raising the profitability of the store. This step resulted in the empty spaces on

the different bays.

Step 5: Empty spaces obtained because of step 4 was then filled by new SKU which

was obtained in consultation with CSAs, FDM, Franchisee Manager, on the basis of

our judgment & based on feedback from store staff . After getting the empty shelves,

those SKUs were finalized in consultation with CSAs, FDM, and Franchisee manager and

on the basis of our own judgments, which were mostly demanded by customers other

than those SKUs which were available in the store. This helped in introducing some new

SKUs in Planogram.

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Methodology Used

1. Research Design

Research Design is the overall plan to conduct research. It covers:

Data collection methods

Sampling decisions

Data analysis methods

Often constraints on resources limit research design so that it is less ideal.

For e.g. smaller sample size. The purpose of research design is to decide approach that

answers our problem in best way, given constraints on resources.

Types of Research Design

There are three types of research designs:

1. Exploratory research design

Used for discovering ideas and insights

2. Descriptive research design – longitudinal and cross-sectional

Used for describing characteristics of population

3. Causal research design

Used for proving cause-effect relationship

2. Exploratory Research: Following designs (methods) are used for exploratory

research:

Secondary data

Focus groups

Depth interviews

Projective techniques: It consists of following techniques

Word Association

Sentence completion

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Third person & Role playing

Thematic Apperception Test

The tool used for research required in re-engineering Planogram is Depth interview.

3. Depth Interview

Principle of Depth Interview

Respondent will reveal truth about sensitive issue after taking

him in confidence.

Respondent’s answer will be obtained by probing

Characteristics of Depth Interview

An unstructured interview of the respondent is taken

Only one respondent is interviewed at a time

Usually conducted by experienced researcher

Interviewer’s role is extremely important since the emphasis is on

probing

For re-engineering Planogram, the respondents selected were

CSAs, store supervisors, FDM, Franchisee manager &

customers.

Collection of Data

Secondary Data

Secondary data is the data gathered by someone else prior to the current needs of the

researcher. It is already available to the researcher before he starts conducting his

research work.

Advantages of secondary data

Quickly available

Economical

Dependable

Easy to Use

Accessible

Understandable

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Primary Data

The researcher originates the primary data. The primary data for re-engineering

Planogram was collected as follows:

Feedback from CSA

Franchisee

Customer (limited to people known)

Customer demographics

Feed Back Questions asked from CSAs

Which SKUs have the maximum queries?

Which SKUs have maximum complains?

Which SKUs customers are happy with?

Are there any SKUs that you suggest as a substitute?

Do you receive any queries for any SKUs which are not stocked?

How much does each SKU is being sold on daily basis?

Is the customer satisfied with the quality of products available in

the store?

Is the customer happy with the pack size available (especially for

staples, ghee & vegetable oil) or they needing big or small one?

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Feedback received from CSAs

Maximum demand is for Fruits & Vegetables (F&V) category.

Customers are happy with F&V and Process Food (P.F.) but for

P.F. introduce some more products.

Substitute suggested is mainly for staples and P.F. category. For

example: - Customer demanded a particular brand of atta but

sometimes due to unavailability of stock, atta of other brand was

offered.

Customers query more about NF FMCG & toiletries (Currently

this category of SKUs is not available in the store.)

Sometimes customers complain about the freshness of F&V as

they find it rotten and also fresh ones mixed with rotten ones.

Some customer also asks for smaller pack size for staple SKUs.

All the findings were communicated to Franchisee Manager for which necessary steps we

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Analysis

&

Interpretation

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Interpretation of questionnaire

Q.1 Best among all retail chains in India?

Best among all retail chains in India

Strongly Agree, 120, 59%Agree, 30, 15%

Netural, 15, 8%

Disagree, 5, 3%

Strongly Disagree, 30,

15%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - As we are looking in the diagram that 60% people

believes that the reliance fresh is the best among all retail chains, talking

on the daily grocery items. As well as 20% people believes that the

Reliance fresh is not as good as others are.

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Q.2 Services offered are best in industry

services offered are best in industry

Strongly Agree, 60, 30%

Agree, 90, 45%

Netural, 30, 15%

Disagree, 10, 5%

Strongly Disagree, 10,

5%

Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- Almost 75% people believe that the services offered by

Reliance Fresh are best and according to the need of customers .here 15%

people are undecided on this factor.

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Q.3 Sms service attracts you?

sms service attracts you

Strongly Agree, 80, 40%

Agree, 30, 15%Netural, 10, 5%

Disagree, 60, 30%

Strongly Disagree, 20,

10% Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:-When we asked people about the new advertisements of

Reliance then they said they are impressed with daily news by SMS on

mobile.55% people were highly impressed by this service while 30% were

not decided on this factor.

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Q.4 Membership cards are really beneficiary

membership cards are really beneficiary

Strongly Agree, 40, 20%

Agree, 40, 20%

Netural, 60, 30%

Disagree, 40, 20%

Strongly Disagree, 20,

10% Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- Only 40% people were agreed that the membership

cards are really beneficiary. While 40% says this is only a way to attract

new customers to store but in reality the cards are not beneficiary.

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Q.5 Comment on Advertisements and Promotions?

comment on advertisements and promotions

Strongly Agree, 60, 30%

Agree, 70, 35%

Netural, 20, 10%

Disagree, 20, 10%

Strongly Disagree, 30,

15%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - 65 % people believe that the advertisement strategy of

RF is good and attractive. While 30% people strongly says that this is

Negative aspect of RF.

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Q.6 Customer is given priority?

customer is given priority

Strongly Agree, 40, 20%

Agree, 60, 30%Netural, 60, 30%

Disagree, 20, 10%

Strongly Disagree, 20,

10%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - As we are looking that only 50% people believe that the

customer is given priority at store.30% says that the employees are ok

and 20% people says that the staff of RF is not helping.

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Q.7 Notices are send properly?

notices are send properly

Strongly Agree, 10, 5%

Agree, 30, 15%

Netural, 75, 37%

Disagree, 55, 28%

Strongly Disagree, 30,

15%

Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - People say that reliance fresh does not send proper

notice to their clients.45% people are criticising the facility of sending

notice on time to them while 37 % people are undecided on this facility.

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Q.8 Vegetables and fruits are really fresh?

vegetables and fruits are really fresh

Strongly Agree, 40, 20%

Agree, 50, 25%

Netural, 60, 30%

Disagree, 40, 20%

Strongly Disagree, 10,

5%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - People says that the ways Used by RF to keep

vegetables fresh are not effective at all.25% people say that they are

not happy with freshness in vegetables, so reliance should change its

strategy for this.

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Q.9 Payment system is suitable to all?

payment system is suitable to all

Strongly Agree, 60, 29%

Agree, 35, 18%Netural, 45, 23%

Disagree, 60, 30%

Strongly Disagree, 0, 0%

Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: - 30 % people strongly recommend that the payment

system of RF is good for all. The queue system is nice and suits all.

While 30 % people were disagree with the queue facility for payment at

store.

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Q.10 Display of all services on time?

display of all services on time

Strongly Agree, 75, 37%

Agree, 25, 13%Netural, 40, 20%

Disagree, 50, 25%

Strongly Disagree, 10,

5%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- After looking at pie chart we can say that almost 50%

people are satisfied with the displays by RF in their store. People are

aware about the current schemes and discounts after visiting the store.

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Q.11 Discounts are really attractive & useful?

discounts are really attractive & useful

Strongly Agree, 55, 28%

Agree, 95, 47%

Netural, 10, 5%

Disagree, 30, 15%

Strongly Disagree, 10,

5%

Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- As pie chart shows that 30% people are strongly agree

and 47 % are agree with the discount facilities are good by RF in this

range. where 20 % are not attracted by this facility.

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Q.12 Time is saved in Reliance fresh?

time is saved in reliance fresh

Strongly Agree, 40, 20%

Agree, 30, 15%

Netural, 60, 30%

Disagree, 40, 20%

Strongly Disagree, 30,

15% Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- 30% people says there is no difference in taking goods

from anywhere, you will spend time as much you can spend there. While

35 % says that time is saved in RF.

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Q. 13 Safety and comfort is good?

safety and comfort is good

Strongly Agree, 30, 15%

Agree, 30, 15%

Netural, 70, 35%

Disagree, 60, 30%

Strongly Disagree, 10,

5%Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation: When the question arises on safety and comfort only

30% people says that RF is good for safety,35% are saying that there is

no proper safety at RF.

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Q.14 Overall, I Am Satisfied With Reliance Fresh?

overall,i am satisfied with reliance fresh

Strongly Agree, 50, 25%

Agree, 60, 30%Netural, 10, 5%

Disagree, 60, 30%

Strongly Disagree, 20,

10% Strongly Agree

Agree

Netural

Disagree

Strongly Disagree

Interpretation:- As a overall performance 55% people says that RF is good experience for shopping daily used goods. there they can all things under one roof.where 40% are not agree with RF and its functions..

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FACTS

AND

FINDINGS

103

FACTS AND FINDINGS

There was a questionnaire, which was filled by me from the employees to

know the feedback of the customer about the “effectiveness of loyalty sales

programme in reliance fresh stores in Jaipur”.

This research is conducted at many places in Jaipur.the research show that

there are various improvement which the company has to focus to retain

the customers and their employees.

The store provide membership card to each customer.

The daily footfall of each store is different depends on the customers.

The store provides sales promotion schemes to attract the customer.

The discount items are helpful to generate the loyalty among the

customers.

The employees say that the geographical condition is important to make the

profits.

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SWOT

Analysis

105

STRENGTH

Brand name.

Strong financial backup.

Good employee’s base.

Easily reachable.

First mover advantage.

Quality

Infrastructure

Relationship with customers

Local language knowledge

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WEAKNESS

More time consume in billing.

Fruits and vegetables are not always fresh.

No incentives provided to employees.

Long working hours.

Offer announcements are not proper.

Less remuneration to employees.

Less educated working staff (CSA).

Discount affects margins

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OPPOURTUNITY

Potential market.

Recruit more trained workforce.

Attractive incentive to employees.

Add more range of products in store.

Improve the security & operating system of store.

Provide attractive promotional schemes daily.

Maintain PR activities.

Reduce the cost & improve the profitability

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THERAT

Local retailer’s competition.

Entry of big retailer organizations.

Govt. policies.

Economical conditions.

Change in consumer behaviour.

Technology

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CONCLUSIONS

110

CONCLUSIONS

There is always a gap between Retailer & customer.

Customers are ready to buy even at same rate or more than as compared

to outside if we provide them a quality.

Customer has no time. They don’t want to waste their time in selecting good

vegetables.

By analyzing the primary and secondary data it was identified that majority

of sales is from F&V category instead of mandi near to store only in the

case when quality is good. While for other categories some changes like

introducing more variety and keeping competitive prices can be done to

increase their sales.

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Data gathered through sales report and CSAs were analyzed to adjust the

MBQ level of each SKU and to increase the store profit.

Reliance Fresh needs to adjust its Planogram according to the tastes and

preferences of customer. Since store does not offer NF FMCG and toiletries

most of the customers are switching to other players.

RECOMMENDATION AND

SUGGESTIONS

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SUGGESTIONS

Announcement for the Membership card should be there.

Provide good promotion schemes, offers to customers.

Improve customer satisfaction on 4 P’s.

Continuously add more verity of products in store.

Possibility of Non-Food FMCG.

Effective utilization of empty Shelves.

Consistency in quality should be maintained.

Proper training should be imparted to CSAs.

Provide the product less than MRP price to customers.

Improve the operating and security system of the stores.

Start producing home delivery services by the store.

Reduction in product’s price fluctuation for continuous purchase.

Change ambiance of the store to improve store sales and convert it i

n the hyper market.

Mark down of SKUs especially for Fruits & Vegetables should be

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done at proper time.

Sample of wheat and other staple items can be kept for better

exposure.

APPENDIX

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Questionnaire

“Effectiveness of loyalty sales program in reliance fresh stores”

Name ---------------------------------------Age----------- Gender--------------

Occupation----------------------Place------------------ Contact No. ---------------------

According to you which of these Factors are Affecting while considering the services offered by Reliance Fresh to Customers:-

S. No

Statements Strongly Agree

Agree Neutral Disagree Strongly Disagree

1. Best among all retail chains in India

2. Services offered are best in industry

3. Sms service attracts you4. Membership cards are really

beneficiary5. Comment on Advertisements

And Promotions6. Customer is given priority

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7. Notices are send properly

8. Vegetables and fruits are really fresh

9. Payment system is suitable to all

10 Display of all services on time11 Discounts are really attractive

& useful12. Time is saved in Reliance fresh

13. Safety and comfort is good

14 Overall, I Am Satisfied With Reliance Fresh

Date……. Signature…..

BIBLIOGRAPHY

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BIBLIOGRAPHY

1. books:

Kotler Philip,” Marketing Management”, New Delhi, Pearson

Education Inc, 2006.

C.R. Kothari,”research methodology”, methods and techniques,

new dehli,new age international P ltd(1990)

C.B. Gupta,”retail management”, introduction of retail industry.

2. Web sites

www.ril.com

www.businessworldindia.com

www.india-reports.com

www.wikipedia.org

www.economictimes.indiatimes.com

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Jitendra

VirahyasJVIRAHYAS@GMAIL.COM

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