Reliance Report 8nbam095

A

Management Thesis

On

“A Study Of Consumer Attitude Towards

Organized Retail Outlet”

With

Special Reference

To

Submitted By: Submitted To:

Anish Patel Pooja D. Kunwar

8NBAM095

2008-10 BATCHCONTENTS

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Sr.No

Particular Page. No.

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1 ACKNOWLEDGEMENT 32 ABBREVIATIONS 43 SUMMARY 54 RESEARCH OBJECTIVE 6

INTRODUCTION 7 Current Retail Scenario Introduction of the company Reliance At A Glance Reliance Products & Brands Reliance retail Vision & Mission Introduction To Reliance Fresh

6 REVIEW OF LITERATURE 217 INTRODUCTION OF PROJECT REPORT 24

Project Title Key Responsibilities Project Details/ Methodology Finalizing Research instrument / Data Collection

8 ANALYSIS AND RESULTS 30 Warm up questions/ general purpose questions Main purpose questions

9 INTERPRETATION OF RESULTS 5010 RECOMMENDATION OF RELIANCE FRESH 5311 CUSTOMER SUGGESTION FOR RELIANCE FRESH 5512 CONCLUSIONS 5613 TERMINOLOGY 5714 REFERENCE 6015 ANNEXURE l 61

Main purpose questions

ACKNOWLEDGEMENT

The management thesis work, which is part of M.B.A. curriculum, is

exciting, instructive learning and full of sincerity and hard work.

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I am grateful to our centre head Mr. Jagdish Patel, who if not directly but

indirectly have been involved in the back hand activities of my project

which proved out to be a back bone for the same.

I would like to thank my management thesis Faculty supervisor Pooja D.

Kunwar for dedicating his valuable time in order to guide me in my

project in a specific direction and make it more meaningful.

I would like to thank Mr. Mobin Sheikh and Mr. Ajay Patel for their

genuine guidance and help when ever required.

I also convey my sincere gratitude to my parents for their continuous love

and support.

Last but not the least I would also like to thank my friends and collogues

for their constant guidance and support.

I would like to thank and appreciate all that support and help, who have

been directly or indirectly involved in making Management Thesis.

ABBREVIATION

GDP: Growth domestic product

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(SEZ): Special Economic Zone

RIL: Reliance India Limited

HUL: Hindustan Uniliver Limited

CSA: Customer Service Associates

SUMMARY

Retail trade at present accounts for 10 to 11 per cent of GDP and India ranks first in the Annual Global Retail Development Index 2006. Organized retail

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in India is virgin territory and the share of organized retailing in urban areas is between 12 and 20 per cent and is growing at 30 per cent annually. According to a McKinsey report on `Retailing in India,' the sector is set to grow as large as US $ 500 billion by 2010.

The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates it is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, modern retail is likely to increase its share in the total retail market to 22 per cent by 2010.

Reliance Industries Limited

The Reliance Group, founded by Late Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 34 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.

Reliance Fresh

The retail chain division of Reliance Industries of India which is headed by Mr. Mukesh Ambani Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RIL’s Rs 25,000 croreS venture and it plans to add more stores across different areas 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. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs.

RESEARCH OBJECTIVES

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To study the different demographic, psychographics and situational variables which are affecting of selection of retail outlet.

To know the Products knowledge & promotional Tools which adapted by reliance fresh at Ahmadabad.

Understanding the needs of the customer.

To study various determinants, this plays a major role in buying decisions.

Identifying the choice and interest of the customers.

To understand the factors which influence consumers for buying?

After the whole project I can conclude my work as per the following points.

The main factor that effect the retail business is Location

Indians are price sensitive they seek value for money so price also matter for Indian customers

The purchasing pattern of the people in one location is totally different from other Location in Ahmedabad city

Customer service is not so much important in grocery retail , Quality, and Price matter a lot

The reason for which people prefer to buy from organized retail store is variety of product available under one roof and customer has not to move from one shop to another shop for his/her daily needs

Most of the people in Gujarat use to purchase their daily needs whenever they require.

INTRODUCTION

CURRENT RETAIL SCENARIO

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Retail trade at present accounts for 10 to 11 per cent of GDP and India ranks first in the Annual Global Retail Development Index 2006. Organized retail in India is virgin territory and the share of organized retailing in urban areas is between 12 and 20 per cent and is growing at 30 per cent annually. According to a McKinsey report on `Retailing in India,' the sector is set to grow as large as US $ 500 billion by 2010.

The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates it is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, modern retail is likely to increase its share in the total retail market to 22 per cent by 2010.

Chart 1.1 Graph showing Predicted Mall Distribution Space in India

Retail and Real Estate are the two booming sectors of India and if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, India’s one of largest industry, has presently emerged as one of the most dynamic and fast growing industries with several players entering in the market.

It accounts for around eight per cent of the employment in retail industry in India and it is gradually inching its way toward becoming the next boom industry.

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As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying attitude, ushering in a revolution in shopping in India. This has also contributed to large scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011.

INTRODUCTION OF THE COMPANY

RELIANCE INDUSTRIES LIMITED

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http://www.indianground.com/real_estate_india.aspx

Late. Dhirubhai H. AmbaniFounder Chairman Reliance GroupDecember 28, 1932 - July 6, 2002

"Between my past, the present and the future,There is one common factor: Relationship and Trust.

This is the foundation of our growth."

RELIANCE RETAIL LIMITED

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Mr. Mukesh AmbaniChairman & Managing Director

(Reliance Retail Ltd)

K. Radhakrishnan Raghu PillaiCEO Chief Executive & President

Reliance Hypermarket Reliance Retail

"Growth has no limit at Reliance.I keep revising my vision.

Only when you can dream it, you can do it."

RELIANCE AT A GLANCE

Reliance Industries Limited

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The Reliance Group, founded by Late Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 34 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, fiber 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, fiber intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber 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 US$ 20 billion to 108 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited ) and Reliance Industrial Infrastructure Limited.

Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with turnover of Rs1,18,354 crores (US$ 27.23 billion), cash profit of Rs17,678 crore (US$ 4.07 billion), net profit of Rs11,943 crores (US$ 2.75 billion) and net worth of Rs63, 967 crore (US$ 14.72 billion) as of March 31, 2007.

RIL is the first and only private sector company from India to feature in the Fortune Global 500 list of World’s Largest Corporations' and ranks amongst the world's Top 200 companies in terms of profits. RIL is amongst the 25 fastest climbers ranked by Fortune. RIL

RELIANCE PRODUCTS & BRANDS

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The Company expanded into textiles in 1975. Since its initial public offering in 1977, the Company has expanded rapidly and integrated backwards into other industry sectors, most notably the production of petrochemicals and the refining of crude oil.

The Company now has operations that span from the exploration and production of oil and gas to the manufacture of petroleum products, polyester products, polyester intermediates, plastics, polymer intermediates, chemicals and synthetic textiles and fabrics.

The Company from time to time seeks to further diversify into other industries. In January 2006, the Company approved a plan to establish a retail business through a subsidiary Reliance Retail Limited that will operate, among other things, supermarkets, convenience stores and specialty stores across India. The Company approved initial expenditure of US$ 750 million to fund the initial stages of this plan.

The Company's subsidiary Reliance Jamnagar Infrastructure Limited is currently establishing infrastructure facilities such as roads and buildings for the proposed Special Economic Zone (SEZ) at Jamnagar, Gujarat.

The Company's major products and brands, from oil and gas to textiles are tightly integrated and benefit from synergies across the Company. Central to the Company's operations is its vertical backward integration strategy; raw materials such as PTA, MEG, ethylene, propylene and normal paraffin that were previously imported at a higher cost and subject to import duties are now sourced from within the Company. This has had a positive effect on the Company's operating margins and interest costs and decreased the Company's exposure to the cyclicality of markets and raw material prices. The Company believes that this strategy is also important in maintaining a domestic market leadership position in its major product lines and in providing a competitive advantage.

RELIANCE RETAIL VISION AND MISSION

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VISION

“To be the most admired and successful organized Retail company in India that materially enhances the quality of life of every Indian”

MISSION

“Leapfrog the way an Indian consumer shops”

INTRODUCTION TO RELIANCE FRESH

The retail chain division of Reliance Industries of India which is headed by Mr. Mukesh Ambani Reliance has entered into this segment by opening new

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retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add more stores across different g, 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. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs.

Reliance Fresh recently opened several "Fresh" outlets in Chennai, New Delhi, Hyderabad, Jaipur, Mumbai, Chandigarh, Ludhiana and in Ahmedabad also.

There are 38 Reliance Fresh stores in Ahmedabad and they are also planning to open new 40 stores over there. Reliance is still testing its retail concepts by controlled entry beginning in the southern states. Reliance has

decided to minimize its exposure in the fruit and vegetable business and position. Reliance Fresh as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT, wellness and auto accessories, with food accounting for the bulk of the business.The company may not stock fruit and vegetables in some states, Orissa being one of them. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly due to political reasons, and partly due to its inability to create a robust supply chain. This is quite different from what the firm had originally planned. When the first Reliance Fresh store opened in Hyderabad last October, not only did the company said the store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the company

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spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way.

Location

Location of the stores and its format there are 38 Reliance Fresh store in different locations in Ahmedabad city.

Operation time of the Stores

8 A.M – 9 P.M.

Store Size

There are store of different sizes and sizes vary from 2000 Sq. ft to 8500 Sq. ft.

Company Website

www. ril.com

COMPETITORS

More

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More stores are owned by Aditya Birla Group and promise a world-class pleasurable shopping experience to Indian consumers in their very own neighborhood.

More Quality

More Variety

More Convenience

More Value

These are the four delivery cornerstones of the more chain of supermarket stores. There are nearly 14 stores of More in Ahmedabad City and giving intense competition to Reliance Fresh Ltd and other organized Retailers in Ahmedabad City.

Indiabulls mart

Indiabulls group, which began its business foray first as a capital market intermediary, delving into real estate business thereafter, entered the booming retail sector, by acquiring entire retail business of Piramal group being conducted under ‘Pyramid’ brand, has completed the process of rechristening Pyramid retail formats as Indiabulls Megastore and Indiabulls Mart. There are only few stores located in Ahmedabad City

Spencer

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http://www.adityabirla.com/media/features/there_is_more.htm#4%234




Spencer’s Retail is one of India’s fastest growing retail stores with multiple formats and retailing food, apparel, fashion, electronics, lifestyle products, music and books. Established in 1996,

Spencer’s has become a popular destination for shoppers in India with supermarkets, hypermarkets and dailies spread all over India. Spencer’s has retail footage of over 2 million square feet and over 400 Spencer’s stores in 65 cities. The company operates through the following formats:

Spencer’s Hypermarkets

a fast growing retail network of hypermarkets with large format stores in Mumbai, Gurgaon, Ghaziabad, Lucknow, Calicut, Hyderabad, Vizag, Vijayawada, Aurangabad Durgapur and Kolkata.

Spencer’s Super

one of the largest supermarket chains in the food and grocery segment in India.

Spencer’s Daily

small format stores conveniently located with a range of products to meet your daily household needs.

Spencer’s Express

your food and grocery store next door.

There are nearly 9 to 10 Spencer’s stores in Ahmedabad city in different areas.

6Ten stores

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Launched on March 27, 2007,neighbourhood convenience store chain 6Ten’s retail network has already spread to over 320 stores acrossNCR, Chandigarh, Mohali, Panchkula, Amritsar,Ludhiana, Ambala, and Nagpur with 3,10,000 sq.ft of retail space on investment of Rs.150 crore. The Rs.1,085 crore listed company REI Agro Ltd plans to open 1,000 stores covering an area of 10 lakh sq.ft by FY 2009 and 2,800 stores covering over 40 lakh sq.ft by FY 2011. There is only one store available in Ahmedabad City and other stores are under construction in Ahmedabad and other parts of Country

Subhiksha

Subhiksha is India's largest supermarket, pharmacy and telecom chain. Started in 1997 as a single store entity in South Chennai, it is now present nationally across 1000 outlets and spread across more than 90 cities. You can now locate the nearest Subhiksha store in your area with the Store Locators. Subhiksha is India's largest supermarket, pharmacy and telecom chain. Started in 1997 as a single store entity in South Chennai, it is now present nationally with 1000 outlets and spread across more than 90 cities. ICICI Venture Capital has a 24% stake in Subhiksha.

Future Group

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Future Group is one of the country’s leading business groups present in retail, asset management, consumer finance, insurance, retail media, retail spaces and logistics. The group’s flagship company, Pantaloon Retail (India) Limited operates over 7 million square feet of retail space, has over 1000 stores across 53 cities in India and employs over 25,000 people. Some of its leading retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar, Home Town, eZone, Depot, Future Money and online retail format, futurebazaar.com.

The group's subsidiary companies include, Home Solutions Retail India Ltd, Pantaloon Industries Ltd, Galaxy Entertainment and Indus League Clothing. The group also has joint venture companies with a number of partners including French retailer Etam group, Lee Cooper, Manipal Healthcare, Talwalkar's, Gini & Jony and Liberty Shoes. Planet Retail, a group company owns the franchisee of international brands like Marks & Spencer, Debenhams, Next and Guess in India. Future Group companies also includes, Future Capital Holdings, Future Generali India Indus League Clothing and Galaxy Entertainment that manages Sports Bar, Brew Bar and Bowling Co. Future Capital Holdings, the group’s financial arm, focuses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels.

The group’s joint venture partners include Italian insurance major, Generali, French retailer ETAM group, US-based stationary products retailer, Staples Inc and UK-based Lee Cooper and India-based Talwalkar’s, Blue Foods and Liberty Shoes.

Partner Companies

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Pantaloon Industries Ltd

Home Solutions Retail (India) Ltd

Future Capital Holdings

CovergeM Retail (India) Ltd

Indus League Clothing Ltd

Galaxy Entertainment Corporate Ltd

Joint Ventures Companies

Planet Retail Holdings Ltd

Footmart Retail

GJ Future Fashions

CapitaLand Retail India

ETAM Future Fashions India Pvt Ltd

Big Bazaar

Big Bazaar is the part of future group and pantaloon India ltd. Big Bazaar is the hyper market kind of retail format. It offers many types of product in a wild range of variety. Big Bazaar offers value. And not just to its customer. At present 101 stores established of Big Bazaar across India. Value to those who benefit when property prices shoot up around Big Bazaar location. Value to the entrepreneurs Big Bazaar sources from. Value, to cottage industry in the vicinity, Value, to more then 21,680 employees.

REVIEW OF LITERATURE

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

India's GDP and around eight per cent of the employment. Retail sector is

one of India's fastest growing sectors with a 5 per cent compounded

annual growth rate. India's huge middle class base and its untapped retail

industry are key attractions for global retail giants planning to enter

newer markets. Driven by changing lifestyles, strong income growth and

favorable demographic patterns, Indian retail is expected to grow 25 per

cent annually. It is expected that retail in India could be worth US$ 175-

200 billion by 2016.

As the nature of the study is survey. Nature of the data is primary by

questionnaire to customers. The same study particularly in Ahmadabad

location and for the same retail outlet is difficult to find. General

information related to catchment analysis and retail store are available

but it is not appropriate to mention all those information here.

Theoretical concept are taken from the different books as mention in the

references. The other information is taken from the different web sites.

Other data are taken from the different sources are mention in references.

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

Until then, the industry was dominated by the un-organized sector. It was

a seller’s market, with a limited number of brands, and little choice

available to customers. Lack of trained manpower, tax laws and

government regulations all discouraged the growth of organized retailing

in India during that period. Lack of consumer awareness and restrictions

over entry of foreign players into the sector also contributed to the delay

in the growth of organized retailing. Foundation for organized retail in

India was laid by Kishore Biyani of Pantaloon Retails India Limited

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

business giants such as Reliance, Bharti, Birla and others are now

entering into retail sector.

A number of factors are driving India's retail market. These include:

increase in the young working population, hefty pay-packets, nuclear

families in urban areas, increasing working-women population, increase

in disposable income and customer aspiration, increase in expenditure for

luxury items, and low share of organized retailing. India's retail boom is

manifested in sprawling shopping centres, multiplex- malls and huge

complexes that offer shopping, entertainment and food all under one roof.

But there is a flip side to the boom in the retail sector. It is feared that the

entry of global business giants into organized retail would make

redundant the neighborhood Kirana stores resulting in dislocation in

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

in India is not hurdle free. The taxation system still favors small retail

business.

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A perfect business model for retail is still in evolutionary stage.

Procurement is very vital cog in the retail wheel. The retailer has to fight

issues like fragmented sourcing, unpredictable availability, unsorted food

provisions and daily fluctuating prices as against consumer expectations

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

at all times.

Trained human resource for retail is another big challenge. The talent

base is limited and with the entry of big giants there is a cat fight among

them to retain this talent. This has resulted in big salary hikes at the level

of upper and middle management and thereby eroding the profit margin

of the business.

But retail offers tremendous for the growth of Indian economy. If all the

above challenges are tackled prudently there is a great potential that retail

may offer employment opportunities to millions living in small town and

cities and in the process distributing the benefits of economic boom and

resulting in equitable growth.

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INTRODUCTION OF PROJECT REPORT

PROJECT TITLE

“To Study the consumer attitude towards organized Retail Outlet with special reference to Reliance fresh”

Consumer Attitude

Consumer attitude helps the organization to understand the purchasing pattern of consumer. For example customer wants to buy from local kirana store (Mom and Pop store) because of location is convenience for them. If the Retailer comes to know that what exactly is the reason of purchasing so the Retailer can change his store according store because the main reason for the existence of Retailer is customer and I have to change according to customer.

Consumer Attitude is very important in Retail consumer attitude means the behavior which a consumer shows while purchasing. The consumer shows different consumer attitude because of different names

Demographics Psychographics Situation

The main aim of this Project to find out the reason what exactly prefer a Retail outlet while purchasing this reason may be:

Location Ambiance of the store Pricing Quality Variety Customer Services

Or I can say that I came to know about the purchasing pattern of the customer then I as a retailer can change ourselves according to customer purchasing pattern.

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KEY RESPONSIBILITIES

There are 38 Reliance fresh store in Ahmedabad some of them are working good means high sales and some of them are not working good means low sales. So, I had been allotted 7 stores to do catchment study

Radhe store ( Khokra Ahmedabad)

SP Mall store ( Bapu Nagar , Ahmedabad)

Pancham store (Bapu Nagar , Ahmedabad)

Shahibag store ( Shahi Bagh , Ahmedabad)

Safal store ( Anand Nagar , Ahmedabad)

Shyam Shikhar store (Bapu Nagar , Ahmedabad)

Pushpak store ( Khanpur , Ahmedabad)

That I have to do catchment analysis of them. Reliance provides me format that I have to follow for catchment.

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WHAT IS CATCHMENT ANALYSIS…?

Catchment means to find out information of the customer, competitors etc. and suitable location to open the store in a particular area means

Income group of people ( Low income group , Middle income group , High income group)

Purchasing pattern

Number of households in that particular area

Distance of residential area ( societies , flats , chawls) from the store so that we can find out that how much far customer can travel to come inside the store

Location of the store( Prime location , Subprime location )

Number of grocery stores in that area

Number of super value ( Hindustan liver product sale is more that Rs. 1 lac monthly) stores in that store

Number of organized Retailer ( Competitors) in that area

Number of Apparels shop

Number of banks in that area

Awareness about the store

Number of educational institute in that area

Number of entertainment centre ( Cinemas) in that area

The main occupation of the people in that are

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From this data I come to know about our customer and I can analysis the purchasing pattern of the customer

Catchment Analysis Format For The Stores Within 2 K.M RadiusCatchment Analysis

List of Residential Societies / Flats List of Organized Retailer( competitor)

List of Organized Retailer( Competitor)

Sr. No.

NameNo. of Households

Sr. No. Name Area in SFT Format Category

1 1 Staples2 2 PF & Beverages3 3 Pharmacy4 4 Dairy5 5 Consumer Durables6 6 Apparel7 7 Stationary/Toys/Gifts/Books/8 8 Apparel9 9 GM ADU,HF&EH10 10 Florist11 List of Govt./ Pvt .Offices/Banks List of Restaurants/Eat Outs12 Sr. No. Name Approx Employee Names13 1 14 2 15 3 16 4 17 5 18 6

19 List of Education Institutes

List of Cinemas/Entertainmet Centres

20 Sr. No. Name Approx Students Names

21 1 22 2 23 3

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After catchment analysis I have to make a report on catchment and Observation about

Store operation Customer Location Pricing strategy of competitors

PROJECT DETAILS/ METHODOLOGY

Selecting and establishing research design

Research type

Exploratory research

Information sources

Primary data

Sample Size

200 People

Research Instrument: Questionnaire

Types of Forms in Questionnaire: Open ended question and Closed ended question

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FINALIZING RESEARCH INSTRUMENT / DATA

Methodology of collecting the data

Personal interview are taken while doing catchment survey of Reliance Fresh Stores.

Data Collection

For Data collection I went to different area of Ahmedabad while doing catchment survey of Reliance Fresh Stores and approach respondents from the front.

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ANALYSIS AND RESULTS

I have divided my question in to three parts general information like respondents age, sex, name etc. warm up questions family size, education qualification, business types. And lastly main purpose questions. (all questions were put in annexure - i)

Results shows out of 200, 80 respondents were female and 120 were male. Out of 200 130 respondents are under the age of 25-35.

Warm up questions/ general purpose questions:

Que.1: What is your Family Size (No. of Member)?

FAMILY SIZE AHEMDABAD2 Members 203 Members 604 Members 705 or Above 50

Most of the respondents having family size of four members, 3members and five and above. Around 10 percent people having family size of two member. Family having less than five members having high disposable income. “Newly wed” group also having high disposable income.

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Que.2: What is your Educational Qualification?EDUCATIONAL QUALIFICATION AHEMDABAD

10th Pass 0812th Pass 18Graduate 72

Post Graduate 80

Result reveled that most of the respondents are educated generally graduate and post graduate.

Que.3: What is your Occupation?OCCUPATION AHEMDABAD

Business (Firm/Company) 12Self Employed (Small Business) 40

Govt. Service 40Private Job 100

Other 8

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Result reveled that most of the respondents are doing privet job. People doing privet job having varied income and they are more sensitive towards safety need. They are generally investing their money for future.

Que. 4: Main purpose to visit retail storePurpose No of respondents

Leisure time activity 40Children’s demand 30

Purchase of special products 30Purchase of general products 100

There are significant amount of people who visit the retail store as a leisure time activity and children’s demand. Significant amount of people come for purchasing general merchandise from the retail store.

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Main purpose questions

Q 1. From where do you buy your daily need products?

Ans. Mom and Pop store Big Bazaar

More Reliance Fresh

Other (Please Specify)

Analysis:-

Retailers No. of PeopleMom and Pop Store 98

Big Bazaar 35More 24

Reliance Fresh 39Others 4

Graph showing store selection for purchasing daily needs

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35, 18%

24, 12%

39, 20% 4, 2%

98, 48%Mom and Pop StoreBig BazaarMoreReliance FreshOthers

As per survey conducted

48% of People are purchasing their daily needs from Mom and Pop

store because of convenience is the main factors for them. Some of

the Customers always prefer to buy their daily needs from Mom &

Pop store because they are situated very near to them.

20 % of People are purchasing their daily needs from Reliance Fresh,

because it gives brand name to them and they feel proud after

purchasing from any of Reliance fresh stores from Ahmedabad

18 % of People are purchasing their daily needs from Big Bazaar

because Big Bazaar has positioned itself “SABSE ACHCHA AUR

SABSE SASTA” Moreover Big Bazaar was the first one to enter into

the Organized Sector in India

12% of People are purchasing their daily needs from More, Well

More (Aditya Birla Group) is not so much Popular among the People

because they are lacking in awareness

2% of People are purchasing their daily needs from other Stores like

Spencer’s, Subhiksha, India Bulls Mart and Vishal Mega Mart etc.

It shows that people still like to purchase from Mom and Pop store and

Street Vendors because they are situated very near to them.

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Q 2. From where do you come to know about the above store?

Ans. Family Print media Friends Radio and TV

Other (Please Specify)

Analysis:-

Retailers No. of PeopleMom and Pop Store 98

Big Bazaar 35More 24

Reliance Fresh 39Others 4

Graph showing the communication channel for promotion

1422

156

6 20

20

40

60

80

100

120

140

160

180

No

. o

f P

eop

le

Series1 14 22 156 6 2

Family Friends Print Media Radio & TV Others

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Nearly 80 % of people come know about store from Print Media,

Because it is very popular source of advertisement among the people

Others like Radio & TV, Friends and informed by family are

following nearly 9 to 10 %

So, from the above data we can conclude that still print media is catching the eyes of consumer.

Q 3. According to you what are important factors for you when you go for shopping?

(Rank 1 to 5)

Ans. Location Customer Services Pricing & Discounts Variety Quality

Analysis:-

Rank Location Pricing & Discount Quality Variety Customer Services1 76 24 48 36 162 46 30 66 42 163 30 50 56 50 144 22 56 24 60 385 26 40 6 12 116

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Graph showing customers preference for selection retail outlet


Nearly 40% of people prefer location as their first priority to buy their daily needs because everybody in Ahmedabad is looking for convenience

33% of people prefer quality of the product as their second priority for the daily needs, quality means freshness of vegetable, cleanliness of stores

25% of people prefer Pricing & Discount of the product as their third priority for the daily needs because in Ahmedabad city People are price sensitive

30% of people prefer Variety of the product as their forth priority for the daily needs

More than 50% of people look after customer service as their least priority for the daily needs.

We can conclude that people look after nearest location and quality of product while purchasing daily needs.

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76

46

30

22

26

24

30

50

56

40

48

66

56

246

36

42

50

60

12

161614

38

116

0%10%20%30%40%50%60%70%80%90%

100%

No. of % people

Location Pricing &Discount

Quality Variety CustomerServices

Factor considered while purchasing

Rank 5

Rank 4

Rank 3

Rank 2

Rank 1

Q 4. When do you purchase more?

Ans. First week of month Mid of the month

End of the month When required

Analysis:-

When they Purchase No. of PeopleFirst of week of Month 46

Mid of the Month 38End of Month 12

When Required 104

Graph showing purchasing nature and time of customers

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Frist of week of Month, 46, 23%

Mid of the Month, 38, 19%

End of Month, 12, 6%

104, 52%When Required,


More than 50% of people purchase when they require means there is no fix time to buy their daily needs but, When they feel the need of product they immediately buy it

23% of people purchase their daily needs within the first week of the month. Some of the survey people prefer to buy their daily needs in first week of the month because service class people get their salary in the first week of the starting month

19 % of people buy their daily needs during the mid of month

Only 6% of people go for purchase at the end of the month.

So, we can conclude that people like to buy when they feel need of that particular product.

Q 5. How frequently do you purchase?

Ans.

Category Daily Weekly Fortnightly Monthly More than a month

F&VGroceryCosmeticsBeverages Ready to food

Analysis:-

Categories Daily Weekly Fortnightly Monthly More than MonthF & V 94 86 4 10 6

Grocery 4 32 30 100 34Cosmetics 2 6 22 138 32Beverages 12 54 46 48 40

Ready to food 20 62 22 66 30

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94

86

4106

432

30

100

34

2622

138

32

12

54

46

48

40

20

62

22

66

30

0%10%20%30%40%50%60%70%80%90%

100%

No.of % people

F & V Grocery Cosmetics Beverages& Snacks

Ready toeat food

Catagories

More than Month

Monthly

Fortnighlty

Weekly

Daily

Graph showing purchasing pattern of different categories


It has been observed that people mostly prefer to buy fruits and vegetables daily or weekly as they are perishable product and they are too difficult to store without refrigerator and most of the surveyed people come under monthly family income slab of Rs. 5,000-15,0000

While grocery and staples product are purchased at least once in a month, because they are not perishable like Fruits & Vegetable and this is people tendency to preserve grocery and staples once in week

Some of the people prefer to preserve grocery and staples only once in a year

While cosmetics and ready to eat food are meant to be bought at least once in a month because it has been clearly observed in the survey that people from Ahmedabad city especially women are not very fond of cosmetics product any how.

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Q 6. Have you ever visited Reliance Fresh store? (If yes than only go ahead)

Ans. Yes No

Analysis:-

Particular No. of PeopleYes 136No 64

Graph showing visit awareness of Reliance fresh Ltd.


68% of people have at least once visited any of the Reliance Fresh stores, because there are nearly 40 Reliance Fresh stores across the Ahmedabad so people visit Reliance fresh stores

From the survey people only 32% of People refused to visit the Reliance Fresh store

So there is good response for Reliance fresh as compared to its competitors.

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136, 68%

64, 32%

Yes No

27

85

18

6

28

93

87

10

57

63

6

26

84

179

13

93

25

5

27

74

28

7

0%10%20%30%40%50%60%70%80%90%

100%

No. of % People

Convenience Ambiance Price Quality Service ProductAvailability

Factors

Poor

Average

Good

Excellent

Q 7. Rate the following factors on the basis of your experience?

Ans. 1. Excellent 2. Good 3. Average 4.Poor

Factors Reliance Fresh Factors Reliance FreshConvenience QualityAmbiance ServicesPrice Product availability

Analysis:-

Factors Excellent Good Average PoorConvenience 27 85 18 6Ambiance 28 93 8 7Price 10 57 63 6Quality 26 84 17 9Service 13 93 25 5Product Availability 27 74 28 7

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More than 70% of people satisfied with the convenience of the Reliance

Fresh store because now it is situated in every area of Ahmedabad city

with Prime Location

80% of people like the ambiance of the Reliance Fresh store like

assortments of Fruits and Vegetables, Chillers are used for Dairy

Products and Beverages

Nearly 50% of people think that price of Reliance Fresh product are

Average because they don’t find much difference between Prices of

Reliance Fresh stores and other stores located in the city like Spencer’s,

More, 6Ten etc,

70% of people feel good about Quality, Service and Product Availability

are offered by Reliance fresh Ltd in Ahmedabad city

So, we can conclude that people are not very satisfied with the pricing of

Reliance Fresh product

Q 8. How far you have to travel to go for purchasing from Reliance Fresh?

Ans. Less than 3 K.M 3 K.M -6 K.M

7 K.M – 10 K.M More than 10 K.M

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Analysis:-

Particular No. of PeopleLess than 3 KM 883 KM to 6 KM 337 KM to 10 KM 9More than 10 KM 6

Graph showing distance preference to visit Reliance Fresh stores

It has been observed that People always prefer to buy their daily needs from the nearest store which is less than 3 K.M

65 % of people like to buy purchase within the radius of 3 K.M from their households because generally in area of Ahmedabad they don’t get organized stores so they have to travel more to reach some of the organized stores like Reliance Fresh, Big Bazaar, Spencer’s and others

While some people who don’t have Reliance fresh store within their locality they still prefer to go beyond 3 K.M to purchase their daily needs

So, we can conclude that majority of people always prefer to purchase from nearest place.

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3 KM to 6 KM, 33, 24% Less than 3

KM, 88, 65%

7 KM to 10 KM, 9, 7%

More than 10 KM, 6, 4%

Q 9. How do you find employees attitude in the Reliance Fresh store?

Ans. Co-Operative Rude

They only help when they are asked

Analysis:-

Graph showing consumer’s experience with Reliance fresh employees

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Particular No. of PeopleCo-Operative 86Rude 18They only help when they are asked 32

Rude, 18, 13%

They only help When they are Asked, 32, 24%

Co-Operative, 86, 63%


63% of consumers who visited Reliance fresh stores they always find CSAs and other staff behavior very co-operative because they think that CSAs approach them from their front and always willing to help them any how

Whereas 24% of People think that they have to always call CSAs to help them anyhow also Customers think that they are demotivated towards their works

While only 13% of People think that CSAs and other staff behave very rudely with them.

So, we can conclude Consumers are much satisfied with service level of CSAs and other staff of Reliance Fresh Ltd.

Q 10. How do you find customer service in the Reliance Fresh store?

Ans. Excellent Good

Average Poor

Analysis:-

Particular No. of PeopleExcellent 47Good 65Average 18Poor 6

Graph showing consumer’s experience with Reliance fresh customer service

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Good, 65, 48%

Average, 18,13% Poor, 6, 4%

Excellent, 47, 35%


Almost 35% of surveyed people find the Customer service offered by Reliance Fresh is excellent like When they visit MSR ( Member of Sales Representive ) within no time MSA inform them about their gather point and other facility like Recharge of Mobile

While 48% of surveyed people find it good means they don’t have to wait for their turn

Only 4% of People find it very poor service offered Customer Service department in Reliance Fresh Stores.

So, we can conclude that customer service level is very good by Reliance fresh towards its potential customers.

Q 11. Do you find the pricing of Reliance Fresh store is less than other store?

Ans. Yes No Equal

Analysis:-

Particular No. of PeopleYes 47No 61Equal 28Total 136

Graph showing consumer’s experience with Reliance fresh pricing comparing with Outside pricing

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No, 61, 44%

Equal, 28, 21% Yes, 47,

35%

120

48

266

020406080

100120140

5000-15000

15000-25000

25000-50000

More than50000

Income Level

No

. o

f P

eop

le

Series1


44% of People think that the prices of daily needs are higher than outside means Local vendors and street vendors or other organized retail format

While 35% of People find it lower than outside and other organized store

Only 21% of People think there no difference between prices of Reliance fresh and other stores.

Q 12. What is your monthly family income?

Ans. Income Level (monthly) - 5000-15000 15000-25000 25000-50000 More than 50000

Analysis:-

Particular No. of PeopleRs. 5000-15000 120Rs. 15000-25000 48Rs. 25000-50000 26More than Rs. 50000 6

Graph showing monthly family income of the customer who visit Reliance fresh Stores


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60% are those people whose family income is between 5000-15000 monthly



3% are those people whose family income is more than 50000-monthly.

We can conclude that here in Reliance fresh store is having every kind of Customers like Higher Class, Middle Class and Lower Class of People

INTERPRETATION OF RESULTS

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Most of the people prefer to purchase their daily needs products from Mom and Pop stores and street vendors because of convenience location

80% of people come to know about organized stores through print media and other printing advertisement

Consumers prefer to purchase from nearest organized stores according to

Location

Quality

Variety

Pricing and Discounts

Customer Service

It has been clearly observed that in Ahmedabad city there no fix time of purchasing daily needs products but, whenever they feel need of the product they immediately purchase it

In survey it has been seen that people prefer to buy

Fruits and vegetables on daily basis as they are perishable

Grocery and staples items on monthly basis

Cosmetics products are purchased on monthly basis

Beverages and snacks are preferred to buy weekly basis

Ready to food like Maggie, Biscuits and Kharkharas are bought on weekly basis

In Ahmedabad city People don’t prefer to eat Frozen foods and readymade food like frozen vegetables, Frozen meat much Increase the number of female in purchasing the products because of the demographic changes.

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The response for Reliance Fresh from the surveyed people is quite good about 70% of surveyed people have at least once visited any of the Reliance fresh storesCustomer find the Convenience, Quality ,Service ,Product availability are good of the Reliance Fresh store and pricing of the products are average as per survey

Most of the People always like to visit nearest Reliance fresh stores in their locality

In any of the Reliance Fresh stores most of the consumers find employees behavior very co-operative towards them

While ¼ of the surveyed people find that CSA(Customer Service Associates) only help when they are asked means the CSA staff does not approach the customer from the front

About 1/5 of the customer find that CSA staff behavior is rude toward customerMost of the people found that customer services are good in Reliance Fresh store

Most of the people found that pricing of the Reliance Fresh store is higher than outside

In survey we find most of the people are from lower income group

About 33 % of the respondents are from middle income group

About 20 % people are from high income group.

According to w size of four members, 3members and five and above. Around 10 percent people having family size of two member.

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Family having less than five members having high disposable income. “Newly wed” group also having high disposable income.

Result reveled that most of the respondents are educated generally graduate and post graduate. Result reveled that most of the respondents are doing privet job. arm up questions it is seen that Most of the respondents having family

People doing privet job having varied income and they are more sensitive towards safety need. They are generally investing their money for future.

There are significant amount of people who visit the retail store as a leisure time activity and children’s demand. Significant amount of people come for purchasing general merchandise from the retail store.

RECOMMENDATION FOR RELIANCE FRESH

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As people prefer to buy from local kirana store because of location so

Reliance Fresh has to open its new store at very main location in the city

because the most important thing in Retail is Location –Location – Location

As per survey conducted most of the people came to know about organized

store because of print media so Reliance must put more emphasis on this

channel of communication and promotion means print media

As customer prefer to buy from organized store firstly due to location so

Reliance must open its store at convenience location, then customer prefer

quality so Reliance must put only quality products inside the store

As customer prefer to buy Fruits and Vegetables on daily basis , grocery

items on monthly basis, cosmetics items on monthly basis, Beverages and

snacks on weekly basis and Ready to eat food on monthly basis and people

prefer to buy products whenever they required so Reliance Fresh must put

all the items in shelves every time

People don’t prefer to buy frozen food and prefer to eat homemade food so

Reliance fresh must not put frozen food in Reliance fresh store to save

inventory cost

As about 33 % customer found that CSA does not approach customer from

the front the CSA only help when they are asked to help, so CSA staff must

approach to customer from the front and help the customer and try to sell

more and more items to increase the sale of Reliance Fresh store

As some the customer found the CSA behavior is rude toward the customer

so CSA must change their attitude toward customer and feel the customer

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proud because customer is King and a satisfied customer can bring 10 new

customer by word of mouth it just like a chain

As most of the customer found that pricing of the items in Reliance fresh

store is higher than outside and as Indians are price sensitive so must keep

pricing of our products less than outside

As our most of the customer are from lower income group so we must keep

merchandise according to their needs.

Most of the people visit the retail store as a leisure time activity so retail

store should use some strategy to generate some income from such people

like retail store should charge for vehicle parking. Store also put some items

to increase “impulse buying”

As the increase of woman in purchasing and visiting the retail store, store

should carry such items which can increase the attention of the woman.

CUSTOMER SUGGESTIONS FOR RELIANCE FRESH

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We have asked some of the customer in Reliance Fresh store to give suggestion

to make Reliance Fresh store to make it more better some of the valuable

suggestions are as follows:-

Pricing of products should be low inside the store than outside

Most of the customer suggested that Fruits and vegetables must be fresh in

store because of brand name Reliance Fresh ( Reliance Fresh)

Credit facility must be provide to the customer just like local Mom and Pop

( Kirana wala) provides

Reliance must improve service quality as Reliance is brand name

More varieties of products should be available inside the store

CSA’s service must be good

There must be enough number of POS and all must be in working condition

during peak hours because customer has to wait in queue

All items should be in enough quantity some time customer find some items

out of stock (butter milk, curd etc.)

More discounts schemes should be available in Reliance fresh store as like

as Big Bazaar.

CONCLUSION

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From above the survey we conclude that

The main factor that effect the retail business is Location

Indians are price sensitive they seek value for money so price also matter

for Indian customers

The purchasing pattern of the people in one location is totally different

from other Location in Ahmedabad city

Customer service is not so much important in grocery retail , Quality,

and Price matter a lot

The reason for which people prefer to buy from organized retail store is

variety of product available under one roof and customer has not to move

from one shop to another shop for his/her daily needs

Most of the people in Gujarat use to purchase their daily needs whenever

they require.

TERMINOLOGY

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Chain store

Stores that have two or more retail out lets that are commonly owned and

monitored. These stores are have a centralized buying, and merchandise system

and sell similar lines of merchandise.

Combination store

A blend of super market and a general merchandise contributes more

than 40 percent of the sales.

Consumer markets

It consist of the individuals, households, which are ultimate users of

goods and services.

Consumer buying behavior

The response and reaction of the ultimate consumer to various situations

involved in purchasing and using various goods and services.

Convenience goods

Products that customers buy frequently, such as fruits, vegetables,

groceries.

Convenience store

Small stores that are located near residential areas. It caters to customers

who prefer convenience buying or shopping to the price of the products.

Conventional supermarket

Stores that focus on food and household maintenance products. These

stores earn very limited revenues from the sale of non food or general

merchandise goods.

Hyper market

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A large retail store that offers products at a low price. It is a

combination of discount store and a food based supermarket.

Isolated store

A freestanding retail outlet situated either on a street or a highway.

Stores of this kind do not have any retailers in their vicinity with whom they

have to share consumers.

Market area analysis

Analyzing regional and local markets to determine the area that seems to

offer the highest market potential. Such an assessment is called market area

analysis.

Merchandise Mix

The total range of products that a store offers to its customers.

Primary trade area

The trade area that consist of fifty to eighty percent of the store’s

customers. This area is nearest to the store, has a highest density of customers

to population, and contributes the highest per capita sales.

Regional shopping centre

A planned shopping centre catering to a geographically dispersed market.

It consist of at least one big department store and 50 or more small retailer.

Retail entrepreneur

A person who has the ability to organize, manage and take on the

responsibility of running a retailing activity/ business.

Retail market

A group of customers who have common or similar needs which can be

collectively addressed by retailer who choose to cater to the same group or

customer segment.

Retailer

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The last entity of the distribution channel.

Retailing

A set of business activity that adds value to the products and services sold

to the final customers for their personal, family or house hold use.

Trade area Analysis

Trade areas refer to the places from which most of the customers are

drawn. The process of selecting trade areas is known as trade area analysis.

Trade area

A geographical area containing the customers of particular firm or group of

firms for specific goods or services.

Warehouse store

The store are discount food retailers with the size of 100,000 square feet.

They cater to customers who look for low price deals.

BIBLIOGRAPHY of 66

BRM(Business research methods) ISBN 81-7881-947-3, Ref. No. BRM/A-

09 2K5 63 [A text book of MBA students by ICFAI university]

Marketing Management by Kotler, Kelly, Kozy and Jha

Research Methodology by William Zikmund

Retail Management Ref. No. RM/A – 052K333 Published by ICFAI Centre

for Management Research, Road # 3, Banjara hills, Hyderabad – 500 034

www.Google.com

www.rai.com

www.ril.com

www. reliancefresh .info

ANNEXURE I

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http://www.reliancefresh.info/

http://www.ril.com/

http://www.rai.com/

http://www.Google.com/

QUESTIONNAIRE

General questions:Name : _______________________________________________________________City : _______________________Gender: Age:

Warm up questions:

Que.1: What is your Family Size (No. of Member)? ____________________

Que.2: What is your Educational Qualification?

Que.3: What is your Occupation?

Que. 4: Main purpose to visit retail store:

Leisure time activityChildren’s demandPurchase of special productsPurchase of general product

Main purpose questions:

Q1. From where do you buy your daily need products?

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Male Female 18-20 21-2425-29 30-3435-45 46-5455 or Above

10th pass 12th passGraduate Post graduateOther (Specify)

Professional Govt. ServiceBusiness (Firm/Company) Private JobSelf Employed (Small Business)Other (Specify)

Ans. Mom and Pop store Big Bazaar

Shubhiksha Reliance Fresh Other (Please Specify)

Q2. From where do you come to know about the above store?

Ans. Family Print media

Friends Other (Please Specify)

Radio and TV

Q3. According to you what is important thing for you when you go for shopping? (Rank 1 to 5)

Ans. Location Pricing & Discounts

Quality Customer Services

Variety

Q4. When do you purchase more?

Ans.

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First week of month Mid of the month

End of the month When required

Q5. How frequently do you purchase?

Ans.

Category Daily Weekly Fortnightly Monthly More than a month

F&V

GroceryCosmeticsBeverages & SnacksReady to eat food

Q6. Have you ever visited Reliance Fresh store? (If yes than only go ahead)

Ans. Yes No

Q7. Rate the following on the basis of your experience?

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Ans. 1. Excellent 2. Good 3. Average 4.Poor

Factors Reliance Fresh Factors Reliance FreshConvenience Quality

Ambiance Services

Price Product availability

Q8. How far you have to travel to go for purchasing from Reliance Fresh?

Ans. Less than 3 K.M 3K.M -6 K.M

7 K.M – 10 K.M More than 10 K.M

Q9. How do you find employees attitude in the Reliance Fresh store?

Ans. Co-Operative Rude

They only help when they are asked

Q10. How do you find customer service in the Reliance Fresh store?

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Ans. Excellent Good

Average Poor

Q11. Do you find the pricing of Reliance Fresh store is less than other store?

Ans. Yes No

Equal

Name ……………………………………………………………………

Suggestions to Reliance fresh………………………………………….…………………………………………………………………...............…………………………………………………………………………...

Income Level (monthly)

5000-15000 15000-25000

25000-50000 More than 50000

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Reliance Report 8nbam095

Documents

Transcript of Reliance Report 8nbam095