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In this era of growing professional and development of new era concept and
industries, education is not complete with the theoretical knowledge of the lecture
theater. One need a practical experience to identify how the management concepts are
helpful in managing the organization being and MBA student. This report is the out
come of the Reliance Retail Ltd.(Bareilly).
This project proved very beneficial for me to understand the organization, their
operation as well as help in knowing how people work as a team to achieve a common
objective, how the consumer requirement are fulfilled and what qualities help the
organization to excel or trail.
This project well proved beneficial for our future managerial and professional life,
also help me to learn the real environment of business operation which provide us a
vast exposure to a management student.

I hereby take an opportunity to present this project, which bears the imprint of much personality for
the compilation of this report. It was a great experience to work with so talented and committed
First of all I would like to extend my heartfelt gratitude towards my father Mr. K.C. Arya and my
family who had given their unconditional support as far as my project is concerned and for constant
guidance, motivation and assistance while I was working on the project for providing me all
necessary information and kind support and guidance.
I would also like to owe my special thanks to Mr. Basant Kumar Potnuru (Project Guide), Mr.
Rahul Gupta (Faculty Incharge) for providing me valuable ideas and suggestions which enabled
me to prepare this report. He has been a great source of inspiration and motivation.
This project would not have been possible without the consistent and constant support of the
placement cell of Invertis Institute of Management Studies, Bareilly.






The word 'Retail' is derived from the French word 'retailer' meaning 'to cut a piece off' or 'to break
bulk'. In simple terms it involves activities whereby product or services are sold to final consumers in
small quantities.
Retailing can be defined as the buying and selling of goods and services. It can also be defined as the
timely delivery of goods and services demanded by consumers at prices that are competitive and
affordable. Retailing involves a direct interface with the customer and the coordination of business
activities from end to end- right from the concept or design stage of a product or offering, to its
delivery and post-delivery service to the customer. The industry has contributed to the economic
growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in
the world today. Although retailing in its various formats has been around our country for many
decades, it has been confined for along time to family owned corner shops. Englishmen are great
soccer enthusiasts, and they strongly think that one should never give Indians a corner. It stems from
the belief that, if you give an Indian a corner he would end up setting a shop.

Retailing. It 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.[1]
Retailing may include subordinated services, such as delivery. Purchasers 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

Shops may be on residential streets, or in shopping streets with few or no houses, or in a shopping
center or mall, but mostly found in the central business district. Shopping streets may or may not be
for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from
precipitation. Retailers often provided boardwalks in front of their stores to protect customers from
the mud. Online retailing, also known as e-commerce is the latest form of non-shop retailing (cf.
mail order).
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities
such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping
often involves window shopping (just looking, not buying) and browsing and does not always result
in a purchase. Most retailers have employees learn facing; a hyper real tool used to create the look of
a perfectly-stocked store (even when it's not).


There are three major types of retailing.
Market . 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).
Store trading. The second form is shop or store trading. Some shops use counterservice, where goods are out of reach of buyers, and must be obtained from the seller.
This type of retail is common for small expensive items (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.
Virtual retail. 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
parallel existing retail types such as online shops or virtual marketplaces such as eBay
or Amazon. Buildings for retail have changed considerably over time. Market halls
were constructed in the Middle Ages, which were essentially just covered
marketplaces. The first shops in the modern sense used to deal with just one type of
article, and usually adjoined the producer (baker, tailor, cobbler). In the nineteenth
century, in France, arcades were invented, which were a street of several different
shops, roofed over. From this there soon developed, still in France, the notion of a
large store of one ownership with many counters, each dealing with a different kind of
article was invented; it was called a department store. One of the novelties of the
department store was the introduction of fixed prices, making haggling unnecessary,
and browsing more enjoyable. This is commonly considered the birth of consumerism.
In cities, these were multi-story buildings which pioneered the escalator.

In the 1920's the first supermarket opened in the United States, heralding in a new era
of retail: self-service. Around the same time the first shopping mall was constructed,
which incorporated elements from both the arcade and the department store.
A mall consists of several department stores linked by arcades (many of whose shops
are owned by the same firm under different names). The design was perfected by the
Austrian architecht Victor Gruen. All the stores rent their space from the mall owner.
By mid-century, most of these were being developed as single enclosed, climatecontrolled, projects in suburban areas. The mall has had a considerable impact on the
retail structure and urban development in the United States.
In addition to the enclosed malls, there are also strip malls which are 'outside' malls (in
Britain they are called retail parks. These are often connected to supermarkets or big
box stores. Also, in high traffic areas, other businesses may lease space from the
supermarket or big box store to sell their goods or services from. A recent
development is a very large shop called a superstore. These are sometimes located as
stand-alone outlets, but more commonly are part of a strip mall or retail park
Local shops can be known as brick and mortar stores in the United States. Many
shops are part of a chain: a number of similar shops with the same name selling the
same products in different locations. The shops may be owned by one company, or
there may be a franchising company that has franchising agreements with the shop
owners (see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods to such
shops, sometimes called 'pawn' shops. In other cases, especially in the case of a
nonprofit shop, the public donates goods to the shop to be sold (see also thrift store).
In give-away shops goods can be taken for free.
There are also 'consignment' shops, which is where a person can place an item in a
store, and if it sells the person gives the shop owner a percentage of the sale price. The


advantage of selling an item this way is that the established shop give the item
exposure to more potential buyers.
The term retailer is also applied where a service provider services the needs of a large
number of individuals, such as with telephone or electric power.

Local shops can be known as brick and mortar stores in the United States. Many shops
are part of a chain: a number of similar shops with the same name selling the same
products in different locations. The shops may be owned by one company, or there
may be a franchising company that has franchising agreements with the shop owners
(see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods to such
shops, sometimes called 'pawn' shops. In other cases, especially in the case of a
nonprofit shop, the public donates goods to the shop to be sold (see also thrift store).
In give-away shops goods can be taken for free.
There are also consignment shops, which are where a person can place an item in a
store, and if it sells the person gives the shop owner a percentage of the sale price. The
advantage of selling an item this way is that the established shop gives the item
exposure to more potential buyers.
The term retailer is also applied where a service provider services the needs of a large
number of individuals, such as with telephone or electric power.





Retail operations enable a store to function smoothly without any hindrances. The
significant types of retail operations consist of:
Department store
Specialty store
Discount/Mass Merchandisers
Warehouse/Wholesale clubs
Factory outlet
Retail Management System targets small and midsize retailers seeking to automate
their stores. The package runs on personal computers to manage a range of store
operations and customer marketing tasks, including point of sale; operations;
inventory control and tracking; pricing; sales and promotions; customer management
and marketing; employee management; customized reports; and information security.
Retailing, one of the largest sectors in the global economy, is going through a
transition phase not only in India but the world over. For a long time, the corner
grocery store was the only choice available to the consumer, especially in the urban
areas. This is slowly giving way to international formats of retailing. The traditional
food and grocery segment has seen the emergence of supermarkets/grocery chains
(Food World, Nilgiris, Apna Bazaar), convenience stores (Convenio, HP Speed mart)
and fast-food chains.
It is the non-food segment; however that foray has been made into a variety of new
sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus, Life Style,






(Archies, Music World, Crosswords, Landmark), appliances and consumer durables

(Viveks, Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo).


Hyper marts
Large supermarkets, typically 3,500-5,000 sq. ft.
Mini supermarkets, typically 1,000-2,000 sq. ft.
Convenience stores, typically 750-1,000sq. Ft.
Discount/shopping list grocer.
The traditional grocers, by introducing self-service formats as well as value-added
services such as credit and home delivery, have tried to redefine themselves. However,
the boom in retailing has been confined primarily to the urban markets in the country.
Even there, large chunks are yet to feel the impact of organized retailing. There are
two primary reasons for this. First, the modern retailer is yet to feel the saturation'
effect in the urban market and has, therefore, probably not looked at the other markets
as seriously. Second, the modern retailing trend, despite its cost-effectiveness, has
come to be identified with lifestyles. In order to appeal to all classes of the society,
retail stores would have to identify with different lifestyles. In a sense, this trend is
already visible with the emergence of stores with an essentially `value for money'
image. The attractiveness of the other stores actually appeals to the existing affluent
class as well as those who aspire for to be part of this class. Hence, one can assume
that the retailing revolution is emerging along the lines of the economic evolution of
Retailing. Consumer Brands. Shopping Malls. Retail Distribution and Logistics.
Department Stores
India Retail: Global Brands and Chains Set Sights
India Retail has got airborne and the concept of organized retailing and better
distribution and logistics has set in. The Indian urban consumer is also now getting
hooked to this new method of home purchases that also combine into family outings
and entertainment. The mall infrastructure across cities and supply chain mechanisms
across the country are getting into place. India Retail seems set to grow exponentially

in the next few years and the global giants are waiting at the wings for entry. The
government regulation on ownership in retail is the only obstacle for international
retailers. Global brands have however come in and set themselves up well.

Technology in Retail
Over the years as the consumer demand increased and the retailers geared up to meet
this increase, technology evolved rapidly to support this growth. The hardware and
software tools that have now become almost essential for retailing can be into 3 broad
Customer Interfacing Systems

Bar Coding and Scanners

Point of sale systems use scanners and bar coding to identify an item, use pre-stored
data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a
new concept where the consumer pushes the full shopping cart through an electronic
gate to the point of sale. In a matter of seconds, the items in the cart are hit with laser
beams and scanned. All that the consumer has to do is to pay for the goods.


Payment through credit cards has become quite widespread and this enables a fast and
easy payment process. Electronic cheque conversion, a recent development in this
area, processes a cheque electronically by transmitting transaction information to the
retailer and consumer's bank. Rather than manually process a cheque, the retailer voids
it and hands it back to the consumer along with a receipt, having digitally captured and
stored the image of the cheque, which makes the process very fast.


Internet is also rapidly evolving as a customer interface, removing the need of a

consumer physically visiting the store.


Operation Support Systems

ERP System

Various ERP vendors have developed retail-specific systems which help in integrating
all the functions from warehousing to distribution, front and back office store systems
and merchandising. An integrated supply chain helps the retailer in maintaining his
stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs,
while servicing the customer better.

CRM Systems

The rise of loyalty programs, mail order and the Internet has provided retailers with
real access to consumer data. Data warehousing & mining technologies offers retailers
the tools they need to make sense of their consumer data and apply it to business. This,
along with the various available CRM (Customer Relationship Management) Systems,
allows the retailers to study the purchase behavior of consumers in detail and grow the
value of individual consumers to their businesses.

Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way from
raw material suppliers right through to the retail shelf. These APS packages
complement existing (but often limited) ERP packages. They enable consolidation of
activities such as long term budgeting, monthly forecasting, weekly factory scheduling
and daily distribution scheduling into one overall planning process using a single set
of data.
Leading manufactures, distributors and retailers and considering APS packages such
as those from i2, Manugistics, Bann, MerciaLincs and Stirling-Douglas.
Strategic Decision Support Systems

Store Site Location

Demographics and buying patterns of residents of an area can be used to compare

various possible sites for opening new stores. Today, software packages are helping

retailers not only in their location decisions but in decisions regarding store sizing and
floor-spaces as well.
Visual Merchandising

The decision on how to place & stack items in a store is no more taken on the gut feel
of the store manager. A larger number of visual merchandising tools are available to
him to evaluate the impact of his stacking options. The SPACEMAN Store Suit from
AC Neilsen and ModaCAD are example of products helping in modeling a retail store

Investment Opportunities

Potential for Investment: The total estimated Investment Opportunity in the retail
sector is around US$ 5-6 Billion in the Next five years.

Location: with modern retail formats having made their foray into the top cities
namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore,
Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5

Sectors with High Growth Potential: Certain segments that promise a high growth
are :

Food and Grocery


Furniture and Fixtures


Durables, Footwear & Leather, Watch & Jewellery

Fastest Growing Formats: Some of the formats that offer good growth potential


Speciality and Super Market

Hyper Market

Discount stores

Department Stores

Convenience Stores and E-Retailing


Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain

and Logistics.

Rural Retail: Retail sector offers opportunities for exploration and investment in

rural areas, with Corporates and Entrepreneurs having made a foray in the past. India's
largely rural population has caught the eye of retailers looking for new areas of
growth. ITC launched the country's first rural mall ' Chaupal Sagar', offering a diverse
product range from FMCG to electronics appliance to automobiles, attempting to
provide farmers a one-stop destination for all of their needs. There has been yet
another initiative by the DCM Sriram Group called the ' Hariyali Bazaar that has
initially started off by providing farm related inputs and services but plans to introduce
the complete shopping basket in due course. Other corporate bodies include :

Escorts and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to

provide products/services targeted at the farmer in order to tap the vast rural market.

Wholesale Trading: wholesale trading also holds huge potential for growth. German

giant Metro AG and South African Shoprite Holdings have already made headway in
this segment by setting up stores selling merchandise on a wholesale basis in
Bangalore and Mumbai respectively. These new-format cash-and-carry stores attract
large volumes from a sizeable number of retailers who do not have to maintain
relationships with multiple suppliers for all their needs.

Cheap Consumer Credit




Type Public (NSE: RELIANCE)

1966 As Reliance Commercial
Mumbai, India
Mukesh Ambani, Chairman
Key people
& Managing Director
Industry Oil Conglomerates
Petroleum Products
Retail Stores
Revenue Rs 1,10,886 crore (2007)
Employees ~90,358 (2004)


Reliance Group
The Reliance Group, founded by 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$ 25 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$ 15 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.


Growth through Value Creation

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 endeavor 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
Starting as a small textile company, Reliance has in its journey crossed several
milestones to become a Fortune 500 company in less than 3 decades.
Reliance continues to cross newer & bigger milestones in its quest for what is known
as "Growth is Life".


Reliance is in the forefront of implementation of Corporate Governance best
Corporate Governance at Reliance is based on the following main principles:
Constitution of a Board of Directors of appropriate composition, size and commitment
to discharge its responsibilities and duties.
Ensuring timely flow of information to the Board and its Committees to enable them
discharge their functions effectively.
Independent verification and safeguarding integrity of the Company's financial

A sound system of risk management and internal control.

Timely and balanced disclosure of all material information concerning the Company
to all its stakeholders.
Transparency and accountability.
Compliance with all the applicable laws and regulations.
Fair and equitable treatment of all its stakeholders including employees, customers,
shareholders and investors.




Retailing in more developed countries is a big business and better organized than what
in India. According to a report published by McKinsey & Co. along with the
Confederation of the Indian Industry the global retail business is a worth a staggering
US$ 6.6 trillion. In the developed world, most of it is accounted for by the organize
retail sector.
The service sector accounts for a large share of GDPin most developed economies.
And the retail sector forms a very strong component of the service sector. In short, as
long as people need to buy, retail will generate employment. Globally, retailing is a
customer-centric with an emphasis on innovation in products, processes and services.
With total sales of US$ 6.6 trillion, retailing is the worlds largest private industry,
ahead of finance and engineering. Some of the worlds largest companies are in this
sector: over 50 Fortune, 500 companies and around 25 of the Asian Top 200 firms and
retailers. Wal-Mart, the worlds second largest retailer, has a turnover of US$ 260
billion, almost one-third of Indias GDP.

As many as 10% of the worlds billionaires are retailers. The industry accounts for
over 8% of GDP in western countries, and is one of the largest employers. According
to the U.S.Department of Labor, more than 22 million Americans are employed in
the retailing industry in over 2 million retail stores.

The retail scenario in India is unique. Much of its in the unorganized sector, with
over 12 million retail outlets of various sizes and formats. Almost 96% of these retail
outlets are less than 500 sq.ft. In size, the per capita retail space in India being 2
sq.ft. Compared to the US figure of 16 sq.ft. Indias per capita retailing space is thus
the lowest in the world.
With more than 9 outlets per1,000 people, India has the largest number in the world.
Most of them are independent and contribute as much as 96% to total retail sales
Because of the increasing number of nuclear families, working women, greater work
pressure and increased commuting time, convenience has become a priority for
Indian consumers. They want everything under one roof for easy access and
multiplicity of choice.
This offers an excellent opportunity for organized retailers in the country who
account for just 2% (and modern stores 0.5%) of the estimated US $180 billion










The growth and development of organized retailing in India is driven by two main
factors lower prices and benefits the consumers cant resist. According to experts,


economies of scale drive down the cost of the supply chain, allowing retailers to
offer more benefits offered to the customer.
The retail business in India in the year 2000 was Rs.400,000 crore and is estimated
to go to Rs.800,000 crore by the year 2005, an annual increase of 20%.The
contribution of the organized retail industry in the year 2000 was Rs.20,000 crore
and is likely to increase to Rs.160,000 crore by 2005.

Retail Sales
Retail sales, which amounted to about Rs7,400 billion in 2002, expanded at an average
annual rate of 7% during 1999-2002. With the upturn in economic growth during
2003, retail sales are also expected to expand at a higher pace of nearly 10%.
In a developing country like India, a large chunk of consumer expenditure is on basic
necessities, especially food related items. Hence, it is not surprising that food,
beverages and tobacco accounted for as much as 71% of retail sales in 2002. The
remaining 29% of retail sales are non-food items. The share of food related items fell
over the review period, down from 73% in 1999. This is to be expected as, with


income growth, Indians, like consumers elsewhere, spent more on non-food items
compared with food products.

Sales through supermarkets and department stores are small compared with overall
retail sales. However, their sales grew much more rapidly (about 30% per year). As a
result, their sales almost tripled during this time. This high acceleration in sales
through modern retail formats is expected to continue during the next few years with
the rapid growth in numbers of such outlets in response to consumer demand and
business potential

Growth of Retailing in India

Indian retailing industry has seen phenomenal growth in the last five years (20012006). Organized retailing has finally emerged from the shadows of unorganized
retailing and is contributing significantly to the growth of Indian retail sector.
RNCOS India Retail Sector Analysis (2006-2007) report helps clients to analyze
the opportunities and factors critical to the success of retail industry in India.
Organized retail will form 10% of total retailing by the end of this decade (2010).
From 2006 to 2010, the organized sector will grow at the CAGR of around 49.53% per
Cultural and regional differences in India are the biggest challenges in front of
retailers. This factor deters the retailers in India from adopting a single retail format.
Hypermarket is emerging as the most favorable format for the time being in India.

The arrival of multinationals will further push the growth of hypermarket format, as it
is the best way to compete with unorganized retailing in India.

Technology Impact
The other important aspect of retailing relates to technology. It is widely felt that the
key differentiator between the successful and not so successful retailers is primarily in
the area of technology. Simultaneously, it will be technology that will help the
organized retailer score over the unorganized players, giving both cost and service
Retailing is a `technology-intensive' industry. It is quoted that everyday at least 500
gigabytes of data are transmitted via satellite from the 1,200 point-of-sales counters of
JC Penney to its corporate headquarters. Successful retailers today work closely with
their vendors to predict consumer demand, shorten lead times, reduce inventory
holding and thereby, save cost. Wal-Mart pioneered the concept of building a
competitive advantage through distribution and information systems in the retailing
industry. They introduced two innovative logistics techniques - cross-docking and
electronic data interchange.
Today, online systems link point-of-sales terminals to the main office where detailed
analyses on sales by item, classification, stores or vendor are carried out online.
Besides vendors, the focus of the retailing sector is to develop the link with the
consumer. `Data Warehousing' is an established concept in the advanced nations. With
the help of `database retailing', information on existing and potential customers is
tracked. Besides knowing what was purchased and by whom, information on softer
issues such as demographics and psychographics is captured.
Retailing, as discussed before, is at a nascent stage in our country. Most organized
players have managed to put the front ends in place, but these are relatively easy to
copy. The relatively complicated information systems and underlying technologies are
in the process of being established. Most grocery retailers such as Food World have
started tracking consumer purchases through CRM.


The lifestyle retailers through their `affinity clubs' and `reward clubs' are establishing
their processes. The traditional retailers will always continue to exist but organized
retailers are working towards revamping their business to obtain strategic advantages








With differentiating strategies - value for money, shopping experience, variety, quality,
discounts and advanced systems and technology in the back-end, change in the
equilibrium with manufacturers and a thorough understanding of the consumer










It would be important to note, however, that the retailing industry in India is still a
`protected industry'. It is one of the few sectors which still have restrictions on FDI.
Given the current trend in liberalization, it will not be long before the retailing sector
is also thrown open to international competition. This will see a further segregation of
the international retailing brands and the domestic retailers, thereby injecting much
greater dynamism into the market. That will be when the real action will begin.
Major retailers in India.
Indias top retailers are largely lifestyle, clothing and apparel stores.
This is followed by grocery stores.
Following the past trends and business models in the west retail giants such as
Pantaloon, Shoppers Stop and Lifestyle are likely to target metros and small
cities almost doubling their current number of stores.
These Wal-Mart wannabes have the economy of scale to be low medium cost
retailers pocketing narrow margin.


Even though India has well over 5 million retail outlets of all sizes and styles (or

non-styles), the country sorely lacks anything that can resemble a retailing industry in
the modern sense of the term. This presents international retailing specialists with a
great opportunity.


It was only in the year 2000 that the global management consultancy AT Kearney

put a figure to it: Rs. 400,000 crore (1 crore = 10 million) which will increase to Rs.
800,000 crore by the year 2007 an annual increase of 20 per cent.

Retailing in India is thoroughly unorganized. There is no supply chain management

perspective. According to a survey b y AT Kearney, an overwhelming proportion of

the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000
crore segment of the market is organized.

As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square

feet in area. This means that India per capita retailing space is about 2 square feet
(compared to 16 square feet in the United States). India's per capita retailing space is
thus the lowest in the world (source: KSA Technopak (I) Pvt. Ltd, the India operation
of the US-based Kurt Salmon Associates).

Just over 8 per cent of India's population is engaged in retailing (compared to 20

per cent in the United States). There is no data on this sector's contribution to the GDP.

From a size of only Rs.20,000 crore, the ORGANISED retail industry will grow to

Rs. 160,000 crore by 2007. The TOTAL retail market, however, as indicated above
will grow 20 per cent annually from Rs. 400,000 crore in 2000 to Rs. 800,000 crore by
2007 (source: survey by AT Kearney)

Given the size, and the geographical, cultural and socio-economic diversity of

India, there is no role model for Indian suppliers and retailers to adapt or expand in the
Indian context.

The first challenge facing the organized retail industry in India is: competition from

the unorganized sector. Traditional retailing has established in India for some
centuries. It is a low cost structure, mostly owner-operated, has negligible real estate
and labor costs and little or no taxes to pay. Consumer familiarity that runs from
generation to generation is one big advantage for the traditional retailing sector.

In contrast, players in the organized sector have big expenses to meet, and yet have

to keep prices low enough to be able to compete with the traditional sector. High costs
for the organized sector arises from: higher labor costs, social security to employees,
high quality real estate, much bigger premises, comfort facilities such as air31

conditioning, back-up power supply, taxes etc. Organized retailing also has to cope
with the middle class psychology that the bigger and brighter a sale outlet is, the more
expensive it will be.

The above should not be seen as a gloomy foreboding from global retail operators.

International retail majors such as Benetton, Dairy Farm and Levis have already
entered the market. Lifestyles in India are changing and the concept of "value for
money" is picking up.

India's first true shopping mall complete with food courts, recreation facilities

and large car parking space was inaugurated as lately as in 1999 in Mumbai. (This
mall is called "Crossroads").

Local companies and local-foreign joint ventures are expected to more

advantageously position than the purely foreign ones in the fledgling organized India's
retailing industry.

These drawbacks present opportunity to international and/or professionally

managed Indian corporations to pioneer a modern retailing industry in India and

benefit from it.

The prospects are very encouraging. The first steps towards sophisticated retailing

are being taken, and "Crossroads" is the best example of this awakening. More such
malls have been planned in the other big cities of India.

An FDI Confidence Index survey done by AT Kearney, retail industry is one of the

most attractive sectors for FDI (foreign direct investment) in India and foreign retail










Reliance relies on rapid expansion


November 3, 2006


Hyderabad on Friday saw the new dawn of a new revolution. Reliance Industries Ltds
dreams of a retail revolution got kick-started in the Andhra Pradesh capital when its
Reliance Fresh super mart opened its doors to the world. And, several hundred
customers flocked to try out what all are on offer on the first day.
The inauguration event saw customers cut red ribbons to open the store widely
believed as Reliance Industries Ltd. first in the series of several thousand stores that
are to come. Following the first, the company opened 10 more on Friday as a first step
towards creating a mega retail chain across the country.
The Reliance Fresh supermarket chain is RILs 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 nonvegetarian 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.
Currently, selling through company-owned stores currently totals just $8 billion in
India. Industry estimates say that the countrys 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.
The opening of Reliances retail chains closely follows the moves of global players
like Wal-Mart Stores Inc and Metro AG seeking to open shop here in the country. With
Reliance announcing plans to expand, and that too rapidly, the retail scenario in the
country is all set to take off in a big way.

Reliance to set up 2,500 retail outlets

RELIANCE Industries Ltd (RIL) will put up 2,500 petroleum retail outlets by April
2004. The entire retail network will be up by end of 2005, Mr. Mukesh Ambani,
Chairman, Reliance Industries Ltd, said here on Wednesday.
"In the first phase we shall set up 2,500 petrol pumps across India by April 2004 and
the entire network will be ready by 2005," Mr. Ambani told reporters on sidelines of
Chemtech World Expo 2003 conference here. The company has been given permission
to set up 5,800 outlets for retailing petroleum products across the country. He said the
work would be completed in phases and the retail outlet would be set up across the
country simultaneously.
The company will also announce details of a hydrocarbon find on the western coast of
India at an "appropriate time".
Mr. Ambani confirmed that the company's find in the Cambay basin on the western
offshore by saying that Reliance would make an announcement on the find.





Based on the insights provided by the literature review, group and personal interviews,
we propose a framework for developing context-specific definitions of consumer
satisfaction. This framework is not a generic definition of satisfaction. As noted above,
innumerable contextual variables will affect how satisfaction is viewed. As such, any
generic definition of satisfaction will be subject to chameleon effects. Rather than
presenting a generic definition of satisfaction, we identify the conceptual domain of
satisfaction, delineate specific components necessary for any meaningful definition of
satisfaction, and outline a process for developing context-specific definitions that can
be compared across studies.
As concluded by the literature review and validated by the group and personal
interview data, there appears to be three essential components of consumer
1. Summary affective response which varies in intensity;
2. Satisfaction focus around product choice, purchase and consumption; and
3. Time of determination which varies by situation, but is generally limited in duration.
In this framework, satisfaction is limited to an affective response reflecting
satisfaction as a holistic evaluative outcome. This distinction does not preclude the
importance of cognitions in determining satisfaction; however, cognitions are bases
for the formation of satisfaction, but the cognitions are not satisfaction. This is similar
to choice in that the brand chosen may be based on cognitive evaluations; however,
the choice is not cognition but the brands selected or not selected.
The summary affective response is defined as the holistic nature of consumers state of
satisfaction, the focus is the object(s) of consumers state, and timing refers to the
temporal existence of satisfaction. According to field data results and supported by

extant satisfaction literature, these components are applicable across situations and
across consumers. All of these components are critical to appropriately operationally
the definition, to produce valid results, and make accurate interpretations and
managerial decisions. Thus, the following components should be included in any
context specific definition of consumer satisfaction.
Consumer satisfaction is: A summary affective response of varying intensity. The
exact type of affective response and the level of intensity likely to be experienced
must be explicitly defined by a researcher depending on the context of interest. With a
time-specific point of determination and limited duration. The researcher should
select the point of determination most relevant for the research questions and identify
the likely duration of the summary response. It is reasonable to expect that consumers
may consciously determine their satisfaction response when asked by a researcher;
therefore, timing is most critical to ascertain the most accurate, well-formed response.
Directed toward focal aspects of product acquisition and/or consumption. The
researcher should identify the focus of interest based on the managerial or research
question they face. This may include a broad or narrow range of acquisition or
consumption activities/issues.
By fleshing out these components, researchers should be able to develop specific
definitions that are conceptually richer and empirically more useful than previous
definitions. To develop context-relevant definitions and measures, researchers must be
able to identify both the questions they are interested in answering and some basic
information about the setting and consumers. Specifically, the researcher will need to
provide details about all three components of satisfaction.
Satisfaction Focus - The difficult decision for a researcher is to determine the degree
of detail needed to define the satisfaction focus. For example, is satisfaction with the
product an appropriate focus (e.g., the automobile), or should it be limited to specific
attributes (e.g., gas mileage) or specific benefits (e.g., the automobile is fun to drive)?
One way researchers could identify the appropriate focus or foci is by surveying or
interviewing existing or new customers during the purchase process or at various
points following purchase (Gardial et al. 1994). This information would allow

researchers to segment their customers on the basis of what foci are actually
considered when they determine their satisfaction. The purpose would be to develop a
battery of satisfaction survey instruments tailored to different types of customers and
research questions.
Timing - As noted above, there are two important properties related to timing; time of
determination and duration. When examining time of determination, the researcher
must identify which stage of the purchase and consumption process is most important
to the research question. For example, if an automobile manufacturer is interested in
repeat purchase, then the final stages of consumption may be most appropriate. On the
other hand, if the firm were interested in improving the warranty program, then earlier
stages would be most appropriate. Duration will also help identify the most
appropriate time of determination to consider. For example, if satisfaction is fleeting,
then it should be measured earlier in the process.
Summary Response - The final step is to identify appropriate affective responses.
Intensity represents the key properties of response. Affective responses can vary
dramatically across a range of responses. For example, Cadotte, Woodruff and Jenkins
(1987) identify ten different types of affective descriptors that may be appropriate in a
restaurant setting. However, it is unreasonable to assume that all of these will be
appropriate in another specific context. Researchers must select descriptors that
accurately reflect the emotional responses to the relevant satisfaction focus. If the
range of intensity is too large, then there will be little variance in any measures of
satisfaction. If the range is too small, then the researcher does not obtain the maximum
information that the consumers can provide (Cox 1980).


Consumer behavior and retailing decisions

DECISION-MAKING with regard to retail outlet selection is very similar to
consumer decision-making on brands where the consumer goes through a process
starting from identifying needs to post-purchase issues. There are a few interesting and
important dimensions associated with consumer behavior and retail outlet selection.
Does the retail outlet have psychological implications on the target segment? When
Titan and Timex watches were retailed through exclusive shops, consumers wanting
lower-end watches probably felt that a typical Titan showroom was too elitist, which
could have had a negative impact.
Does selection of outlets varies in accordance with types of product categories? While
buying a TV or a washing machine, would consumers visit an exclusive showroom of
BPL, Onida or Sony, or would they visit a multi-brand outlet?
Would there be differences in the psychographic (and demographic) profiles of
consumers choosing outlets? What is the sequence in which consumers are likely to go
about their decisions? Will they select the brand or the category first before choosing
the outlet?
What is the impact of the image developed by a retail outlet? Is Food World different
from a neighborhood grocery shop in the minds of consumers? What kind of
perception are consumers likely to have with regard to shopping from an online outlet
such as Fabmart vis--vis a brick-and-mortar outlet like Fountainhead or Landmark?
Would consumers be interested in store or retail brands? Traditionally, retailers have
been carrying manufacturers' brands. But in recent times (at least to a significant
extent in the foods category), supermarkets such as Food World have started carrying
retail or store brands. Nilgiri's is another example in the South which carries its own
brands of chocolates, biscuits and other commodities.
What contributes to retail equity or retail image or retail loyalty?
How do retail outlets handle perceived risks?

Marketers need in-depth knowledge about the various dimensions which link retailing
and consumer behavior. There is research required to handle retail decisions in a
competitive context. McDonald's found that a major chunk of its consumers decide to
eat a few minutes before they make the purchase decisions and hence it is building
small outlets in large supermarkets such as Wal-Mart and Home Depot. It is providing
play areas to ensure a number of families visit its outlets with children. A few
companies also operate through kiosks in airports, malls and high-traffic areas.
Sunglass Hut is a brand which operates kiosks at various places which displays about
1,000 different models along with their prices. Consumers could place an order
through these kiosks and the product is home-delivered.



There are three fundamental patterns which a consumer can follow and they could be:
(I) Brand first, retail outlet second
(ii) Retail outlet first, brand second
(iii) Brand and retail outlet simultaneously.
A consumer wanting to buy a car may collect information on brands and purchase it
from a retail outlet based on his perception of price offered or after-sales service
provided by the outlet (typically, search for information on brands is followed by retail
outlet selection in durables). In certain product categories, especially where `category
killers' exist, consumers may think of the retail outlet initially and then the brands
(television, refrigerator and audio products retailed through outlets like Vivek and Co.
in the South, could be an example).


One more dimension may be to compare brands in the evoked set at retail outlets
which also exist in an evoked set of their own. This is highly possible, especially in
the Indian context where dealers develop a social relationship with consumers,
especially in semi-urban and rural areas. Primary research could be used to discover
the specific sequence involved in a situation of this kind. A `brand first' dimension
may need feature-based advertising and a `retail outlet first' dimension may require a
set of point-of-purchase (POP) materials and special training to sales personnel to
recognize the needs of consumers.
Further, if it is known that a number of consumers may be oriented to visit their
favorite retailer (before obtaining information on brands) in a geographical area, there
would have to be more emphasis on regional/local advertising which highlights the
retail shop rather than regular brand-based national advertising.
Strategies and sequences
Retail outlet first and brand second: When a number of consumers follow this
sequence of decision-making, display of point-of-purchase material and building the
image of the outlet becomes important. The manufacturer of the brand may have to
ensure that the brand (and the variants demanded) will be available at the key outlets
in a locality. Point-of-purchase materials which are to be used at the retail outlet may
require primary research - should visuals be used, should product features be used,
should the POP material be in the regional language. There may also be a need to
monitor competition from other retail outlets to ensure that consumers are kept
satisfied in terms of service, price, promotional deals and ambience. This is especially
applicable to durables retailing in India (in cities). Retailers attempt to increase
consumer traffic by providing a number of `add-ons'.
Brand first and outlet second: The brand was probably thought of by the consumers

The consumers may not have developed a relationship with any retailer
which is strong enough to get into the `evoked retail set'



The brand has got into the evoked set because of advertising or positive word of
mouth. Local advertising with the mention of brand names which have already got
into the evoked set would enable consumers to be `pulled' to the outlet.
Primary research may be required to identify the brands in the evoked set. This
feedback may have to be provided by the manufacturers of a brand to retailers in
various regions (especially if it is a brand with a major chunk of the market and one
which is nationally advertised). Even multinational outlets could make use of this
approach and mention the brands in the evoked set (in a given geographical area). This
is likely to improve traffic to the outlet. Besides, the evoked set could also change
from time to time depending on the strategies of brands.
About two decades ago, brands like Solitaire, Dyanora and Crown may have been topof-the-mind (in a specific geographical area) but slowly gave way to other brands these changes should be captured (how often this happens, why, and the differences
between markets) to formulate retail strategies. The local advertising could be
different from the national advertising for the brand. A brand may be advertised on
features nationally but the retail outlet in may prefer to highlight the effective aftersales service associated with the brand as this may be a priority of consumers. The
interest generated in the brand would have to be backed by good pre-sale services at
the outlet.
Brand and retail outlet simultaneously: When consumers think of the brand and
retail outlet together, it means that they have a certain preference for the outlet and
would like to check the evoked set of brands there. The marketer would have to carry
out primary research to find out specific markets where consumers have a very
positive relationship with retailers. This is important because of the influence of
retailers over the purchase behavior of consumers in the Indian context.
It may also be worthwhile to check if the evoked brands are carried by the retailers
who have a positive relationship with the target segments. This is to ensure that the
retailers who have a favorable perception among the target segment carry the desired
brands. Failing this, consumers may turn to a different retailer, which would be to the
disadvantage of a retailer who has already won the confidence of consumers. Retail

sales personnel also become important in this situation. The prospective consumers are
"carried over" to the purchase stage by the store personnel and hence there should be
incentive programs for the store personnel.
If a company such as BPL or Videocon is dealing with a number of brands/sub-brands,
it has to ensure the availability of specific brands which may interest the consumers. If
the retail outlet is a large one dealing with a number of brands (like Vivek), a shop-inshop arrangement may be preferable. This model puts the brand in focus and
reinforces the positive association a consumer may have about it. A considerable
amount of pre-sale service would have to back up the shop-in-shop concept.
The shop-in-shop concept creates an aura of exclusivity. Consumers tend to have
higher expectations about the pre-sale service and the attention given to them. A large
store also is likely to stock several brands and hence all brands in the evoked set
would have to compete with each other to progress from the evoked set to choice set.
Large outlets may also have a built-in provision for a lower price (because of
volumes) and hence may be in a better position to clinch the deal with consumers who
may simultaneously consider both the brand and the retail outlet.




Customer Relationship Management (CRM)

What is Customer Relationship Management (CRM)?
CRM is a term that is often referred to in marketing. However, there is no complete
agreement upon a single definition. This is because CRM can be considered from a
number of perspectives. In summary, the three perspectives are:
Information Technology (IT) perspective
The Customer Life Cycle (CLC) perspective
Business Strategy perspective
1. CRM from the Information Technology Perspective.
From the technology perspective, companies often buy into software that will help to
achieve their business goals. For many, CRM is far more than a new software package,
the renaming of traditional customer services, or an IT-based customer management
system to support sales people. However, IT is vital since it underpins CRM, and has
the payoffs associated with modern technology, such as speed, ease of use, power and
memory, and so on.


2. CRM from the Customer Life Cycle (CLC) Perspective.

The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle
(PLC). However, CLC focuses upon the creation of and delivery of lifetime value to
the customer i.e. looks at the products of services that customers need throughout their
lives. It is marketing orientated rather than product orientated. Essentially, CLC is a
summary of the key stages in a customer's relationship with an organization.

CRM from the Business Strategy Perspective.

The Business Strategy perspective has most in common with many of the lessons and
topics contained on this website, and indeed within the field of marketing itself. The
diagram below shows the Marketing Teacher Model of CRM and Business Strategy.
Our model contains three key phases - customer acquisition, customer retention and
customer extension, and three contextual factors - marketing orientation, value
creation and innovative IT
A commonly cited definition of CRM is that of CRM (UK) Ltd (2002), as follows:
Customer Relationship Management is the establishment, development, maintenance
and optimization of long-term mutually valuable relationships between consumers and
What you cry? What does that mean? Let's unpack the definition. The key to the
definition is long-term mutually valuable relationship. This is based upon a definition
of marketing that considers marketing as a mutually satisfying system of exchanges
(for example Baker 2002). So CRM is the building and maintenance of long-term
customer relationships. The relationship delivers value to customers, and profits to
companies. The relationship is supported (but not driven) by cutting edge IT. The
business strategy is based upon the recruitment, retention and extension of products,
services, solutions or experiences to customers. This is the core of CRM.





The Marketing Research Process

Once the need for marketing research has been established, most marketing research
projects involve these steps:
1. Define the problem
2. Determine research design
3. Identify data types and sources
4. Design data collection forms and questionnaires
5. Determine sample plan and size
6. Collect the data
7. Analyze and interpret the data
8. Prepare the research report
Problem Definition
The decision problem faced by management must be translated into a market research
problem in the form of questions that define the information that is required to make
the decision and how this information can be obtained. Thus, the decision problem is
translated into a research problem. For example, a decision problem may be whether
to launch a new product. The corresponding research problem might be to assess
whether the market would accept the new product.
The objective of the research should be defined clearly. To ensure that the true
decision problem is addressed, it is useful for the researcher to outline possible
scenarios of the research results and then for the decision maker to formulate plans of
action under each scenario. The use of such scenarios can ensure that the purpose of
the research is agreed upon before it commences.
Research Design
Marketing research can classify in one of three categories:

Exploratory research

Descriptive research

Causal research

These classifications are made according to the objective of the research. In some
cases the research will fall into one of these categories, but in other cases different
phases of the same research project will fall into different categories.

Exploratory research has the goal of formulating problems more precisely, clarifying
concepts, gathering explanations, gaining insight, eliminating impractical ideas, and
forming hypotheses. Exploratory research can be performed using a literature search,
surveying certain people about their experiences, focus groups, and case studies.
When surveying people, exploratory research studies would not try to acquire a
representative sample, but rather, seek to interview those who are knowledgeable and
who might be able to provide insight concerning the relationship among variables.
Case studies can include contrasting situations or benchmarking against an
organization known for its excellence. Exploratory research may develop hypotheses,
but it does not seek to test them. Exploratory research is characterized by its

Descriptive research is more rigid than exploratory research and seeks to describe
users of a product, determine the proportion of the population that uses a product, or
predict future demand for a product. As opposed to exploratory research, descriptive
research should define questions, people surveyed, and the method of analysis prior to
beginning data collection. In other words, the who, what, where, when, why, and how
aspects of the research should be defined. Such preparation allows one the opportunity
to make any required changes before the costly process of data collection has begun.
There are two basic types of descriptive research: longitudinal studies and crosssectional studies. Longitudinal studies are time series analyses that make repeated
measurements of the same individuals, thus allowing one to monitor behavior such as
brand-switching. However, longitudinal studies are not necessarily representative
since many people may refuse to participate because of the commitment required.
Cross-sectional studies sample the population to make measurements at a specific
point in time. A special type of cross-sectional analysis is a cohort analysis, which
tracks an aggregate of individuals who experience the same event within the same


time interval over time. Cohort analyses are useful for long-term forecasting of
product demand.

Causal research seeks to find cause and affect relationships between variables. It
accomplishes this goal through laboratory and field experiments.
Data Types and Sources
Secondary Data
Before going through the time and expense of collecting primary data, one should
check for secondary data that previously may have been collected for other purposes
but that can be used in the immediate study. Secondary data may be internal to the
firm, such as sales invoices and warranty cards, or may be external to the firm such as
published data or commercially available data. The government census is a valuable




Secondary data has the advantage of saving time and reducing data gathering costs.
The disadvantages are that the data may not fit the problem perfectly and that the
accuracy may be more difficult to verify for secondary data than for primary data.
Some secondary data is republished by organizations other than the original source.
Because errors can occur and important explanations may be missing in republished
data, one should obtain secondary data directly from its source. One also should












There are several criteria that one should use to evaluate secondary data.

Whether the data is useful in the research study.

How current the data is and whether it applies to time period of interest.

Errors and accuracy - whether the data is dependable and can be verified.

Presence of bias in the data.

Specifications and methodologies used, including data collection method, response

rate, quality and analysis of the data, sample size and sampling technique, and
questionnaire design.

Objective of the original data collection.


Nature of the data, including definition of variables, units of measure, categories used,
and relationships examined.
Primary Data
Often, secondary data must be supplemented by primary data originated specifically
for the study at hand. Some common types of primary data are:

Demographic and socioeconomic characteristics

Psychological and lifestyle characteristics

Attitudes and opinions

Awareness and knowledge - for example, brand awareness

Intentions - for example, purchase intentions. While useful, intentions are not a
Reliable indication of actual future behavior.

Motivation - a person's motives are more stable than his/her behavior, so motive is a
better predictor of future behavior than is past behavior.
Primary data can be obtained by communication or by observation. Communication
involves questioning respondents either verbally or in writing. This method is
versatile, since one need only to ask for the information; however, the response may
not be accurate. Communication usually is quicker and cheaper than observation.
Observation involves the recording of actions and is performed by either a person or
some mechanical or electronic device. Observation is less versatile than
communication since some attributes of a person may not be readily observable, such
as attitudes, awareness, knowledge, intentions, and motivation. Observation also might
take longer since observers may have to wait for appropriate events to occur, though
observation using scanner data might be quicker and more cost effective. Observation
typically is more accurate than communication.
Personal interviews have an interviewer bias that mail-in questionnaires do not have.
For example, in a personal interview the respondent's perception of the interviewer
may affect the responses.
Questionnaire Design
The questionnaire is an important tool for gathering primary data. Poorly constructed
questions can result in large errors and invalidate the research data, so significant

effort should be put into the questionnaire design. The questionnaire should be tested
thoroughly prior to conducting the survey.
Measurement Scales
Attributes can be measured on nominal, ordinal, interval, and ratio scales:

Nominal numbers are simply identifiers, with the only permissible mathematical use
being for counting. Example: social security numbers.

Ordinal scales are used for ranking. The interval between the numbers conveys no
meaning. Median and mode calculations can be performed on ordinal numbers.
Example: class ranking

Interval scales maintain an equal interval between numbers. These scales can be used
for ranking and for measuring the interval between two numbers. Since the zero point
is arbitrary, ratios cannot be taken between numbers on an interval scale; however,
mean, median, and mode are all valid. Example: temperature scale

Ratio scales are referenced to absolute zero values, so ratios between numbers on the
scale are meaningful. In addition to mean, median, and mode, geometric averages also
are valid. Example: weight
Validity and Reliability
The validity of a test is the extent to which differences in scores reflect differences in
the measured characteristic. Predictive validity is a measure of the usefulness of a
measuring instrument as a predictor. Proof of predictive validity is determined by the
correlation between results and actual behavior. Construct validity is the extent to
which a measuring instrument measures what it intends to measure.
Reliability is the extent to which a measurement is repeatable with the same results. A
measurement may be reliable and not valid. However, if a measurement is valid, then
it also is reliable and if it is not reliable, then it cannot be valid. One way to show
reliability is to show stability by repeating the test with the same results.


Attitude Measurement
Many of the questions in a marketing research survey are designed to measure
attitudes. Attitudes are a person's general evaluation of something. Customer attitude
is an important factor for the following reasons:

Attitude helps to explain how ready one is to do something.

Attitudes do not change much over time.

Attitudes produce consistency in behavior.

Attitudes can be related to preferences.

Attitudes can be measured using the following procedures:

Self-reporting - subjects are asked directly about their attitudes. Self-reporting is

the most common technique used to measure attitude.

Observation of behavior - assuming that one's behavior is a result of one's

attitudes, attitudes can be inferred by observing behavior. For example, one's
attitude about an issue can be inferred by whether he/she signs a petition related
to it.

Indirect techniques - use unstructured stimuli such as word association tests.

Performance of objective tasks - assumes that one's performance depends on

attitude. For example, the subject can be asked to memorize the arguments of
both sides of an issue. He/she is more likely to do a better job on the arguments
that favor his/her stance.

Physiological reactions - subject's response to a stimuli is measured using

electronic or mechanical means. While the intensity can be measured, it is
difficult to know if the attitude is positive or negative.

Multiple measures - a mixture of techniques can be used to validate the

findings, especially worthwhile when self-reporting is used.


There are several types of attitude rating scales:

Equal-appearing interval scaling - a set of statements are assembled. These

statements are selected according to their position on an interval scale of
favorableness. Statements are chosen that has a small degree of dispersion.
Respondents then are asked to indicate with which statements they agree.

Likert method of summated ratings - a statement is made and the respondents

indicate their degree of agreement or disagreement on a five point scale
(Strongly Disagree, Disagree, Neither Agree nor Disagree, Agree, Strongly

Semantic differential scale - a scale is constructed using phrases describing

attributes of the product to anchor each end. For example, the left end may state,
"Hours are inconvenient" and the right end may state, "Hours are convenient".
The respondent then marks one of the seven blanks between the statements to
indicate his/her opinion about the attribute.

Staple Scale - similar to the semantic differential scale except that 1) points on
the scale are identified by numbers, 2) only one statement is used and if the
respondent disagrees a negative number should marked, and 3) there are 10
positions instead of seven. This scale does not require that bipolar adjectives be
developed and it can be administered by telephone.

Q-sort technique - the respondent if forced to construct a normal distribution

by placing a specified number of cards in one of 11 stacks according to how
desirable he/she finds the characteristics written on the cards.

Sampling Plan
The sampling frame is the pool from which the interviewees are chosen. The

telephone book often is used as a sampling frame, but has some shortcomings.
Telephone books exclude those households that do not have telephones and those
households with unlisted numbers. Since a certain percentage of the numbers listed in
a phone book are out of service, there are many people who have just moved who are
not sampled. Such sampling biases can be overcome by using random digit dialing.
Mall intercepts represent another sampling frame, though there are many people who
do not shop at malls and those who shop more often will be over-represented unless
their answers are weighted in inverse proportion to their frequency of mall shopping.
In designing the research study, one should consider the potential errors. Two sources
of errors are random sampling error and non-sampling error. Sampling errors are
those due to the fact that there is a non-zero confidence interval of the results because
of the sample size being less than the population being studied. Non-sampling errors
are those caused by faulty coding, untruthful responses, respondent fatigue, etc.
There is a tradeoff between sample size and cost. The larger the sample size, the
smaller the sampling error but the higher the cost. After a certain point the smaller
sampling error cannot be justified by the additional cost.
While a larger sample size may reduce sampling error, it actually may increase the
total error. There are two reasons for this effect. First, a larger sample size may reduce
the ability to follow up on non-responses. Second, even if there are a sufficient
number of interviewers for follow-ups, a larger number of interviewers may result in a
less uniform interview process.
Data Collection
In addition to the intrinsic sampling error, the actual data collection process will
introduce additional errors. These errors are called non-sampling errors. Some nonsampling errors may be intentional on the part of the interviewer, who may introduce a
bias by leading the respondent to provide a certain response. The interviewer also may
introduce unintentional errors, for example, due to not having a clear understanding of
the interview process or due to fatigue.

Respondents also may introduce errors. A respondent may introduce intentional errors
by lying or simply by not responding to a question. A respondent may introduce
unintentional errors by not understanding the question, guessing, not paying close
attention, and being fatigued or distracted.
Such non-sampling errors can be reduced through quality control techniques.
Data Analysis - Preliminary Steps
Before analysis can be performed, raw data must be transformed into the right format.
First, it must be edited so that errors can be corrected or omitted. The data must then
be coded; this procedure converts the edited raw data into numbers or symbols. A
codebook is created to document how the data was coded. Finally, the data is tabulated
to count the number of samples falling into various categories. Simple tabulations
count the occurrences of each variable independently of the other variables. Cross
tabulations, also known as contingency tables or cross tabs, treats two or more
variables simultaneously. However, since the variables are in a two-dimensional table,
cross tabbing more than two variables is difficult to visualize since more than two
dimensions would be required. Cross tabulation can be performed
For nominal and ordinal variables.
Cross tabulation is the most commonly utilized data analysis method in marketing
research. Many studies take the analysis no further than cross tabulation. This
technique divides the sample into sub-groups to show how the dependent variable
varies from one subgroup to another. A third variable can be introduced to uncover a
relationship that initially was not evident.
Conjoint Analysis
The conjoint analysis is a powerful technique for determining consumer preferences
for product attributes.
Hypothesis Testing

A basic fact about testing hypotheses is that a hypothesis may be rejected but that the
hypothesis never can be unconditionally accepted until all possible evidence is
evaluated. In the case of sampled data, the information set cannot be complete. So if a
test using such data does not reject a hypothesis, the conclusion is not necessarily that
the hypothesis should be accepted.
The null hypothesis in an experiment is the hypothesis that the independent variable
has no effect on the dependent variable. The null hypothesis is expressed as H0. This
hypothesis is assumed to be true unless proven otherwise. The alternative to the null
hypothesis is the hypothesis that the independent variable does have an effect on the
dependent variable. This hypothesis is known as the alternative, research, or
experimental hypothesis and is expressed as H1. This alternative hypothesis states that
the relationship observed between the variables cannot be explained by chance alone.
There are two types of errors in evaluating hypotheses:

Type I error: occurs when one rejects the null hypothesis and accepts the
alternative, when in fact the null hypothesis is true.

Type II error: occurs when one accepts the null hypothesis when in fact the
null hypothesis is false.

Marketing Research Report

The format of the marketing research report varies with the needs of the organization.
The report often contains the following sections:

Authorization letter for the research

Table of Contents

List of illustrations

Executive summary

Research objectives




Conclusions and recommendations

Appendices containing copies of the questionnaires, etc.

Concluding Thoughts
Marketing research by itself does not arrive at marketing decisions, nor does it
guarantee that the organization will be successful in marketing its products. However,
when conducted in a systematic, analytical, and objective manner, marketing research
can reduce the uncertainty in the decision-making process and increase the probability
and magnitude of success.
Marketing Research
Managers need information in order to introduce products and services that create
value in the mind of the customer. But the perception of value is a subjective one, and
what customers value this year may be quite different from what they value next year.
As such, the attributes that create value cannot simply be deduced from common
knowledge. Rather, data must be collected and analyzed. The goal of marketing
research is to provide the facts and direction that managers need to make their more
important marketing decisions.
To maximize the benefit of marketing research, those who use it need to understand
the research process and its limitations.
Marketing Research vs. Market Research
These terms often are used interchangeably, but technically there is a difference.
Market research deals specifically with the gathering of information about a market's
size and trends. Marketing research covers a wider range of activities. While it may
involve market research, marketing research is a more general systematic process that
can be applied to a variety of marketing problems.
The Value of Information

Information can be useful, but what determines its real value to the organization? In
general, the value of information is determined by:

The ability and willingness to act on the information.

The accuracy of the information.

The level of indecisiveness that would exist without the information.

The amount of variation in the possible results.

The level of risk aversion.

The reaction of competitors to any decision improved by the information.




Objective of Research


To know the expectation of Bareilly Citys consumers from big retail store.


To know the timing of consumers which they prefer to buy the products.


Reliance Retail Limited is gearing up to revolutionize the retail industry in India

& know the role of Bareilly in revolutionizing the retail industry.


Reliance Retail working on introducing a pan-India networks of retail outlets in

multiple Format.

To know the consumer awareness of Bareilly City about organized retail sector.


To help the management of Reliance in establishment of retail outlets.


To know whether they prefer home delivery or like to go to store for purchasing.


To find the potential market & want to become the leader of market.


To become the leader in the organized retailing format.


To study the buying pattern of the customer of Bareilly.


What are the factors which affect the buying behavior of the customer.



Serve the customer as per there need and wants.


To study the purchasing power of the customer.

(To study the customer expectation from big
retail outlet)



Q.1) What attracts you the most while shopping?
a) Discount on every item
b) Overall discount
c) Schemes like free offer
d) Availability of wide variety
Q.2) Will you buy Sabzi/Fruits from Sabzi Mandi or Thelewala even

when getting fresh and cheap in big stores?

a) Yes -


No -

Q.3) Your preference would be?

a) Home Delivery

b) Like to go to store -

Q.4) Preferred timings for shopping

a) 6 a.m. to 9 a.m. -

d) 3 p.m. to 6 p.m. -

b) 9 a.m. to 12 a.m. -

e) 6 p.m. to 8 p.m. -

c) 12 p.m. to 3 p.m. -

f) 8 p.m. to 10 p.m.







Market Survey
Survey of Civil line (Bareilly)
Q.1) What attracts you the most while shopping?

Discount on every item

Overall discount
Schemes like free offer
Availability of wide variety








Customer preference for discount on every product

These data shows that 60% of the total population survey gave preference to 1 st & 2nd
to discount on every item purchased. It shows that the people prefer to purchase the
items from the stores where the discount is given on every items purchased. It means
that now a day price is the ultimate factor responsible for affecting the behavior of the


Customer preference for discount on total bill

This shows that only 15% of the population like discount on total bill.
This helps us to know that people of Bareilly did not like discount on total bill as
Compared to the discount on each item purchased. They want separate discount
on each individual items.

Customer preference for scheme like free offer

Here the given data shows that 14% of the customer needs free offer with the products

While rest of them prefer different option. If we are going to launch any business we
have to do in depth analysis of that particular area and depending upon the customer
preferences we have to launch the schemes. In the present scenario customer are not
very much influenced by the free offers and free gifts given by the company.

Availability of wide variety of products in good atmosphere even

With less discount.

Majority of the population says that they will go to place where the atmosphere is
good lot of variety are available in this case 44% of customer are compromise with
discount. Even they are getting fewer discounts they are willing to visit such place for
shopping. This is just because of changing trends in the live style of the customer.
They are highly considering the hygienic environment.


Q.2) Will you buy Sabzi/Fruits from Sabzi Mandi or Thelewala even when
getting fresh and cheap in big stores?

Yes - 155

b) No 161

Customer preference for Big Store selling Fruits & Vegetables

Comparison of Sabzi Mandi, Thelewala Vs Big Stores

Only 42.5% of customer said that they will continue buying vegetables & fruits from
Sabzi Mandi even when they are getting more products in a near by store. Where as
57.5% of people said that they will go to Big Store because there they will get all
products at one place which make convenient for shopping.


Q.3) Your preference would be?

a) Home Delivery


b) Like to go to store -192

Customer choice between Home Delivery and Shopping

Only 28% of customer said that they will prefer home delivery where rest of them said
that they will prefer to go to store for shopping, because there they have lot of choice
(alternative) they can make comparison between the products. Where as in case of
Home Delivery its is not possible.


Q.4) Preferred timings for shopping


6 a.m. to 9 a.m. -39


3 p.m. to 6 p.m. -120


9 a.m. to 12 a.m. -79


6 p.m. to 8 p.m. -172


12 p.m. to 3 p.m. -109


8 p.m. to 10 p.m. -94

Here the given data shows that most prefer timing for shopping is between 6pm to
8pm followed by 3pm to 6pm. This proves that people of Bareilly prefer to go for
shopping between 3pm to 8pm. This is the convenient time for them.




Wide Variety :-


The product should be available in wide range with all branded products.


Discounts, schemes and free gifts on regular basis.


Quality, Quantity and reasonable rates to attract the interest of the customer.




Wide range of the product.


The product should be fresh and available at reasonable rate.

g) All newly launched products should be available.


Atmosphere of store and expected behavior of staff :-

a) Attractive appearance, cool environment and neat and clean.

b) Touch and feel and proper display of the product.
c) Staff should be educated and help in purchasing.
d) Pay equal attention to each customer.


Location and services :-


Nearer to home.


Wide space to avoid rush.


Separate department.


Parking facility.


Facility of Home delivery.


All time availability.


Long hours for shopping


Cards should be made so that no need to carry money


Payment facility :-


Cash payment.


Payment through debit and credit cards.


Payment should be convenient, no long queue at payment counter.

5) Time saving :a. Convenience shopping.

b. Membership card.
c. No bargaining (Fixed rates) it will save lot of time.

d. All the items should be display on the racks.

6) Additional facility :a) Should have sitting facility.

b) Medical section should open 24 hours.
c) Light refreshment facility-Coffee shop, Snacks shop, and Ice - cream parlor.
d) Mobile charging facility.
e) Should have place for entertainment of kids where they can play while their
parents in shop.
f) Place where customer can keep their other bag etc. safely while shopping in
g) Stationary section should be there.
h) Hosiery items should also be available.





The most important features is people prefer to buy fresh Vegetables from Subzi

market rather than retail store.


Highly opposed by the owner of the traditional retail store.


Television is a major source of creating awareness.


The peak hour for purchasing the product is 6-8 pm.


Standard of living and life style Bareillys people is not so well.


Major consumers who want to buy the product from retail store having income

group between 5000-10000.


At present Subhiksha is playing crucial role in Bareilly but not get good response.


Government employees are interest toward to purchase the product from

traditional Kirana store situated near at their home.


The important feature is there is no advertisement and people are unaware of

Reliance Retail store.

10. People having less income prefer to purchase from the traditional store.
11. The age groups of 23-35 have to be give importance because it is potential age
12. Daily needs are generally purchase by the housewifes so other companies may
target them.




1. Print media and television are major sources of awareness, so these Medias can be
concentrated for efficient result.
2. There should be one brand ambassador that should be well or famous personality
3. The age groups of 40-60 are not interested to go to retail outlet so these potential
groups can concentrate
4. Subhiksha is the major competitor and there is substantial between them.
5. There is also considerable difference between other competitor, so their necessities
to concentrate on other private player and their activity, product, price and facility etc.
6. Young generation and service man are interested in retail outlets, so these potential
customers have to be attracted towards subhiksha.
7. Low-level income group are not interested to go in retail outlet. These people have
great deal of money to purchase, so these customers have to be attracted.
8. The satisfied customers by existing traditional general store are important since
they bring in customer by word of mouth.
9. Safety and tax relief are the most important.
10.People do not know about the product, scheme, their price, quality, and benefit of
purchasing product from retail outlets, if informs this will improve the market share.




The following books and articles from various news papers, websites have
been consulted for completing this project.

Marketing Management by PHILIP KOTLER.
Research Methodology by Dr. ELHANCE.
Consumer Behavior by LEON, LESLIE LAZER.




The following books and articles from various news papers, websites have
been consulted for completing this project.

Marketing Management by PHILIP KOTLER.
Research Methodology by Dr. ELHANCE.
Consumer Behavior by LEON, LESLIE LAZER.