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Reliance Fresh

Giant corporations like Wal-Mart and Reliance have started to try and take over the
Indian retail sector. The entry of the giant corporate retail in India's food market will have direct
impact on India's 650 million farmers and 40 million people employed in tiny retail. More than
6600 mega stores are planned with Rs40,000 crore by 2011. Our case is intended to cover two
primary objectives which are: First, when experts and giants like future group WalMart and
Reliance they are ready to start operations in retail what kind of strategies and structure they
would be having to get the competitive edge over each other and established small and
unorganized retailers. Second, what kind of impact has been on other retailers including
unorganized ones with the opening of Reliance Fresh stores.
In the following case findings about Reliance Fresh were quite awakening and exemplary. Even
after recent shutdown of Reliance fresh stores from UP and unwelcoming vibes from states like
Kerala, West Bengal, Orissa and Jharkhand for its retail format (which was allegedly capturing
the unorganized sector and leaving thousands of self employed people jobless) Reliance was not
in any mood to hamper its 25000 crore plan. Reliance responded with superb strategy in which it
shifted its focus from retailer to being a supplier i.e. targeting hawkers, vendors, Push cart
wheelers instead of customers. Big retailers like Reliance have huge resources and network
which directly impacted many of the retailers some of whom are planning to quit. In our sample
size of 75 retailers more than 30 agreed to have lost as much as 50% of their sales. This case also
discusses pros and cons of contract farming which on one part assures farmers of price for their
crop and knowledge about fertilizers and seed but on other side has some obvious drawbacks like
monopoly of big retailers. As a big market in which organized sector is poised to grow with 25%
- 30% annually our government must come with appropriate regulations to save small retailers
and our agricultural sector.

sugar and oil for the daily consumption were distributed at subsidized rates through the government ration shops. After independence. This is largely due to the excellent food retailing system that was established by the kiranas (mom and-pop) stores that continue meet with all the requirements of retail requirements albeit without the convenience of the shopping as provided by the retail chains. Our streets are bazaars .organization. 2. safe and the source of livelihood for millions. High levels of self . came into existence the system of Public distribution of foods through the ration shops.lively. This does not include the village haats. Giant corporations like WalMart and Reliance have started to try and take over the Indian retail sector. The modern corporate retail formats are of the exclusive brand outlets. High levels of livelihoods in retail with nearly 40 million employed which accounts for 8% of the employment and 4% of the entire population. Our retail democracy is characterized by: 1. vibrant. where all the traders gather at one big place to sell their products every week. where food grains. hypermarkets and supermarkets. High levels of decentralization Retail in India has started with the concept of weekly markets.BACKGROUND OF RETAIL India is a land of retail democracy. Currently the value of . departmental stores and shopping malls.hundreds of thousands of weekly haats and bazaars are located across the length and breadth of our country by people's own self-organizational capacities. Once the people started getting busy with their lives and when they turned entrepreneurial. there emerged the mom and pop shops and the kiranas in the neighbourhood. which almost account for 97% of the total retail trade. The Hawkers/lari galla vendors and the local kiranas are the two main forms of unorganized retail in the country. 3. Village fairs and melas were also common as it had more of an entertainment value. Low capital input 4. But still the Indian consumer depends on the self-organized retail shops for their daily needs. with 11 outlets per 1000 people. The people come to these weekly markets to buy the household items for the next one week. India has the highest shop density in the world.

feet and caters to a catchment area of 2-3 km. staples. home. the size of big retail is small. The company already has in excess of 560 reliance fresh outlets across the country. 1000 billion or $ 70 billion by 2010 from the current size of US $ 8. The company may not stock fruit and vegetables in some states. FMCG. Though Reliance Fresh is not exiting the fruit and vegetable business altogether. with food accounting for the bulk of the business. Reliance Retail has decided to minimise its exposure in the fruit and vegetable business and position Reliance Fresh as a pure play super market focusing on categories like food. groceries. which employs nearly 10% of India's population. it has decided not to compete with local vendors partly due to political reasons. The size of small retail is big. These stores sell fresh fruits and vegetables. History Post launch. The real difference is however not unorganized vs organized. The strategy here is to define the small scale selforganized retail as "unorganized" and the large scale corporate retail as "organized". and partly due to its inability to create a robust supply chain. fresh juice bars and dairy products.7 per cent per annum according to the Indian retail report. This is quite different from what the firm had originally planned. a mere Rs.7 billion. Reliance Retail is moving out of stocking fruits and vegetables. in a dramatic shift in its positioning and mainly due to the circumstances prevaling in UP. the large scale corporate retail is projected to grow at the rate of 28% to 30% per annum.the retail market is estimated at around $ 270 billion with a growth rate of 5. reaching Rs. corporate" Reliance Fresh is the convenience store format which forms part of the retail business of Reliance Industries of India which is headed by Mukesh Ambani. The tenfold increase in corporate retail will be at the cost of small scale retail. consumer durables. IT and wellness . 485 billion or 4. Reliance plans to invest in excess of Rs 25000 crores in the next 4 years in their retail division. A typical Reliance Fresh store is approximately 3000-4000 square. 250 billion in 2004 or 3% and Rs. But it is "self-organized vs. it was mentioned recently in news dailies that. However. West Bengal and Orissa.7% per cent of the retail market in 2006. .

Reliance Footprint. Reliance Digital. it is very difficult to keep fruits and vegetables fresh. there are few Ones who are focused to return this society. Reliance Retail is directly sourcing fresh agricultural produce from . Reliance Fresh. a part of what they have earned through this society. Reliance Retail has entered into an alliance with Apple for setting up a chain of Apple Specialty Stores branded as iStore. Asked whether the company will take students on an employment basis and pay them a stipend during the course period. Reliance Trendz. Reliance Wellness. we consider this as a part of our corporate social responsibility. CORPORATE SOCIAL RESPONSIBILITY Today when most of the companies are busy in making profits by any means. Reliance Jewels. "Hence. The idea the company spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way. starting with Bangalore. To secure high quality. but also spoke at length about its "farm-to-fork'' theory. and will reimburse that once they are inducted into service. In addition. it is planning to charge a "small fee" from those who want to join the course "as we want to bring in some discipline and regularity among the students".When the first Reliance Fresh store opened in Hyderabad last October. 2) Farming in India is highly fragmented and subject to harsh climatic conditions: once harvested. And. not only did the company said the store's main focus would be fresh produce like fruits and vegetables at a much lower price. Following efforts of reliance retail are aimed at benefiting the society making reliance socially responsible: 1) Reliance Retail aims at recruiting people from the underprivileged community in society. Reliance Timeout and Reliance Super are various formats that Reliance has rolled out. Reliance Mart. he said that actually. Reliance retail is one of them. we are planning to train students from corporation schools and schools run by NGOs." he said.

literacy and education level. material) since you can touch it and own it.cultural environment consists of influence of religion. Service marketing environment Service marketing environment of reliance fresh can be scanned by considering the six major environment forces like demographic.e. A service tends to be an experience that is consumed at the point where it is purchased. reducing transaction costs and training the farmers in better and sustainable farming practices. This initiative results in higher income and upgrading of skills for the farmers.e. It is largely intangible (i. Socio. economic. They have centers in villages who apart from providing information make farmers aware of market rates of different crops so that farmers can choose crops they want to sow to become profitable. and political legal. 3) Reliance retail has adopted "farm to fork" theory which means it is procuring Directly from the farmers thus offering them quite reasonable prices for their produce as now no intermediaries are involved. The rich grew by 400% in urban areas and 200% in rural areas. farmers are provided technical help as well like information about quality of seeds and fertilizers. languages and customer that shapes the values and attitudes of customer preferences.thousands of farmers from villages through Collection Centers. not material). technological. Services Marketing and Marketing Mix A service is the action of doing something for someone or something. natural. . Economic level consists of income distribution of different people. socio-culture. Reliance has built a business model generating shared value that links the company supply chain more closely to poor farmers in Indian villages. In return Reliance is giving farmers information about how can farmers improve their productivity. Reliance is providing a guaranteed market for the farmers' produce. With this concept. and cannot be owned since is quickly perishes. habits and behaviour. A product is tangible (i. As the demographic environment consists of the age mix of population. A person could go to a café one day and have excellent service. and reduced spoilage of produce (up to 35 percent) and better quality products for Reliance retail stores.

since the human involvement of service provision means that no two services will be completely identical.e. So often marketers talk about the nature of a service as: Inseparable . Variability. and from the provider of the service. For example. motor insurance may have a certificate.physical evidence. You cannot sell it on once it has been consumed.From the point where it is consumed. but the financial service itself cannot be touched i. or speediness of work. Reliance Fresh Marketing Mix (7 P's) After segmenting the market. each company needs to come up with an offer. Intangible . and a growth in their service economies. also known as the 7P's . Product .is not taken to the service. since you merely experience it. For example. Perishable . but you do not own the service. not a service). Therefore the marketing mix has seen an extension and adaptation into the extended marketing mix for services. physical presence as does a product. you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product. finding the target segment and positioning itself. Right of ownership . and even then it will be staged in a different place with many different finalists. process and people. and do not take ownership of it.and then return the next day and have a poor experience. it is intangible. Western economies have seen deterioration in their traditional manufacturing industries. For example. once a 100 metres Olympic final has been run. an engineer may service your air-conditioning. For example. returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction.in that once it has occurred it cannot be repeated in exactly the same way. For example. The 7 P's used by Reliance Fresh are: 1. there will be not other for 4 more years.and cannot have a real. the engineer or his equipment.

Process Target Segment what is Reliance fresh for me? A Family with children. quick service without affecting the work schedule. Price 4. Reliance Fresh studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering. But keep it affordable.2. Reliance fresh has intentionally kept its product depth and product width limited. Physical Evidence 7. looks etc. Even the sauces and cheese used in India are 100% vegetarian. India is the only country where reliance Fresh serve vegetarian. Product includes certain aspects such as packaging. People 6. Product: How should the company design. Urban customer on the move Great taste. a purchase place to be for the children. Promotion 5. Place 3. guarantee. This includes both the tangible and the non tangible aspects of the product and service. manufacture the product so that it enhances the customer experience? Product is the physical product or service offered to the consumer. .

A is within a 3 minute drive from a Reliance Fresh outlet. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. Reliance fresh offers hygienic environment. It is important so that the product is available to the customer at the right place. There is a certain degree of fun and happiness that a customer feels each time he dines at. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base Reliance fresh has now. at the right time and in the right quantity. the discount functions available. good ambience and great service. There are certain dedicated areas for children where they can play while their parents can have some quality time together. . There are certain value propositions that reliance fresh offer to its customers based on their needs. Nearly 50% of U. Reliance fresh came up with a very catchy punch line "Growth Through Value Creation". The price must take into consideration the appropriate demand-supply equation. Now Reliance Fresh have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. the financing options available etc.Place: Where should be the product be available and the role of distribution channels? The place mainly consists of the distribution channels. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred.S. Price: What should be the pricing strategy? Pricing includes the list price.

Reliance fresh does its promotion through television. Front line managers . A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. People: How to converge the benefits of internal and external marketing? Reliance fresh understands the value of both its employees and its customers. Reliance fresh continuously does Internal Marketing. This is important as it must precede external marketing. training and motivating able employees. The level of importance has changed to be in the following order (the more important people are at the top): 1. Middle level managers 4. This way they serve customers well and the final result is a happy customer. Front line employees 3. This includes hiring. It understands the fact that a happy employee can serve well and result in a happy customer. They use print ads and the television programmes are also an important marketing medium for promotion. feel positive about it and remember it. There are three main objectives of advertising for Reliance fresh are to make people aware of an item. The right message has to be communicated to the right audience through the right media.Promotion: What is the suitable strategy and channels for promotion of the product? The various promotion channels being used Reliance fresh to effectively communicate the product information are given above. Customers 2. hoardings and bus shelters.

I have always used these on booking and have never had a problem. poor by providing standards of facility in different ways.Physical evidences -Actual Experiferal evidence -A good time entry. -Communication process. -Good parking place Process Process Exist are complex on railways like some processes are: -refund process / claim process. Organizations are taking an interest in the international marketing of services because of low cost factors and the ability to compete in nearby country markets (Bradley 1995). -Sign boards. for example . write the abbreviation in which you want to purchase. next to the word on the purchase form. 'Items at a Glance' timetable. international . In all these service segmentation Reliance Fresh is providing different facilities and charging same money. -Essential eminence of service. however. The service segmentation Reliance Fresh has segmented their service to all class of people like rich.you can find different items/buget packs for them these are the service segmentation of Reliance Fresh by which they are serving different categories of people. -Entraining/Detraining Process.

 The staff is cordial and friendly very much eagerly looking forward to help. I do not know why but shop keepers in Salt Lake have this tendency of looking at you as if why do these customers keep bothering us. 6. . Just one or two we can easily live without. 3. Especially after horrible experiences of visiting shops in Kolkata. The Ambiance in the shop is good. the staff greeting me by saying a Namaste. the extent of customization. Customers Requirements and Customer Expectations Customers Experience after visiting the store can be said to be not much satisfactory. service influences on national competitive advantage and strategic differences across services . 5. This I liked a lot. particularly in the international domain. but as I said nothing much different from the other super market chains. So. Hardly there is any range available. when u visits them. and Modern Market especially the last one has a superb range and Reliance Fresh is nowhere in comparison to them. Subhikhsa. After this entire buzz it seemed to be a damp squib to me. 1. Choice and Range. Trinethra (recently bought by Birlas). just to ensure that you show loyalty to them. any categories of goods. Not even. Research on international service offerings has focused on entry-mode choices technology growth . They accept card payment even for payments less than a hundred rupees. geographic roles. After I made the payment. Super Markets like Nilgiris. 2. and differences in preferences across cultures. brands and price ranges.services pose special challenges for marketing managers as a result of the intangibility of services. 4. Reliance Retail is primarily a super market store. one expects a wide range of goods available across various categories. They have this membership card option with a free insurance thrown in. Yet the marketing literature has not investigated several key components of service strategy.

that's the fact straightly put. -Admit and apologies. 4. Though it might be surprising. We are just part of the market grind that is happening right now! Service recovery strategies -Improving the after sales services. In contrary. We feel happy becoming a part of another India. The feel good factor. We like being greeted. But why are the Customers visiting them. the more is the number of people visiting them. They are least bothered about providing a range of goods and brands to the Customer. which I want to share with you. The goods we buy here can be easily bought at any other grocery store round the corner. 2. the companies that pay them the highest commission get to sell their goods from them. when they are not getting what they want? 3. By making a right balance between the numbers and the feel good factor. We love the ambience.As they go through the reviews by the members. The more the number of stores opened. the more the chances of success. -rectification of any error -Compensate -Minor performance lapse need monitoring . Customer is the last person in the minds of these supermarket chains. browsing and research made me understand some of the aspects related to it. Then why do we flock to them? Just because. The commission they get for selling a product. What matters the most is the number. which looks great much unlike the India we have grown in. When they have the numbers. they observe that the same points they have quoted above are bothering them too. the large number of customers visiting them. Some more reading. they achieve their targets some times much beyond the expectations they have set. 1. companies cannot afford to ignore them courtesy. we feel good.

. what are the expectation of customer of Reliance Fresh which can be due to inadequate marketing research. The main quality concern of Reliance Fresh is: To provide hygienic condition inside the stores. the difference between customer expectations and perceptions. GAP-1 Not knowing what customer expect i.e. Reliance Fresh have a good service design but not reached to that level of standards to meet all customer expectations. Freshness is also one of the concern for Reliance fresh. Avoiding as much as possible the delay in the schedule. Integrated gap model of service quality The central focus of gap model is the customer gap. Because of the huge population of India. GAP-4 Not matching performance to promises. In this way the gap between expected quality and perceived quality can be calculated by Reliance Fresh. This can be due to lack of integrating services marketing communication and ineffective management of customer expectation by Reliance Fresh.Quality concern Quality means watching the services from customer prospective. And may be due to failure in meeting supply and demand. Improving the infrastructure to world class level of standards. GAP-2 Not selecting the right service design and standards. GAP-3 Not delivering to service designs and standards. This can be due to deficiency of human resource policy of Reliance Fresh.

Pricing Strategies by Reliance Fresh -Discount pricing strategy -Wide price range of each items -Credit card acceptance -Accept coupons . The billing counter is first right of entrance.Competitive prices. .Blueprint of Reliance Fresh (near Patel chowk) Entering path Tracks for purchase of goods Tracks for purchase of goods Billing counter Gate keeper Entrance to Reliance Fresh This is the blueprint of reliance fresh. If he needs some help than he also can ask for it but telling the nearest salesman. When customer enters it the tracks whether for seeing of goods and if he liked something than he can put it in trolley and then he can go the billing counter. Customer when comes to this store firstly the gate keeper will check it and keep the bag if he has with him. -Price marked in paisa's -comparable cost. Gate keeper now demand for the receipt for just the security purpose. After selecting the good he can go to billing and go back to gate keeper.

The success of reliance fresh is because of all these marketing and retailing management. .Conclusion These are the strategies and implementations that reliance fresh is adapting. By all these means Reliance fresh stands as a leading retail chain in India.