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Study of Consumer Buying Behaviour in Reliance Fresh
Study of Consumer Buying Behaviour in Reliance Fresh
In
Reliance Fresh
New Delhi
Project Report
Submitted To
SCHOOL OF MANAGEMENT SCIENCES
Submitted By
Amit Kumar Gupta
(Roll No. : PG/08/05)
1
Study of Consumer Buying Behaviour
In
Reliance Fresh
Submitted By
Amit Kumar Gupta
(Roll No. : PG/08/05)
2
Reliance fresh
3
Certificate
4
5
Executive Summary
Retailing is the interface between the producer and the individual
consumer buying for personal consumption. This excludes direct
interface between the manufacturer and institutional buyers such as
the government and other bulk customers. A retailer is one who stocks
the producer’s goods and is involved in the act of selling it to the
individual consumer, at a margin of profit. As such, retailing is the last
link that connects the individual consumer with the manufacturing and
distribution chain. The retail industry in India is of late often being
hailed as one of the sunrise sectors in the economy. AT Kearney, the
well-known international management consultancy, recently identified
India as the ‘first most attractive retail destination’ globally from among
thirty emergent markets. It has made India the cause of a good deal of
excitement and the cynosure of many foreign and domestic eyes. The
entry of foreign and Indian retail giants like Wal-Mart, Metro, Reliance,
Birla, Tata etc. made Indian market more competitive which is at cut
throat level. So how retailers can reach to their end customers, to win
the mind share and increase the basket size of each shopping trip.
India retail industry is the largest industry in India, with an employment
of around 8% and contributing to over 10% of the country's GDP. Retail
industry in India is expected to rise 25% yearly being driven by strong
income growth, changing lifestyles, and favourable demographic
patterns.
6
The growth of scope in the Indian retail market is mainly due to the
change in the consumer’s behaviour. For the new generation have
preference towards luxury commodities which have been due to the
strong increase in income, changing lifestyle, and demographic patterns
which are favourable.
More than a century ago, the father of our nation, Mahatma Gandhi,
had made visionary and deep meaningful statement at Johannesburg,
South Africa in 1980. A customer is the most important visitor of our
premises. He is not dependent on us .We are dependent on him He is
not interruption on our work. He is the purpose of it and not an
outsider on our premises. He is a part of it. We are not doing him
favour by serving him.
7
Today the entire firm engaged in a process of creating a life time value
and relationship with customers. This report start with discussion on
the diversity of consumer behaviour and the need for studying
consumer buying behaviour and consumer as a related field of
marketing .this can be largely be attributed to the prevailing market
situation .Today the company image is built and made known by its
customers. Thus success of the firm determined how effective it has
been in meeting the diverse consumer need and wants by treating each
customer as unique and offering products and services to suit has or her
need.
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Declaration
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ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude to the following
personalities without whose help and guidance the successful
completion of my project work would have been remained a dream.
I extend my heartfelt thanks to our HR Miss. SHIVANGALI SINGH for the
constant and valuable guidance by him through out my course.
I would like to take the pleasure of this opportunity to express my
heartful gratitude to my guide Professor Mrs VANDANA SHRIVASTAV
(Faculty Member, SMS) who took personal interest and gave valuable
suggestions through out my field work and completion of the project.
I thank all my faculty members of MBA department for their valuable
suggestions throughout my course.
The importance of the moral support and good wishes of my parents
and friends is external and I am very much indebted to them.
Finally I thank all my friends who directly or indirectly helped me a lot
during my project.
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Contents
13
Interpretation of collect data 49
CHAPTER-4 RESEARCH FINDING 69
CHAPTER-5 LIMITATION OF RESEARCH 71
CHAPTER-6 SUGGESTION 73
APPENDIX 75
REFRENCES 77
14
RELIANCE
"Growth has no limit at Reliance. I keep revising my vision. Only
when you can dream it, you can do it."
Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002
RELIANCE GROUP
15
polyester, fibre 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, fibre
intermediates, plastics and chemicals), textiles and retail.
16
Subsidiaries of RIL
Reliance Petroleum
Ranger Farms Limited
Retail Concepts and Services (India) Private Limited
Reliance Retail
Reliance Global Management Services (P) Limited
Reliance Biopharmaceuticals
Reliance Ghatraj Services
Reliance Engineering Associates (P) Limited
17
Reliance Retail Limited
Reliance is gearing up to revolutionize the retailing industry in India.
Towards this end, Reliance is aggressively working on introducing a pan-
India network of retail outlets in multiple formats.
18
13% per year. Of this, presently, organized retailing is about 5%. This is
expected to grow to 10% by 2011. RRL has embarked upon an
implementation plan to build state-of-the-art retail infrastructure in
India, which includes a multi-format store strategy of opening
neighbourhood convenience stores, hypermarkets, and specialty and
wholesale stores across India.
RRL launched its first store in November 2006 through its convenience
store format ‘Reliance Fresh’. Since then RRL has rapidly grown to
operate 590 stores across 13 states at the end of FY 2007-08. RRL
launched its first ‘Reliance Digital’ store in April 2007 and its first and
India’s largest hypermarket ‘Reliance Mart’ in Ahmadabad in August
2007. This year, RRL has also launched its first few specialty stores for
apparel (Reliance Trends), footwear (Reliance Footprints), jewellery
(Reliance Jewels), books, music and other lifestyle products (Reliance
Timeout), auto accessories and service format (Reliance AutoZone) and
also an initiative in the health and wellness business through ‘Reliance
Wellness’. In each of these store formats, RRL is offering a unique set of
products and services at a value price point that has not been available
so far to the Indian consumer. Overall, RRL is well positioned to rapidly
expand its existing network of 590 stores which operate in 57 cities.
During the year, RRL also focused on building strong relationships in the
agri-business value chain and has commenced marketing fruits,
vegetables and staples that the company sources directly to
wholesalers and institutional customers. RRL provides its customers
with high quality produce that has better shelf life and more consistent
quality than was available earlier. RRL has made significant progress in
establishing state-of-the-art staples processing centres and expects to
make them operational by May 2008.
Through the year, RRL also expanded its supply chain infrastructure.
The Company is fully geared to meet the requirements of its rapidly
growing store network in an efficient manner.
19
Recognizing that strategic alliances are going to be a key driver to its
retail business, in FY 2007-08, RRL established key joint ventures with
international partners in apparel, optical and office products
businesses. Further, RRL will continue to seek synergistic opportunities
with other international players as well. This year, RRL will continue its
focus on rapid expansion of the existing and other new formats across
India.
20
Popular Profiles at Reliance Retail
Management team
Name Designation
Mr. Mukesh Ambani Chairman&Managing Director
Nikhil R Meshwani Executive Director
Hital R Meshwani Executive Director
Madhumita Mohant Deputy General Manager
Akashay Lokhande Area Manager-Operation &Sales
and NSO
Devandra Chawla Vice-President-Business Head,
Merchandise Head
Zubin Nowrojee, Mangement State Head Category
21
Formats of Reliance RETAIL
Reliance Fresh,
Reliance Mart,
Reliance Digital,
Reliance Trendz,
Reliance Footprint,
Reliance Wellness,
Reliance Jewels,
22
RELIANCE fRESH
BACK GROUND
23
Reliance is quite different. Reliance has developed such huge amount of
resources and capital over the years that whenever it steps into any
segment it is not required to wait for growing signal, that’s why it
always thinks of expanding without any boundaries. Reliance retail is
next Step by RIL which will be a pan India project.
Reliance Fresh is the retail chain division of Reliance Industries of India
which is headed by Mukesh Ambani. Reliance has entered into this
segment by opening new retail stores into almost every metropolitan
and regional area of India. Reliance plans to invest Rs 25000 crores in
the next 4 years in their retail division and plans to begin retail stores in
784 cities across the country. The Reliance Fresh supermarket chain is
RIL’s Rs 25,000 crore venture and it plans to add more stores across
different g, and eventually have a pan-India footprint by year 2011.
The super marts will sell fresh fruits and vegetables, staples, groceries,
fresh juice bars and dairy products and also will sport a separate
enclosure and supply-chain for non-vegetarian products. Besides, the
stores would provide direct employment to 5 lakh young Indians and
indirect job opportunities to a million people, according to the
company. The company also has plans to train students and housewives
in customer care and quality services for part-time jobs.
The company is planning on opening new stores with store-size varying
from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and
vegetables, staples, FMCG products and dairy products. Each store is
said to be within a radius of 1-2 km of each other, in relation to the
concept of a neighbor store. However, this is only the entry roll-out that
the company has planned. Bangalore is said to have 40 stores in all by
the end of the year.
In a dramatic change due circumstances prevailing in UP, West Bengal
and Orissa, It was mentioned recently in News Dailies that, Reliance
Retail is moving out stocking. Reliance Retail has decided to minimize its
exposure in the fruit and vegetable business and position Reliance
Fresh as a pure play super market focusing on categories like food,
FMCG, home, consumer durables, IT, wellness and auto accessories,
with food accounting for the bulk of the business.
24
The company may not stock fruit and vegetables in some states, Orissa
being one of them. Though Reliance Fresh is not exiting the fruit and
vegetable business altogether, it has decided not to compete with local
vendors partly due to political reasons, and partly due to its inability to
create a robust supply chain. This is quite different from what the firm
had originally planned. When the first Reliance Fresh store opened in
Hyderabad last October, not only did the company said the store’s main
focus would be fresh produce like fruits and vegetables at a much lower
price, but also spoke at length about its “farm-to-fork’’ theory. The idea
the company spoke about was to source from farmers and sell directly
to the consumer removing middlemen out of the way.
25
FARM TO FORK
TRADI
26
TIONAL MODEL OF RETAIL RELIANCE “FARM TO
FORK”
RELIANCE FRESH
Fa
rm n
ers atio
Ow COLLECTIO sport
nT N ran
ran nT
sp POINT/UNI O w
ort
a tio T ers
rm
n Fa
RELIANCE OWN
LOGISTICS
PROCESSIN
G
RF tics UNIT/POINT Re
gis li an RF
n Lo ce
ow
e ow nL
nc og
lia ist
Re ics
27
WHOLESALE TRADING (WST) :
Reliance formalized its second supply chain model to shift itself from
grocery retailer to grocery supplier by focusing and establishing itself
in Mandi’s.
28
away as Hyderabad and even Mumbai (formerly Bombay). If they are
not, workers will inspect the entire shipment and discard anything
below standard.
5) In case still some vegetables and fruits are not sold reliance
logistics own
Transportation sends them to reliance fresh stores.
29
SWOT ANALYSIS
The Indian retail market accounted for $ 200 billions. Food accounts
for over two-thirds of the $200-billion Indian retail market. Yet, it has
seen less than 1 per cent penetration by modern retail so far.
Reliance industries which always looking for new business
opportunities just started a new era with its introduction of new
concept stores named Reliance Fresh with opening convince store in
high streets of Banjara hills of Hyderabad. Reliance Fresh is very
different from what modern retail has offered in India so far and with
this reliance is planning to establish strong retail network in India in
food and farm sector. They have started with new eleven stores in the
last week and they are thinking to add 100 more stores to their feather
by the end of this year.
Strengths:
30
positioning themselves different from other players of the industries
like Food world, Big Bazaar and Nilgiris. But over come the short
comings of these specialized stores they are also introducing new
Reliance full-fledged supermarket called Shakhari Bhandar which
offers each and everything from the staple to soap. Most of the staples
are under its own private label brand — ‘Reliance Select’. There is a
500g channa dal pack priced at Rs 28, a 500g urad dal pack for Rs 39,
all under Reliance’s own brand. Excepting a few packets of Nestle’s
Maggi, or MTR’s masalas or Pepsi’s Lays chips, there is very little shelf
space given to the big brand owners in the country. Reason: private
labels offer far better profit margin to the retailer than branded
products of FMCG companies. Most of these outlets will need only
2,000-5,000 sq. ft. A supermarket may need as much as 8,000-10,000
sq. ft.
Weakness:
Opportunities
31
huge wastage in transit. This offers potential for savings and profits. To
reduce the cost and increase the profit it has been sourcing out its
requirements from the farmers. For example, the leafy vegetables,
brinjals, tomatoes and green chilies in the Banjara Hills outlet were
sourced directly from farmers in Vantimamdi, Chevella and nearby
mandals in Ranga Reddy district of Andhra Pradesh. The supply chain
already has been backed by few hundred farmers the number is
estimated to touch million in next five years. The main aim of the
reliance is to eliminate the intermediaries in the sector and reduce the
cost. Smaller stores have two advantages. They bring down the cost of
real estate (and increase profits). It is easier to find space for small
convenience stores in a quiet neighbourhood than for supermarkets in
high streets.
Threats:
32
CORPORATE SOCIAL RESPONSIBILITY
Today when most of the companies are busy in making profits by any
means, there are few
Ones who are focused to return this society, a part of what they have
earned through this society. Reliance retail is one of them. Following
efforts of reliance retail are aimed at benefiting the society making
reliance socially responsible:
33
With this concept, Reliance has built a business model
generating shared value that links the company supply chain more
closely to poor farmers in Indian villages. Reliance is providing a
guaranteed market for the farmers’ produce, reducing transaction
costs and training the farmers in better and sustainable farming
practices. This initiative results in higher income and upgrading of
skills for the farmers, and reduced spoilage of produce (up to 35
percent) and better quality products f or Reliance retail stores.
34
Major players in retail sector
Shoppers Stop:
Pantaloon:
35
Incorporated in 1987, Pantaloon Retail is among the pioneers in chain
retailing. It is the largest retailer in the country operating 350 stores
across segments in over 40 cities across the country and constituting 5
m square feet of retail space. Starting out with dedicated apparel stores
(Pantaloon), the company has stores across the cross-section of the
society. The company’s business is broadly divided into 2 segments,
Lifestyle and Value retailing. On the apparels front it has Pantaloon (31
departmental stores), Central Malls (4 seamless malls as well as its
other concepts). These stores can be classified under ‘Lifestyle
Retailing’. On the general merchandise front it has Big Bazaar
(51hypermarkets), Food Bazaar (77 supermarkets) and Fashion Station
(5 fashion stores) and other delivery formats. These fall under ‘Value
Retailing’.
more
36
daily needs. The retail offering from the Aditya Birla Group, has been
crafted after in-depth research of the needs and expectations of the
Indian consumers. more. is the answer to the shopping needs of the
Indian housewife who wants a modern and convenient option in her
neighbourhood, with an attractive and consistent range of products?
more. assures consumers the security of knowing that they are paying
the best price in the market for good quality products.
RPG Group:
Provogue (India) Ltd., (PIL) formerly Acme Clothing Pvt. Ltd was
incorporated in November 1997, converted in to a public limited
company in March 2005. It deals with fabrics, dyestuffs, chemicals and
textile machinery. PIL operates in two core industry segments. The first
being designing, manufacturing and selling branded ready-made
37
garments and other accessories under the brand 'Provogue'. The
second business is export of finished fabrics, dyestuffs, chemicals and
textile machinery to several markets in African continent.
38
Research Objective
39
40
Research Methodology
Research Problem
Type of research
Data collecton:
Primary Data
Primary data of research are collected from direct resources (customer
of Reliance fresh) through questionnaire.
Secondary Data
Secondary Data which are used for research to know the history scop of
Retail industry are collected from already available resources like net
and other sources
41
Universe
Sampling technique
Sample size
42
43
Understanding The Buying Behaviour Of Reliance Fresh
Consumers
Definition
Purchase decision making pattern that is a complex amalgam of needs
and desires, and is influenced by factors such as the consumer's (1)
societal role (parent, spouse, worker, etc.), (2) social and cultural
environment and norms, and (3) aspirations and inhibitions.
44
Model of Buying Behaviour
Market
ng Other Buyer’s Buyer’s Buyer’s
Character
Stmuli Stmuli istcs Decision Decision
Process
Problem
recognitio Product
Product Economic Cultural n choice
Technolog Informatio
Price ical Social n Search Brand choice
Dealer
Place Political Personal Evaluation choice
Promoti Psycholog Purchase
on Cultural ical Decision timing
Post Purchase
purchase amount
Behaviour
45
are focused on price rather than product, place and promotion, other
factor which influenced people is the technological advancement.
Cultural Social
Personal
Reference Psychologica
culture Groups l
Cycle Stage Motivation
Subculture Family Economic Perception
Circumstance
s Learning
Beliefs and
Life Style Attitudes
Roles and Personality BUYER
Statuses and
Social Class Self Concept
46
Where reference groups’ influence is operative, the advertiser should
stress not only the people who buy the product but also those who
influenced the purchasing decision.
47
standards the consumer has developed. When such a comparison leads
to favourable evaluations, the consumer is likely to develop a purchase
intention towards that alternative that received the most favourable
evaluation.
48
49
(1). Gender of the consumer
Male & Female
150 275
Data Collected-
Data collected for this questionnaire to know the
gender of customer of reliance fresh.
ANALYSIS—
Data collected for project from 425 responded
in which 275 are female which are 64.7% and 150 are male which are
35.29% of total respondent
Interpretation-
In total respondent we analyses that most of the
customer in this store is female and their demand always consider at
the time of taking the decision. Company should try to attract new
male customer by provide new scheme on their customer
50
10-20 21-50 51& above
123 230 72
Data Collected-
Data collected for this questionnaire to know the
age of customer of reliance fresh.
ANALYSIS—
Data collected for project from 425 responded in which
123 are the age between 10-20 which are28.9% and230are between
age of 21-50 which are54.29%and 72 are between age of 51 & above
which are 16.9 % of total respondent
Interpretation-
In total respondent we analyses that most of the
customer are youth .in my observation I found that most new people
believe in convenience shopping It help the company to keep
management such type which understand the problem of customer
easily and rectify the problem effectively.
51
Daily ( ) week ( ) fortnightly ( ) once in month ( )
Data Collected-
Data collected for this questionnaire to know the
shopping behaviour of customer of reliance fresh.
ANALYSIS—
Data collected for project from 425 responded in
which 22 are like to purchase daily which are5.1% and224arelike to
purchase weekly which are52.27%and 89 are likely to purchase
fortnightly which are 20.9%, 90 likely to purchase once in a month
which are21.17% of total respondent
52
Interpretation-
In total respondent we analyses that most of the
customer are likely to purchase on weekend .in my observation I found
that more scheme should be provided on weekend.
53
(4).What do you mostly shop for at mentoned
store?
Data Collected-
Data collected for this questionnaire to know
the products which are like to purchase by the customer.
ANALYSIS—
Data collected for project from 425 responded in
which 200 customer are like to purchase all product which are47.00%
and108 are like to purchase vegetables which are25.41%and 96 are
54
likely to purchase grocery 22.5 which are 22.58.%, 21 likely to purchase
cosmetic product which are4.9% of total respondent
Interpretation-
In total respondent we analyses that most of the
customer are like to purchase all product in the store. Company should
try to retain the customer. And should increase the variety o cosmetic
product& grocery.
55
(5). Preference of shopping?
Quality ( ) Brand ( ) Price ( ) one stop shop
Data Collected-
Data collected from this questionnaire to know
the preference the shopping
ANALYSIS—
Data collected for project from 425 responded in
which 134 customer are believe in reliance brand which are31.50%
and130 are like to purchase in one stop shop which are 30.54%and 102
are like to purchase quality product which are 24.00%, only 59
respondent consider price which are 13.08.%.
Interpretation
56
In total respondent we analyses that most of the
customer are believe in reliance brand like to purchase qualitative
product in stop shop. Here I observed that people want to purchase
fresh and original product and want better service.
57
(6). which store do you kept in preference for
purchasing
Reliance Fresh ( ) Big apple ( ) other ( ) Local market
Data Collected-
Data collected from this questionnaire to know
the preference of the purchasing (comparison of store to other).
ANALYSIS—
Data collected for project from 425 responded in
which 244 customer are like to purchase from local market which
are57.74% and 83 are like to purchase from reliance fresh which
are19.51%and 83 are likely to purchase from Big apple which are
58
18.82.%, 18 likely to purchase other which are4.2% of total
respondent
Interpretation
In my observation I found till today organised
retail sector didn’t penetrate the market. Company should try to open
new convenience store and provide more scheme and good service to
customer to penetrate the market. Initial it may be costlier, but it will
give long term benefit.
59
(7). Do advertsement and promoton influence your shopping
decision?
Yes ( ) No ( )
Yes No
390 35
Data Collected-
Data collected from this questionnaire to know
the effect of promotion scheme on purchasing.
ANALYSIS—
Data collected for project from 425 responded in which
390 customer are like promotion scheme which are91.76% and 35 are
those people which say promotion scheme doesn’t effect on
purchasing.
60
Interpretation In my observation I found promotion scheme is
must to sustain customer attract customer & influence the purchasing.
Data Collected-
Data collected from this questionnaire to know
display of promotion scheme..
ANALYSIS—
Data collected for project from 425 responded in which
218 customer say yes which are51.29% and 89 are those which say no
which are 20.94 and 118 say some time.
61
Interpretation- Company should try making promotion scheme easy
understandable, promotion scheme should be in both in English &
Hindi
62
(9).How likely are you to recommend Reliance
Fresh to a friend or relatve? Would you say the
chances are?
Excellent ( ) Good ( ) Fair ( ) Poor ( )
Data Collected-
Data collected from this questionnaire to know
the satisfaction level of customer.
ANALYSIS—
Data collected for project from 425 responded in
which 29 customer say excellent which are6.8% and19 8 say good
which are 46.6%, 190 say fair which are 44.7% and 8 customer are
those say poor
63
Interpretation
64
Which form of advertsement do you think is
(10).
most effectve?
Print ( ) TV ( ) Radio ( ) telephone ( )
Data Collected-
Data collected from this questionnaire to know
the better advertisement mode of promotion.
ANALYSIS—
Data collected for project from 425 responded in
which 119 customer say TV which are28% and 74 say print which are
17.4%, 56 say Radio which are 13.17% and 176 customer are say
telephone.
Interpretation -
65
According responded result company can choose telephone as best for
advertisement and call indusial for attracting the customer
66
(11). Did you get help from CSA when asked?
Yes ( ) No ( ) some time ( ) Never ( )
Data Collected-
Data collected from this questionnaire to know
about CSA performance.
ANALYSIS—
Data collected for project from 425 responded in
which 192 customer say yes which are 45.1% and 95 say no which are
22.35%, 124 say some time which are 29.17% and 14customer are say
never which are 3.25%.
67
Interpretation-
68
69
Finding
70
71
Limitations
72
Suggestion
73
1- More promotion scheme should be used to penetrate the
market.
2- Skilled employees should be higher because mostly customers
are young.
3- Promotion scheme should in such way that customer can
understand easily.
4- Service of store should be providing in such way which full the
need of the customer.
Appendix
74
Reliance Fresh
Questionnaire
NAME-
GENDER-
AGE - Monthly income-
4- Preference of shopping
Yes ( ) No ( )
75
8- Are the Price of Reliance fresh is lower than the other competitor
Print ( ) TV ( ) Radio ( )
References
76
Referred books-
Referred site-
www.ril.com
www.google.com
www.wickipedia.com
77