SUMMER INTERNSHIP REPORT

Indian Institute of Planning & Management

Satbari Campus

The Importance & Analysis Of

Marketing Activities (Outdoor & In
store) During New Store Launch

Submitted By:
Anuj Gupta

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 Declaration
I, hereby declare that the project work entitled “The Importance and Analysas of Marketing
Activities (outdoor and instore) during New Store Luanch” submitted to IIPM Satbari Campus,
is a record of an original work done by me and this project has not performed the basis for the award
of any Degree or diploma/ associate ship/ fellowship ans similar project if any. The results embodied
in this thesis have not been submitted to any other University or Institute for the award of anything.

Anuj Gupta
IIPM
SB-2, 2011-13

2
Acknowledgement

The understanding of the business organization had been a stepwise familiarization

with policies procedure etiquettes responsibilities execution, implementation, etc.
Every step had presented some challenges or the other. But had at the end crowned
our efforts with something valuable called experience.

The short span of traineeship with Reliance brings to me the fond recollection of
balanced work atmosphere which helped to optimize on my skill sets.
In this regard I express my deepest sense of gratitude to Mr. Puneet Mishra and Mr.
Vibhor Bhargava for their valuable support, encouragement for the completion of
the project.

I vote my special thanks to Ms. Shivajali from HR.

In addition I would like to give my sincere thanks to my team members with whom I
worked. It was a great experience working with these people.

Gaurav Soni
Nalin Lal Das

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 EXECUTIVE SUMMARY

Retailing consists of all activities involved in selling goods and services to

consumersfor their personal, family or household use. It covers sales of goods
ranging from automobiles to apparel and food products and services ranging from
hair cutting to air travel and computer education. Sales of goods to intermediaries
who resell to retailers or sales tomanufacturers are not considered a retail activity.

Retailing can be examined from many perspectives. A manufacturer of white goods

like washing machine and refrigerators has many options to reach out to consumers.

The retail sector in India is highly fragmented with organized retail contributing to
only 2% of total retail sales. The retail sector in developed countries was also highly
fragmented at the beginning of the last century but the emergence of large chains like
Wal Mart, RIL led to rapid growth of organized retail and growing consolidation of
the retail industry in the developed countries. Today, in India we see a rise in the
purchasing power and growth of a middle class which follows the western lifestyle.

Hence, conditions are conducive for the rapid growth of organized retail in India.
Organized retail is growing rapidly and we see the emergence of large organized
retail chains like Reliance Retail, Bigbazzar, Easyday etc . We also find retail malls
mushrooming all over the country. The opportunities in retail industry in India will
increase since Indian retailing is on the threshold of a major change.

However, with the rapid growth in organized retail and increased emphasis of
manufacturers on understanding sales at the retail level, the study of retailing has
become increasingly relevant.

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 Preface

It is an integral part of our MBA programme to undergo “On the job/summer training
“ in a business organization with following objective:
To acquire a better understanding of business environments under professional
guidance.

To blend the practical experience acquired in the business concern with the
theoretical knowledge received in the classroom and apply them in actual business
situation soon after the completion of MBA programme.

To perform a profound analysis of functioning of various department of business

concern where we undergo the training.

This market research is a short introduction to the main management concept that has
determined the structure of Reliance Retail, we have tried to identify the areas where
strategic management as a paradigm has be applied to manage and withstand the
unforeseen and competitive challenges offered by this growing segment of Retail
Sector. But any serious omission is my fault and I owe humble apologies for that.

The more I become conclusive with the outcome of my research I became incredibly
amazed by the depth of research on the subject of marketing strategies of Reliance
Retail.

In order to achieve the objectives as mentioned above objective, my training was

arranged in:

Reliance Industries Limited(RIL), A-3 Sarita Vihar, South Delhi.

Contents
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• Reliance Group ………………………………..9-15
• Reliance Retail Limited……………………....16-27

 Growth through Valuable Creation

 Reliance Digital
 Reliance Fresh
• Types of Retailers………………………….….28-29
• Some of the Major Groups………………………30

• Retail Scenario……………………………………31
• Visual Merchandising………………………...32-35

• Retail Customers……………………………...36-42
• Functioning of Retailing……………………...43-45

• Loyalty………………………………………....46-54
• Methodology…………………………………...55-58
• Demographic Delails………………….………..59-81
• Conclusion…………………………………………82
• Bibliography……………………………………….83

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OBJECTIVE OF PROJECT
• To understand the concept of retailing during NSO.

• Understanding and analyze consumer behavior during NSO.

• Understanding the importance of outdoor media and its placement.
• To analyze the concept of loyalty program and consumer response to such
program.

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 Reliance group

Founder Chairman of Reliance Group

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

Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002

Shri Dhirubhai Ambani was an exceptional human being and an outstanding leader.
He dared to dream on a scale unimaginable before in Indian industry. His life and
achievements prove that backed by confidence, courage and conviction, a man can
achieve the impossible. From a humble beginning, he went on to create an enviable
business empire within a span of just 25 years. The US$ 54 billion Reliance Group is

8
a living testimony to his indomitable will, single-minded dedication and an
unrelenting commitment to his goals.

The Group's track record of consistent growth is unparalleled in Indian industry and
perhaps internationally too. Today, the Group's turnover represents nearly 3 percent
of India's GDP.

The corporate philosophy he followed was short, simple and succinct - "Think big.
Think differently. Think fast. Think ahead. Aim for the best". He inspired the
Reliance team to do better than the best - not only in India but in the world. He was
probably the first Indian businessman to recognize the strategic significance of
investors and discover the vast untapped potential of the capital markets and
channelise it for the growth and development of industry. He was supremely
confident that finance would never be a constraint in executing his projects because,
as he said proudly, Indian investors would provide him with the necessary resources.
For him, his people were his most important asset.

He scouted around for the best and most talented professionals, nurtured them and
continuously propelled them to aim for still higher goals. These highly motivated
people comprise the core of what he named: "The Reliance Family".

Shri Dhirubhai Ambani visualized the growth of Reliance as an integral part of his
grand vision for India. He was convinced that India could become an economic
superpower within a short period of time and wanted Reliance to play an important
role in realizing this goal.

The Bhagavad Gita states, "The actions of a great man are an inspiration for others.
Whatever he does, becomes a standard for others to follow." This certainly applies to
Shri Dhirubhai Ambani.

9
The Reliance Group is India's largest private sector enterprise, with businesses in the
energy and materials value chain. Group's annual revenues are in excess of USD 22
billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500
company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth
of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of
backward vertical integration - in polyester, 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 USD 7 billion to more than 100 countries in
the world. There are more than 25,000 employees on the rolls of Group Companies.
Major Group Companies are Reliance Industries Limited (including main
subsidiaries Reliance Petroleum Limited and Reliance Retail Limited), Indian
Petrochemicals Corporation Limited and Reliance Industrial Infrastructure Limited.

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Mr. Mukesh Ambani

Chairman & Managing Director

Mr. Mukesh D. Ambani, age 49, is a Chemical Engineer from the University of Bombay and pursued
MBA from Stanford University, USA. He is the elder son of Mr. Dhirubhai H. Ambani, Founder
Chairman of the Company

Mukesh Ambani is the chairman, managing director and the largest shareholder of Reliance
Industries, India's largest private sector company and a Fortune 500 Company. His personal stake in
Reliance Industries is 48%. His wealth is US$ 20.1 billion as of March 2007, making him the world's
14th richest person and the second richest person in India. Mukesh and younger brother Anil are sons
of the late founder of Reliance Industries.

Mukesh Ambani joined Reliance in 1981 and initiated Reliance's backward integration from textiles
into polyester fibres and further into petrochemicals. In this process, he directed the creation of 60
new, world-class manufacturing facilities involving diverse technologies that have raised Reliance's
manufacturing capacities from less than a million tonnes to twelve million tonnes per year.

Mukesh Ambani is also steering Reliance's initiatives in a world scale, offshore, deep water oil and
gas exploration and production program, a pan-India petroleum retail network involving 5,800 outlets
and a research-led life sciences initiative covering medical, plant and industrial biotechnology.

Mr. Mukesh D. Ambani joined Reliance in 1981 and initiated Reliance's backward integration from
textiles into polyester fibers and further into petrochemicals. In this process, he directed the creation

of several new and large world-class manufacturing facilities involving diverse

11
technologies that have raised Reliance's petrochemicals manufacturing capacities
from less than a million tones to over thirteen million tones per year. He directed and
led the creation of the world's largest grassroots petroleum refinery at Jamnagar,
India, with a present capacity of 660,000 barrels per day (33 million tones per year)
integrated with petrochemicals, power generation and port and related infrastructure.
He had set up the Reliance's communications technology initiative that is the largest
and most complex information and communications technology initiative in the
world.

Mr. Ambani is steering Reliance's initiatives in a world scale, offshore and onshore
oil and gas exploration and production program, creation of a pan-India petroleum
retail network and setting up of a new export oriented refinery through RIL's
subsidiary Reliance Petroleum Limited (RPL) with a capacity of approximately
580,000 barrels per stream day integrated with a 0.9 MMTPA polypropylene plant.

12
Mr. Ambani's Achievements include:

Conferred 'ET Business Leader of the Year' Award by The Economic Times (India)
in the year 2006.

Had the distinction and honor of being the co-chair at the World Economic Forum
Annual Meeting 2006 in Davos, Switzerland.

Ranked 42nd among the 'World's Most Respected Business Leaders' and second
among the four Indian CEOs featured in a survey conducted by Price waterhouse
Coopers and published in Financial Times, London, November 2004.

Conferred the World Communication Award for the 'Most Influential Person in
Telecommunications in 2004' by Total Telecom, October 2004.

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

Ranked 13th in Asia's Power 25 list of 'The Most Powerful People in Business'
published by Fortune magazine, August 2004. 30 Growth is Life

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

WashingtonD.C., USA, May 2004.

Ranked No.1 for the second consecutive year, in The Power List 2004 published by
India Today, March 2004.

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

Limited, Reliance Petroleum Limited and Reliance Retail Limited. He is member of
the Shareholders'/ Investors' Grievance Committee of the Company.

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Major Subsidiaries & Associates:-

The Reliance Industries Limited is the flagship company of Reliance Group which
has ownership interest in the following subsidiaries & associates

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RELIANCE RETAIL LIMITED

Growth through Value Creation

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

this end, they are aggressively working on introducing a pan-India network of
retail outlets in multiple formats. A world class shopping environment, state of
art technology, a seamless supply chain infrastructure, a host of unique value-
added services and above all, unmatched customer experience, is what this
initiative is all about.

The retail initiative of Reliance will be without a parallel in size and spread and
make India proud. Ensuring better returns to Indian farmers and manufacturers
and greater value for the Indian consumer, both in quality and quantity, will be an
integral feature of this project. By creating value at all levels they will actively
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.

The magnitude and strategy of RIL's retail foray is sure to have far reaching
social and economic implications by directly influencing the lifestyles of
hundreds of millions of consumers, besides indirectly impacting the livelihood of
tens of millions. This indirect impact will be on those engaged in a wide range of

15
economic activities including farming, consumer goods manufacturing, and a
host of myriad other services that bring hundreds of categories of goods and
services from the producers to the final consumers.

Business analysts feel that Mukesh Ambani's advantage is his huge financial
strength coupled with a track record of implementing mega projects in record
time, at globally competitive capital costs. Mukesh Ambani has learned to dream
big from his great visionary father, the late Dhirubhai H Ambani, who is
acknowledged as one of India's tallest, most ambitious and successful business
leaders for his sharp business acumen and skilled people management ability. If
the announced retail project is any indication, Mukesh Ambani has indeed
inherited all these skills from his father. Re-writing the rules of business has
been the forte of Dhirubhai and Mukesh is attempting the same in retail.

Quite clearly, RIL is now all set and ready to conquer the organized retail
domain. The Indian retail scene is now going to witness some real fast-paced
action, with the consumer – as always – having the best deal.

So, as they say, let the action begin!

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Reliance Digital: Mukesh Ambani's Reliance Industries Ltd launched a second
group of retail stores called RELIANCE DIGITAL which will sell consumer
electronics and other household appliances. Reliance Digital Store has been launched
five months after the company first introduced its fresh food format outlets, Reliance
Fresh, that stock its own label of groceries under the brand, Reliance Staple.

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

New Delhi April 24 Reliance Retail Ltd, the mega retail venture from the
Mukesh Ambani stable, marked its foray into speciality retail with the launch of
its first consumer durable outlet, Reliance Digital, in the NCR region.

Reliance is planning to open a total of 150 Reliance Digital stores across 70 cities
with investment of Rs 1,000 core over the next three to four years

One-stop shops: The stores size approx. 15,000-30,000 sq. ft, will function as
one-stop shops for all technological solutions in the consumer durables and IT
telecommunications segment to cater to the tastes and requirement of customers.

Reliance Digital stores would sell everything from TV sets, home theatres,
refrigerators, cooking ranges, dishwashers to computers and mobile phones from
across brands. Each store would be set up at an investment of Rs4 to Rs7 core
and also provide after-sales services

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

products from over 150 brands. As part of their overall business strategy they will
have their own consumer durable private labels, but not immediately. With its
own labels in the consumer durables segment, Reliance Retail will be fighting for

17
a share of the $5.6-billion domestic market, which is dominated by South Korean
brands LG and Samsung and Japan's Sony.

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

and is split between imported South Korean brands such LG and Samsung and
Japan’s Sony on the one hand and Indian market leaders like Videocon and BPL

The prices being offered at the Reliance Digital stores will be most competitive
and if any consumer finds a cheaper product in the market within 30 days they
will not hesitate to match the offer.

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

The stores will also offer finance schemes for consumers for which the retail
majors are in talks for tie-ups with several financial institutions, Citi Financial
being one of them.

Reliance Digital will also be offering customers Reliance One, a common

membership and loyalty Programme across all its formats, which means users,
would be able to redeem points earned on purchases. Other formats of Reliance
Retail such as supermarkets and hypermarkets are soon to launch.

Reliance Industries had last year announced an investment of Rs 25,000 crore for
the retail business, which it hopes would help the company earn around Rs
100,000 crore revenues in the next five years, 10-15 per cent of which will be
contributed through retailing of consumer durables at its Reliance Digital stores
and hypermarkets.

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Industry estimates suggest India's retail market is worth $320 billion, of which
organized retail accounts for $7.5 billion and expected to grow to $21.5 billion by
2010.

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Reliance Fresh

Reliance Industries launched its first retail format called Reliance Fresh in
Hyderabad. Spread over 2,000-5,000 sq ft, 11 such Reliance Fresh neighborhood
convenience stores were come up in the city. These stores sell fresh fruit and
vegetables besides staples (dal, atta, rice) as well the company’s in-house brand
Reliance Select and Reliance Value.

Relianceis 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.

The Fresh stores at Hyderabad are part of a pilot project, which will help company
understand customer needs. The pilot for this format will be taken to many other
cities over the next few months. Next on the company’s list are bigger cities
including Delhi and Mumbai

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RIL intends to invest close to Rs 25,000 crore over the next five years in the retail
business. The company plans to establish 4,000 retail outlets across various formats
by then, and is eyeing sales of Rs 1,00,000 crore over the 5-year period from the
retail business.

Besides Reliance Fresh, the company also plans to launch larger format stores called
“Feel Fresh Plus” which will be spread over 10,000-15,000 sq ft. The Fresh Plus
stores will stock fruit and vegetables as well as apparel, consumer electronics, FMCG
items and even medicines. From Hyderabad, these stores will travel to Mumbai and
Delhi where Reliance has identified up to 80 locations each.

But even as the retail debut kicks off with fruit and vegetables, it seems the company
is doing a rethink on whether to get into the larger formats such as hypermarkets and
supermarkets. These two formats require over 1 lakh sq ft of space and may not come
up at prime city locations. Instead, Reliance is contemplating tapping alterative sites
such as the SEZs for opening hypermarket

The strategy is to open one Reliance Fresh store in a radius of three to four km to
serve 1,000-2,000 families. This means about 30-40 stores in the major metros.
Reliance Fresh is selling vegetables and fruits sourced from farmers through the
company’s agri hubs.

Reliance Fresh would carry fresh fruits and vegetables, staples, top-up grocery, non-
food items and dairy products and a whole lot of other categories at very competitive
prices. All the stores opened have an average area of about 1,800 sq ft and an average
of about 20 sales associates attending to customers in each store open from 8 a.m. to
10 p.m. on all seven days of the week.

A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010 with a planned
investment of Rs 30,000 crore over the next five years – that's the retail vision of
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Mukesh Ambani and his RIL retail team. RIL's retail venture seems all set to achieve
the status of being the flag-bearer of India Retail Inc, and that too in record time!

Culling information from all possible sources, Images F&R Research attempts to put
the Reliance Retail jigsaw in order and see how the concept and strategy
differentiates from the existing competition, how it impacts the intermediaries and
consumers, and more interestingly, how will it stand up to the real competition from
global retail powerhouses like Wal-Mart, Carrefour, Target, Metro, Sears and Tesco
that are eager to enter the Indian retail arena once the FDI barrier is lifted. Read on
for the full story…

It's been in the news for quite some time now. Earlier, about a year ago, it was only
whispered in close industry circles. Slowly the whispers become louder, and the word
gained ground that India's largest private sector company, Reliance Industries
Limited (RIL), is entering the Indian retail sector in a real big way.

But with virtually nothing coming from anyone in the know inside RIL about their
retail plans, this has to be one of the most closely guarded secrets of India's corporate
story.

Amidst all sorts of speculations in the media circles about RIL's intended retail foray,
the word finally came out on January 23, 2006, when the Mukesh Ambani-controlled
Reliance Industries Limited presented the mega retail initiative plans to its board of
directors who subsequently gave their consent to pursue the retail business through a
wholly-owned subsidiary of the company – likely to be christened Reliance Retail
Limited.

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

supermarkets, discount stores, department stores, convenience stores and specialty
stores, in about 800-odd cities and towns across the length and breadth of India. The
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RIL board of directors approved the initial phase of the retail foray at an estimated
cost of Rs 3,350 crore (US$ 750 million).

That was big news for both the national and international media, which went all agog
again with intense speculation. Giving full respect to the importance of this
announcement, more than one leading international daily – chiefly, The Financial
Times – gave this news a front-page treatment, speculating (like many others) that
this investment could just be an initial tranche of a much larger commitment from
Reliance Industries towards the retail project.

Just how big and grand this investment is for the Indian retail sector can be gauged by
the simple fact that the entire Indian retail sector is estimated to be at Rs 1050,000
crore (US$ 233 billion) – growing at five per cent annually – and the estimated share
of organised retail is only Rs 36,000 crore (US$ 8 billion), at present, albeit growing
at over 30 per cent every year.

That makes Reliance Retail's proposed investments equivalent to about 10 per cent of
India's organised retail market – such a level of investment in the Indian retail arena
has been unprecedented in the country's most promising sunrise industry – retail.

So much so, projections by the Images-KSA India Retail Report 2005 of an organised
retail market of Rs 100,000 crore (US$ 22 billion) by 2010 now appears
conservative, likely to be achieved much earlier than 2010.

If Indian retail was lacking a whole-hearted and full-blooded thrust from a big and
large corporate house (apart from the lukewarm investments made by the Tatas and
ITC), it is now all set to change. Mukesh Ambani, who has been nourishing retail
ambitions for quite some time now, has clearly positioned himself in to the role of
redefining the entire landscape of Indian retail.

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

What is even more interesting is that Reliance Industries Limited will far out-surpass
the Catholic Church in becoming the world's largest owner of real-estate property by
virtue of its mega Retail and SatelliteTownship plans, in the next two to three years!

Now what exactly does this mega retail plan portend for the Indian retail sector? In
fact, what exactly are RIL's plans, in terms of retail strategy? How will RIL
differentiate its stores and concept from existing players who have already moved
into the retail space earlier, and have already established a good foothold? How will
this impact the existing retail majors – the likes of Pantaloon Retail, Trent India,
Shoppers' Stop, RPG, etc? How will the consumer benefit from RIL's venture and
how will intermediaries like traders, suppliers and farmers all along the supply chain
network benefit? What will be the USP of Reliance Retail?

And, more significantly, how will this impact the major international retailers who
plan to enter the Indian retail market? Reliance Retail is in fact giving India for the
first time a real feel of the scale at which these global retail powerhouses actually
operate, it is preparing India to stand up to the ensuing competition and in the
process, allow consumers the full benefits of modern retail.

Retailing is the business where an organization directly sells its products and services
to an end consumer and this is for his personal use. By definition whenever an
organization is manufacturing or a whole seller sells directly to the end consumer it is
actually operating in the Retail space. This industry has traveled a long way from a
humble beginning to a situation where worldwide Retail sales are more than $ 7
Trillion.

Retailing has played a vital role worldwide in increasing productivity across a wide
range of consumer goods and services. The impact can be best felt in countries like
USA, UK, Mexico, Thailand and more recently in China. Economies of countries like
Singapore, Hong Kong and Malaysia are also heavily boosted by the Retail Industry.

24
It is a changing Industry and old traditional ways of doing business has lost relevance
nowadays. It is an Industry which is heavily dependent on consumer spending. In this
ecosystem consumers play the most important role. As a result of this, Retailers are
continuously challenging themselves to find out ways and means of identifying
customers need. They are busy in devising new strategies to have an atomic level
understanding of consumer demand.

Type of Retailers:

Retail Organizations have shown great variety and different format of stores are
coming up quite rapidly. Generally Retailers can be of six types.

Specialty Store

These stores are characterized by narrow product lines but with deep assortments
such as Apparel Stores, Sporting goods store, Furniture store,Florist and Book
store. Under this also there could be specializations like limited line store (eg.
Men’s clothing store) and Superspecialty store (eg. Men’s custom shirt store).
Example of such stores is Reliance Mart.

Departmental Store

Several Product Lines –typically clothing,home furnishing and household goods

with each line operated as a separate department managed by specialist buyers and
merchandisers Examples:

Supermarkets

Relatively large ,low cost ,low margin high volume ,self-service operationwhich is
designed to cater total needs for food, laundry, household maintenance products

25
 .Supermarkets earn an average profit of only 1 percent on sales. Example:
Reliance Super.

ConvenienceStore

These are the stores which are relatively small in size and they are located near
residential area, normally remains open seven days a week and carrying a limited
line of high turnover convenience products at slightly high prices. Many have
added take away sandwiches, coffee and pastries. Example: Kiryana Stores

Discount Stores
Standard merchandise sold at lower prices with lower margin but higher volumes.
Actual discount stores regularly sell merchandise at lower prices and offer mostly
national brands. In Discount retailing, Discount specialty retailing is also present
eg. Discount electronic store or discount book store Example: NEXT Store

Off Price Retailers

Merchandise bought at less than regular wholesale prices and sold at less than
retail prices. Often left over goods, irregulars obtained at reduced prices from
manufacturers and other retailers. Factory outlets are owned and operated by
manufacturers and they normally carry manufacturer’s surplus,discontinued and
irregular goods. Example:Shopper Stop

Some of the major groups & their plans are as follows

Reliance Group:Rs. 30,000 cr ($ 6.67 bn) investment to set up multiple retail

formats with expected sales of Rs. 90,000+ cr ($ 20 bn) by 2009-10

Bharati Group:Plans Rs. 11,250 cr (US$ 2.5 bn) by 2015 investment and will
open multi-format Retail outlets across all cities in India with a population of over

26
one million. Bharti Retail looking at approximately 10 million square feet of retail
experience & will employ around 60,000 people.

Tata Group:It runs departmental stores under Westside, a books and music
chain calledLandmark, hypermarket Star India Bazaar, and a consumer durables
chain christened Croma, in a tie-up with Woolworths of Australia. Trent is planning
to open 27 more stores across its retail formats adding 1 mn sq ft of space in the next
12 DLF malls.

A.V. Birla Group:The A.V. Birla group plans to invest Rs 15,000 crore in its
retail venture and began its retail play early this Year by taking over Trinethra Super
Retail for Rs 150 crore (currently with two formats - Trinethra and Fabmall plans 220
stores with a turnover of over Rs. 300 cr ($667 mn) this fiscal.

Pantaloon Retail (Future Group):Expansion into all possible formats

of retail across categories and segments will have 30 mn Sq.Ft of retail space by
FY10. The group turnover is expected to touch Rs. 30,000 cr ($ 6.67 Bn) in FY 10 –
11.

Mahindra Group:Mahindra & Mahindra is in talks with European fresh

produce supply chain and distribution companies to set up a supply joint venture to
cater to international and domestic markets. The venture will leverage on Mahindra
agribusiness division, which is involved in contract farming, contract services,
exports and Agri retailing (through Mahindra Shubh-Labh stores).

RETAIL SCENARIO
The Indian population is whooping 1 billion with 75% of the people living in villages
and small towns. It is only natural that the agricultural sector is the biggest employer
with its contribution to GDP pegged at 26.7%. Retail is India’s largest industry after
Agriculture with around 20% of the economically active population engaged in it and
generation 10% of our country’s GDP.

The growth of the efficient small store culture can be attributed to the 6 million
villages distributed across the length and breadth of the country. The 12 million retail
outlets in India are the highest in the world, and cater to the purchase need of its pole.
It is interesting to note, that the Urban Population although just 25% of the total, is an
astounding 250 million in size and is growing at a healthy rate of 7% per annum.

27
The chief driver of growth in the retail sector has been the consumer, with the
spending increasing at an average of 11% per annum. The Core and the Lower
middle have increased their share in the Growth.

Currently estimated at $205 billion to grow to $400-500 million, over the next 2-3
years.

• Smaller cities will have about 12.8 million sq ft of mall space by 2007.
• Ludhiana to account for 2.5 million sq ft.
• Ahmedabad about 3.4 million sq ft.
• Delhi and Mumbai now have maximum number of shopping centers.
• Gurgoan saw the largest development in terms of retail outlet.
• North region has 39% of India’s retail share.
• East region has 10% of India’s retail share.
• West region has 33% of India’s retail share.
• South region has 18% of India’s retail share.
• Government and co-operative sector is also making their steps in retailing.
For example, Kendriya Bhandar, Apna Bazar, Mother Dairy, Super Bazar etc.

28
Visual Merchandising
• Exterior Presentation

– Marquees

– Banner

• Interior Presentation

– Fixtures

– Floor layout

– Signage

– Plan-o-gram(visual mapping)

VM
• Product placement,

• Floor layout

• Aesthetics and appeal for standardization of process across shops

• Focuses on much targeted control of visual displays

• Benchmarking product displays

29
PROCESS
 BEFORE DURING

 Categorization of  During the period of

product, Preparing and implementation, the
printing plan-o-gram for behavior of the employee
the specific store and customer was
observed.
 Finding out the no. of
available products and  Working culture and
SKUs in store technical working
knowledge of employee
 Defining the was observed.
merchandise flow
 Plan-o-gram
 No. of allotted bay implementation Carry
according to the area forwarding ability of
available employees has been
 Defining the time of the studied.
day and day of the week
to work on the project
AFTER

 After implementation of plan-o-gram the sales of the store has been

monitored

 To measure the efficiency of employees store’s VM has been monitored.

 The effectiveness and result of the implementation of Plan-o-gram has

been asked from employees.

 After implementation of plan-o-gram views has been collected from

customers.

 The carry forwarding duration of activity has been recorded after

30
  implementation.

Problems in VM implementation
• Too many Props

• Poorly selected Props

• Undefined Areas of Responsibility

• Lack of Coordination

• Improper Communication

• Poor Time Management

31
RETAIL CUSTOMER

Consumer buying behavior refers to the buying behavior of the ultimate consumer.
Consumer behavior is the study of how consumers make decisions to use their
respective resources such as time, money and effort for buying, using and disposing
goods and services. The behavior of humans as consumers is complex.

Marketers’ understanding of the drivers of consumers’ buying behavior will help

them to serve their customers effectively and efficiently and attract new customers. In
the retailing context marketers are required to understand customers’ shopping
behavior, which includes decision variables regarding, among other things, brand
selection, shopping timing and choice of retail format and store.

32
Consumers’ shopping behavior can be understood by analyzing the factors that affect
behavior. These factors could be demographic, psychological, environmental or
related to the lifestyle of the customer. It is equally important for the retailer to
identify the various stages in the consumer decision-making process and the major
influences at each stage. This would make possible an effective retail marketing
strategy.

WHY DO PEOPLE SHOP?

It has been suggested that consumer shopping activities are influenced by personal
and social motives. Consumers’ motives are important and positively related to their
pleasure and satisfaction while shopping in terms of retail choices.

Personal Motives
• Role playing—shopping activities are learned behaviors and are expected or
accepted as part of one’s position or role, such as mother or housewife.
• Diversion—shopping may be motivated not by the expected utility of
consuming, but the utility of their buying process itself. Thus, emotional states
or moods may explain why or when someone goes shopping.
• Learning about new trends—shopping provides consumers with information
about trends and movements and product symbols reflecting attitudes and
lifestyle.
• Physical activity—it involves considerable amount of exercise.
• Sensory stimulation—shopping can provide sensory benefits such as looking
at and handling merchandise, listening to the sounds and smelling scents.

Social Motives

• Social experience outside home—shopping can provide opportunities for

seeking new acquaintances, encounters with friends or just ‘people watching’.

• Communication with other similar interests—it provides opportunity for

interactions with other customers or sales people.

33
 • Peer group attraction—certain stores provide a meeting place where
members of peer group may gather.

• Status and authority—shopping may provide an opportunity to attain status

and power by being waited.

• Pleasure Bargaining—shopping may offer the enjoyment of gaining a lower

price through bargaining comparison shopping or visiting special sales.

Having understood why people shop it is important to analyze the factors that affect
the consumers’ decision making process regarding what, when and from where to
shop.

34
FACTORS AFFECTING CONSUMER DECISION-MAKING

A consumer’s purchase decision tends to be affected by the following four factors:

1. Demographic
2. Psychological
3. Environmental
4. Lifestyle

DEMOGRAPHIC FACTORS PSYCHOLOGICAL FACTORS

Gender Perception
Age Learning
Occupation Attitude
Education Personality
Family size
Income
ENVIRONMENTAL FACTORS LIFESTYLE
Physical Environment Activities and interests
Social Environment—culture, social Nature of occupation
class

CONSUMERS’ IMAGE OF RETAIL STORES

A consumer’s image of a store is the summation of his attitudes towards various

aspects of that store. Retail marketers have provided considerable importance to
consumers’ attitude and images in store selection and rejection. Every retail store
possesses an individuality that differentiates it from its competitors. A retailer must
devise a strategy to communicate its individuality or personality across to its target
segments to build their confidence in its merchandise and services.

Consumer decision-making is a process of matching self-imaged with the image of

relevant retail store to meet their specific needs. It is argued that where there is some
degree of congruity of individual’s self-image and his image of a store or brand, there
is a strong possibility of positive behaviortowards that particular store or shopping
center. The measurement of consumers’ images of the store and measurement of
consumers’ self-images aid retailers in segmenting the consumer population into

35
 groups by demographic characteristics or patronage practices based on differences in
the image of the retail store or shopping center.
Dimension
1. Locational convenience
2. Merchandise suitability
3. Value for price
4. Sales effort and store services
5. Congeniality
6. Post-transaction satisfaction
Determinants
1. Access route
2. Traffic barrier
3. Travelling time
4. Parking availability
1. Number of brands stocked
2. Quality of line
3. Breadth of assortment
4. Depth of assortment
5. Number of outstanding departments in the
store.
1. Price of a particular item in a particular
store.
2. Price of same item in another store
3. Price of same item in a substitute store
4. Trading stamps and discounts
1. Courtesy of sales clerks
2. Helpfulness of sales clerks
3. Reliability and usefulness of advertising
4. Billing procedures
5. Adequacy of credit arrangements
6. Delivery promptness and care
7. Eating facilities
1. Store layout
2. Store décor
3. Merchandise displays
4. Class of customers
5. Store traffic and congestion
1. Satisfaction with good in use
2. Satisfaction with returns and adjustments
3. Satisfaction with price paid
4. Satisfaction with accessibility to store
36
Competitor’s Location

The type and number of competitors is another important factor. The presence of
major retail centers, industrial parks, franchisee chains and department stores should
be noted. Intense competition in the area shows that new businesses will have to
divide the market with existing businesses. If one is not able to offer better quality
and competitively priced products, one might reconsider that particular location. An
excellent location may be next or close to parallel or complementary businesses that
will help to attract customers.

POPULAR MEDIA VEHICLES USED IN THE INDIAN RETAIL SECTOR

There is a whole range of vehicles for promotion available to the retailers to choose
from. While selecting a particular set of materials for the publicity, retailers have to
consider factors such as cost of the selected material, compatibility with their
objective and the rest of the communication strategy.

Leaflets of Flyers:-Retailers to promote specific activities and events use leaflets or

flyers. They have a short shelf life, so they are most useful for marketing specific
activities such as opening of a new outlet or off-season sale.

Posters/Calendars: -Retailers use posters to promote specific activities and events

or as free gift to other channel members, especially their loyal customers.

Booklets:-Retailers from the organized sector can afford this costly mode of
communication. It is effective in case of products or services which are intense on
information, such as banking, real estate practitioners, fashion designers and
insurance services.

Direct mail:-Retailers can opt to send out regular, targeted letters as part of their
communication strategy. Direct mail advertising includes postcards, catalogues,
brochures, email and single letters. This technique is considered to be effective at the
time of introducing new product and informing about prospective sales and or special
discounts.

Magazines:-Magazines are considered to be and effective medium to advertise to the

target segment. For example, a retailer selling baby products could put an ad in
Parenting orHealth and Nutrition.

37
Local Cable Channels:-With the advent of the local cable TV channels, most of the
small retailers, basically located in central business districts, use this medium
tocommunicate about their offerings and promotions to their target segment more
effectively.

THEORIES AND MODELS OF RETAILING

1. DIALECTIC PROCESS: - An evolutionary theory based on the premise that

retail institutions evolve. The theory suggests that new retail formats emergeby
adopting characteristics from other forms of retailers in much the sameway that a
child is the product of the pooled genes of two differentindividuals.

2. GRAVITY MODEL: - A theory about the structure of market areas. The model
states that the volume of purchases by consumers and the frequency oftrips to the
outlets are a function of the size of the store and the distancebetween the store and the
origin of the shopping trip.

3. RETAIL ACCORDION THEORY:- A theory of retail institutional changes that

suggests that retail institutions go from outlets with wide assortments tospecialized,
narrow, line store merchants and then back again to the moregeneral, wide-
assortment institution. It is also referred to as the generalspecific-general theory.

4. RETAIL LIFECYCLE THEORY:-A theory of retail competition that states that

retailing institutions, like the products they distribute, pass through andidentifiable
cycle. This cycle can be partitioned into four distinct stages:
i. Innovation,
ii. Accelerated development,
iii. Maturity, and
iv. Decline.

5. WHEEL OF RETAILING THEORY: - A theory of retail institutional changes

that explains retail evolution with an institutional life cycle concept.

6. NATURAL SELECTION THEORY: - A theory of retail institutional changes

that states that retailing institutions that can most effectively adapt toenvironmental
changes are the ones that are most likely to prosper or survive.

38
7. CENTRAL PLACE THEORY: - A model that ranks communities according to
the assortment of goods available in each. At the bottom of the hierarch
arecommunities that represent the smallest central places (centres of commerce).They
provide the basic necessities of life. Further up the hierarchy are thelarger central
places, which carry all goods and services, found in lower-ordercentral places plus
more specialized ones that are not necessary.

39
FUNCTIONS OF RETAILING

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

suppliers and consumers. In this context, they perform variousfunctions like sorting,
breaking bulk, holding stock, as a channel ofcommunication, storage, advertising and
certain additional services.

SORTING

Manufacturers usually make one or a variety of products and would like to sell their
entire inventory to a few buyers to redu7ce costs. Final consumers, incontrast, prefer
a large variety of goods and services to choose from and usuallybuy them in small
quantities. Retailers are able to balance the demands of bothsides, by collection an
assortment of goods from different sources, buying them insufficiently large
quantities and selling them to consumers in small units.

The above process is referred to as the sorting process. Through this process, retailers
undertake activities and perform functions that add to the value of theproducts and
services sold to the consumer. Supermarkets in the US offer, on andaverage, 15,000
different items from 500 companies. Customers are able tochoose from a wide range
of designs, sizes and brands from just one location. Ifeach manufacturer had a
separate store for its own products, customers wouldhave to visit several stores to
complete their shopping. While all retailers offer anassortment, they specialize in
types of assortment offered and the market to which the offering is made. Westside
provides clothing and accessories, while a chainlike Nilgiris specializes in food and
bakery items. Shoppers’ Stop targets the eliteurban class, while Pantaloons is targeted
at the middle class.

BREAKING BULK

Breaking bulk is another function performed by retailing. The word retailing is

derived from the French word retailler, meaning ‘to cut a piece off’. To
reducetransportation costs, manufacturers and wholesalers typically ship large
cartons ofthe product, which are then tailored by the retailers into smaller quantities
to meetindividual consumption needs.

40
HOLDING STOCK

Retailers also offer the service of holding stock for the manufacturers. Retailers
maintain an inventory that allows for instant availability of the productto the
consumers. It helps to keep prices stable and enables the manufacturer toregulate
production. Consumers can keep a small stock of products at home asthey know that
this can be replenished by the retailer and can save on inventorycarrying costs.

ADDITIONAL SERVICES

Retailers ease the change in ownership of merchandise by providing services that

make it convenient to buy and use products. Providing product guarantees,after-sales
service and dealing with consumer complaints are some of the servicesthat add value
to the actual product at the retailers’ end. Retailers also offer creditand hire-purchase
facilities to the customers to enable them to buy a product nowand pay foe it later.
Retailers fill orders, promptly process, deliver and installproducts. Salespeople are
also employed by retailers to answer queries and provide additional information
about the displayed products. The display itselfallows the consumer to see and test
products before actual purchase. Retailessentially completes transactions with
customers.

CHANNEL OF COMMUNICATION

Retailers also act as the channel of communication and information between the
wholesalers or suppliers and the consumers. From advertisements, salespeople and
display, shoppers learn about the characteristics and features of a product orservices
offered. Manufacturers, in their turn, learn of sales forecasts, deliverydelays, and
customer complaints. The manufacturer can then modify defective orunsatisfactory
merchandise and services.

TRANSPORT AND ADVERTISING FUNCTIONS

Small manufacturers can use retailers to provide assistance with transport, storage,
advertising and pre-payment of merchandise. This also works the otherway round in
case the number of retailers is small. The number of functionsperformed by a
particular retailer has a direct relation to the percentage andvolume of sales needed to
cover both their costs and profits.

41
As a result of these functions, retailers are required to perform the
following activities:

ACTIVITIES PERFORMED BY RETAILERS

Retailers undertake various business activities and perform functions that add value
to the offerings they make to their target segments. Retailers provide convenient
location, stock and appropriate mix of merchandise in suitablepackages in accordance
with the needs of customers.

The four major activitiescarried out by retailers are:

1. Arrange for assortment of offerings

2. Breaking quantity
3. Holding stock
4. Extending services

42
 LOYALTY

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

Building Customer Loyalty

SERVICE NETWORK:-The mantra for marketing professionals is service,

service and more service! That’s right! One of the best ways of ensuring your
customers keep coming back to you is providing impeccable service. This includes
everything from service at the point of sale to after-sales service, which builds a
lasting relationship with the customer. Most manufacturers of white goods
understand relationship marketing like no one else. The peculiarity lies in the product
itself, where it might need to be serviced long after it is bought. Moreover, the
purchase might have taken place somewhere different from where the service is
required. Companies like Eureka Forbes and Whirlpool pride themselves on superb
customer service satisfaction levels. They manufacture a wide range of durables
which can be serviced at various locations throughout the country. Remember, the
customer is smart. He will judge your company even on small things like whether the
salesperson reached in time. If he is late, the customer will never trust any claims of
“zero error” quality made by you. So, watch out for service, the buzzword of the
industry.

43
QUALITY CONTROL:- “You never get a second chance to make a first
impression” was the tagline for ‘Head and Shoulders’ shampoo years ago.
Impeccable service too cannot save you if you do not deliver a good quality product
each and every time. This is true especially for restaurants, where the food served has
to be of the same quality time and again to keep customers coming back to you. Here,
quality is conveyed via word-of-mouth. One bad experience is enough to ruin the
impression forever.

Another good way of assuring customers value the quality of your product is to get
an outside agency or someone else to endorse the results. For instance, Colgate
Toothpaste continually reminds the customer that it is endorsed by IDA, the Indian
Dental Association and it is the brand trusted by most dentists. HLL gets customers
to talk about their “Pond’s Age Miracle” range of cosmetics and Dove soaps in their
television ads, to endorse the quality of their products. That is also the psyche behind
prompting a customer to try out the product. If a Vim Bar is a good dishwashing bar
for Mrs X, a housewife, it has to be good for you too! If others say that your product
is good, it’s gotta be good!

CONSTANT INNOVATION:-“Once a customer, always a customer”, is

no longer true in these days of fluctuating brand usage. Customers now have more
choices than before and are more willing to try out new brands. This fickle-minded
buying warrants a constant focus on the changing mindset of the customer. The brand
too has to change with customer tastes. Nestle India does it best with its brand of
Maggi food products. They now have variants for their instant noodles like ‘Dal Atta
Noodles’ and ‘Rice Noodle Mania’. Their competitors in the food segment, HLL
(Hindustan Lever Limited, now called Hindustan Unilever Limited) tickled the
Indian palate by making multiple variants of the traditional Tomato Ketchup in
flavors like mint, tamarind and chilli. Amul, which has a strong presence in the ice-
cream segment, sensed the need to keep the health-conscious customer in its kitty by

44
adding the new Probiotic range of sugar free ice-creams! Kellogg’s Chocos are now
available in a new flavour – Chocos Toffee to keep the children happy and dedicated!
Innovation is the name of the game and timing is everything!

DIVERSIFICATION INTO SIMILAR PRODUCT LINES:- If

a customer feels that Dove Soap is the best for her skin, why not make her think the
same way about shampoos as well? That’s exactly why the brand name has now been
extended to shampoos in the Indian market. Stretch the loyalty and benefits
associated with a brand to include other similar products.

Lotus Herbals, for instance, makes chemical-free skincare products like creams,
lotions and sunscreens. It has a strong base of happy customers because of its USP -
‘herbal ingredients’. Now, it has also launched its ‘herbal’ range of cosmetics on the
shelves. So the same customers have a choice of using herbal preparations for their
lipsticks and eye shadows as well. Chances are, they will be only too eager to try
them out! Even when it comes to food products, brand loyalties can be stretched
further. Knorr Soups, manufactured by HLL, extended their “instant soup powder”
mixes to include “instant make-a-meal” powders for Chinese recipes. They now offer
instant Chinese Manchurian, Hot & Sour, Chilli and other preparations for a quick
meal at home. Amul too capitalized on its distribution network to deliver different
products to its customers. They started from milk and now provide butter, ghee,
cheese and even ice-creams.

STRONG DISTRIBUTION CHAINS:- If I want to buy a product, it

must simply be available. For fast moving consumer items, it means availability at the
nearest grocer. From personal experience, I can tell you how important this is. I like
Nestle’s Munch chocolate a lot, but many a time I end up coming home with a
Cadbury’s Perk in hand, due to unavailability of the other brand. Perk tastes just as

45
good, and pretty soon I ended up asking for Perk at the local grocery shop instead of
Munch. This shows how just availability or lack of it can affect the customer’s brand
choices forever. For a long period Amul faced a similar problem with its products.
Originating from Gujarat, the availability of its products was restricted to the home
state and a few neighboring ones. Consciously, after a lot of effort Amul successfully
expanded its distribution chains throughout the country. An effective media
campaign helped pass this advantage on to the customers. If you want people to keep
buying your brands, make sure the grocery store around the corner stocks it.

REINFORCE THE DECISION:-Lastly, after people have tried your

product, tell them that they have made the right decision. What better example to give
you than the Pepsi ad which said, “Yehi hee hai right choice baby, aha!” You will
have customers hanging on to you forever. The human mind looks for signals to
reinforce the decision made by it, to tell itself that yes, you were correct! It’s no
wonder then that the L’Oreal ad shows Aishwarya Rai spouting the phrase “Because
you’re worth it!

Customer loyalty towards your brand can give you the advantage of decreased cost of
advertising. You can also increase the price of your brand to capitalize on the same.
So, go ahead and take the plunge into the world of brand loyalty!

Benefits

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

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

46
Loyalty Sales % = Sales through the Loyalty Card X 100

Total Sales

Customer Loyalty programs need to stay fresh, be easy to administer, and tightly
integrate with the central price file and all the customer touch points. Successful
Loyalty programs pinpoint value to a specific group of consumers. The continuous
change in programs keeps consumers engaged and avoids the attitude of entitlement.

The Retalix customer loyalty application suite, however, is not your run-of-the-mill
solution. It is comprehensive, easy to administer, and effective.

Retalix Loyalty is a real time, online, centralized system that manages the Loyalty
and Promotional marketing campaigns for Grocery and Convenience Store Retailers.

Coupled with the Retalix 1-to-1 Targeted Marketing Analysis tool, a retailer can
easily reward customers according to their specific taste and loyalty level via a
multitude of reward programs to keep it fresh and fun. Moreover, through a tight
integration with the Pricebook, POS and Fuel Pumps, electronic rewards can be
fulfilled for the consumer right at their purchase location.

47
Retalix Loyalty includes:

 Integrated POS and Pump interface to collect data, print Loyalty program
information on the receipt, display messages to the cashier and customer,
discount items, and redeem e-gift certificates, tender credits, and loyalty points
 Net-based online communications architecture
 Multiple set of basic programs (Charity, Continuity, Sweepstakes, e-Coupons,
Points)
 Tiered pricing rewards (electronic discounts) including fuel, according to
loyalty levels
 Reports to measure loyalty not only by gross spending but also by gross profit
 Reports to measure program participation by store and chain
 Net-based Centralized Management System
 Retalix 1-to-1, Targeted Marketing

48
What is Loyalty Membership?
Loyalty Membership is a program devised by Reliance Industries Limited for
Reliance Fresh to retain the customers visiting their stores. It is a program by which
Reliance Fresh store issues a Loyalty Membership Card to its customers to encourage
them to shop at the store regularly. Each time they buy something they collect points
which will allow them to redeem cash vouchers to shop at store in future. Followings
are the features of the program:

• An electronic method of identifying customer purchases and translating that

information to reward customers based on their shopping habits.

• There is a reward point system by which customers receive reward points on

every purchase made at the store.
• For every purchase of Hundred Rupees customer will receive One reward
point.
• Customer should accumulate minimum of 25 points to get a reward voucher by
which he can make purchase at the store equivalent to Rupees 25.
• Customers can also retain these points and receive reward voucher whenever
they want.
• Members will also receive accidental insurance of Rupees 50,000 under this
program.
• Customer will be issued a permanent membership card after 180 days of
issuing of temporary card.

How Loyalty Membership Program benefitRetailers?

• The program data help retailers to adjust their product assortment to customer
demands.
• Retailers remove or cut back slow-moving items and devote more shelf space
to the products that program members buy.
• Identify their most loyal customers.
• Learn more about their best customers buying habits.
• Offer the products and services according to their best customers demand.

49
How do Loyalty-Membership Program works?

• To enroll, customers typically complete an application form asking for their

Name, address, gender, phone number, e-mail address, income etc.
• Each time cardholders make a purchase, the store scans their membership card,
tracks the sale and converts this data into useful information.
• Loyalty Membership programs give customers points that accrue with their
purchases and can be redeemed for rewards.
• Cardholders receive their discounts by presenting their card at the checkout or
by redeeming targeted coupons.

50
What are the advantages of this LoyaltyProgram for
customers?

Following are the advantages of Loyalty Program:

• Loyalty Program gives customers the sense that the retailer values them
personally and respects them.
• This program has an inbuilt system of giving discount over the competitive
prices of the goods, if compared from general retailers.
• Besides this it also offers an accidental insurance of rupees 50,000.

How we can make Loyalty Program more effective?

• We can make it effective by introducing various types of schemes which can

attract customers.
• We can issue prepaid cards in different denominations to our customers and
provide additional discounts and offers in addition to our normal reward point
system.
• We can also categories the cards as Platinum, Gold and Silver based on
purchasing capacity/trend of different segments of customers. The advantages
can be increased with the upgraded membership.
• Card can be made attractive by issuing a plastic or a laminated card in place of
the present paper card so that it can be retained for a long time.
• Increase level of personalized service/interactive approach with the customers.
Through interaction and personalize service the front line staff should ensure to
make the customers feel that they are the valued clients.
• Cashier should request and enlighten the customers to use their cards.
• Regular announcement should be made to encourage customers to use their
loyalty cards to redeem reward points.
• There can be additional rewards depending on the frequency of usage of card
or can be based on their visit to the store.

51
• The Loyalty Program form can be bilingual and should be of one page so that
customers find it easy to fill.
• The form at present is very lengthy and it becomes irritating for the customer
when too much information is being asked. Therefore, it is suggested that the
form should be made simple and some irrelevant questions, if any, may be
removed.
• If need be in order to facilitate the customers, a separate person may be
assigned the task for filling up the forms.
• Customers need instant answers to their queries. So store staff can be trained
about this Loyalty Program so that they can also assist customers.
• The FDM should ensure optimum utilization of available manpower.

52
 METHODOLOGY

This project is the mixture of theoretical as well as practical knowledge. Also it

contains ideas and information imparted by the guide. The secondary data required
for the project was collected from various websites and books of reputed authors.

The project started with sorting all the raw data and arranging them in perfect order.
To add value to the project and to understand the practicality of retailing business, I
have visited various stores who are the best ones in retailing business.

Further, to understand the consumers better, a field survey was also conducted to find
out the tastes and preferences, purchasing habits, expectations of the consumers etc.
Analysis of this primary data has been done to actually understand the survey in a
better way.

53
Name :
Age : < 18 18-30 30 - 45 45 - 60 > 60
Sex : M F
Marital Status : Married Single
Contact
: ____________________________________
________ _______ _______ _______
Occupation : Service _ Businees _ Retired _ Others _

1 Which is your preffered place to shop ?

_______
    _
Big Baazar Reliance Store Mega More Kirana Store Others
Reason :
_______
    _
Low
Price Quality Range Nearby Others

2 How frequently do you visit?

   
Once in a week Twice in aweek Once in a month Depending on the need

3 How much money you spent per month on purchasing from this place ?
   
Below 2000 2000-4000 4000-6000 6000-8000 Above 8000

4 What have you shopped mostly from this place ?

Grocery 
Electronics 
Apparel 
Home 
Furniture 

5 How did you come to know about the offers ?

    
Hoard/Banners Catalogue Press ad passing by word of mouth

6 Please rate the players on the basis of given parameters

Price     
Big Baazar Reliance Store Mega More Kirana Store Others

Quality     
Big Baazar Reliance Store Mega More Kirana Store Others

Offers     
Big Baazar Reliance Store Mega More Kirana Store Others

54
7 Which offers you like most?

BOGO Price Off Buy X Get Y any other

DEMOGRAPHC DETAILS

The profile of the data gathered through questionnaires is summarized in the following table.

55
 No of % Cumulative%
respondents
1 Gender
.
Male 288 72 400
Female 112 28

INTERPRETATIONS:-

From the above dig. we see that out of 400 people, 288 are Male and 112 are Female.

FINDINGS: -

We found that percentage of male are more than that of female in the store.

Age

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INTERPRETATIONS:

Major age group in reliance store was between 18-30(276). People of age group of 30-45(108), 45-
60(8) and above 60(8) was comparatively lower than age group of 18-30.

FINDINGS: -

People who are of age group in between 18-30 are found more inclined towards Reliance store.

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 Marital Status

INTERPRETATIONS:

From the above figuren we came to know that out of (400), 269 are single and 131 are married.

FINDINGS: -

It has been found that people who are single and working use to come to Retail store as they preffer to
purchase weekly rather than the married people who buy in bulk.

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 Occupation

INTERPRETATIONS:

From the above dig. we can see that service class people(327) come frequently in the store which is
more than business class(29), retired(8) and others.

FINDINGS: -

It has been found that service class people has to go to out every day. So, they need day to day
products frequently.

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 1. Which is your preffered place to shop?

INTERPRETATIONS:

From the above table and dig we can see that maximum people prefer to go to reliance outlets(370)
for their purchasing and remaining goes to big bazaar(22), Mega More(0), others(9) , because in their
opinion availability of these stores are less than reliance store.

FINDINGS: -

We can find more no. of stores of Reliance in Delhi, NCR region. Other stores are mostly located in
the big market areas.

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 Reason:

INTERPRETATIONS:

From the above dig. and table we can easily understand that most of the people go to retail store
because they are Near By(145) and the other reason is because of Low Price(131).

FINDINGS: -

People preffer to go to Retail store because of its availability and low price.

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 2. How frequently do you visit?

INTERPRETATIONS:

Most of the people visit store mainly in weekends(247) and very few comes twice in a week(130). So,
from the dig we can see that maximun no. of people come once in a week.

FINDINGS: -

Due to lack of time it has been found that people like to come mostly on weekends or holidays.

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 3. How much money you spent per month on the purchasing from this
place?

INTERPRETATIONS:

From the above data we see that maximum people spent in between Rs. 2000-4000(181) while
purchasing their monthly requirements from retail outlets as compare to them who spent in between
below 2K(130), 4K-6K(73),6K-8K(16) and ablove 8K(0).

FINDINGS: -

Generally people buy branded and well packed product like chips and biscuits etc from these retail
stores.

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 4. What have you shopped mostly from this place?

INTERPRETATIONS:

People generally buy fruits, vegetables(168) and FMCG products(HOME)(148) from these retail
outlets and the sales of apparels(8) and other products are quite less as those.

FINDINGS: -

Study shows customer visit reliance store mainly for buying fruits and vegetables and FMCG
products.

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 5. How did you come to know about the offers?

INTERPRETATIONS:

As we see from the above table and dig that the Hoard/Banners(200) of reliance retailstores is very
effective and able to attract the customer towards the store.

FINDINGS: -

Hoard/banners are very effective source of communicating offers to public at large.

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 6. Please rate the players on the basis of given parameters
Price

INTERPRETATIONS:

From the above dig. and table we can see that maximum no. of customer come to Reliance store
because reliance is known for its low price.

FINDINGS: -

It has been found that both customer, who have high and low purchasing power preffer to come to
Reliance store as in Reliance store price of the products are low and customer always get some or the
other offer in the store.

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 Quality

INTERPRETATIONS:

According to observation many customers(174) are coming to Reliance Store due to there Quality
then to Big Baazar(152).

FINDINGS: -

According to customers Reliance Store are giving good quality then others.

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 Offers

INTERPRETATIONS:

According to above figure we can see that 210 customers are coming to Reliance because of there
offers other then Big Baazar(116).

FINDINGS: -

Offers in Reliance Store attracts customers more then others.

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 7. Which offers you like the most?

INTERPRETATIONS:

From the above table and dig we see that maximum people inclined towards buy and get free(232)
scheme rather than others offers.

FINDINGS: -

People get attracted towards buy and get scheme .People want tangible thing as free for buying the
product.

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 8. How do you come to know about the offers in the store?

INTERPRETATIONS:

With the help of the figure we came to know that most of the customers come to know about the
offers by observation(362) than other ways.

FINDINGS: -

Customers come to Reliance Store and then come to know about the offers by observing them

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 9. Have you meet with the premoting stock in the store?

INTERPRETATIONS:

According to figure only 175 out of 400 customers meet the promoting stock in the Store.

FINDINGS: -

Matching to the promoting stock is little difficult for the store due to unavailability of stock..

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 10.What are the difficulties that you suffered in the store?

INTERPRETATIONS:

225 customers out of 400 found stock unavailable in the store other 175 customer found deley in
billing.

FINDINGS: -

Stock unavailable and deley in billing is the major problem in the store.

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 11.What are the things you found in the staff?

INTERPRETATIONS:

According to figure, 298 customers found staff helpful and 87 found knowledgable.

FINDINGS: -

Communication is a major problem in the store but staff is found to be helpful.

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 12.Do you/ family members have a Loyalty Card ?

INTERPRETATIONS:

392 customers have Loyalty Card out of 400.

FINDINGS: -

Customers are aware of Loyalty Card

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 13. Which company's loyalty card do you have?

INTERPRETATIONS:

392 customers have Reliance Loyalty Cards.

FINDINGS: -

Customers are having Loyalty card of Reliance.

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 14. Do you know the benefits of Loyalty programs?

INTERPRETATIONS:

363 customers out of 400 are getting benefits from Reliance Loyalty Card.

FINDINGS: -

Customers are getting benefits from card.

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 15. Which benefits you like most?

INTERPRETATIONS:

We see that maximum people are aware of our membership scheme and they like the points
reward very much.

FINDINGS: -

People are aware about the loyalty program and prefer points reward.

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 16.Have you discussed about benefits of loyality card with your friends/
family?

INTERPRETATIONS:

334 customers out of 400 have aware of card and also spreading it’s knowledge among others.

FINDINGS: -

Customers are aware of spreading the importance of Card.

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 Conclusion

 Reliance Fresh has a tremendous potential where it can improve its revenue drastically by
concentrating on its existing customer base.

 As in the research findings it is very clear that even regular customers are still not spending
major part of their monthly expense in the Reliance Fresh Store.

 Reliance Fresh should improve its operations in its Fruits and Vegetable section as it has been
seen that people coming just to buy fruits and vegetables go ahead and buy other products in
the store. F&V is the major footfall driver in the Reliance Fresh Store.

 During the course of study it was found that Queuing problem exists at the billing counters
which need immediate attention. This problem can be sorted by improving operational
efficiency by way of better managing the staff available at the stores.

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80
 Bibliography

I have made this report by the help of internet and some books details of which are
mentioned below.

 Leon G. Schiffman & Leslie Lazar Kanuk, “Consumer Decision Making & Beyond”,
Consumer Behaviour, 8th ed. (Prentice Hall of India, 2004); 570 – 571.

 Kotler, Keller, Koshy & Jha, “Analysing Consumer Markets”, Marketing Management
(Pearson Education, 2007); 166 – 167.

 Swapna Pradhan, “Retail Store Operations”, Retailing Management 2nd ed. (Tata
McGraw-Hill, 2008); 272 – 280.

 Michael Levy & Barton A Weitz, “Store Management”, Retailing Management 5th Edition
(Tata McGraw-Hill, 2007); 550 – 626.

 Marketing Whitebook 2011-2012

 www.cpasind.com

 www.ril.com

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