KAMALA NEHRU COLLEGE

Tesco v/s Reliance Fresh: A comparison on the sales promotion techniques

By : Sakshi Mittal , Mallika Chadha , Mehek Sarin

2014

INDEX
Acknowledgements............................................................................................ 3 Aim and Objectives .............................................................................................4 Methodology ......................................................................................................5 Introduction..8 About Tesco ........................................................................................................7 Promotional tools used by Tesco..9 Recommendations for Tesco . 15 Reliance Fresh.. 16 Promotional activities by reliance fresh. 21 Survey work.25 Bibliography.28

Acknowledgements
We would like to take this opportunity to express our sincere appreciation to our supervisor, Vibhuti. This dissertation would not have been possible without her precious time, immense guidance, thoughtful ideas and morale support. We would also like to thank our friends and family for their encouragement and best wishes. Finally, we are grateful to our friend Mayank, who has helped us by providing suggestions and motivating us throughout to finish the dissertation

Aim and Objectives

Aim
To determine the importance of excellent sales promotion strategies by using Tesco as the model and compare them to Reliance Fresh so that they it can do better and learn from Tescos current strategies.

Objectives
questions -communication tools and promotional strategies used by Tesco and Reliance Fresh -marketing strategies and various tools.

METHODOLOGY The research was conducted using both primary data as well as secondary data.
Secondary Research
In this project, most of the data has been collected through secondary research. Secondary research is using the previously available resources to fulfill the research objectives. Secondary data is using the already available and collected data from various sources to fulfill the objectives. Using secondary data saves a lot of time and effort as it comes in many forms. Secondary data becomes important when we know where exactly to look for it. The results might be published in books, journals, a government-sponsored information database, or a host of other resources. The advantages of using secondary data is that, availability of information from different sources which can be used very which is very easy to search. The amount of information available is very high and helps in comparing the data that is already present. It is also very cost effective as compared to the other forms of data collection methods. With the availability of large amounts of information, extra information can be collected which may be useful and new objectives can be covered. The researcher must become familiar with the data and how it was collected because they are not aware about the existing data has that will be searching .The biggest problem with the secondary data is not being familiar with the methods and the sources used to collect the data at the first place. The data may be outdated which cannot be used for the current research study .This creates a big problem in the research process due to the reason that, if the data is outdated, it cannot be used completely and the results may come

wrong. The data may not directly answer the research question, that is, the data available may answer only a small part of the objective .While conducting a research, the availability of data in abundance leads to too much confusion and creates a problem in deciding which particular data to use.

Primary Research
Primary research consists of a collection of original primary data collected by the researcher. It is often undertaken after the researcher has gained some insight into the issue by reviewing secondary research or by analyzing previously collected primary data It can be accomplished through various methods, including questionnaires and telephone interviews in market research, or experiments and direct observations in the physical sciences, amongst others. The term primary research is widely used in academic research, market research and competitive intelligence. There are advantages and disadvantages to primary research. Advantages:

Researcher can focus on both qualitative and quantitative issues. Addresses specific research issues as the researcher controls the search design to fit their needs Great control; not only does primary research enable the marketer to focus on specific subjects, it also enables the researcher to have a higher control over how the information is collected. Taking this into account, the researcher can decide on such requirements as size of project, time frame and goal.

Disadvantages:

Compared to secondary research, primary data may be very expensive in preparing and carrying out the research. Costs can be incurred in producing the paper for questionnaires or the equipment for an experiment of some sort. In order to be done properly, primary data collection requires the development and execution of a research plan. It takes longer to undertake primary research than to acquire secondary data. Some research projects, while potentially offering information that could prove quite valuable, may not be within the reach of a researcher. By the time the research is complete it may be out of date. Low response rate has to be expected.

INTRODUCTION
TESCO
Tesco was founded in 1919 by Jack Cohen from a market stall in Londons East End. Over the years their business has grown and they now operate in 12 countries around the world, employ over 530,000 people and serve tens of millions of customers every week (PLC). Tesco is one of the biggest food retail chains in the world operating around 2,318 stores (Datamonitor 2004). Operating in UK, Tesco has stores in Europe and Asia as well. It also offers online services through its subsidiary, Tesco.com. The companys largest market is in UK which runs under four banners: Express, Extra, Metro and Superstore. Tesco sells around 40,000 food products through its superstores, besides clothing and other non-food products. The companys own-label products are at three different levels: value, normal and finest. Their own brand provides nearly 50% of sales (Datamonitor 2004). Ever since gaining the first rank in 1996, Tesco has created a successful and effective multi-format strategy that has accelerated its benefit. The sales of Tesco in UK are now 71% higher than Sainsburys which makes gives it a very strong position in the domestic market (Datamonitor 2004). The multichannel approach of Tesco helps it to influence the current store network and online capability to make customers shopping experiences even better. Tesco is the first retailer to develop grocery home shopping in 1997 and has grown to be the worlds biggest and most profitable online grocery retailer (PLC). Their in-store picking model is accompanied by a small number of specialized dotcom-only

stores which helps in meeting with the high demands of the customers. The popular Click & Collect service is an essential part of Tescos multichannel offering which enables the customers to collect their products according to their preference (PLC).

Various Promotional Strategies of Tesco

Tesco has used various promotional strategies in order to reach out to its customers and promoting about their offers and incentives through a few campaigns and innovative ideas. A few of them are as follow:

Double Clubcard Points on Facebook

In May 2012, Tesco had launched a four week trial promotional campaign on the social networking site Facebook, in which the customers were offered double Clubcard points who liked, shared and bought products on its e-commerce website. Customers who wanted to gain additional points had to register for Share & Earn Facebook application that could be found via brands Facebook page . Facebook users then had to post products they liked to their Facebook wall. If their friends bought the products after clicking through the Facebook post, both the individuals who shared the post and purchased the product would earn Clubcard points for the purchase. Tesco currently has more than 1 million likes on Facebook and it uses its page to promote the various deals and offers on the products. Matthew Entwistle, marketing director for general merchandise online at Tesco, said: "More and more of our customers are using Facebook to chat about and recommend products they like from Tesco Direct". Thus these types of short campaigns help in creating awareness and generating high amount of sales as customers get interested in the fun

activities and are initiated to take part in these campaigns and also recommend other people as well.

Social Wine Campaign

Tesco had launched a new campaign to produce the worlds first socially created wine, which aims to help the Enaleni Community in South Africa as well as to increase social market .It started by inviting wine bloggers and members of Tescos social- media community to a wine-tasting event in the last week of June 2012, where the customers were given an option to judge five wines, all of which were made with the different grapes picked by the Enaleni community .The customers who tasted the wine were asked to vote on which of the five wines they though should be sold at Tesco The campaign was launched on Tescos social channels and it used an application which was created by We are Social and the event took place on Tescos Facebook page. The fans were able to submit and vote for their suggestions and ideas for the name of the wine and design of the wine bottle. In the end the fan whose name and design would be selected would win a free trip to South Africa. Till the campaign was not launched, Enaleni Community was only able to sell its grapes to the local winemakers (Influence 2013). The customers were eager to participate in the campaign and give their ideas and suggestions. The final wine will be sold in Tesco stores and on the e-commerce websites from October 2013 onwards. This campaign is not just about producing a bottle of wine, its about supporting a community," said James Griswood, product development manager at Tesco. I cant wait to see what the social media communities suggest and select Im sure this wine will be a best seller by the end of the year (Hall 2013). This campaign resulted in a huge success for the company as they received thousands of ideas on Facebook and attracted many users to take part in the campaign. The campaign was designed to be interactive and fun for the customers.

Random ideas and thoughts were presented and generated a lot of news on the social networks as other users had also appreciated what Tesco was doing.

YouTube Channel of Tesco

YouTube is a social network video website where the users upload different types of videos on the internet and anyone can view them. Tesco relaunched its YouTube channel a part of a strategy to produce a simple and a clear social media strategy .The main aim of the new strategy is to provide a more combined customer experience and allow the cross-promotion of information more effectively. Video advertising a new phenomenon and is very popular amongst the customers as it helps them to understand the message given by the company in a better way. Before launching the new YouTube channel, Tesco.com TV channel had only added 30 videos since its launch in 2007, while channels such as Tesco Greener Living and Tesco Mobile Network were updated in 2010 (Chapman 2012). Tom Daniell, head of digital marketing at Tesco, said Zone was hired in June to help Tesco to "understand how to manage our video content with consistency and efficiency so it best serves our customers" (Chapman 2012). Only the supermarkets recipe idea channel, Tesco Real Food had been continuously updated with nearly 250 videos being updated since July 2010, while the Tesco magazine channel was updated more than 100 times during the same time (Chapman 2012). The customers who want to look and learn how to make a certain dish can watch the videos uploaded by Tesco on YouTube. The food dishes are made by professional cooks and experts who give the customers step by step information. The best advantage of using videos is that the customers can store them in order to use it in future as well or if they have to forward a video to another user. The amount of videos available is in great number which helps the customers to find most of the dishes that

they are looking for. This creates a sense of commitment in the mind of customers that the company is not only fulfilling its promise through its loyalty programs but also uses different methods and platforms to create awareness and motivate more people to join the Tesco community .

Tesco helps Everyday Commuters

To help the customers save time while they are working, Tesco had targeted travellers with a new section on its grocery website that is improved for mobile to allow people to shop with ease on travel (Chapman 2012). The commuter zone is designed to target consumers who want to circumvent the trouble of carrying heavy shopping bags at the end of a working day. This section offers customers access to their favourites section on the website which allows them easy access to the shopping basket and multi-buying savings .The customers can save a list of their favourite products that they buy every time and in future, they can directly click on the list to buy those products which would directly be added to their shopping carts. Customer will also be able to select a delivery slot that suits their daily routine with no additional delivery charges for those who have registered for the retailers Delivery Saver Service. Ken Towle, director of internet retailing at Tesco, said: "As the nights close in and it gets colder and darker, customers neednt worry about stopping to shop on their way home Tesco can deliver their order straight to their door, giving them more time to enjoy their evenings and weekends (Chapman 2012).

Tesco Clubcard TV
Tesco has expanded its retail business to Video on Demand with Blinkbox; they have developed their own online portfolios with Clubcard TV drawing upon shopping data to form information and advertisements. Tesco says that it is the first retailer in UK to provide rewards to its customers with their own online movie and TV channels which is offered directly to 16 million Tesco loyalty card holders (News 2013). The channels will offer different genres like comedy, drama, kids TV, thrillers and action without any charge, contracts or subscriptions as it is maintained by targeted adverting based in customers purchasing habits and demographics as stored on their Clubcard. Customers will be given a chance to shape Clubcard TV by giving feedback both on content and extra features they think should be added in the service.

Tesco Virtual Store

In August 2012, Tesco had launched a trial program virtual grocery store in UK where the customers were able to order products with their smartphones from interactive billboards which were placed in public places (Steadman 2012). It followed a successful trail concept of South Korea. An electronic billboard displayed the products that were kept in shelves, each with its own barcode. The customer could easily scan the barcode of the product using Tescos phone application and add the products to their basket and then select a delivery time. It was launched at Gatwick Airports North Terminal and was promoted simply as a timesaver- the passengers or customers who were waiting for their flights at the airport could buy products directly from the virtual store and the groceries would be ready for them when they reached back to their homes. There is also a huge different between browsing shelves and searching for specific items -- this way; Tesco might grab extra sales

of items customers didn't think to buy before browsing a brightly colored virtual store shelf (Steadman 2012). Virtual shops are a way to encourage people to spend even more using their phones. Anyone can order products online using their smartphones, but Tescos idea had the advantage of being both an advertisement that encourages an order and making the method of ordering the products easier. There is also a vast distinction between browsing shelves and searching for specific items. By doing this, Tesco can generate extra sales as customers may buy additional products after browsing the brightly colored virtual store shelf. It's estimated that by 2016, 90 percent of all mobile phones in the UK will be smartphones (according to the IDC), and the Centre for Retail Research thinks that UK consumers will spend 4.5bn via their smartphones in 2012 (Steadman 2012).

Tesco Mobile Application

Tesco has launched a free mobile application for Googles Android operating system to provide shopping and delivery services to the customers. The application includes features like voice searching and barcode scanning using the mobile phones camera to add the product to the cart. The products can be searched through aisles or shopping lists and separated according to various special offers (Williams 2011). The customers can also buy the products through this application and book delivery slots. Information relating to any product can be viewed as the application is directly linked with the Tesco store. This gives the customers an easy way to shop as most of the people nowadays use smartphones to shop online, therefore, this application proved to be very successful in the market as it saved time for the customers in a huge way and is very convenient. Any smartphone user can download and install this application on their phones.

Recommendations
and buy different products. Tesco already has its website from where customers order the product. But they can take their website a step further by creating a virtual store on the website that would help the customers to buy more products. For example: When customers go to Tesco Metro for buying various products, the customers who go regularly to the same store are familiar with the layout of the store and they know where different products or different sections are located. It is a human tendency to shop more when a person actually sees and feels the product. Therefore, Tesco can create a virtual store on their website by allowing the customers to virtually travel in the store and give them an experience of an actual brick and mortar store. The customers can search for different virtual stores on the website that are developed by the company on the basis of the layout of Tesco Metro stores at different locations. When the customers would see the actual layout of the brick and mortar stores in a virtual way; by going through the various sections at a time and by seeing other products, they may recall their memory and buy more products. This would help Tesco in generating more sales and creating an innovative environment and experience for the customers.

who are active on social media site Facebook. This would help the representatives of Tesco to gain more data about the customers and can tailor the promotional messages as per individuals. Tesco can also send offers and deals to the mutual friends of the individual and Tesco. Friends can be mutual when users have liked the Tesco page on Facebook, it can be linked with the profile of the customer and Tesco can track the users who have liked their page and are friends with the customers. This would help them expand their customer base.

customers based on the products that have been sold the most during a whole day and also show the total number of items that have been sold. This would help customers to compare the products if they have purchased any substitute product that is already there on the recommended list. This can encourage the customer to try out new products based on the ranks and numbers.

Reliance Fresh
About
Reliance Fresh a convenient store format, is governed by the Mukesh Ambani and is the most important part of Reliance Industries retail Business. Reliance Ltd. has planned to invest more than Rs. 25000 crores in the retail division. It also comprises more than 560 reliance fresh stores all over the country. The outlet sells fresh fruits, staples, dairy products, fresh juice bars, groceries and vegetables. A distinctive Reliance Fresh outlet is around 3000 to 4000 sq. feet and accommodates catchment area of one to three Kilometers.

History of Reliance Fresh

The Reliance Retail had to face various difficulties before the launch of Reliance fresh, because of the various circumstances prevailing in Orissa, West Bengal and UP, along with the news focusing on the

dearth of vegetables and fruits stocks. The retail business of Reliance then minimized its exposure in vegetable and fruit business, as a result established Reliance fresh positioning a pure super market play focusing on various categories like IT, consumer durables, home, FMCG and food. The retail company of Reliance may not supply the vegetables and fruits in a few states, the Reliance Fresh decided to not to race with local wholesalers partly because of the political reasons as well as its incapability to maintain a healthy supply chain.

Growth of Reliance Fresh

The first ever a Reliance Fresh store was established in Hyderabad, wherein the company, mainly focused on the fresh produced vegetables and fruits at comparatively low price along with an introduction of farm to fork theory. This was the idea, which was anticipated by the company was to take the supply direct from the farmers and then sell straightaway to the consumers removing the middle-men off the beaten track. Reliance introduced several formats in the marketplace to cater to needs of common people, which includes Reliance Fresh, Reliance Super, Reliance Footprint, Reliance Timeout, Reliance Jewels, Reliance wellness, Reliance Mart and Reliance Digital, to name a few. In addition to this, the Reliance Retail also entered into a treaty with Apple, which is a leading Information Technology company, to set up a series of Apple Specialty Outlets branded as IStore, with its first ever store in Bangalore. With an idea to produce inclusive prosperity and growth for farmers, consumers, small shopkeepers and vendor partners, Reliance Retail was

set up in order to lead the foray of Reliance Group into an organized retail.

Objectives: To provide high quality products to its customers. To reduce spoilage through its state of-the-art supply chain & logistic networks. To enrich customers shopping experience through customized offer, private labels & value for money merchandise. To foster relationship with partners that will create new avenues of value enhancement for customers. To bolster its agribusiness & dairy value chain to support its rapidly expanding store footprint. To ensures fair & timely payments to farmers.

Product Availability:
- Baby foods and baby-care products such as disposable diapers - Breads and bakery products (many stores may have a bakery on site that offers specialty and dessert items) -Bulk dried foods such as legumes, flour, rice, etc. (typically available for self-service) - Canned goods and dried cereals -Confections and candies

-Cosmetics -Dairy products -Delicatessen foods (ready-to-eat) -Electrical products such as light bulbs, extension cords, etc. -Feminine hygiene products -Frozen foods -Fresh produce, fruits and vegetables - Housecleaning products -House wares, crockery and cooking utensils, etc. (typically limited) - Laundry products such as detergents, fabric softeners, etc. -Non-alcoholic beverages such as soft drinks, juices, bottled waters, etc. (some stores may have a juice bar that prepares ready-to-drink freshly squeezed juices, smoothies, etc.) - Personal hygiene and grooming products -Seasonal items and decorations -Soft-Drinks

STORE LAYOUT AND DESIGN

Store Layout: Grid Type Layout

Grid Type Layout: This type of layout is a retailers primary choice when it comes to Layout Planning or Designing. These layouts makes you feel where and what are you shopping.

Ambience: Reliance fresh provides good ambience having proper lighting, ventilation facilities. Also products are properly arranged according to category. Customers are provided with trolleys and baskets to select products on their own. For this purpose enough space is made available with the help of grid layout. Air conditions are also used.

Shelving Pattern: Use of Wall Racks, Corner Racks, Retail Gondolas, Fruits & Vegetable Racks, Shopping Trolleys And Baskets, Wire Products, Check Out Counter, Glass Shelves and Accessories, Gondola End Racks, Wall Unit Racks, Wire Baskets.

PARKING & OTHER FACILITIES

Parking space is available at most of the stores allowing over 30 commuters to park their vehicles. 500 to 1200sq. ft space is provided

for two wheeler & car parking. In-house facilities for customers: Various facilities such as drinking water, toilet, etc are provided in shop. Help desks are provided to assist the customers, weighing machines available to weigh the vegetables and fruits, shopping trolleys and baskets are available to collect and carry the goods inside the store.

PROMOTIONAL ACTIVITIES Promotional schemes: Promotional schemes are more targeted to the impulse buying nature of the customers. They have in-store promotions, which are majorly given by company on branded products. If any new schemes are introduced then pamphlets are distributed to customers house near the store. POP displays are used on regularly basis on the selected items. A variety of short term incentives is used to encourage trail or purchase of a product or service. The sales promotion at Reliance fresh includes premiums and gifts, Sampling, rebates.

Loyalty schemes, membership cards: Reliance Fresh has started loyalty program on day one and you get 1 point for every Rs.100 you spend in any of the Reliance Retail stores and you encash the same in any of Reliance Retail stores be it be Reliance Fresh or Reliance Hypermarket. Reliance Credit Card is given to the customers. It can be used to purchase goods at various Reliance retail store. Monthly Shopping Paradise: Shop for 1999 & get gift of Rs. 49. Shop for 2999 & get gift of Rs. 99.

Point of purchase displays: At Reliance Fresh it is used to communicate the benefits of the products. The point of purchase is used to

communicate promotions with the help of Shelf Talkers. Shelf Talker is mode of communication at the shelf where the product is displayed.

Reliance Fresh Loyalty Programme

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. Following 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.

RELIANCEONE MEMBERSHIP CARD

This is a card which was given to the customer at free of cost. This card helps to increase the loyalty sales percentage of the store. Benefits of this card are: Customer will get 1% point of his purchasing amount added to his\her membership card.

When these points will become 25, it means that 25 points is equivalent to 25/-. He\she will be able to redeem his\her points & get a discount of 25/With this card customer will get Accidental Death Insurance of 50000/- by default. If customer will recharge their Hutch, Reliance, Airtel & Idea mobile from CSD then also 15 point of the amount he recharge will be added to his card. In starting customer will get temporary card, which is valid for 180 days. Within 180 days customer will get permanent card, which is look like plastic card at postal address given by the customer in the form for issuing of RelianceOne Membership Card. Conditions for eligibility of permanent card are as follows: Customers have to do a purchasing of 1500/- with the help of card within 3 months from the issuing date OR he have to scan his card at least 10 times. If above criteria is not fulfill then in next 2 months customers have to do a purchasing of 600/- with the help of card OR he have to scan his card at least 6 times.

Survey work