“CUSTOMER LOYALTY PROGRAMME OF

RELIACE FRESH”

Dissertation Submitted to the

D.Y. Patil Deemed To Be University School of Management
In partial fulfilment of the requirements for the award of the
Degree of
BACHELORS OF BUSINESS ADMINISTRATION

Submitted by:
Ms Priyadarshni Singh
(Roll No- BBA017251)

Submitted To
Guide’s Name and Designation

D.Y. Patil Deemed to be University

School of Management
CBD Belapur, Navi Mumbai
March 2020

1
 “CUSTOMER LOYALTY PROGRAMME OF
RELIACE FRESH”

Dissertation Submitted to the

D.Y. Patil Deemed To Be University School of Management
In partial fulfilment of the requirements for the award of the
Degree of
BACHELORS OF BUSINESS ADMINISTRATION

Submitted by:
Ms Priyadarshni Singh
(Roll No- BBA017251)

Submitted To
Guide’s Name and Designation

D.Y. Patil Deemed to be University

School of Management
CBD Belapur, Navi Mumbai
March 2020

2
 DECLARATION

I hereby declare that the dissertation “CUSTOMER LOYALTY PROGRAMME OF

RELIACE FRESH” submitted for the Full time BBA Degree at Dr. D.Y. Patil Deemed
to be University School of Management is my original work and the dissertation has
not formed the basis for the award of any degree, associate ship, fellowship or any
other similar titles.

SIGNATURE OF THE STUDENT

Priyadarshni Singh

PLACE: Navi Mumbai

DATE:

3
 CERTIFICATE

This is to certify that the dissertation entitled “CUSTOMER LOYALTY

PROGRAMME OF RELIACE FRESH” is the bona fide research work carried out by
Student Name, student of Full Time BBA, at D.Y. Patil Deemed to be University
School of Management during the year 2019- 2020, in partial fulfilment of the
requirements for the award of the Degree of Bachelors in Business Management and
that the dissertation has not formed the basis for the award previously of any degree,
diploma, associate ship, fellowship or any other similar title.

Guide Name Dr. R. Gopal

Designation Director & HOD
D.Y. Patil University D.Y. Patil University
School of Management School of Management
Belapur, Navi Mumbai Belapur, Navi Mumbai

Place: Mumbai
Date:

4
 ACKNOWLEDGEMENTS

In the first place, I thank the Dr. D. Y. Patil Deemed to be University, School of
Management, Navi Mumbai for giving me an opportunity to work on this project.

I would also like to thank Dr. R. Gopal (Director & HOD) & Guide name and
Designation Dr. D.Y. Patil Deemed to be University School of Management, Navi
Mumbai for having given me his/her valuable guidance for the project. Without
his/her help it would have been impossible for me to complete the project.

I would be failing in my duty if I do not acknowledge with a deep sense of gratitude

the sacrifices made by my parents and thus have helped me in completing the
project work successfully.

SIGNATURE OF THE STUDENT

Priyadarshni Singh

PLACE: Navi Mumbai

DATE:

5
 TABLE OF CONTENT

SR.NO TOPIC PG.NO.

A LIST OF FIGURES
B EXECUTIVE SUMMARY

1 INTRODUCTION

2 OBJECTIVE OF STUDY

6
EXECUTIVE SUMMARY

7
 EXECUTIVE SUMMARY

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key
element of business strategy. Customer satisfaction is an abstract concept and the
actual manifestation of the state of satisfaction will vary from person to person and
product/service to product/service. The state of satisfaction depends on a number of
both psychological and physical variables which correlate with satisfaction behaviors
such as return and recommend rate. The level of satisfaction can also vary
depending on other factors the customer, such as other products against which the
customer can compare the organization's products. The enormous retail boom in
India has given space to many companies who have mushroomed out to benefit
from this retail boom, which is nothing but a structured format of the unorganized
retail business which is being done in India from ages. Many stores have come up
with exquisite interiors, state of the art infrastructure and the best possible products
or services to the customer which has led to the growth of mall culture in India. The
stores try and attract customers by providing them with such services and plethora of
options in products and services in different categories so that they can retain
customers for long and make them loyal towards their retail stores. The retail
business is booming in India and there has been remarkable shift in the buying
behavior of the people from traditional stores to these departmental stores. It
becomes important for the marketers to understand these relationships service
quality and customer satisfaction.

8
 CHAPTER 1
INTRODUCTION

9
 CHAPTER 1
INTRODUCTION

Evolution of Retail

Retail, according to Concise Oxford English Dictionary, is “the sale of goods to the
public for use or consumption rather than for resale”. The barter system was first
known retail form; then the currency changed hands; we had the handcart vendor
selling goods in the streets; of late we have a pop & mom stores which compliment
the neighbourhood stores. The first retailer in India includes Bata, Pantaloon,
Bombay Dyeing, Spencer’s, and Nilgiris & Higginbotham. The current retail scenario
is controlled by the likes of Shoppers’ Stop, Brand Outlets, Big Bazaars etc.
The top 4 world players include Wal-Mart, Carrefour, Tesco and Metro. The
opportunities as mentioned are aplenty with close to 15000000sq.feet of retail space
is under construction for various malls &shopping centers across the country.
Retailing consists of the sale of goods or merchandise, from a fixed location such as
a department store or kiosk, in small or individual lots for direct consumption by the
purchaser. Retailing may include subordinated services, such as delivery.
Purchasers may be individuals or businesses. In commerce, a retailer buys goods or
products in large quantities from manufacturers or importers, either directly or
through a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the end of the
supply chain. Manufacturing marketers see the process of retailing as a necessary
part of their overall distribution strategy.

10
What is retailing?
The sale of goods or commodities in small quantities directly to consumers.
Buy, Sell & Move

Buy, Move & Sell

Having gone through some of the terminologies in retail and having seen a broad
outline of retail now let’s look into the 3 basic things, which govern the retail market.

1. Buy
Buying would involve the following activities, which would mean setting the guiding
principles for all the merchandise decisions that a retailer makes. It should reflect
target market desires, retailer’s institutional type, market place positioning, defined
value chain, supplier capabilities, costs, competitors & product trends.

2. Move
It can be easily said but the processes that are involved in the “move” part are
complex but simple. From the product stage through the processing stage to the
packed ones the move stage would continue. Various levels that involves in “move”
part are: The buyer shortlists the product, places the order. The vendors receives the
order, process the same, packs and send it to the distribution center from where it
reaches the store for the customer to buy. One of the fast picking up aspects of the
logistic in India is the COLD
CHAIN. More and more organizations are looking for various aspects of cold chain
to ensure that the products where temperature plays a vital role is maintained and
sustained till such time the sale happens. The Merchandising and Category
management is another important function of the retail industry. In this we have to
opt for right product, place, quantity, quality, mix, price and time. Each of the stores
would operate on certain basic business projection and all others will follow atypical
pattern. For this pattern to be arrived, the merchandise management plays a big role.
The merchandise can make or break an organization of its profitability. When we say

11
category management, it would amply the assortments of products the customer
sees as reasonable substitutes for each other with similar characteristics. It also
covers the process of managing merchandise in a retail business with the objective
of maximizing sales and profits of a category. The category manager is also
responsible for developing assortment plans for the entire category, buying pricing
and coordinating promotions.

3. Sell
Finally of the Buy, Move & Sell comes the selling part of it which involves a running
of a retail stores. Operations as it is known are the crucial functions, which derive its
strength from various other faculties. The beginning of the day is done with the store
being opened by the competent person. The first activity to happen will be the
housekeeping activities followed by the staff scheduling. The morning’s meetings
happen chaired by the head of the store. The stock outs are established and the
replenishments happen as the day progresses, though it is suggested that
replenishments of the stock should always happen when the customer is not there.
The head of the store usually inspects any one or all the departments of the store,
which is otherwise called the “FLOOR WALK”. The cashier would ensure that all the
cashiers have enough and correct float cash, whether the POS role, card swap
machine and pen is in place or not. In starting of the day head cashier gives all
cashiers a sum of Rs.1500 as loan. Having set everything in place, the store would
then be opened for the customers. The department’s heads in turn would brief their
team on the achievements of the previous day and set target of the day. During this
brief any incidents worth mention would also be discussed and the promotion offers,
which are current, will also be taken up. Orders will be placed for all the stock out
SKU follows up will also be done for those articles, which are delivered during the
day. Cleaning of the self and also ensuring that the stocks are kept as per the
planogram are checked. It’s just not the duties mentioned above but selling also
happen simultaneously.
At the end of day the process of concluding the activities is called the “END OF THE
DAY” activities. As the person who is in charge of closing the store goes around
checking whether the locks are in place or not; the high value merchandise counters

12
are properly secured; check for any person hidden in the change rooms or cloaks
rooms; the cashier would ensure that all the money that has been given as float
tallies apart from the money that need to be submitted by the respective cashiers.
There will be a checklist that needs to sign off together by the security as well as the
in charge for having checked for conformity at the end of the day.

BASICS OF RETAIL

The Indian Retail market is worth a whooping 930000 crores. If one has to divide
between the organized and unorganized sectors the major contribution comes from
the unorganized sector, which contributes close to 98% of the total retail market. The
balance of 2%amounts anywhere between 18-2000 crores. The difference between
organized and unorganized sectors in the US &some of the Far East Asian countries
are pretty low unlike in India. With the advent of seasoned players in the field of retail
in India, the gap is likely to be abridged in the coming years. The difference between
them is 85:15 in favor of organized sector in the US and 81:19 in the favor of the
organized sector in Taiwan. The employment opportunities in retail is pretty high. But
again the ratio of organized and unorganized is skewed towards the unorganized
sector. While the organized retail sectors deploys 500000 people & the unorganized
sector deploys close to 80 times the workforce. Factors that influence the growth in
retail The DINK/HINK families, working women, working parents and the rising
disposable income has contributed to the growth of Retail across. The middle-
income group is the fastest growing segment in the country today. Further the
electronic media is also aiding the growth of the Retail industry.
To summarize the top 6 factors that drive the growth of the retail industry in India
would be as follows:
 The Demographics
 Lifestyles
 Needs and Desires
 Shopping Attitudes and Behaviour
 Retailers action

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  Environmental Factors
These six factors clubbed with a co-coordinated logistics make the sale happen. As
in any industry there is a social commitment also to be fulfilled. These can be
recapitulated as under:
 Quality products
 Competitive prices
 Wide range to choose from
 Employment opportunities that are created
 The economy would experience sea of change and
 Would mean a WIN WIN situation to everyone

Support Functions:
The entire operation is possible with the help of a support team. This support team
consists of the following:
 Human Relation-Involves itself in recruitment, training and welfare apart from
their regular activities
 Good Receiving-This department is responsible not just for the receipt of
goods but also checking for their conformity and returns goods to the
suppliers as need arises.
 Maintenance-The entire stores furniture and fixtures are taken care of by the
maintenance team
 Accounts-the department, which receives all the cash, charge slips and other
types of tenders; keeps a tag on the local store expenditure and also monitors
any deviation in the transactions.
 Housekeeping- Mostly it’s an outsourced agency, which does the work. They
keep the premises clean and tidy at all levels.
 Security-They are responsible for safeguarding men and material of the
organization.
 VM-This department maintains the displays and the signage across the
stores.

14
  CSD-Otherwise known as the customer service desk takes care of the
customer complaints and issuance of merchandise credit and taking care of
the loyalty programmed.
 IT-The IT department takes care of all the Networking, data maintenance and
upkeep of all the tills.

RETAIL TERMINOLOGIES

Alike any other industry the retail industry also has a wide range of terminologies,
which are in use on a day-to-day basis. Few samples of them would include the
following:
 Till - The cash point
 Tender - The type of payment the customer is making
 SKU - Stock keeping unit
 Merchandise Credit - Credit note
 Assortment - Range of products and so forth
 Maximum Bay Quantity (M.B.Q.) - It is the maximum quantity of each product,
which can be placed on each shelf.
 Maximum Display Quantity (M.D.Q.) – It is the number of SKUs, which can be
directly seen by the customer in the front side.

Retail types

There are three major types of retailing. The first is the market, a physical location
where buyers and sellers converge. Usually this is done on town squares, sidewalks
or designated streets and may involve the construction of temporary structures
(market stalls). The second form is shop or store trading. Some shops use counter-
service, where goods are out of reach of buyers, and must be obtained from the
seller. This type of retail is common for small expensive items (e.g. jewellery) and
controlled items like medicine and liquor. Self-service, where goods may be handled

15
and examined prior to purchase, has become more common since the Twentieth
Century. A third form of retail is virtual retail, where products are ordered via mail,
telephone or online without having been examined physically but instead in a
catalogue, on television or on a website. Sometimes this kind of retailing replicates
existing retail types such as online shops or virtual marketplaces such as eBay or
Amazon.

Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves
adding a mark-up amount (or percentage) to the retailers cost. Another common
technique is suggested retail pricing. This simply involves charging the amount
suggested by the manufacturer and usually printed on the product by the
manufacturer. In Western countries, retail prices are often so-called psychological
prices or odd prices: a little less than a round number, e.g. $6.95. In Chinese
societies, prices are generally either a round number or sometimes a lucky number.
This creates price points. Often prices are fixed and displayed on signs or labels.
Alternatively, there can be price discrimination for a variety of reasons. The retailer
charges higher prices to some customers and lower prices to others.
For example, a customer may have to pay more if the seller determines that he or
she is willing to. The retailer may conclude this due to the customer's wealth,
carelessness, lack of knowledge, or eagerness to buy. Price discrimination can lead
to a bargaining situation often called haggling — a negotiation about the price.
Economists see this as determining how the transaction's total surplus will be divided
into consumer and producer surplus. Neither party has a clear advantage, because
the threat of no sale exists, whence the surplus vanishes for
both. Retailers who are overstocked, or need to raise cash to renew stocks may
resort to "Sales", where prices are "marked down", often by advertised percentages -
"50% off" for example."Sales" are often held at fixed times of the year, for example
January sales, or end-of-season sales, or Blue Cross Sale.

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Global Retail Scenario

Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services .The impact can be best seen in countries
like U.S.A., U.K., Mexico, Thailand and more recently China. Economies of countries
like Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted
by the retail sector. Retail is the second-largest industry in the United States both in
number of establishments and number of employees. It is also one of the largest
worldwide. The retail industry employs more than 22 million Americans and
generates more than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion
sector

Top Retailer Worldwide

Rank Retailer Home Country

1 Wal-Mart Stores, Inc. U.S.A.
2 Carrefour Group France
3 The Kroger Co. U.S.A.
4 The Home Depot, Inc. U.S.A.
5 Metro Germany
(Source: Stores/Deloitte Touché Tomahatsu)

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RETAIL SCENARIO IN INDIA

As the corporate – the Piramal’s, the Tata’s, the Raheja’s, ITC Ltd, S.Kumar’s, RPG
Enterprises, Shopper’s Stop, Pantaloons, Reliance Retail, Vishal Mega Mart, Aditya
Birla Group, Subhiksha, Landmark Group, True Mart race to revolutionize the
retailing sector, retail as an industry in India is coming alive. Across the country,
retail sales in real terms are predicted to rise more rapidly than consumer
expenditure during 2003-08. The forecast growth in real retail sales during 2003-
2008 is 8.3% per year, compared with 7.1% for consumer expenditure.
Modernization of the Indian retail sector will be reflected in rapid growth in sales of
supermarkets, departmental stores and hyper marts. Sales from these large-format
stores are to expand at growth rates ranging from 24% to 49% per year during 2003-
2008, according to a latest report by Euro monitor International, a leading provider of
global consumer-market intelligence. A. T. Kearney Inc. places India 6th on a global
retail development index. The country has the highest per capita outlets in the world
- 5.5 outlets per 1000 population. Around 7% of the population in India is engaged in
retailing, as compared to 20% in the USA.

The factors responsible for the development of the retail sector in India can be
broadly summarized as follows:
 Rising incomes and improvements in infrastructure are enlarging consumer
markets and accelerating the convergence of consumer tastes.
 Looking at income classification, the National Council of Applied Economic
Research (NCAER) classified approximately 50% of the Indian population as
low income in 1994-95; this has declined to 17.8% in 2006-07.
 Liberalization of the Indian economy which has led to the opening up of the
market for consumer goods has helped the MNC brands like Kellogg,
Unilever, Nestle, etc. to make significant inroads into the vast consumer
market by offering a wide range of choices to the Indian consumers.
 Shift in consumer demand to foreign brands like McDonalds, Sony,
Panasonic, etc.

18
The internet revolution is making the Indian consumer more accessible to the
growing influences of domestic and foreign retail chains. Reach of satellite T.V.
channels is helping in creating awareness about global products for local markets.
About 47% of India’s population is under the age of 25; and this will increase to 55%
by 2015. This young population, which is technology-savvy, watch more than 50 TV
satellite channels, and display the highest propensity to spend, will immensely
contribute to the growth of the retail sector in the country. As India continues to get
strongly integrated with the world economy riding the waves of globalization, the
retail sector is bound to take big leaps in the years to come. The Indian retail sector
is estimated to have a market size of about $180 billion; but the organized sector
represents only 3% share of this market. Most of the organized retailing in the
country has just started recently, and has been concentrated mainly in the metro
cities.
India is the last large Asian economy to liberalize its retail sector. In Thailand, more
than 40% of all consumer goods are sold through the super markets and
departmental stores. A similar phenomenon has swept through all other Asian
countries. Organized retailing in India has a huge scope because of the vast market
and the growing consciousness of the consumer about product quality and services.
A study conducted by Fitch, expects the organized retail industry to continue to grow
rapidly, especially through increased levels of penetration in larger towns and metros
and also as it begins to spread to smaller cities and B class towns. Fuelling this
growth is the growth in development of the retail-specific properties and malls.
According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is
being developed and will be available for occupation over the next 36-48 months.
Fitch expects organized retail to capture 15%-20% market share by 2010.
A McKinsey report on India says organized retailing would increase the efficiency
and productivity of entire gamut of economic activities, and would help in achieving
higher GDP growth. At 6%, the share of employment of retail in India is low, even
when compared to Brazil (14%), and Poland (12%). Total Private Consumption
Expenditure in India – 375 Billion USD Retail Sale – 205 Billion USD Organized
Retail – 6.2 Billion USD (3%) Retailing – 35% of GDP

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RETAILING FORMATS IN INDIA

Malls:

The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above.
They lend an ideal shopping experience with an amalgamation of product, service
and entertainment, all under a common roof. Examples include Shoppers Stop,
Piramyd, Pantaloon.

Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet M, are
focusing on specific market segments and have established themselves strongly in
their sectors.

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP
through selling in bulk reaching economies of scale or excess stock left over at the
season. The product category can range from a variety of perishable/ non perishable
goods.

Department Stores:

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc.

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Department Stores:

Departmental Stores are expected to take over the apparel business from exclusive
brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop,
which started in Mumbai and now has more than seven large stores (over 30,000 sq.
ft) across India and even has its own in store brand for clothes called Stop!.

Hyper marts/Supermarkets:

Large self service outlets, catering to varied shopper needs are termed as
Supermarkets. These are located in or near residential high streets. These stores
today contribute to 30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft
and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong
focus on food & grocery and personal sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residential areas.
They stock a limited range of high-turnover convenience products and are usually
open for extended periods during the day, seven days a week. Prices are slightly
higher due to the convenience premium.

MBO’s:

Multi Brand outlets, also known as Category Killers, offer several brands across a
single product category. These usually do well in busy market places and Metros.

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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, 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
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
channelize 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".

22
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 Bhagavat Geeta 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. 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.

23
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 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
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

24
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.
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 honour 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 water house 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, Washington D.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.

Major Subsidiaries & Associates:-

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

25
Major Subsidiaries

 Reliance Petroleum Limited

 Reliance Netherlands BV (including Trevira)
 Reliance Retail Limited
 Ranger Farms Private Limited
 Retail Concepts and Services Private Limited
 Reliance Retail Insurance Broking Limited
 Reliance Dairy Foods Limited
 Reliance Retail Finance Limited
 RESQ Limited
 Reliance digital Retail Limited
 Reliance Service Solutions Limited
 Reliance Jamnagar Infrastructure Limited
 Reliance Haryana SEZ Limited
 Reliance Industrial Investment & Holdings Limited
 Reliance Ventures Limited
 Reliance Strategic Investments Limited
 Reliance Exploration & Production - DMCC
 Reliance Industries (Middle East) DMCC
 Reliance Global Management Services (P) Limited
 Reliance Commercial Associates Private Limited
 RIL (Australia) Pty Limited

Major Associates

 Indian Petrochemicals Corporation Limited

 Reliance Industrial Infrastructure Limited

26
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 endeavour 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 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.

27
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!

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 crore 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 consume 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 crore 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 a share of the $5.6-
billion domestic market, which is dominated by South Korean brands LG and

28
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.
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. 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.

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 neighbourhood
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.

29
Reliance is gearing up to revolutionize the retailing industry in India. Towards this
end, we are aggressively working on introducing a pan-India network of retail outlets
in multiple formats. A world class shopping environment, state of art technology, a
seamless supply chain infrastructure, a host of unique value-added services and
above all, unmatched customer experience, is what this initiative is all about. The
retail initiative of Reliance will be without a parallel in size and spread and make
India proud. Ensuring better returns to Indian farmers and manufacturers and greater
value for the Indian consumer, both in quality and quantity, will be an integral feature
of this project. By creating value at all levels, we will actively endeavour 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 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.

30
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
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

31
stores, in about 800-odd cities and towns across the length and breadth of India. The
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 Tata’s 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.
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 Satellite Township 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,

32
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.

Retail Will Become Core Business of RIL

Reliance Industries Limited is the largest and one of the fastest growing private
sector companies in India, with business activities encompassing almost all major
growth sectors of the Indian economy.
The company manufactures and markets a wide range of products with market
leadership in almost all its businesses. All of Reliance Group production and services
ventures have one common feature – global scale operations employing state-of-the-
art technology in all fields. The company is truly emerging as a well diversified
conglomerate with global competence in technology, management and financial
capabilities to meet the needs of a rapidly growing Indian market.
With domestic market shares ranging from 40-80 per cent, RIL is also ranked among
the top 10 producers globally, for all its major product segments. It is one of India's
largest business conglomerates with total revenues of Rs 1,00,650 crore (US$ 22.6
billion). It is being speculated within the industry that the ROIs made by RIL in the
retail space will far out-shadow its existing core flagship businesses – and very soon
retail will become the core business for the Mukesh Ambani-controlled Reliance
empire.

33
Future Planning:-

Company plans to have a pan-India presence by opening stores in 784 cities and
600 small towns and achieve a target of Rs.10 billion revenue by 2010 by which time
it hopes to complete Phase 1. In the first phase company plans to employ 500,000
people. It is following an all-inclusive model giving the right affordability across all
income groups. Company is aggressively partnering farmers by following a farm-to-
fork strategy in its supply chain management model and ensures that it delivers fresh
fruits and vegetables at affordable prices to consumers. Currently, Reliance Fresh
has over 100 stores across the country.
Reliance Fresh also offers a membership and loyalty programme - Reliance One - to
deliver customized benefits to frequent shoppers. Currently, it has 200,000 loyalty
customers across Hyderabad, Jaipur and Chennai. Reliance Retail, the 100%
subsidiary of Reliance Industries, on October 28 unveiled Reliance Fresh, the first of
its multi-format retail foray involving an investment of Rs 25,000 crore. Reliance
Fresh is the company’s brand for neighbourhood fresh-food outlets. It will also sell
kitchen equipment and other edibles. Besides, it has planned hypermarkets,
supermarkets, discount stores, department stores, convenience stores and specialty
stores, to be unveiled shortly.
The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans
to add more stores across different geographies, and eventually have a pan-India
footprint by year 2011. The super marts will sell fresh fruits and vegetables, staples,
groceries, fresh juice bars and dairy products and also will sport a separate
enclosure and supply-chain for non-vegetarian products.
Currently, selling through company-owned stores currently totals just $8 billion in
India. Industry estimates say that the country’s retail industry is worth $300 billion,
that is about Rs 13, 50,000 crore. This stands a chance to blossom to $427 billion in
the next four years. Organized retail accounts for just over Rs 35,000 crore. Reliance
Fresh bids to tap the potential for organized retail in the country.

34
Point of Sale Software System

Retalix StoreLine is an open-standards, fully integrated and cross functional Point of

Sale (POS) and store management software system. Its uniqueness is in the
functionality, world-wide install base, and hardware independence.
Multi-Concept Functionality that delivers a fully integrated POS solution to meet all of
your business needs Open by Design supports industry standards and is hardware
independent plus integration with other third-party retail applications is
straightforward, affordable and low risk
Advanced Promotion Features enable a single point of update for pricing and
promotions across all retail formats
Graphical, Easy to Use flexible intuitive user interface, touch-screen capabilities and
even graphical customer screens, means that cashier training is minimal and
customer interaction is effortless
Quick Service Deli, provides a powerful method of managing fresh made sandwiches
and deli items Fuel provides full support for operating an onsite fuel station,
supporting a full range of fuel station and supermarket services Retalix BackOffice is
tightly integrated with Retalix StoreLine, and offers POS item management and
reporting, DSD receiving, label and sign printing, handheld RF communications, host
communications and in-store ordering Retalix PocketOffice is a mobile platform that
enables users to manage store operations anywhere in the store, taking the
application to the business decision point, while on the sales floor or receiving dock.
Retalix StoreLine is installed in more than 250,000 POS terminals worldwide, and is
the selected POS solution of top-tier retailers such as Tesco, Publix, Sainsbury's,
Woolworths Australia, Delhaize Group, Hy-Vee, and the A.S. Watson Group.

35
Supply Chain Management

A supply chain is a network of facilities and distribution options that performs the
functions of procurement of materials, transformation of these materials into
intermediate and finished products, and the distribution of these finished products to
customers. Supply chains exist in both service and manufacturing organizations,
although the complexity of the chain may vary greatly from industry to industry and
firm to firm.
From the above pictorial representation of supply chain management of reliance
fresh it is clear that raw material is procured from vendors, transformed into finished
goods in a single step, and then transported to distribution centers, and ultimately,
customers. Realistic supply chains have multiple end products with shared
components, facilities and capacities. The flow of materials is not always along an
arbores

Farmers
Collection center
Reliance Fresh Distribution center

percent network, various modes of transportation may be considered, and the bill of
materials for the end items may be both deep and large.

36
What is Loyalty?

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

Six Ways in Building Customer Loyalty

1. 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.

37
2. 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 got ta be good!

3. 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

38
keep the health-conscious customer in its kitty by 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!

4. 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.

5. 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

39
brand. Perk tastes just as 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 neighbouring 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.

6. 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.

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

40
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.

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 alsoby gross profit
 Reports to measure program participation by store and chain
 Net-based Centralized Management System
 Retalix 1-to-1, Targeted Marketing

41
Why the card is not being used?

 Customer forgets their card.

 Customer doesn’t know the benefits of card.
 Quality of temporary card is very poor.
 Cashier forgets to ask about the card.
 Many unwanted details are to be filled in form by customer.

SWOT ANALYSIS

STRENGTHS

Brand name

Strong financial backup

Good employee base

Easily reachable

First mover advance

OPPORTUNITIES

Potential market

WEAKNESS

More time in billing

42
Fruits & vegetables

Offer’s announcements are not proper

THREATS

Local retailers

Opposition by govt.

Big retailers are entering

43
 CHAPTER 2
REVIEW OF LITERATURE

44
 REVIEW OF LITERATURE

Step 1: Per day sales of each SKU was obtained. The SKUs list of
Reliance Fresh which contains approximately 6000 SKUs/products of all different
categories (Fruits & Vegetables, Staples, Process Food, Non-Food Fast Moving
Consumer Goods, House wares, Beverages, Dairy, Bakery, Frozen, etc.) is provided
by the head office. With the help of this list, at store, daily sales of each SKU was
obtained from CSAs by interviewing them in depth. The probable demand of those
SKUs which were not in the Planogram of the store were also obtained so that these
could also be introduced if found appropriate.

Step 2: Per day sales was then multiplied by 3 so as to maintain the

required stock level for 3 days. After getting the daily sales of each SKU, it
was then multiplied by 3. Since, the supply of SKUs other than Fruits & vegetables
and Dairy from Distribution Center is made after every 3 days and in order to
maintain the required MBQ level the sales figure is multiplied by 3.

For example, the daily sales of Parle Krack jack 75-gram biscuit were 5 units
approximately told by the CSA. This projection of MBQ level was totally based on the
judgments of CSAs and on the previous month’s sales report. Therefore, its required
MBQ level should be 5x3, i.e., 15 units in the store. This approach was applied for all
SKUs of each category in order to adjust the MBQ level of all SKUs of Planogram.

Step 3: Figure obtained in step 2 was then compared with MBQ

figure of current Planogram for each SKU. The figure so obtained for all
the SKUs, by applying the same approach, was then compared with the actual MBQ
level of respective SKUs in the Planogram. By this comparison the difference

45
between actual and obtained MBQ level was found. This difference was then used to
adjust the MBQ level.

For example, the MBQ level as per current Planogram of fortune soya oil 1 lt poly
pack was 56 units but actual per day sales of this were 32 units, therefore, according
to this sales figure MBQ level should be 96 units. But this figure is more than actual
MBQ level; therefore, its MBQ level was increased to 96 units by providing it single
facing and double vertical stacking.

Step 4: MBQ level of each SKU was adjusted by either increasing or

decreasing its quantity. Similarly the MBQ level of each SKU was adjusted by
either increasing or decreasing its quantity which was required for the optimum
utilization of available bay space and better inventory management. This approach
helped in better visibility of the SKUs and raising the profitability of the store. This
step resulted in the empty spaces on the different bays.

Step 5: Empty spaces obtained because of step 4 was then filled by

new SKU which was obtained in consultation with CSAs, FDM,
Franchisee Manager, on the basis of our judgment & based on
feedback from store staff. After getting the empty shelves, those SKUs were
finalized in consultation with CSAs, FDM, and Franchisee manager and on the basis
of our own judgments, which were mostly demanded by customers other than those
SKUs which were available in the store. This helped in introducing some new SKUs
in Planogram.

46
 CHAPTER 3

OBJECTIVES OF THE STUDY

47
 OBJECTIVES OF THE STUDY

 To study & Increase the “Loyalty Sales Percentage” (in consultation with
Franchisee Manager, Franchisee Development Manager (F.D.M.).
 Better utilization of available resources.
 To increasing Loyalty Sales Percentage.
 Aware customer about Reliance One Membership card.
 To increase store profit and methods to reduce costs.
 To study the effective utilization of Planogram of the store.
 To study about the customer loyalty program in different Reliance stores.
 To study that how they attract their customer for purchasing in the Reliance
store.
 To know about the affect of loyalty programmes on customers.
 To study about the consumer’s awareness towards Reliance product.

48
 CHAPTER 4
MERKET RESEARCH

49
 MERKET RESEARCH

Methodology Used

For re-engineering Planogram, following research was done:

1. Research Design

Research Design is the overall plan to conduct research. It covers:

 data collection methods

 sampling decisions
 data analysis methods
Often constraints on resources limit research design so that it is less ideal.

Types of Research Design

There are three types of research designs:

1. Exploratory research design

Used for discovering ideas and insights

2. Descriptive research design – longitudinal and cross-sectional

Used for describing characteristics of population

3. Causal research design

Used for proving cause-effect relationship

50
2. Exploratory Research

Following designs (methods) are used for exploratory research:

I. Secondary data
II. Focus groups
III. Depth interviews
3. Depth Interview

Principle of Depth Interview

 Respondent will reveal truth about sensitive issue after taking him in
Confidence.

 Respondent’s answer will be obtained by probing

Collection of Data:

Secondary Data

Secondary data is the data gathered by someone else prior to the current needs of
the researcher. It is already available to the researcher before he starts conducting
his research work.

Advantages of secondary data

 Quickly available
 Economical
 Dependable
 Easy to Use
 Accessible
 Understandable

51
Primary Data

The researcher originates the primary data. The primary data for re-engineering
Planogram was collected as follows:

 Feedback from
 CSA
 Customer (limited to people known)
 Customer demographics

Feed Back Questions asked from CSAs

1. Which SKUs have the maximum queries?

2. Which SKUs have maximum complains?
3. Which SKUs customers are happy with?
4. Are there any SKUs that you suggest as a substitute?
a.) For what SKUs?

b.) What is the substitute?

5. Do you receive any queries for any SKUs which are not stocked?
6. How much does each SKU is being sold on daily basis?
7. Is the customer satisfied with the quality of products available in the
store?
8. Is the customer happy with the pack size available (especially for
staples, ghee & vegetable oil) or they require big or small one?

52
Feedback received from CSAs

 Maximum demand is for Fruits & Vegetables (F&V) category.

 Customers are happy with F&V and Process Food (P.F.) but for P.F.
introduce some more products.
 Substitute suggested is mainly for staples and P.F. category. For
example:- Customer demanded a particular brand of Atta but
sometimes due to unavailability of stock, Atta of other brand was
offered.
 Customers query more about NF FMCG & toiletries (Currently this
category of SKUs is not available in the store.)
 Sometimes customers complain about the freshness of F&V as they find
it rotten and also fresh ones mixed with rotten ones.
 Some customer also asks for smaller pack size for staple SKUs.

53
 CHAPTER 5
DATA ANALYSIS

54
 DATA ANALYSIS

1. Where do you purchase your monthly household provision?

 Reliance Fresh
 Any other modern outlet,
 Local Market

Where did you purchase your monthly house

hold provision?
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Reliance Fresh Modern Outlet Local Market

55
2. Please specify reason for regular/occasional purchase from Reliance Fresh?

 Quality stuffs.
 Availability of all items,
 Good ambience,
 Any other specific reason

Specify reason for regular/occasional purchase

from Reliance Fresh
40%

35%

30%

25%

20%

15%

10%

5%

0%
Quality Stuffs Availability of all items Good ambiance Other

56
3. Are you aware of Reliance Fresh Customer Loyalty Programme?

a) Yes b) No

Are you aware of Reliance Fresh customer loyalty programme?

Yes No

57
4. What is your suggestion to make Customer loyalty programme of Reliance Fresh
more popular?

 Offering discount to customer participated in this programme.

 Door delivery of the merchandise under this programme.
 Establishing direct relation with customer by organizing loyal customer meets.
OR
 Any specific suggestion.

Suggestion to make Customer loyalty programme of Reliance Fresh

more popular
50%

30%

20%

Offering discount Door delivery Direct relation with

customer

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5. How you find Reliance Fresh modern retail format in comparison to Big Bazar,
Pantaloon etc.?

 Superior,
 Not much different.

Reliance Fresh in comparison to Big Bazar & Pantaloon

30% Superior
70%
Not much
different

59
6. How do you find the customer service staff of Reliance Fresh?

a) Excellent,

b) Good.

c) Needs improvement .

d) Poor

How do you find customer service staff of Reliance Fresh?

45%

15%

15% 25%

Excelent
Good
Needs to improve
Poor

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7. Have you ever faced any problem with Reliance Fresh floor manager during your
purchases?

 No never.
 B) Yes, sometimes.
 Often faced.

Have you ever faced any problem with Reliance Fresh store manager during
your purchase?
No never Yes some time Often faced

0%

25%

45%

30%

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8. Which section of Reliance Fresh you like most?

 Grocery.
 Vegetables
 Cosmetics & stationery.

Which section of Reliance Fresh you like most

60%
50%
40%
30%
20%
10%
0%
Grocery Vegetable Cosmetics &
stationary
Grocery 25%
Vegetable 55%
Stationary 20%

62
9. Which aspect of Reliance Fresh attracts you most?

 Commitment level.
 Relationship building with customer.
 Understanding of Customer need,
 Friendly approach towards all section of customer.

Which aspect of Reliance Fresh attract you most?

30%
30%

25%
15%

Comitment level
Relationship
building with Understanding of
customer customer need Friendly approach
towards customer

63
10. Are you getting all your household requirements during your visit to Reliance
fresh?

Are you getting all your house hold requrements during your visit?

55%

35%
10%

Yes
Almost
No

64
11. Do you feel the products more in demand are often not available during your
visit?

Do you feel the product in more demand are not available in

your visit?
0% 0%

No
45%
Yes
55%

65
12. Do you feel the perished/expired items are not properly differentiated from fresh
items?

Do you think that the perished items are not properly differenciated
from fresh items?

58%

42%

Yes
No

66
CHAPTER 6
CONCLUSION

67
 CONCLUSION

Bomikhal is a price sensitive area. People prefer smaller quantities and good quality
products. There are less retail shops nearby the store. Instead some small grocery
stores and local vegetable market at Cuttack road There is always a gap analysis
between Retailer & customer. Customers are ready to buy even at same rate or
more than as compared to outside if we provide them a quality. Customer has no
time. They don’t want to waste their time in selecting good vegetables. By analyzing
the primary and secondary data it was identified that majority of sales is from F&V
category instead of market near to store only in the case when quality is good. While
for other categories some changes like introducing more variety and keeping
competitive prices can be done to increase their sales. Data gathered through sales
report and CSAs were analyzed to adjust the MBQ level of each SKU and to
increase the store profit. Reliance Fresh needs to adjust its Planogram according to
the tastes and preferences of customer. Since store does not offer NF FMCG and
toiletries most of the customers are switching to other players.

68
 CHAPTER 7
SUGGESTIONS

69
 SUGGESTIONS

 Announcement for the Membership card should be there.

 Effective utilization of storage space is possible.
 Rigidity in following Planogram should be avoided.
 Possibility of Non-Food FMCG
 Effective utilization of empty Shelves
 Consistency in quality should be maintained.
 Proper training should be imparted to CSAs.
 Effective utilization of space should be done.
 Mark down of SKUs especially for Fruits & Vegetables should be done at
proper time.
 Sample of wheat and other staple items can be kept for better exposure.
 Consistency in quality should be maintained
 Proper training should be imparted to CSA’s
 Effective utilization of space should be done
 Mark down of SKU’s, especially for Fruits & Vegetable should
be done at proper time.

 Sample of wheat & other staples items can be kept for better Exposure

 Fine Line Product Differentiation of SKUs should be done.

 Announcement for the Membership card should be there.
 Effective utilization of storage space is possible.
 Rigidity in following Planogram should be avoided.
 Possibility of Non-Food FMCG

70
 CHAPTER 8
BIBLIOGRAPHY

71
 BIBLIOGRAPHY

1) Philip Kotler ,” Marketing Management”, New Delhi, Pearson Education Inc,

2006.

2) Kothari, C. R, Research Methodology methods and techniques, New Delhi,

New Age International (p) Ltd,1990.

3) Copy of current Planogram

4) List of SKUs

5) Websites:

www.ril.com
www.businessworldindia.com
www.ORG-GFK.com
www.india-reports.com
www.wikipedia.org
www.economictimes.indiatimes.com

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