1. PROJECT
DRIVING THE LOYALTY SALES PERCENTAGE OF RELIANCE
FRESH STORE, VAISHALI NAGAR,JAIPUR..
Submitted To:
Centurion Institute Of Professional Studies, Pratap Nagar, Jaipur.
(In partial fulfillment for the requirement of degree of P.G.D.M.)
(Two year full time Programme)
SUBMITTED BY: Under the supervision of
BHOMA RAM Dr. Raghuveer singh
PGDM 2nd Semester (Director CIPS. )
BATCH
2007-2009
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2. PREFACE
For a management student theoretical knowledge as well as
practically orientation exposes oneself to experiences, one can again
be mastering it is best possible time. PGDM curriculum has been fine-
tuned in such a way that a student not applies the theoretical
knowledge but also gain it in a practical sense. Thus objective can be
attained through application of theory tools concepts and techniques
of Management.
The Project Starts With Introduction about –
Chapter -1 includes Introduction
Chapter-2 includes Introduction to the company
Chapter -3 includes understanding planogram
Chapter-4 includes research methodology
Chapter-5 includes data analysis and findings
Chapter-6 includes conclusions and suggestions
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3. ACKNOWLEDGEMENT
There is always a sense of gratitude which one express to other for the
helpful so needy services they render during all phases of life. I would like to
express my gratitude towards all those who have been helpful to me in getting
this mighty task of training to a successful end.
First of all, I consider it a pleasant duty to express my heart felt
appreciation, gratitude and indebtedness to Sir RAGHUVEER SINGH for there
keen interest, invaluable pains taking & excellent guidance, patience, endurance,
encouragement & thoughtful advice for the project work.
I would take this opportunity to thank all my family members for their helps
& suggestions during the course of project work. I am also thankful to all my
friends who gave me constant & continuous inspiration to complete this project.
(BHOMA RAM)
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4. EXECUTIVE SUMMARY
The project studies were conducted at Reliance Fresh convenience
store of Reliance Retail situated at Vaishali Nagar, Jaipur.
The Summary of the project is as follows:
Project title is “DRIVING THE LOYALTY SALES PERCENTAGE OF
RELIANCE FRESH STORE, VAISHALI NAGAR,JAIPUR.
Research methodology is –
Sampling plan :-
Non Probability (convenience)
Research design :-
Exploratory research.
Data collection method :-
Interrogation through personal interview.
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 RealianceOne Membership card.
 To increase store profit and methods to reduce costs.
 Identify methods to study and evaluate the stock movement of Non Food Fast
Moving Consumer Goods (NF-FMCG) & high value SKUs esp. large chocolates
and house wares and suggest appropriate low value NF-FMCG product mix.
 To study the effective utilization of Planogram of the store.
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5. Limitation of the study: -
The study was restricted to theoretical ground only so it was difficult to draw the true
interpretations of the study.
The conclusion arrived at are based on vary less experience of researcher in this field.
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6. TABLE OF CONTENTS
CHAPTER PAGE
CONTENTS NO.
1 INTRODUCTION 7-28
1.1 PROJECT INTRODUCTION 11-18
1.2 RETAIL IN DETAIL 18-20
1.3 RETAIL TERMINOLOGY 20-23
1.4 RETAIL SECTOR IN INDIA 23-26
1.5 RETAILING FORMATS IN INDIA 26-28
2 INTRODUCTION TO THE COMPANY 29-62
2.1 RELIANCE GROUP 29-49
2.2 RELIANCE FRESH LOYALTY PROGRAMME 50-56
2.3 RELIANCEONE MEMBERSHIP CARD 57-62
3 UNDERSTANDING PLANOGRAM 63-66
4 RESEARCH METHODOLOGY 67-74
5 DATA ANALYSIS AND FINDINGS 75-84
6 CONCLUSIONS AND SUGGESTIONS 85-86
ANNEXURES 87-88
89
BIBLIOGRAPHY
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7. 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
neighborhoods stores.
The first retailer in India includes Bata, Pantaloon, Bombay Dyeing,
Spencers, 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 15000000
sq.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
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8. see the process of retailing as a necessary part of their overall
distribution strategy.
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.
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9. 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
a typical 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.
9

10. When we say 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.
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11. 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 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.
1.1 - PROJECT INTRODUCTION
The project was done at Reliance Fresh convenience store of Reliance
Retail situated at Vaishali nagar.
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12. This project is all about to increase the Loyalty Sales Percentage
of the individual stores.
What is Loyalty?
The degree to which customers are predisposed to stay with one
company and resist competitive offers.
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.
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
12

13. quality time and again to keep customers coming back to you. Here,
quality is conveyed via word-of-mouth. One bad experience is enough
to ruin the impression forever.
Another good way of assuring customers value the quality of your
product is to get an outside agency or someone else to endorse the
results. For instance, Colgate Toothpaste continually reminds the
customer that it is endorsed by IDA, the Indian Dental Association
and it is the brand trusted by most dentists. HLL gets customers to
talk about their “Pond’s Age Miracle” range of cosmetics and Dove
soaps in their television ads, to endorse the quality of their products.
That is also the psyche behind prompting a customer to try out the
product. If a Vim Bar is a good dishwashing bar for Mrs X, a
housewife, it has to be good for you too! If others say that your
product is good, it’s gotta be good!
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-
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14. cream segment, sensed the need to 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.
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15. 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 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 neighboring ones. Consciously, after a lot of effort Amul
successfully expanded its distribution chains throughout the country.
An effective media campaign helped pass this advantage on to the
customers. If you want people to keep buying your brands, make sure
the grocery store around the corner stocks it.
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
15

16. 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
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.
16

17. 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 also
by gross profit
 Reports to measure program participation by store and chain
 Net-based Centralized Management System
 Retalix 1-to-1, Targeted Marketing
Why the card is not being used?
 Customer forget their card.
 Customer don’t know the benefits of card.
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18.  Quality of temporary card is very poor.
 Cashier forget to ask about the card.
 Many unwanted details are to be filled in form by customer.
1.2 - RETAIL IN DETAIL
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
18

19. 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 Behavior
 Retailers action
 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
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20. 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.
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.
1.3 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:
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21. 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 - It is the maximum quantity of each
product, which can be placed on each shelf.
Maximum Display Quantity – 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 itms (e.g.
jewelry) and controlled items like medicine and liquor. Self-service,
where goods may be handled 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
catalog, 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.
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22. Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This
involves adding a markup 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
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23. at fixed times of the year, for example January sales, or end-of-season
sales, or Blue Cross Sale.
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 Touche Tomahatsu)
1.4 RETAIL SECTOR IN INDIA
As the corporate – the Piramals, the Tatas, the Rahejas, 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 termss 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
23

24. 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.
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
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25. 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.
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26. 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
1.5 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.
26

27. 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.
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!.
Hypermarts/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.
27

28. 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.
CHAPTER-2 INTRODUCTION TO THE COMPANY
2.1 reliance group
28

29. 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.
29

30. The Group's track record of consistent growth is unparalleled in
Indian industry and perhaps internationally too. Today, the Group's
turnover represents nearly 3 percent of India's GDP.
The corporate philosophy he followed was short, simple and succinct
- "Think big. Think differently. Think fast. Think ahead. Aim for the
best". He inspired the Reliance team to do better than the best - not
only in India but in the world. He was probably the first Indian
businessman to recognize the strategic significance of investors and
discover the vast untapped potential of the capital markets and
channelise it for the growth and development of industry. He was
supremely confident that finance would never be a constraint in
executing his projects because, as he said proudly, Indian investors
would provide him with the necessary resources. For him, his people
were his most important asset.
He scouted around for the best and most talented professionals,
nurtured them and continuously propelled them to aim for still higher
goals. These highly motivated people comprise the core of what he
named: "The Reliance Family".
Shri Dhirubhai Ambani visualized the growth of Reliance as an
integral part of his grand vision for India. He was convinced that
India could become an economic superpower within a short period of
time and wanted Reliance to play an important role in realizing this
goal.
The Bhagavad Gita states, "The actions of a great man are an
inspiration for others. Whatever he does, becomes a standard for
others to follow." This certainly applies to Shri Dhirubhai Ambani.
30

31. 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.
31

32. 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,
32

33. 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 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.
33

34. Had the distinction and honor of being the co-chair at the World
Economic Forum Annual Meeting 2006 in Davos, Switzerland.
Ranked 42nd among the 'World's Most Respected Business Leaders'
and second among the four Indian CEOs featured in a survey
conducted by Pricewaterhouse 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
34

35. 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
35

36. RELIANCE RETAIL LIMITED
Growth through Value Creation
Reliance is gearing up to revolutionize the retailing industry in India.
Towards this end, they are aggressively working on introducing a pan-
India network of retail outlets in multiple formats. A world class
shopping environment, state of art technology, a seamless supply
chain infrastructure, a host of unique value-added services and above
all, unmatched customer experience, is what this initiative is all
about.
The retail initiative of Reliance will be without a parallel in size and
spread and make India proud. Ensuring better returns to Indian
farmers and manufacturers and greater value for the Indian
consumer, both in quality and quantity, will be an integral feature of
this project. By creating value at all levels they will actively endeavor
to contribute to India's growth.
The project will boast of a seamless supply chain infrastructure,
unprecedented even by world standards. Through multiple formats
and a wide range of categories, Reliance is aiming to touch almost
every Indian customer and supplier.
The magnitude and strategy of RIL's retail foray is sure to have far
reaching social and economic implications by directly influencing the
lifestyles of hundreds of millions of consumers, besides indirectly
impacting the livelihood of tens of millions. This indirect impact will
be on those engaged in a wide range of economic activities including
farming, consumer goods manufacturing, and a host of myriad other
36

37. services that bring hundreds of categories of goods and services from
the producers to the final consumers.
Business analysts feel that Mukesh Ambani's advantage is his huge
financial strength coupled with a track record of implementing mega
projects in record time, at globally competitive capital costs. Mukesh
Ambani has learned to dream big from his great visionary father, the
late Dhirubhai H Ambani, who is acknowledged as one of India's
tallest, most ambitious and successful business leaders for his sharp
business acumen and skilled people management ability. If the
announced retail project is any indication, Mukesh Ambani has
indeed inherited all these skills from his father. Re-writing the
rules of business has been the forte of Dhirubhai and Mukesh is
attempting the same in retail.
Quite clearly, RIL is now all set and ready to conquer the organized
retail domain. The Indian retail scene is now going to witness some
real fast-paced action, with the consumer – as always – having the
best deal.
So, as they say, let the action begin!
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.
37

38. 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 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
38

39. and Samsung and Japan’s Sony on the one hand and Indian market
leaders like Videocon and BPL
The prices being offered at the Reliance Digital stores will be most
competitive and if any consumer finds a cheaper product in the
market within 30 days they will not hesitate to match the offer.
Besides, the stores will also provide pre- and post sales services
through its in-house RelianceresQ vertical.
The stores will also offer finance schemes for consumers for which the
retail majors are in talks for tie-ups with several financial institutions,
Citi Financial being one of them.
Reliance Digital will also be offering customers Reliance One, a
common membership and loyalty Programme across all its formats,
which means users, would be able to redeem points earned on
purchases. Other formats of Reliance Retail such as supermarkets and
hypermarkets are soon to launch.
Reliance Industries had last year announced an investment of Rs
25,000 crore for the retail business, which it hopes would help the
company earn around Rs 100,000 crore revenues in the next five
years, 10-15 per cent of which will be contributed through retailing of
consumer durables at its Reliance Digital stores and hypermarkets.
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
39

40. Reliance Industries launched its first retail format called Reliance
Fresh in Hyderabad. Spread over 2,000-5,000 sq ft, 11 such Reliance
Fresh neighborhood convenience stores were come up in the city.
These stores sell fresh fruit and vegetables besides staples (dal, atta,
rice) as well the company’s in-house brand Reliance Select and
Reliance Value.
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 endeavor to
contribute to India's growth.
The project will boast of a seamless supply chain infrastructure,
unprecedented even by world standards. Through multiple formats
and a wide range of categories, Reliance is aiming to touch almost
every Indian customer and supplier.
The Fresh stores at Hyderabad are part of a pilot project, which will
help company understand customer needs. The pilot for this format
will be taken to many other cities over the next few months. Next on
the company’s list are bigger cities including Delhi and Mumbai
40

41. RIL intends to invest close to Rs 25,000 crore over the next five years
in the retail business. The company plans to establish 4,000 retail
outlets across various formats by then, and is eyeing sales of Rs
1,00,000 crore over the 5-year period from the retail business.
Besides Reliance Fresh, the company also plans to launch larger
format stores called “Feel Fresh Plus” which will be spread over
10,000-15,000 sq ft. The Fresh Plus stores will stock fruit and
vegetables as well as apparel, consumer electronics, FMCG items and
even medicines. From Hyderabad, these stores will travel to Mumbai
and Delhi where Reliance has identified up to 80 locations each.
But even as the retail debut kicks off with fruit and vegetables, it
seems the company is doing a rethink on whether to get into the
larger formats such as hypermarkets and supermarkets. These two
formats require over 1 lakh sq ft of space and may not come up at
prime city locations. Instead, Reliance is contemplating tapping
alterative sites such as the SEZs for opening hypermarket
The strategy is to open one Reliance Fresh store in a radius of three
to four km to serve 1,000-2,000 families. This means about 30-40
stores in the major metros. Reliance Fresh is selling vegetables and
fruits sourced from farmers through the company’s agri hubs.
Reliance Fresh would carry fresh fruits and vegetables, staples, top-
up grocery, non-food items and dairy products and a whole lot of
other categories at very competitive prices. All the stores opened have
an average area of about 1,800 sq ft and an average of about 20 sales
associates attending to customers in each store open from 8 a.m. to 10
p.m. on all seven days of the week.
41

42. 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
42

43. a wholly-owned subsidiary of the company – likely to be christened
Reliance Retail Limited.
The Reliance Retail blueprint envisages nation-wide chains of
hypermarkets, supermarkets, discount stores, department stores,
convenience stores and specialty stores, in about 800-odd cities and
towns across the length and breadth of India. The 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
43

44. 2010 now appears conservative, likely to be achieved much earlier
than 2010.
If Indian retail was lacking a whole-hearted and full-blooded thrust
from a big and large corporate house (apart from the lukewarm
investments made by the Tatas and ITC), it is now all set to change.
Mukesh Ambani, who has been nourishing retail ambitions for quite
some time now, has clearly positioned himself in to the role of
redefining the entire landscape of Indian retail.
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,
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
44

45. 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.
Future Planning:-
45

46. 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 neighborhood 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.
46

47. 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.
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
47

48. 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.
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.
48

49. Farmers
Collection center
Reliance Fresh Distribution center
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
arborescent network, various modes of transportation may be
considered, and the bill of materials for the end items may be both
deep and large.
2.2 Reliance Fresh Loyalty Programme
1. What is Loyalty Membership?
49

50. Loyalty Membership is a program devised by Reliance Industries Limited
for Reliance Fresh to retain the customers visiting their stores. It is a
program by which Reliance Fresh store issues a Loyalty Membership Card
to its customers to encourage them to shop at the store regularly. Each time
they buy something they collect points which will allow them to redeem
cash vouchers to shop at store in future. Followings are the features of the
program:
• An electronic method of identifying customer purchases and
translating that information to reward customers based on their
shopping habits.
• There is a reward point system by which customers receive reward
points on every purchase made at the store.
• For every purchase of Hundred Rupees customer will receive One
reward point.
• Customer should accumulate minimum of 25 points to get a reward
voucher by which he can make purchase at the store equivalent to
Rupees 25.
• Customers can also retain these points and receive reward voucher
whenever they want.
• Members will also receive accidental insurance of Rupees 50,000
under this program.
• Customer will be issued a permanent membership card after 180 days
of issuing of temporary card.
•
2. How Loyalty Membership Program benefit
Retailers?
50

51. • The program data help retailers to adjust their product assortment to
customer demands.
• Retailers remove or cut back slow-moving items and devote more
shelf space to the products that program members buy.
• Identify their most loyal customers.
• Learn more about their best customers buying habits.
• Offer the products and services according to their best customers
demand.
3. How do Loyalty-Membership Program
works?
• To enroll, customers typically complete an application form asking for
their Name, address, gender, phone number, e-mail address, income
etc.
• Each time cardholders make a purchase, the store scans their
membership card, tracks the sale and converts this data into useful
information.
• Loyalty Membership programs give customers points that accrue with
their purchases and can be redeemed for rewards.
• Cardholders receive their discounts by presenting their card at the
checkout or by redeeming targeted coupons.
4. How can food retailers help consumers
and Manage Operations with the data they
collect?
51

52. Analyze shopping habits, refine marketing programs and fine-tune the
product mix at the chain or individual store level.
Stores use data gleaned from loyalty-marketing programs to:
• Identify the promotions that appeal most to various customer groups,
e.g., discounts or rebates for price-conscious shoppers; home delivery
services for busy shoppers.
• Reduce the shelf space devoted to slow-moving items in order to stock
the products that customers prefer.
• Reveal when products were sold and whether they were sold on or off
promotion, and the profit margin on each sale.
• Improve speed-to-shelf and decrease out-of-stocks.
• Determine how product deletions affect their best customers, and take
steps to keep those customers from taking their business elsewhere.
5. What are the advantages of this Loyalty
Program for customers?
Following are the advantages of Loyalty Program:
• Loyalty Program gives customers the sense that the retailer values
them personally and respects them.
• This program has an inbuilt system of giving discount over the
competitive prices of the goods, if compared from general retailers.
• Besides this it also offers an accidental insurance of rupees 50,000.
6. How we can make Loyalty Program more
effective?
• We can make it effective by introducing various types of schemes
which can attract customers.
52

53. • We can issue prepaid cards in different denominations to our
customers and provide additional discounts and offers in addition to
our normal reward point system.
• We can also categories the cards as Platinum, Gold and Silver based
on purchasing capacity/trend of different segments of customers. The
advantages can be increased with the upgraded membership.
• Card can be made attractive by issuing a plastic or a laminated card in
place of the present paper card so that it can be retained for a long
time.
• Increase level of personalized service/interactive approach with the
customers. Through interaction and personalize service the front line
staff should ensure to make the customers feel that they are the valued
clients.
• Cashier should request and enlighten the customers to use their cards.
• Regular announcement should be made to encourage customers to use
their loyalty cards to redeem reward points.
• There can be additional rewards depending on the frequency of usage
of card or can be based on their visit to the store.
• The Loyalty Program form can be bilingual and should be of one page
so that customers find it easy to fill.
• The form at present is very lengthy and it becomes irritating for the
customer when too much information is being asked. Therefore, it is
suggested that the form should be made simple and some irrelevant
questions, if any, may be removed.
• If need be in order to facilitate the customers, a separate person may
be assigned the task for filling up the forms.
53

54. • Customers need instant answers to their queries. So store staff can be
trained about this Loyalty Program so that they can also assist
customers.
• The FDM should ensure optimum utilization of available manpower.
7. Can Loyalty be bought?
• Yes, it can be bought by winning the faithfulness of the customers by
giving them quality services without interruption. Meeting the
changing expectations of the customers will help strengthen a lasting
relationship and ensure that the customers no longer feel like going
elsewhere.
8. What is the percentage of customers using
Loyalty Cards?
• On an average every Reliance Fresh is issuing 80-120 loyalty cards
per day.
• The ratio of customers using this card floats between 50%-60%.
• Educated people are giving more attention to the loyalty card.
9. How many customers are having more
then one card? Why?
• Customers are not able to retain existing paper card for a long time so
customers can be issued a new card with the same number if the
exiting card cannot be scanned by machine properly.
• 10% cards cannot be scanned as these are paper cards and get
distorted.
• 10. How we can build our product
awareness?
54

55. • The advantages of a customer card must be actively conveyed from
the management to the customer via the staff.
• We can utilize the time of customers by making them aware about the
reward program when they are waiting for billing.
• Regular announcements can be made by the MSR’s regarding the
benefits of the Loyalty Card and asking customers to use the benefits
of the program.
• Clippings about the product may be flashed through the electronic
media.
• Details of the Loyalty Program may also be circulated through
pamphlets in newspapers.
11. What are the problems being faced by
customers? How we can work on it?
• Token system should be introduced, as yet customers are facing
problems as their belongings are not safe outside the store.
• Customers have to wait for a long time for billing so we can introduce
a system of separate queues for ladies and senior citizens and can also
increase number of cash counters.
• Customer is coming in Reliance Fresh due to a brand name and
thinking its product would be of good quality, but sometimes there are
rotten fruits and vegetables with the bunch of fresh ones this leads to a
wrong impression on customers. So, there should be proper sorting to
maintain the consistency in there quality.
• Proper availability of stock should be maintained to cater to the needs
of customers.
55

56. • Sometimes store staff are ignorant and don’t pay much attention to
customers and this frustrates the customers. So store staff should be
trained to assist the customers in a proper way.
• Facility of drinking water should be provided at the store which is not
available at present
.
• Toilets for customers should be made available.
• There should be counting of items purchased by a customer at the
billing point to prevent misplacement.
12. How to increase efficiency of employees?
• Providing refreshments like tea, coffee at least in two intervals so that
the employees feel energetic and work more efficiently.
• Orientation program can be conducted for the employees to make
them aware of the targets to be achieved.
• The employees should be kept in high state of morale. This could be
achieved by the effective leadership.
• Career progression of the employees should be chalked out.
2.3 RELIANCEONE MEMBERSHIP CARD
56

57. 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 hisher
membership card.
When these points will become 25, it means that 25 points is
equivalent to 25/-. Heshe will be able to redeem hisher 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.
CUSTOMER INFORMATION CHANGE REQUEST
57

58. If customer wants to change his Postal address, Telephone Number or
Email ID then customer have to fill the “Customer Information
Change request”.
Process to be followed for change of Customer Information
Take a printout of the Customer Information Change Request form.
The customer has fill up all the required details mentioning his
RelianceOne Membership card number.
The customer has to sign the request form and hand it over to the
MSR.
The MSR checks for the following on the form
RelianceOne membership number
First Name
Last Name
Information regarding change request
Date
Customer Signature
The MSR then fills up the information in the “FOR OFFICE USE”
space.
The format for request ID is store code- date in DDMYY- serial
number stating from 0001.
The MSR fills up the MSR code and signs in the space provided.
This entire request should be filled separately and kept at the store
under lock and key.
Once the system for making these changes is live, all these forms have
to be sent to the data entry center for the processing. The data for
dispatch will be notified later.
The format of Customer Change Request Form is:
58

59. Customer Information Change request
Please incorporate the following changes in my RelianceOne
membership details
(Please tick the appropriate box)
The format of Customer Change Request Form is:
Customer Information Change request
Please incorporate the following changes in my RelianceOne membership details
(Please tick the appropriate box)
RelianceOne Membership No.
First Name
Last Name
I have moved to a new house. Please send all communication to my new
address given below
Address Line 1*
Address Line 2
Landmark
City Taluka*
Pincode*
My Phone Number has changed
Std Code Phone (Res)
Mobile
Std Code Phone (Off)
I have a new email address
Email
Date D D M M Y Y Y Y Signature
59

60. FOR OFFICE USE ONLY
Store Code
Request ID: CIC - D D M M Y Y -
Store code Date Serial No
MSR Code
MSR Signature
Replacement Card Request
If the card of the customer is damaged or lost then he has to fill a
“Application Form for Request for Replacement Card”.
Process to be followed for Request for Replacement Card
1. Take a printout of the Application form for request for
Replacement Card.
2. The customer has fill up all the required details mentioning his
RelianceOne Membership card number, first name and last
name.
3. The MSR has to handover the new temporary card to the
customer and fill up the new card number in the space
provided. The MSR has to destroy the corresponding
application form by tearing it.
4. The customer has to sign the request form and hand it over to
the MSR.
5. The MSR checks for the following on the form
a. RelianceOne membership number
b. First Name
c. Last Name
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61. d. If the card is damaged, the MSR has to collect the
damaged card and tick the appropriate option on the
application form. If the card is lost, then the appropriate
option is ticked.
e. Date
f. Customer Signature
6. The MSR has to inform the customer that heshe will not be
able to earn points using the old card since it will be
deactivated.
7. The MSR should inform the customer that heshe would be able
to use the new card with immediate effect. However, the
customer can start redeeming only after a period of 21 working
days, which are required for processing the replacement
request.
8. The MSR then fills up the information in the “FOR OFFICE
USE” space.
9. The format for request ID is store code- date in DDMYY- serial
number stating from 0001.
10.The MSR fills up the MSR code and signs in the space provided.
11. All these damaged cards and application for replacement cards
should be filled separately and kept at store under lock and key.
12.Once the system for making these changes is live, all these
forms have to be sent to the data entry center for the processing.
The data for dispatch will be notified later.
The format of Application Form for Request for Replacement Card is:
Application Form for Request for Replacement Card
61

62. RelianceOne Membership No.
First Name
Last Name
This is to inform you that my RelianceOne membership card is lost/ damaged. I
have been issued a replacement card with card number
I request you to deactivate my old card and transfer all the points to my new card
number mentioned above. I understand that I would not earn any points on
usage of my old card.
I declare that I have surrendered the damaged card at the customer service
desk
I declare that I will destroy the lost card if found.
Date D D M M Y Y Y Y Signature
FOR OFFICE USE ONLY
Store Code
Request ID: RRC - D D M M Y Y -
Store code Date Serial No
MSR Code
MSR Signature
CHAPTER- 3 UNDERSTANDING PLANOGRAM
A planogram is a diagram of fixtures and products that illustrates how
and where retail products should be displayed, usually on a store shelf
in order to increase customer purchases. It is an arrangement of
different products in the most appropriate order with optimum
62

63. utilization of available space. It also shows the exact quantity of each
product in the store as well as its position on a particular bay & shelf.
They may also be referred to as plannograms, plano's, plano-grams,
plan-o-grams, schematics (archaic) or POGs. A planogram is often
received before a product reaches a store, and is useful when a retailer
wants multiple store displays to have the same look and feel. Often a
consumer packaged goods manufacturer will release a new suggested
planogram with their new product, to show how it relates to existing
products in said category.
Planograms differ significantly by retail sector. Fast-moving
consumer goods organizations and supermarkets largely use text and
box based planograms that optimize shelf space, inventory turns, and
profit margins. Apparel brands and retailers are more focused on
presentation and use pictorial planograms that illustrate "the look"
and also identify each product.
Since the purpose of a planogram is to communicate how to set the
merchandise to increase customer purchases, much research often
goes into the layout of a planogram. Attention is given to adjusting
the visibility, appearance and presence of products to make them look
more desirable, or to ensure sufficient inventory levels on the shelf or
display. There are some consulting firms which specilize in retail
space layout and planogramming. Some chain stores and wholesalers
also create and maintain planograms for their stores.
Planogramming is a skill developed in the fields of merchandising and
retail space planning. A person with this skill can be referred to as a
planogrammer.
63

64. Scope
To study and re-engineer the existing Planogram.
Purpose
• To communicate how to set the merchandise.
• To increase customer purchases.
• To adjusting the visibility, appearance and presence of products
• To make them look more desirable.
• To ensure sufficient inventory levels on the shelf or display.
• To use space effectively whether floor, page or virtual.
• To optimize short- and long-term returns on investment into retail
space.
• To provide a logical, convenient and inspiring product-customer
interface.
• To make right selection of products available.
• To facilitate communication of retailer’s brand identity.
• To maximize profit per centimeter of shelf space.
• Understand the relationship between space, sales and profit
Merchandising
Merchandising refers to the methods, practices and operations
conducted to promote and sustain certain categories of commercial
activity.
64

65. Visual Merchandising (VM) is the art of presentation, which puts the
merchandise in focus. It educates the customers, creates desire and
finally augments the selling process.
Visual Merchandising helps in:
 Educating the customers about the product/service in an
effective and creative way.
 Establishing a creative medium to present merchandise in 3D
environment, thereby enabling long lasting impact and recall
value.
 Setting the company apart in an exclusive position.
 Establishing linkage between fashion, product design and
marketing by keeping the product in prime focus.
 Combining the creative, technical and operational aspects of a
product and the business.
 Drawing the attention of the customer to enable him to take
purchase decision within shortest possible time, and thus
augmenting the selling process.
PROCEDURE OF REPLENISHMENT OF STOCK
65

66. The whole system of RELIANCE FRESH is connected through an ERP
SOFTWARE i.e. SAP and the replenishment procedure is based on
auto indenting & manual indenting.
Auto Indenting
MBQ of each SKU is already stored in the system of DISTRIBUTION
CENTRE. (D.C. is the place from where the required quantity of stock
is sent to the respective stores.)
As & when sales of a particular SKU takes place it is automatically
recorded in the system.
Within 3 days D.C. dispatches the required quantity of each SKU to
the store, to maintain the MBQ level of each shelf.
Manual Indenting
Before closing the store daily CSA of each category identify the
requirement of each SKU and communicate it to supervisor and
finally it is feed to SAP or mailed to Distribution Centre (D.C.) to
maintain the required level of inventory.
CHAPTER- 4 RESEARCH METHODOLOGY
66

67. 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, Backery, 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 Krackjack 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
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68. 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 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 then 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
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69. 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.
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.
For e.g. smaller sample size. The purpose of research design is to
decide approach that answers our problem in best way, given
constraints on resources.
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
69

70. The research design used in re-engineering Planogram is Exploratory
Research.
2. Exploratory Research
Following designs (methods) are used for exploratory research:
I. Secondary data
II. Focus groups
III. Depth interviews
Projective techniques: It consists of following techniques
I. Word Association
II. Sentence completion
III. Third person & Role playing
IV. Thematic Apperception Test
The tool used for research required in re-engineering Planogram is
Depth interview.
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
Characteristics of Depth Interview
 An unstructured interview of the respondent is taken
 Only one respondent is interviewed at a time
 Usually conducted by experienced researcher
70

71.  Interviewer’s role is extremely important since the emphasis is
on probing
 For re-engineering Planogram, the respondents selected were
CSAs, store supervisors, FDM, Franchisee manager &
customers.
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
While conducting study for re-engineering Planogram, the secondary
data was collected as follows:
 Analyse the following data from Management Information
Systems (MIS)
 Current Plano gram
 Category vise Net Sales
71

72.  SKU vise Net Sales
 Category vise unit sales
 SKU vise unit sales
 Maximum Bin/Bay Quantity (MBQ)
Primary Data
The researcher originates the primary data. The primary data for re-
engineering Planogram was collected as follows:
 Feedback from
 CSA
 FDM
 Franchisee
 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?
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73. 8. Is the customer happy with the pack size available
(especially for staples,
ghee & vegetable oil) or they need big or small one?
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.
All the findings were communicated to Franchisee
Manager for which necessary steps were taken.
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74. SWOT ANALYSIS
Strengths Opportunities
•Potential Market
• Brand Name
• Strong Financial Backup
• Good employee base
• Easily Reachable
• First Mover advantage
Weaknesses Threats
• More time in billing •Local retailers
• Fruits & Vegetables are not •Opposition by Govt.
always fresh
•Big retailers are entering
• Offer’s announcements are
not proper
CHAPTER- 5 DATA ANALYSIS AND FINDINGS
74