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Introduction
• India has often been called a nation of shopkeepers. Presumably the reason for this is; that,
a large number of retail enterprises exist in India. In 2004, there were 12 million such units
of which 98% are small family businesses, utilizing only household labour. Even among
retail enterprises, which employ hired workers, a majority of them use less than three
workers.
• Retailing is the combination of activities involved in selling or renting consumer goods
and services directly to ultimate consumers for their personal or household use. In addition
to selling, retailing includes such diverse activities as, buying, advertising, data processing
and maintaining inventory.
• While sales people regularly call on institutional customers, to initiate and conclude
transactions, most end users or final customers, patronize stores. This makes store
location, product assortment, timings, store fixtures, sales personnel, delivery and other
factors, very critical in drawing customers to the store.
• Final customers make many unplanned purchases. In contrast those who buy for resale or
use in manufacturing are more systematic in their purchasing. Therefore, retailers need to
place impulse items in high traffic locations, organize, store layout , trains sales people in
suggestion , and place related items next to each other, to stimulate purchase.
• Convenience Stores
• Grocery Stores
• Drug Stores
• Home furnishing retailers
• Auto Retailers
• Direct Sales Catalog and mail order companies
• Some e-commerce businesses
• Successful retail operations depend largely on two main dimensions: margin and turnover.
How far a retail enterprise can reach in margin and turnover depends essentially on the
type of business (product lines) and the style and scale of the operations. In addition the
turnover also depends upon the professional competence of the enterprise.
• In a given business two retail companies may choose two different margin levels, and yet
both may be successful, provided the strategy and style of management are appropriate.
• Ronald R. Gist "Suggested a conceptual frame work, using margin and turnover, for
understanding the retail structure and evolving a retail strategy."
• Margin is defined as the percentage mark tip at which the inventory in the store is sold and
turnover is the number of times the average inventory is sold in a year. This is a
diagrammatic representation of the frame work and can be applied to almost any type of
retail business.
• Depending upon the, combination of the two parameters, a retail business will fall into one
of the four quadrants. For instance L-L signifies a position which is low on both margin
and turnover; whereas, H-L indicates high margin and low turnover.
• Such an operation assumes that low price is the most significant determinant of customer
patronage. The stores in this category price their products below the market level.
Marketing communication focuses mainly on price. They provide very few services; if
any, and they normally entail an extra charge whenever they do. The merchandise in these
stores are generally pre-sold or self sold. This means that the customers buy the product,
rather than the store selling them.
• These stores are typically located in isolated locations and usually stock a wide . range of
fast moving goods in several merchandise lines. The inventory consists of well known
4
brands for which a consumer pull is created by the manufacturer through national
advertising. Local promotion focuses on low price. Wal-mart in the United States is an
example and Pantaloon Chain or Subhiksha are Indian examples of such stores.
• This operation is based on the premise that distinctive merchandise, service and sales
approach are the most important factors for attracting customers. Stores in this category
price their products higher than those in the market, but not necessarily higher than those
in similar outlets. The focus in marketing communication is on product quality and
uniqueness.
• Merchandise is primarily sold in store and not pre-sold. These stores provide a large
number of services and sell select, categories of products. They do not stock national
brands which are nationally advertised. Typically, a store in this category is located in a
down town area or a major shopping center. Sales depend largely on salesmanship and
image of the outlet.
• Form of Ownership
• A retail business like any other type of business, can be owned by a sole proprietor,
partners or a corporation. A majority of retail business in India are sole proprietorships
and partnerships.
• Independent Retailer
• Generally operates one outlet and offers personalized
service, a convenient location and close customer contact.
Roughly 98% of all the retail businesses in India, are
managed and run by independents, including barber shops,
drycleaners, furniture stores, bookshops, LPG Gas Agencies
and neighborhood stores. This is due to the fact that into
retailing is easy and it requires low investment and little
technical knowledge. This obviously results in a high degree
of competition..
Retail Chain
Retail Franchising
Cooperatives
RETAILING DECISIONS
• There are many factors for retailers to consider while
developing and implementing their marketing plans. Among
the major retailing decisions are these related to (a) Target
markets (b) Merchandise management (c) Store location (d)
Store image (e) Store personnel (f) Store design (g)
Promotion, and (h) Credit and collections.
Target Markets: Although retailers normally aim at the mass market, a growing number are
engaging in marketing research and market segmentation, because they are finding it
increasingly difficult to satisfy everyone. Through a careful definition of target markets,
retailers can use their resources and capabilities to position themselves more effectively and
achieve differential advantage. The tremendous growth in number of speciality stores in
recent years is largely due to their ability to define precisely the type of customers, they want
to serve.
• Merchandise Management: The objective here is to identify the merchandise that
customers want, and make it available at the right price, in the right place at the right
time. Merchandise Management includes (i) merchandise planning (ii) merchandise
purchase, and (iii) merchandise control. Merchandise planning deals with decisions
relating to the breadth and depth of the mix, needed to satisfy target customers to
achieve the retailers return on investment. This involves sales forecasting, inventory
requirements, decisions regarding gross margins and mark ups etc. Merchandise
buying involves decisions relating to centralized or decentralized buying, merchandise
resources and negotiation with suppliers. Merchandise Control: deals with maintaining
the proper level of inventory and protecting it against shrinkage (theft, pilferage etc.).
• Store Location: Location is critical to the success of a retail store. A store's trading-
area is the area surrounding the store from which the outlet draws a majority of its
customers. The extent of this area depends upon the merchandise sold. For example
some people might be willing to travel a longer distance to shop at a speciality store
because of the unique and prestigious merchandise offered. Having decided on the
trading area a specific site must then be selected. Factors affecting the site include,
traffic patterns, accessibility, competitors' location, availability and cost and
population shifts within the area.
• Store Image: A store image is the mental picture, or personality of the store, a retailer
likes to project to customers. Image is affected by advertising, services; store layout,
personnel, as well as the quality, depth and breadth of merchandise. Customers tend to
shop in stores that fit their images of themselves.
• Store Personnel: Sales personnel at a retail store can help build customer loyalty and
store image. A major complaint in many lanes of retailing, is the poor attitude of a
salesperson. There is a growing trend now, to provide training to, these sales clerks to
convert them from order takers to effective sales associates.
• Store Design: A store's exterior and interior design affect its image and profit
potential. The exterior should be attractive and inviting and should blend with the
store's general surroundings. The term "Atmospherics" is used to refer to the retailer's
effort at creating the right ambience. Merchandise display is equally important. An
effective layout guides the customer though the various sections in the store and
facilitates purchase.
• Promotion: retail promotion includes all communication from retailers to consumers
and between sales people and customers. The objective is to build the stores image,
promote customer traffic, and sell specific products. It includes both, personal and non
personal promotion. Personal communication is personal selling - the face to face
interaction between the buyer and the seller. Department stores and speciality stores,
emphasize this form of promotion. Non personal promotion is advertising. The media
used are TV, Radio, Newspapers, Outdoor displays and direct mail, other forms of
promotion include, displays, special sales, give always and contests etc.
• Credits & Collections: Retailers are generally wary of providing credit, because of
additional costs-financing accounts receivables, processing forms and bad debts etc.
But many customers prefer some form of credit while purchasing. This explains the
popularity of different types of credit cards and debit cards.
Multi Channel Retailing: Traditional store based and catalogue retailers are placing more
emphasis on their electronic channels and evolving into multi channel retailers, because they
can reach new markets and overcome limitations posed by traditional formats.
RELIANCE COMPANY PROFILE
RELIANCE GROUP
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), 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 27 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, fibre intermediates, plastics, petrochemicals, petroleum
refining and oil and gas exploration and production - to be fully integrated along the materials
and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining and
marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and
retail.
Reliance enjoys global leadership in its businesses, The Group exports products in excess of
USD 15 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) and Reliance Industrial Infrastructure Limited.
FOUNDER PROFILE
"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
Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global
leader in the materials and energy value chain businesses.
H.S.Kohli
Nikhil R. Meswani Executive Hital R. Meswani
Executive
Director Executive Director
Director
RELIANCE FRESH
APKA FRESH APKA PADAOS ME
India’s Fortune 500 private sector giant, Reliance Industries Ltd, has, in fact, been first off the
blocks by launching its first Reliance Fresh outlets in Hyderabad,
Reliance fresh is the retail chain division of reliance industries of India which is headed by
Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into
almost every metropolitan and regional area of India. Reliance plans to invest rs 25000 crores
in the next 4 years in their retail division and plans to begin retail stores in 784 cities across
the country. The reliance fresh supermarket chain is ril’s rs 25,000 crore venture and it plans
to add more stores across different g, and eventually have a pan-India footprint by year 2011.
The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and
dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian
products. Besides, the stores would provide direct employment to 5 lakh young Indians and
indirect job opportunities to a million people, according to the company. The company also
has plans to train students and housewives in customer care and quality services for part-time
jobs.
• Forge strong and lasting bonds with millions of farmers and will transform the
Relationship with customers to a new level
• Offer unmatched affordability, quality, convenience, service and choice
• Offer our customers the widest range of fruit and vegetables at the best prices in
the neighborhood
• Provide for the daily needs of our customers by offering staples, grocery and
household products at great prices
• Offer consistent high quality, unbeatable freshness and great service so that our
Customers know that we can be trusted every day.
1. SPG Mart
2. Trikuta Hill
4. Vyas Enclave
5. L N Complex
6. M R Tower
8. Prasad Motors
9. Booty More
On an average turnover is 50, 000 in Ranchi, where as compare to others cities it is too low.
Their main aim is to provide good quality products in lower price & customer service &
customer satisfaction.
According to reliance fresh store manager they were satisfying 75% of customer expectations.
OBJECTIVES:
Other R
Marketing Research
the success of the business does not depend upon the guess work rather
have the correct information about the customer, what they want, how
want, how much they are able to pay, and the substitute available in the
they market etc. This information’s can be collected and utilized the help
of marketing research.
Types of Research
Basically there are two types of data which are used in marketing research
process.
1. Primary Data
A. Observation
B. Interview
C. Questionnaires
Surveys: There are mainly three types of surveys, depending upon the
method of data gathering used: Personal surveys, telephone
surveys and mail surveys.
Advantages of Surveys
1. Wider Distribution
2. Less Distribution bias
3. Thoughtful reply
The primary data under processing is collected from both direct filling the
questionnaires and through telephone interviews also.
1. Bibliography
2. Directories
3. Televisions
4. Newspapers
5. Journals
6. Websites
RESEARCH DESIGN
Process – Sampling
The Nominal Scale is used while designing the questionnaire. Both close
ended and open ended questions are put together in the questionnaire.
DATA COLLECTION:
PRIMARY DATA – Collected from consumers and suppliers, reliance fresh employees
The information is the major part of any research proposal to attain certain objectives we
require both secondary and primary data which is discussed above
HYPOTHESIS TESTED:
LIMITATIONS:
Every research has certain limitation so there is no research is free from limitation same thing
happen in this research which is discussed below:
- Much of the research done was based on consumer and supplier survey
- NEED OF STUDY:-
A detailed study in Reliance Retail focusing primarily on two areas of their operations.
2. An analysis of footfall, ticket size & catchment of Reliance fresh stores operating in
Ranchi district in order to determine their performances based on indicators like sale,
sale per sq. feet , gross margin, shrinkage , dumping and ticket size for the month of
(a)Indenting – DC Delivery:-
Indenting will be happen after checking stock in the store and goods in transit. Or whenever if
required any changes in indenting due to season, weekends or any festivals then the quantity
is modified. For branded goods there is a automatic indenting system which is handled by the
head office (Mumbai). Delivery of fruit & vegetables is after 48hours after being raised.
Indenting for milk and dairy products is delivered after 36 hours.
PO (purchase order) for bakery supply is raised in the store and also released to the vendors
by the stores. PO on vendors can be raised only once each day & it will be valid for 24 hours.
2) Receiving:-
All the Dry DC delivery will be checked by a store staff in the DC staging area before
packing and loading. This is to minimize delivery count error and ensure that right quantity is
delivered to the stores. Behind this all the activity owner is Store Manager.
Receiving indented goods from the DC & CPC as per the delivery schedule. At the time of
receiving goods from DC many things which is followed by the SM, ASM,& CSA:-
Check the seal in front of driver.
Note down the air condition temperature.
Inspect stocks for transit damages.
If any HU (Handling unit) / article is found damaged, excess, or missing noted it on
the trip sheet for return to DC.
Do the GRN (Goods return note) for the delivery for the actual received quantity.
Stores are not unloading transit damaged stocks. Transit damages will be returned to
DC in the same delivery truck.
The main focus during goods receiving must be to unload the crates/ cartons from the
truck as quickly and safely as possible.
Process of moving goods from goods receiving area to the respective bays/freezers/chillers as
per the priority fill rule.
Frozen products received must have first priority for stacking in the Freezers.
Strictly follow FIFO
Place previous stock in the front/top of the shelf.
Chilled product received must have second priority after frozen product for stacking
in the chillers.
(a) Changing SELs for those SKU’s where price has been changed. All the changing
of SKU’s is done by headquarter Mumbai.
5) Managing Planogram
The Planogram indicates the location for each SKU on a shelf. This process describes how to
change Planogram. Changing of Planogram is wholly managed by headquarter. Headquarter
send new Planogram to store by mail. Changing of fixtures and shelf heights, at
per new Planogram. The major change of shelf is less than 5 bays. Check quality of stock
received as per Planogram, raise an indent of additional stock if required. Stack goods as per
Planogram and readjust SEL to align with the left hand side of the first facing going from the
left. All the changes made on shelf to be signed off by store manager. All the Planogram to be
provided in standard format. Planogram indicate shelf heights. Planogram is send to the store
at least 2 days in advance of the change. No stock to be displayed on the shelf if it not in the
Planogram. If the F& V section looks empty in the late evening because of stock outs, then
store manager may change only the F& V Planogram in a suitable manner to give appearance
of full store.
Filling up the gaps on the shelves for SKU sold during the day is defined as spot fill.
Fill F&V in a similar manner using crates stored in the bottom shelf of the wall racks,
below heapers and in back room. Follow FEFO, FIFO rules.
In case of F&V, remove the old crates, place the new crates on the racks and then
place the older products on top of the newer products – FIFO
Checking of temperature of chillers and freezers is also a part of SDM.
It is the process of checking and moving stocks to ensure that the older stock gets
sold before the newer ones.
FEFO / FIFO to be followed for stock rotation for non F&V SKUs.
The thing which is strictly followed is removal of damaged part of the F&V will not
be carried out at the shop floor under any circumstances.
In every store every day employees check for date code check schedule for the day in
store perform.
Employees removed expired products from the shelves and take them to the back of
the store.
Employees identify & segregate near expiry products for mark down as per
markdown policy and guidelines.
Procedure for selling loose staple products to the customer in desired quantity.
Procedure for managing the concessionaire in our stores like the Pickles counters,
Sweet counters etc.
Home delivery: for this there is some procedure which is followed by stores.
Purchase a detailed street map of the local area e.g. Eicher
map
Outline on the map the catchments which fall in 2 Km
radius of the store.
Prepare a list of roads / building with in that area.
They appoint two employees for Home delivery champions
(HDC) – for order taking, picking and billing.
Home delivery associate (HDA) – billing and delivery.
There is two type of home delivery which is given by the
RF: Convenience order – this is a situation in which the
customer has come to the store, picked items, got them
billed and then request RF store team to deliver to his
residence. The payment in this case for the goods has
already been received.
Phone Orders - This is a situation in which the customer
does not carry out the activities of physically picking,
billing etc. but places an order on phone by calling either at
the store or at the call centre. The payment in this case
would be received once the delivery CSA goes to the
customer destination and hands over the goods.
(a) For F&V crates are received carefully for the item not for sale as per reliance retail
quality and are removed from the shelf.
(b) It is done by CSA / F&V champion.
EXPIRY:-
(a) Near expiry product is markdown as per the RR rule.
(b) An expired product is segregated and are treated as per following.
Markdown criteria:-
Up to Rs. 15 or 15 % of selling price (whichever is lower) & it is done by Store manager.
Dumping of damages & expiry product:- Treatment for damaged & expired product are
done in following manner:-
For processing of dump (damaged & expired) approval is obtained from store
manage.
After dumping, all the dump are entered into dump register in the presence of SM
with his /her signature.
The entire dumped product is then get hand overed to garbage collection agency.
For type C damaged product some part of each product is kept as proof.
Finally the dump register is present near DM/AM for approval (signature).
(c)Dump on arrival:-
On arrival of goods (F&V stock received from DC) poor quality goods are
segregated.
It is kept in separate place in the store with the sticker “dumped on arrival – not
for sale” along with receiving date.
And the respective SM is informed.
In the GRN (goods received roles) for the delivery, poor quality stocks are
entered as “Damaged Quality”.
Further it is kept for inspection and area F&V executive is informed. E-mail is
send to the F&V head / F&V category head.
Finally dumped stocks are hand over to garbage agency.
In case the GRN is done at the back end maintain a record of the DUA and also
record the some on the invoice that is sent to the commercial team.
(9) Returns:-
SKUs by count:-
(i) Product variants are segregated. Number of units are counted and stickers are pasted
with the quality on SKUs.
(ii) It is continued until all the SKUs are not counted.
(iii) PI count in the HHT is opened (all PI document together) and quantity is entered after
scanning the EAN / article code of the SKUs from the product in the HHT PI
document.
(iv) It is continued in this manner till all the SKUs in the back of store is counted and the
quantity is entered in the PI documents with the help of HHT.
(e) Store Opening :-
(i) Store shutter is opened.
(ii) Burglar alarm is put off.
(iii) Entry for collection of keys and store opening details are recorded in the
register kept at the security.
(iv) Lights are switched on and all the equipments are checked for working made.
(v) Generators are checked for water level, engine oil and Diesel.
Catchment area: - the area and population from which a region attracts visitors or
customers
if we consider the above chart it can be easily concluded that the people between the age
group 23-32 visit more and more in the reliance fresh store and hence store manager
should take care of this age group peoples so that they may captivate them by giving
various discount or facilities etc.
The targets for the current month to any store are assigned according to the sales figures of
the preceding month. Usually the target for the current month is greater than the sales
achieved for the last month by 10-15 % in normal conditions. They can also exceed to almost
25% in some cases where there is large scale supply of stocks of certain kind seeing upon the
arising opportunity for their sale.
SALES
Sr Store Store Area LMTD MTD MTD MTD LMTD
. code Name Achieve Targe Achieve Archive Vs MTD
No d t d d%
1 2118 SPG mart 4163 32.87 37.62 34.58 92 % 5%
2 2119 Trikuta hill 2234 8.66 9.55 8.84 93 % 2%
3 2120 Rathoid 2111 17.60 20.25 17.59 87 % 0%
C.R
4 2121 Vyas 2560 16.15 18.91 17.65 93 % 9%
Enclave
5 2122 L N 4832 29.09 32.67 32.83 100 % 13 %
Complex
6 2377 M R Tower 1935 6.65 7.72 6.81 88 % 2%
7 2445 Eyelex 2800 20.26 26.47 22.58 85 % 11 %
hinoo
8 2727 Prasad 5764 20.03 22.96 21.08 92 % 5%
Motors
9 2812 Booty 2440 15.22 17.56 16.60 95 % 9%
More
Result 28839 166.53 193.7 178.55 92 % 7%
Reliance Retail calculates its input per store in form of sales / ft / day in total no. of hrs. of
operation (from 7:00 AM till 9;30 PM). This cost of operation / input includes rentals,
logistics cost, labor costs, electricity charges and up keep and maintenance charges. FTD
(fixed till date) sale / sq ft. represents the break-even point for the company. In case of May
2009 FTD takes into consideration. 31st days of operation from 1st may 2009 to 31st may 2009.
FTD sale/sq ft is assigned to each individual store from the Mumbai based headquarters of
Reliance Retail
So it can be seen that none of the nine operating. Reliance fresh stores in Ranchi have been
able to achieve their break-even point for the month of May 2009. Reliance Fresh stores are
on verge of completing almost 2yrs of their operation in Ranchi district but they are yet to
reach their breakeven point.
Out of the 47 Reliance fresh outlets in eastern region (including 9 from Ranchi) none have
yet reached their BEP.The Company assigns gross margin of operation to each individuals
stores based on their past performances of sales, inputs in current month, shrinkages and
dumping.
It can be seen that except store no Trikuta Hill, L N Complex & Eyelex, none of these stores
have been able to give the assigned levels of gross margin.
Reliance Retail has a policy of not letting to exceed the shrinkage (loss of goods due to theft
& pilferage) & dumping (loss of goods due to expiry) to individually exceed 2% of the total
sales. It was observed that due to practices like better in-store upkeep, supply close to demand
, better surveillance etc. the shrinkage & dumping were restricted to the desired level in
almost of the stores.
Trikuta hill store, Vyas Enclave store, & M R Tower had above restricted limit shrinkage &
dumping. For Prasad motor store only % age & shrinkage was high.
Whereas in Rathod circular road ,Eyelex hinoo & Booty more store only (%) age dumping
was high than the restricted limit.
Number of tickets means the total number purchases that were made during the entire month.
NUMBER OF TICKETS SIZE:-
It was observed that against the target on only 4189 purchase all the 9 Reliance Fresh stores
of Ranchi registered combinedly 115,593 purchases.
Sales / tickets (ticket size) FTD represents the value of sales per purchase that the stores
should make in order to reach the BEP margin.
Sales /ticket (MTD) represents the value of sales per purchase actually achieved by the store.
Reliance retail expected its Reliance Fresh venture to reach its BEP within a span of 1 – 1.5 of
their operation and to become a profit making entity after that out of 9 stores in Ranchi all
have completed their at least 1 – 2 years of existences but are yet to achieve their BEP.
RECOMMENDATION
COMMUNICATION:
PROMTNESS IN SERVICES:
Behavior and commitments of sales man towards the dry outlets should be improved.
CONCLUSION