DISSERTATION REPORT

OF

A STUDY ON MEASURING CUSTOMER SATISFACTION AT

‘RELIANCE FRESH’ RETAIL OUTLET IN NEW DELHI

“Submitted in the Partial Fulfillment for the Requirement of

Post Graduate Diploma in Management in International Business”

(PGDM-IB)

Submitted To: Submitted By:

Dr. Vandana Mehta Obaid Yaseen

Assistant Professor Roll No: 32/PGDM (IB)

Batch: 2017-2019

10
 DISSERTATION REPORT

ON

A STUDY ON MEASURING CUSTOMER SATISFACTION AT

‘RELIANCE FRESH’ RETAIL OUTLET IN NEW DELHI

“Submitted in the Partial Fulfillment for the Requirement of

Post Graduate Diploma in Management in International Business”

(PGDM-IB)

Submitted To: Submitted By:

Dr. Vandana Mehta Obaid Yaseen

Assistant Professor Roll No. 32/PGDM (IB)

Batch 2017-2019

Jagannath International Management School

Kalkaji, New Delhi

11
 DECLARATION

Title of Dissertation Report Program: A Study on Measuring Customer

Satisfaction At ‘Reliance Fresh’ Retail Outlet in New Delhi

I declare,

(a) That the work presented for assessment in this Summer Internship Report is
my own, that it has not previously been presented for another assessment and that
my debts (for words, data, arguments and ideas) have been appropriately
acknowledged.

(b) That the work conforms to the guidelines for presentation and style set out in
the relevant documentation.

Date: …………….… Obaid Yaseen

32/PGDM-2017(IB)

2017-2019

12
 CERTIFICATE

This is to certify that Mr. Obaid Yaseen of PGDM (IB) has completed his Summer
Training Project on “A Study on Measuring Customer Satisfaction At ‘Reliance
Fresh’ Retail Outlet in New Delhi” of his own. His work is up to my satisfaction.

Project Guide

-----------------------

Dr. Vandana Mehta

Assistant Professor

13
 ACKNOWLEDGEMENT

A project is never the work of an individual. It is moreover a combination of ideas,

suggestions, review, contribution and work involving many folks. It cannot be
completed without guidance

I am thankful to my internal faculty guide of my institute DR. J.K BATRA (Director

at JIMS Kalkaji) and my internal mentor DR. VANDANA MEHTA (Assistant
Professor at JIMS Kalkaji) for guiding me with all the rules and regulations of
internships and clearing the doubts whenever required. I choose this moment to
acknowledge their help gratefully.

It is my radiant sentiment to place on records my best regards and deepest sense

of gratitude to the constant support I have received through my Family, Friends
and Co-workers during the Internship period.

I perceive as this opportunity a milestone in my career development. I will strive to

use gained skills and knowledge in the best possible way, and I will continue to
work on their improvement to attain desired career objectives.

Hope to continue cooperation with all of you in the future.

Obaid Yaseen

32/PGDM-2017(IB)

2017-2019

14
EXECUTIVE SUMMARY

Retailing is the interface between the producer and the individual consumer buying
for personal consumption. This excludes direct interface between the
manufacturer and institutional buyers such as the government and other bulk
customers. A retailer is one who stocks the producer’s goods and is involved in the
act of selling it to the individual consumer, at a margin of profit. As such, retailing
is the last link that connects the individual consumer with the manufacturing and
distribution chain. The retail industry in India is of late often being hailed as one of
the sunrise sectors in the economy. AT Kearney, the well-known international
management consultancy, recently identified India as the ‘first most attractive retail
destination’ globally from among thirty emergent markets. It has made India the
cause of a good deal of excitement and the cynosure of many foreign and domestic
eyes. The entry of foreign and Indian retail giants like Wal-Mart, Metro, Reliance,
Birla, Tata etc. made Indian market more competitive which is at cut throat level.
So how retailers can reach to their end customers, to win the mind share and
increase the basket size of each shopping trip.

India retail industry is the largest industry in India, with an employment of around
8% and contributing to over 10% of the country's GDP. Retail industry in India is
expected to rise 25% yearly being driven by strong income growth, changing
lifestyles, and favorable demographic patterns.

It is expected that by 2016 modern retail industry in India will be worth US$ 175-
200 billion. India retail industry is one of the fastest growing industries with revenue
expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5%
yearly. A further increase of 7-8% is expected in the industry of retail in India by
growth in consumerism in urban areas, rising incomes, and a steep rise in rural
consumption. It has further been predicted that the retailing industry in India will
amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

The growth of scope in the Indian retail market is mainly due to the change in the
consumer’s behavior. For the new generation have preference towards luxury

15
commodities which have been due to the strong increase in income, changing
lifestyle, and demographic patterns which are favorable.

Reliance Retail 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 regions, and eventually have a pan-India footprint by year 2011to
the company.

As the twentieth century has come to and we have moved in to third millennium,
we can see many development and changes taking place around us with all the
industries and firms within each industry trying to keep pace with all the industries
and firm within each industry trying to keep pace with the changes and diverse
need of people. Marketer have regarded “customer” as the king and evolved all
activities to satisfy him or her, this concept gaining more momentum and
importance today.

More than a century ago, the father of our nation, Mahatma Gandhi, had made
visionary and deep meaningful statement at Johannesburg, South Africa in 1980.
A customer is the most important visitor of our premises. He is not dependent on
us. We are dependent on him He is not interruption on our work. He is the purpose
of it and not an outsider on our premises. He is a part of it. We are not doing him
favor by serving him.

Today the entire firm engaged in a process of creating a life time value and
relationship with customers. This report starts with discussion on the diversity of
consumer behavior and the need for studying consumer buying behavior and
consumer as a related field of marketing. this can be largely be attributed to the
prevailing market situation. Today the company image is built and made known by
its customers. Thus, success of the firm determined how effective it has been in

16
meeting the diverse consumer need and wants by treating each customer as
unique and offering products and services to suit has or her need.

Consumer buying behavior will be a primary force in determining how this transition
will evolve. Getting closer to the customer in today’s highly competitive landscape
is essential for the entire industry and is no longer just a retail issue. It requires all
organizations across the supply chain to work as a single enterprise, sensing and
responding rapidly to consumer demand in a coordinated manner. Detailed
analysis of the changing patterns of consumer demand, shopping trends.

This research report is based on to know the

 Major factors influencing consumer buying behavior.

 Buying decision process.
 The stage in buying decision process
 Awareness of consumer towards organized retail sector

17
 CONTENTS
CHAPTER 1: INTRODUCTION ....................................................... 21
INTRODUCTION ............................................................................................. 21

RETAIL MEANING AND DEFINITION ............................................................ 22

IMPORTANCE OF RETAIL MARKETING....................................................... 22

DEFINITION OF RESEARCH ......................................................................... 23

NEED FOR THE STUDY ................................................................................ 24

CHAPTER 2: INDUSTRY AND COMPANY PROFILE .................... 26

INDUSTRY PROFILE...................................................................................... 26

GROWTH OF RETAIL COMPANIES IN INDIA ............................................... 37

COMPANY PROFILE ...................................................................................... 45

COMPANY HISTORY ..................................................................................... 47

CORPORATE SOCIAL RESPONSIBILITY ..................................................... 53

CHAPTER 3: THEORETICAL PERSPECTIVE ............................... 56

STATEMENT OF THE PROBLEM .................................................................. 57

LITERATURE REVIEW ................................................................................... 57

OBJECTIVES OF THE STUDY ....................................................................... 58

CHAPTER 4: RESEARCH METHODOLOGY ................................. 60

RESEARCH DESIGN...................................................................................... 60

TOOLS OF DATA COLLECTION .................................................................... 61

SAMPLING PLAN ........................................................................................... 62

PLANNING AND ANALYSIS ........................................................................... 62

LIMITATION OF THE STUDY ......................................................................... 63

SCOPE OF THE PROJECT ............................................................................ 63

18
CHAPTER 5: DATA ANALYSIS AND FINDINGS ........................... 65
DATA ANALYSIS ............................................................................................ 65

FINDINGS ....................................................................................................... 87

CHAPTER 6: CONCLUSION AND RECOMMENDATIONS ............ 90

RECOMMENDATIONS ................................................................................... 90

CONCLUSION ................................................................................................ 91

BIBLIOGRAPHY ............................................................................. 93
BOOKS ........................................................................................................... 93

WEBSITES...................................................................................................... 93

MAGAZINES & JOURNAL .............................................................................. 93

ANNEXURE QUESTIONNAIRE ...................................................... 94

19
 CHAPTER 1

INTRODUCTION

20
CHAPTER 1: INTRODUCTION

INTRODUCTION

Customer satisfaction is a measure of how product and services supplied a

company can meet the customer expectations. Customer satisfaction is still one of
the single strongest predictors of customer retention. It’s considerably more
expensive to attract new customers than it is to keep old once happy. In a climate
of decreasing brand loyalties, understanding customer service and measuring
customer satisfaction are very crucial. There is obviously a strong link between
customer satisfaction and customer retention. Customer perception of service and
quality of product will determine the success of the product or service in the market.

With better understanding of customer perceptions, companies can determine the

customers need e actions required to meet the can customer’s needs. They can
identify their own strengths and weaknesses, where they stand in comparison to
their competitors, chart out path future progress and improvement. Customer
satisfaction measurement helps to promote an increased focus on customer
outcomes and stimulate improvements in the work practices and processes used
within the company.

In a sharp contrast to the retail sector in developed economies, retailing in India –

though large in terms of size - is highly fragmented and unorganized. With close
to 12 million retail outlets the country has one of the highest retail densities
worldwide. Retailing like rest of the world retailing is one of the largest industries
in India with sales amounting to about $350 billion, but organized retail is estimated
at only US$ 8 billion. It is country’s largest source of employment after agriculture,
has deepest penetration into rural India and accounts to about 10-11 % of’ India’s
GDP and around 8%of the employment.

Inefficiency in the existing supply chains presents further opportunity for organized
players to draw on this large market even as lack of consumer culture and low

21
purchasing power restricted the development of modern formats. Migration from
unorganized to organized retail has been visible with economic development in
most countries

The Indian retail industry is the fifth largest in the world. Comprising of organized
and unorganized sectors, India retail industry is one of the fastest growing
industries in India, especially over the last few years. Though initially, the retail
industry in India was mostly unorganized, however with the change of tastes and
preferences of the consumers, the industry is getting more popular these days and
getting organized as well. With growing market demand, the industry is expected
to grow at a pace of 25-30% annually. The India retail industry is expected to grow
from Rs. 35,000 crores in 2004-05 to Rs. 109,000 crores by the year 2010.

RETAIL MEANING AND DEFINITION

To distribute in small portions or at second hand; to tell again or to many (what has
been told or done); to report; as, to retail slander.

The sale of commodities in small quantities or parcels; -- opposed to wholesale;

Sometimes, the sale of commodities at second hand.

Done at retail; engaged in retailing commodities; as a retail trade; a retail grocer.

the consumer; as, to retail cloth or groceries.

IMPORTANCE OF RETAIL MARKETING

The retail landscape is in a constant state of change. As retail marketing is one of

the most dynamic and exciting areas of growth in the global economy so, to beat
the competition, stand out in a saturated marketplace and succeed despite
tightening margins, savvy retailers are focusing on customer-centric service,
personalization and loyalty programs to attract and retain customers.

22
A successful retail organization understands their market, their customers, and the
importance of strategic location. Because competition in the retail industry can be
fierce, such organizations need the best micro marketing tools available to analyze
where to place new stores, establish customer profiles, and determine best
marketing practices in order to find new customers. The trick in retailing, therefore,
is to find things that you can do for customers that will modify their behavior in
profitable ways.

As retailers strive to touch consumers at every step of the purchase cycle, retail
marketing has evolved to become a mosaic of mass media branding, tactics for
driving store traffic, in-store experience, and loyalty programs.

DEFINITION OF RESEARCH

Research is a more systematic activity directed towards discovery and

development of an organized body of knowledge.

 It is directed towards aiming at a solution to a problem

 It emphasizes development of general principles of theories helpful in
predicting in future occurrence
 Based on observed experience or empirical evidence
 It involves gathering new data from primary or firsthand sources and using
the existing data for the new purpose

PRINCIPLES OF SAMPLING

The idea behind principle of sampling is that we seek knowledge about the total
units by observing a few units and extend our inference about the sample to the
entire population.

23
QUESTIONNAIRE

This method of data collection is quite popular in case of big enquiries. A

questionnaire consists of a number of questions printed or typed in a defined order
on a set of forms. The questionnaire is mailed to respondents who are expected
to read and understand the questions and write down the reply on the space meant
for the purpose in the questionnaire itself.

NEED FOR THE STUDY

Over the years, research has been done in different service sectors, even in retail
services, to find out the drivers of customer satisfaction with respect to service
quality and service features of Reliance Fresh products. To survive in competitive
market and make the necessary improvements in the service quality and feature
trend and comparison on is a need for study.

24
 CHAPTER 2

RESEARCH METHODOLOGY

25
CHAPTER 2: INDUSTRY AND COMPANY PROFILE

INDUSTRY PROFILE

A retailer or retail store is any business enterprise whose sales volume comes
primarily from retailing. Retail organizations exhibit great variety and new forms
keep emerging. There are store retailers, non-store retailers, and retail
organizations. Consumers today can shop for goods and services in a wide variety
of stores. The best-known type of retailer is the department store. Japanese
department stores such as Takashimaya and Mitsukoshi attract millions of
shoppers each year. These stores feature art galleries, cooking classes, and
children’s playgrounds. A retailer is at the end of the distributive channel.

He provides goods and service to the ultimate consumers. This he does through
his small organization, with the help of a few personnel. In an individual retail store
there is not much scope for organization except in the sense that the shopkeeper
has to organize apportions his time and resources. The need for organization
becomes essential as soon as he hires people o enters into partnership or takes
the help of members of his family in running his store. A retailer deals in an
assortment of goods to cater to the needs of consumers. His objective is to make
maximum profit out of his enterprise.

With that end in view he has to pursue a policy to achieve his objective. This policy
is called retailing mix. A retailing mix is the package of goods and services that
store offers to the customers for sale. It is the combination of all efforts planned by
the retailer and embodies the adjustment of the retail store to the market
environment. Retailing mix a communication mix and a distribution mix. The
maximum satisfaction to the customers is achieved by a proper blend of all three.

The success of the retail stores, therefore, depends on customers’ reaction to the
retailing mix which influences the profits of the store, its volume of turnover, its
share of the market, its image and status and finally its survival.

26
RETAILING

Retailing is the set of business activities that adds value to the products and
services sold to the consumer for their personal or family use. A "retailer" buys
goods or products in large quantities from manufacturers or importers, either
directly or through a wholesaler, and then sells smaller quantities to the end-user.
Retail establishments are often called shops or stores. Retailers are at the end of
the supply chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy. The term "retailer" is also
applied where a service provider services the needs of a large number of
individuals, such as a public utility, like electric power.

 Retailing is an important institution in our society,

 Retailing provides considerable value to consumers while giving people
opportunities for
 Rewarding and challenging careers.
 Retail formats and companies are now major factors in the industry.
 The key to successful retailing is offering the right product, at the right price,
in the right
 Place, at the right time, and making a profit.
 Retailers must understand what customers want and what competitors are
offering now and in the future.

THE WORLD OF ORGANIZED RETAILING

 Retailers are using sophisticated communications and information systems

to manage their business. The use of new technologies helps retailers
reduce their operations costs, while better serving their customers.
 To compete against non-store retailers, stores are now becoming more than
just places to buy products. They are offering entertaining and educational
experiences for their customers.
 In this dynamic environment, entrepreneurs are launching new companies
and concepts and becoming industry leaders, while traditional firms have

27
 had to rethink their business.
 Retail managers today must make complex decisions on selecting target
markets and Retail locations, determining what merchandise and services
to offer, negotiating with Supplier and distributing merchandise to stores,
training and motivating sales associates, and deciding how to price,
promote and present merchandise.

RETAIL MIX

The retail mix is the combination of factors retail used to satisfied customer needs
and influences their purchase decision. It includes the type of merchandise and
services offered, merchandise pricing, advertising, promotional programs store
design merchandise display, assistance to customer provided by salespeople, and
convenience of the store’s location.

Retail mix is the term used to describe the various elements and methods required
to formulate and execute retail marketing strategy. Retail managers must
determine the optimum mix of retailing activities and coordinate the elements of
the mix. While many elements may make up a firm’s retail mix, the essential
elements may include:

 Store Location,
 Merchandise Assortments
 Store Ambience,
 Customer Service,
 Price,
 Communication with Customer
 Personal Selling
 Store Image
 Store Design
 Sales Incentives
 People
 Process

28
  Physical Evidence

COMPOSITION OF RETAIL MIX

 Place
 Product
 Price
 Promotion
 People

 Process

 Physical Environment

KEY ELEMENT

1. Place (store location)

2. Product (merchandise)
 Target market Product development
 Channel structure Product management
 Channel management Product features and benefits
 Retailer image Branding
 Retail logistics Packaging
 Retail distribution

3. Price

4. Promotion
 Costs developing promotional mixes
 Profitability Advertising management
 Value for money Sales promotion
 Competitiveness Sales management
 Incentives Public relations
 Quality Direct marketing
 Status

29
  After-sales services

5. People element

6. Process element
 Staff capability Order processing
 Efficiency Database management
 Availability Service delivery
 Effectiveness queuing system
 Customer interaction Standardization

RETAIL INDUSTRY IN INDIA

Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP
and around 8 per cent of the employment. Retail sector is one of India's fastest
growing sectors with a 5 percent compounded annual growth rate. India's huge
middle-class base and its untapped retail industries are key attractions for global
retail giants planning to enter newer markets. Driven by changing lifestyles, strong
income growth and favorable demographic Patterns, Indian retail are expected to
grow 25 per cent annually. It is expected that retail in India could be worth US$
175-200 billion by 2016.

The organized retail industry in India had not evolved till the early 1990s. Until then,
the Industry was dominated by the un-organized sector. It was a seller’s market,
with a limited Number of brands and little choice available to customers. Lack of
trained manpower, tax Laws and government regulations all discouraged the
growth of organized retailing in India During that period. Lack of consumer
awareness and restrictions over entry of foreign players into the sector also
contributed to the delay in the growth of organized retailing.

Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon
Retails India Limited (PRIL). Following Pantaloon's successful venture a host of
Indian business giants such as Reliance, Bharti, Birla and others are now entering
into retail sector. A number of factors are driving India's retail market. These
include: increase in the young working population, hefty pay packets, nuclear

30
families in urban areas, increasing workingwomen population, increase in
disposable income and customer aspiration, increase in expenditure for luxury
items, and low share of organized retailing.

India's retail boom is manifested in sprawling shopping centers, multiplex- malls

and huge complexes that offer shopping, entertainment and food all under one
roof. But there is a flip side to the boom in the retail sector. It is feared that the
entry of global Business giants into organized retail would make redundant the
neighborhood Kirana stores resulting in dislocation in traditional economic
structure. Also, the growth path for organized retail in India is not hurdle free. The
taxation system still favors small retail business. With the intrinsic complexities of
retailing such as rapid price changes, constant threat of product obsolescence and
low margins there is always a threat that the venture may turn out to be a loss
making one.

A perfect business model for retail is still in evolutionary stage. Procurement is very
vital cog in the retail wheel. The retailer has to fight issues like fragmented
sourcing, unpredictable availability, unsorted food provisions and daily fluctuating
prices as against consumer expectations of round-the-year steady prices, sorted
and cleaned food and fresh stock at all Times.

The Indian retail industry is the fifth largest in the world. Comprising of organized
and unorganized sectors, India retail industry is one of the fastest growing
industries in India, especially over the last few years. Though initially, the retail
industry in India was mostly unorganized, however with the change of tastes and
preferences of the consumers, the industry is getting more popular these days and
getting organized as well. With growing market demand, the industry is expected
to grow at a pace of 25-30% annually. The India retail industry is expected to grow
from Rs. 35,000 crores in 2004-05 to Rs. 109,000 crores.

31
 Fig 3.1

PRESENT INDIAN RETAIL INDUSTRY SCENARIO

The retail industry is divided into organized and unorganized sectors. Over 12
million outlets operate in the country and only 4% of them being larger than 500
sq. ft (46 m²) in size. Organized retailing refers to trading activities undertaken by
licensed retailers, that is, those who are registered for sales tax, income tax, etc.
These include the corporate-backed hypermarkets and retail chains, and also the
privately-owned large retail businesses. Unorganized retailing, on the other hand,
refers to the traditional formats of low-cost retailing, for example, the local kirana
shops, owner manned general stores, paan/beedi shops, convenience stores,
hand cart and pavement vendors, etc.

 Unorganized market: Rs. 583,000 cores

 Organized market: Rs.5, 000 cores
 5X growth in organized retailing between 2005-2012
 Over 4,000 new modern Outlets in the last 3 years

32
  Over 5,000,000 sq. ft. of mall space under development
 The top 3 modern retailers’ control over 750,000 sq. ft. of retail space
 Over 400,000 shoppers walk through their doors every week
 47 global fortune companies & 25 of Asia's top 200 companies are retailers
 Biggest player in India is Pantaloon Retail India Limited.
 Growth in organized retailing on par with expectations and projections of
the last 5 Years on
 Course to touch Rs. 35,000 corers (US$ 7 Billion) or more by 2005-06 The
growth factors of

SCOPE OF THE INDIAN RETAIL MARKET

The scope of the Indian retail market is immense for this sector is poised for the
highest growth in the next 5 years. The India retail industry contributes 10% of the
country’s GDP and its current growth rate is 8.5%. In the Indian retail market, the
scope for growth can be seen from the fact that it is expected to rise to US$ 608.9
billion in 2009 from US$ 394 billion in 2005. The organized retailing sector in India
is only 3% and is expected to rise to 25- 30% by the year 2010. There are under
construction at present around 325 departmental stores, 300 new malls, and 1500
supermarkets. This proves that there is a tremendous scope for growth in the
Indian retail market. The growth of scope in the Indian retail market is mainly due
to the change in the consumer’s behavior. For the new generation have preference
towards luxury commodities which have been due to the strong increase in income,
changing lifestyle, and demographic patterns which are favorable. The scope of
the Indian retail market has been seen by many retail giants and that’s the reason
that many new players are entering the India retail industry.

THE FUTURE INDIAN RETAIL SCENARIO

The retail industry in India is currently growing at a great pace and is expected to
go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3
trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth
rates, the consumer spending has also gone up and is also expected to go up

33
further in the future. In the last four year, the consumer spending in India climbed
up to 75%. As a result, the India retail industry is expected to grow further in the
future days.

By the year 2013, the organized the retail sector in India is witnessing a huge
revamping exercise as traditional markets make way for new formats such as
departmental stores, hypermarkets, supermarkets and specialty stores. Western-
style malls have begun appearing in metros and second-rung cities alike
introducing the Indian consumer to a shopping experience like never before.

The sector is at an inflexion point where the growth of organized retailing and
growth in the consumption by the Indian population is going to take a higher growth
trajectory. The Indian population is witnessing a significant change in its
demographics. Organized retail is on all-time high in India. The growth is boosted
by various factors such as availability of professional practices, media proliferation,
various brands which are gaining value thereby enhancing industry growth,
availability of various funding options, regulations like VAT implementation to make
processes simple, sea change in demographics of country and international
exposure.

This report is structured into three major parts. First part comprises of Executive
Summary and highlights of the retail sector. Second part consists of 12 chapters
which includes an introduction and discusses vital topics in retail industry like A
Brief Overview of Global Retail Industry, Indian Retail Industry, Organized Retail
Formats in Indian retail, Food Retail in India, Apparel Retail in India, Growth
Drivers of Indian Retail, Technology implications, Issues & Challenges faced by
the sector, Critical Success Factors, Regulations and Policies and Future Outlook
of the industry.

The third and final part consists of supporting literature in the form of Annexure.
This report will be useful to entrepreneurs interested in getting insights of retail
industry for doing direct and indirect business in the sector, management
consultants, banks evaluating retail sector growth trajectory. The Indian population
is witnessing a significant change in its demographics. Organized retail is on all-
34
time high in India. The growth is boosted by various factors such as availability of
professional proposals, investors who are interested in this sunrise sector, retail
professionals for getting larger picture of the sector. Last but not the least this
report can also be useful for educational institutions imparting courses in retail
sector is also expected to grow at a CAGR of 40%.

The retail sector in India is witnessing a huge revamping exercise as traditional

markets make way for new formats such as departmental stores, hypermarkets,
supermarkets and specialty stores. Western-style malls have begun appearing in
metros and second-rung cities alike introducing the Indian consumer to a shopping
experience like never before.

The sector is at an inflexion point where the growth of organized retailing and
growth in the consumption by the Indian population is going to take a higher
practice, media proliferation, various brands which are gaining value thereby
enhancing industry growth, availability of various funding options, regulations like
VAT implementation to make processes simple, sea change in demographics of
country and international exposure.

This report is structured into three major parts. First part comprises of Executive
Summary and highlights of the retail sector. Second part consists of 12 chapters
which includes an introduction and discusses vital topics in retail industry like A
Brief Overview of Global Retail Industry, Indian Retail Industry, Organized Retail
Formats in Indian retail, Food Retail in India, Apparel Retail in India, Growth
Drivers of Indian Retail, Technology implications, Issues & Challenges faced by
the sector, Critical Success Factors, Regulations and Policies and Future Outlook
of the industry. The third and final part consists of supporting literature in the form
of Annexure. This report will be useful to entrepreneurs interested in getting
insights of retail industry for doing direct and indirect business in the sector,
management consultants, banks evaluating retail sector proposals, investors who
are interested in this sunrise sector, retail professionals for getting larger picture of
the sector. Last but not the least this report can also be useful for educational
institutions imparting courses in retail management.

35
THE OPPORTUNITIES IN INDIAN ORGANIZED RETAIL

The opportunities in Indian organized retail sector are many for this sector is
witnessing a boom. The retail industry in India amounted to US$ 200 billion in 2006,
and out of this amount the Indian organized retail sector amounted to US$ 6.4
billion. The opportunities in India organized retail sector can be judged from the
fact that by 2010 it is expected to rise to US$ 23 billion. The various opportunities
in the organized retail sector in India are mainly there for the Indian consumers
behavior pattern has changed.

Now the Indian consumer gets more hefty pay- packages, is younger, a large
number of women are working, western influences, and more disposable income
have opened a lot of opportunities in Indian organized retail sector. The Indian
consumer wants to shop, eat and get entertainment in one place and is having
also given Indian organized retail sector an opportunity to grow.

The Indian government in 2005 allowed foreign direct investment (FDI) in single
brand retail to 51%. This has opened up a lot of opportunities in India organized
retail sector. In fact, 325 departmental stores, 300 new malls, and 1500
supermarkets are being built which shows the tremendous opportunities in the
organized retail sector in India. Many Indian companies seeing the various
opportunities in organized retail sector in India have entered it.

Pantaloons have decided to increase its retail space to 30 million square feet with
an investment of US$ 1 billion. Reliance Industries Limited is targeting for annual
sales of US$ 25 billion by 2011. It is planning to invest US$ 6 billion in order to
open 1,500 supermarkets and 1000 hypermarkets. Bharti Telecoms is planning a
joint venture with Telco a global retail giant worth £ 750 million. The opportunities
in the organized retail sector in India have also increased with the desire of many
global retail giants to set up shop here. The global retail giants who are entering
the Indian organized retail sector are:

36
  Tesco, Walmart, Metro AG, Carrefour SA
The opportunities in Indian organized retail sector are varied and it must be fully
exploited by the Indian retailers.

GROWTH OF INDIAN RETAIL

According to the 8th Annual Global Retail Development Index (GRDI) of AT

Kearney, India retail industry is the most promising emerging market for
investment. In 2007, the retail trade in India had a share of 8-10% in the GDP
(Gross Domestic Product) of the country.

According to a report by Northbridge Capita, the India retail industry is expected to

grow to US$ 700 billion by 2010. By the same time, the organized sector will be
20% of the total market share. It can be mentioned here that, the share of
organized sector in 2007 was 7.5% of the total retail market.

GROWTH OF RETAIL COMPANIES IN INDIA

Growth of Retail Companies in India exhibits the boom in the retail industry in India
over the years. The increase in the purchasing power of the Indian middle classes
and the influx of the foreign investments has been encouraging in the Growth of
Retail Companies in India.

OVERVIEW

Growth of Retail Companies in India is still not yet in a matured stage with great
potentials within this sector still to be explored. Apart from the retail company like
Nilgiri's of New Delhi, most of the retail companies are sections of other industries
that have stepped in the retail sector for a better business. The Growth of Retail
Companies in India is most pronounced in the metro cities of India; however the
smaller towns are also not lagging behind in this. The retail companies are not only
targeting the four metros in India but also is considering the second graded
upcoming cities like Ahmedabad, Baroda, Chandigarh, Coimbatore, Cochin,
Ludhiana, Pune, Trivandrum, Simla, Gurgaon, and others. The South Indian zone

37
have adopted the process of shopping in the supermarkets for their daily
requirements and this have also been influencing other cities as well where many
hypermarkets are coming up day to day.

REASONS FOR THE FAST GROWTH OF RETAIL COMPANIES IN

INDIA:

The retail companies are found to be rising in India at a remarkable speed with the
years and this has brought a revolutionary change in the shopping attitude of the
Indian customers. The Growth of Retail Companies in India is facilitated by certain
factors like - existing Indian middle classes with an increased purchasing power
rise of upcoming business sectors like the IT and engineering firms change in the
taste and attitude of the Indians effect of globalization heavy influx of FDI in the
retail sectors in India.

THE EMERGING TRENDS IN THE INDIAN ORGANIZED RETAIL

SECTOR

The emerging trends in the Indian organized retail sector would help the economic
growth in India. There is a fantastic rise in the Indian organized retail sector in a
very short period of time between 2001 and 2006. Eventually, out of the shadows
of the unorganized retail sector, India has a chance of tremendous economic
growth, both in India and abroad. The emerging trends in the Indian organized
retail sector are also adding up to the development of the Indian organized retail
sector. The relaxation by the government on regulatory controls on foreign direct
investments has added to the process of the growth of the Indian organized retail
sector.

The infrastructure of the retail sector will evolve radically in the recent future. The
emergence of shopping malls is increasing at a steady pace in the metros and
there are further plans of expansion which would lead to 150 new ones coming up
in India by 2008. As the count of super markets is going up much faster than rate
of growth in retail sector, it is taking the lions share in food trade. The growth of the
Indian organized retail sector is anticipated to be heavier than the growth of the

38
gross domestic product. Alterations in people's lifestyle, growth in income levels,
and encouraging conventions of demography are proving favorable for the new
emerging trends in the Indian organized retail sector. The success of this retail
sector would also lie in the degree of penetration into the lower income strata to
tap the possible customers in the lowest levels of society.

The demands of the buyers would also be enhanced by more access to credit
facilities. With the arrival of the Transnational Companies (TNC), the Indian retail
sector will undergo a transformation. At present the Foreign Direct Investments
(FDI) is not encouraged in the Indian organized retail sector but once the TNC'S
get in they inevitably try to oust their Indian counterparts. This would be challenging
to the retail sector in India.

CHALLENGES FACING THE INDIAN ORGANIZED RETAIL SECTOR

The challenges facing the Indian organized retail sector are various and these are
stopping the Indian retail industry from reaching its full potential. The behavior
pattern of the Indian consumer has undergone a major change. This has happened
for the Indian consumer is earning more now, western influences, women working
force is increasing, desire for luxury items and better quality. He now wants to eat,
shop, and get entertained under the same roof. All these have led the Indian
organized retail sector to give more in order to satisfy the Indian customer.

The biggest challenge facing the Indian organized retail sector is the lack of retail
space. With real estate prices escalating due to increase in demand from the
Indian organized retail sector, it is posing a challenge to its growth. With Indian
retailers having to shell out more for retail space it is affecting their overall
profitability in retail. Trained manpower shortage is a challenge facing the
organized retail sector in India.

The Indian retailers have difficulty in finding trained person and also have to pay
more in order to retain them. This again brings down the Indian Retailers profit
levels. The Indian government has allowed 51% foreign direct investment (FDI) in
the India retail sector to one brand shops only.

39
This has made the entry of global retail giants to organized retail sector in India
difficult. This is a challenge being faced by the Indian organized retail sector. But
the global retail giants like Tesco, Wal-Mart, and Metro AG are entering the
organized retail sector in India indirectly through franchisee agreement and cash
and Carry wholesale trading. Many Indian companies are also entering the Indian
organized retail sector like Reliance Industries Limited, Pantaloons, and Bharti
Telecoms. But they are facing stiff competition from these global retail giants. As
a result, discounting is Indian unorganized retail sector & its challenge

India is the only one country having the highest shop density in the world, with 11
outlets per 1000 people (12 million retail shops for about 209 million households).
Rather we can see the democratic scenario in Indian Retail (because of low level
of centralization, low capital input and due to a good number of self-organized
retail).

India started its Retail Journey since ancient time. In Ancient India there was a
concept of weekly HAAT, where all the buyers & sellers gather in a big market for
bartering. It takes a pretty long times to & step to shape the modern retail. In
between these two concepts (i.e. between ancient retail concept & the modern one
there exist modern kirana/ mom and pop shops or Baniya ki Dukan. Still it is
predominating in India so the Indian retail industry is divided into two sectors-
organized and unorganized.

Organized retail sector refers to the sectors undertaken by licensed retailers, that
is, those who are registered for sales tax, income tax, etc. These include the
corporate retail formats of the exclusive brand outlets, hypermarkets,
supermarkets, departmental stores and shopping malls.

Unorganized retailing, on the other hand, refers to the traditional formats of low-
cost retailing, for example, hand cart and pavement vendors, & mobile vendors,
the local kirana shops, owner manned general stores, paan/beedi shops,
convenience stores, hardware shop at the corner of your street selling everything
from bathroom fittings to paints and small construction tools; or the slightly more

40
organized medical store and a host of other small retail businesses in apparel,
electronics, food etc.

CHARACTERISTICS OF UNORGANIZED RETAIL

Small-store (kirana) retailing has been one of the easiest ways to generate self-
employment, as it requires limited investment in land, capital and labor. It is
generally family run business, lack of standardization and the retailers who are
running this store they are lacking of education, experience and exposure. This is
one of the reasons why productivity of this sector is approximately 4% that of the
U.S. retail industry. Unorganized retail sector is still predominating over organized
sector in India, unorganized retail sector constituting 98% (twelve million) of total
trade, while organized trade accounts only for 2%.

THE REASONS FOR RESISTANCE TO ORGANIZED RETAIL:

 In smaller towns and urban areas, there are many families who are
traditionally using these kirana shops/ 'mom and pop' stores offering a wide
range of merchandise mix. Generally, these kirana shops are the family
business of these small retailers which they are running for more than one
generation.
 These kirana shops are having their own efficient management system and
with this they are efficiently fulfilling the needs of the customer. This is one
of the good reasons why the customer doesn’t want to change their old loyal
kirana shop.
 A large number of working class in India is working as daily wage basis, at
the end of the day when they get their wage, they come to this small retail
shop to purchase wheat flour, rice etc for their supper. For them this the
only place to have those food items because purchase quantity is so small
that no big retail store would entertain this.
 Similarly, there is another consumer class who are the seasonal worker.
During their unemployment period they use to purchase from this kirana
store in credit and when they get their salary, they clear their dues. Now this

41
 type of credit facility is not available in corporate retail store, so this kirana
stores are the only place for them to fulfill their needs.
 Another reason might be the proximity of the store. It is the convenience
store for the customer. In every corner the street an unorganized retail shop
can be found that is hardly a walking distance from the customer’s house.
Many times, customers prefer to shop from the nearby kirana shop rather
than to drive a long-distance organized retail store.

RETAIL FORMATS IN INDIA

 Hypermarkets/supermarkets: large self-servicing outlets offering

products from a variety of categories
 Mom-and-pop stores: they are family owned business catering to small
sections; they are individually handled retail outlets and have a personal
touch
 Departmental stores: are general retail merchandisers offering quality
products and services
 Convenience stores: are located in residential areas with slightly higher
prices goods due to the convenience offered
 Shopping malls: the biggest form of retail in India, malls offer customers a
mix of all types of products and services including entertainment and food
under a single roof
 E-trailers: are retailers providing online buying and selling of products and
services
 Discount stores: these are factory outlets that give discount on the MRP
 Vending: it is a relatively new entry, in the retail sector. Here beverages,
snacks and other small items can be bought via vending machine
 Category killers: small specialty stores that offer a variety of categories.
They are known as category killers as they focus on specific categories,
such as electronics and sporting goods. This is also known as Multi Brand
Outlets or MBO's
 Specialty stores: are retail chains dealing in specific categories and

42
 provide deep assortment. Mumbai's Crossword Book Store and RPG's
Music World is a couple of examples

EVOLUTION AND TRENDS IN ORGANIZED RETAILING FORMATS

AND RETAIL OUTLETS IN INDIA

 Hypermarket: It is the largest format in Indian retail so far is a one stop

shop for the modern Indian shopper.
 Merchandise: food grocery to clothing to spots goods to books to
stationery.

 Space occupied: 50000 Square feet. And above.

 SKUs: (Stock keeping Unit) 20000-30000.

 Example: Pantaloon retail’s Big Bazaar, RPG’s Spencer’s (Giant), Vishal

mega mart.
 Supermarket: A subdued version of a hypermarket.
 Merchandise: Almost similar to that of a hypermarket but in relatively
smaller proposition.
 Space occupied: 5000 Sq. ft. or more.
 SKUs: (Stock keeping units) Around 10000.
 Example: Nilgiris, Apna Bazaar, Trinethra/more.
 Convenience store: A subdued version of a supermarket.
 Merchandise: Groceries are predominantly sold.
 Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.
 Example: stores located at the corners of the streets, Reliance Retail’s
fresh, More Retail
 Department store: A retail establishment which specializes in selling a
wide range of A product without single prominent merchandise line and is
usually a part of a retail chain.
 Merchandise: Apparel, household accessories, cosmetics, gifts etc.
 Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

43
 Example: Landmark Group’s Lifestyle, Trent India Ltd.’s Westside.
 Discount store: Standard merchandise sold at lower prices with lower
margins and higher volumes.
 Merchandise: A variety of perishable/ nonperishable goods.
 Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.
 Specialty store: It consists of a narrow product line with deep assortment.
 Merchandise: Depends on the stores
 Example: Bata store deals only with footwear, RPG’s Music World,
Crossword
 MBO’s: (Multi Brand outlets), also known as Category Killers. These usually
do well in busy market places and Metros.
 Merchandise: Offers several brads across a single product category.
 Kirana stores: The smallest retail formats which are the highest in number
(15 million approx.) in India.
 Merchandise: Mostly food and groceries.
 Space occupied: 50 sq ft and even smaller ones exist.
 Malls: The largest form of organized retailing today located mainly in metro
cities, in Proximity to urban outskirts.
 Merchandise: They lend an ideal shopping experience with an
amalgamation of product, Service and entertainment, all under a common
roof.
 Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.
 Example: Pantaloon Retail’s Central, Mumbai’s Iorbit.

44
COMPANY 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

OVERVIEW

Reliance Industries Limited (RIL) is India's largest private sector company on all
major financial parameters with turnover of Rs1,18,354 crores (US$ 27.23 billion),
cash profit of Rs17,678 crores (US$ 4.07 billion), net profit of Rs11,943 crores
(US$ 2.75 billion) and net worth of Rs63, 967 crores (US$ 14.72 billion) as of March
31, 2007.RILis the first and only private sector company from India to feature in
the Fortune Global 500 list of 'World's Largest Corporations' and ranks amongst
the world's Top 200 companies in terms of profits. RIL is amongst the 25 fastest
climbers ranked by Fortune. RIL also features in the Forbes Global list of worlds’
400 best big companies and in FT Global 500 list of world's largest companies

Reliance Industries Limited (RIL) is India's largest private sector company on all
major financial parameters with turnover of Rs. 73,164 crores (US $ 16.7 billion),
cash profit of Rs. 12,087 crores (US $ 2.8 billion), net profit of Rs. 7,572 crores
(US $ 1.7 billion), net worth of Rs. 40,403 crores (US $ 9.2 billion), and total assets
of Rs. 80,586 crores (US $ 18.4 billion). RIL is the first and only private sector from
India to feature in 2005 Fortune Global 500 list of 'World's Largest Corporations'

45
and ranks amongst the world's Top 200 companies in terms of profits. Reliance in
now putting up a completely export oriented unit with 30 MMPTA capacity under
Special Economic Zone (SEZ) at Jamnagar. Construction will commence very
shortly and the project is schedule to go into operation by March 2008.

RIL group is about to establish yet another industrial landmark by putting up the
world's largest grass root refinery totally dedicated for exports with an outlay of
over Rs. 27,000 crores. RIL group, as a corporate citizen, has always believed in
creating "employability" apart from providing employment. Towards this, it is
process of establishing a World Class Craft Training Institute This world class
facility will have latest generation equipment’s and machineries imported from best
of class manufacturers and will be located at Jamnagar. The Scheme We will bring
in thousands of youngsters - skilled / semi-skilled / partially skilled / unskilled from
all over the country and provided temporary barracks - labor accommodation with
full facilities through contractors. The institute will train them in respective trades
with proper process for "Certification". Current estimate warrants training of
(assuming 50% will be Certified): Welders - 8000, Carpenters - 5000, Pipe Fitters
- 5000, Grinders - 5500, Mill Wright Fitters - 2000 Immediately on certification, they
will be absorbed by our contractors and be deployed on our world scale project at
Jamnagar for a period of approx. of 2 years. Thereafter, Reliance is confident that
these skills, which are badly required, will have an unlimited market and therefore,
offer a great earning future prospect to these youngsters around the globe.

Reliance Fresh falls under Reliance Industries. It is the first retail venture of the
Group. The company offers fresh fruits and vegetables, staples, groceries, fresh
juice bars, FMCG products and dairy products and non-vegetarian items. Reliance
Industries has invested nearly Rs. 3,000 crores to expand the Reliance Fresh
stores. Reliance Fresh directly buys stock from the farmers to cut down on the
wastage. The stores work on The Ranger Format which means selling of fresh
vegetables to the road sellers. Reliance Retail has signed a pact with Apple for the
establishment of a chain of Apple Specialty Stores branded as iStore, starting with
New Delhi.

46
Reliance Fresh is the convenience store format which forms part of the retail
business of Reliance Industries of India which is headed by Mukesh Ambani.
Reliance plans to invest in excess of Rs 25000 crores in the next 4 years in their
retail division. The company already has in excess of 560 reliance fresh outlets
across the country. These stores sell fresh fruits and vegetables, staples,
groceries, fresh juice bars and dairy products.

A typical Reliance Fresh store is approximately 3000-4000 square feet and caters
to a catchment area of 2–3 km.

THE RELIANCE EMPIRE

Reliance being the all-encompassing company has entered into all the sectors,
retail being their latest. Reliance Industries Limited Chairman and Managing
Director: Mukesh Ambani Market Capitalization: INR 39,609,150,020 (Sept, 2006)
Total Shares Outstanding: 22,405,900 (Sept, 2006) Closely Held Shares:
11,365,943 Sales: INR 10,512,963,000.

According to the company website "1 out of every 4 investors in India is a Reliance
shareholder. RIL is ranked at 342 in the 2006 Fortune Global 500 list among the
world’s largest corporations.

COMPANY HISTORY

Post launch, in a dramatic shift in its positioning and mainly due to the
circumstances prevailing in UP, West Bengal and Orissa, it was mentioned
recently in news dailies that, Reliance Retail is moving out of stocking fruits and
vegetables. Reliance Retail has decided to minimize its exposure in the fruit and
vegetable business and position Reliance Fresh as a pure play super market
focusing on categories like food, FMCG, home, consumer durables, IT and
wellness, with food accounting for the bulk of the business.

The company may not stock fruit and vegetables in some states. Though Reliance
Fresh is not exiting the fruit and vegetable business altogether, it has decided not
to compete with local vendors partly due to political reasons, and partly due to its
47
inability to create a robust supply chain. This is quite different from what the firm
had originally planned.

When the first Reliance Fresh store opened in Hyderabad last October, not only
did the company said the store’s main focus would be fresh produce like fruits and
vegetables at a much lower price, but also spoke at length about its “farm-to-fork’’
theory. The idea the company spoke about was to source from farmers and sell
directly to the consumer removing middlemen out of the way.

Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance

Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance
Super are various formats that Reliance has rolled out. In addition, Reliance Retail
has entered into an alliance with Apple for setting up a chain of Apple Specialty
Stores branded as I Store, starting with New Delhi.

Reliance Fresh, the $20 billion Reliance Industries' brand for its grocery outlets,
Monday opened nine new stores in the national capital region (NCR) with an
investment of about Rs.8 billion ($180 million).The stores have been opened in
Ghaziabad, Faridabad, Noida, Greater Noida and Gurgaon covering a total area
of 19,000 sq. ft. Mukesh Ambani's Reliance Industries Ltd. entered the retail trade
last year with an investment of $5.6 billion and has plans to expand its footprint in
the NCR in multiple formats of hypermarkets, supermarkets and convenience
stores. 'We plan to have a pan-India presence and achieve a target of Rs.10 billion
revenue by 2010 by which time we hope to complete Phase I,' Raghu Pillai,
president and chief executive of Reliance Retail, said at a press conference here.
'In the first phase we have plans to employ 500,000 people. We are following an
all-inclusive model giving the right affordability across all income groups,' Pillai
added. According to him, Reliance will open 100 stores in the NCR by the quarter
ending in June 2007.'We are aggressively partnering farmers by following a farm-
to-fork strategy in our supply chain management model and ensure that we deliver
fresh fruits and vegetables at affordable prices to our consumers.' Currently,
Reliance Fresh has 49 stores across the country covering an area of 109,000 sq.
ft. Reliance Fresh also offers a membership and loyalty program – Reliance One -

48
to deliver customized benefits to frequent shoppers. Currently, it has 200,000
loyalty customers across Hyderabad, Jaipur and Chennai. With a vision to
generate inclusive growth and prosperity for farmers, vendor partners, small
shopkeepers and consumers, Reliance Retail Limited (RRL), a subsidiary of RIL,
was set up to lead Reliance Group’s foray into organized retail.

Since its inception in 2006, Reliance Retail Limited (RRL) has grown into an
organization that caters to millions of customers, thousands of farmers and
vendors. Based on its core growth strategy of backward integration, RRL has made
rapid progress towards building an entire value chain starting from the farmers to
the end consumers.

In the last year, Reliance Retail Limited (RRL) continued to fulfill its commitment
of enriching Indian consumer’s shopping experience and providing quality
merchandise at an attractive value proposition. More than 3 years into operation,
RRL has now expanded its presence in more than 85 cities across 14 states in
India. RRL forged ahead with its expansion plans and rolled out stores across the
country. RRL’s footprint now spans a network of more than 1,000 stores.

RRL operates several ‘value’ & ‘specialty’ formats. The ‘value’ formats that RRL
operates are: ‘Reliance Fresh’, a neighborhood concept, ‘Reliance Mart’, an all
under one roof supermarket concept & ‘Reliance Super’, a mini-mart concept. The
‘value’ formats offer a wide range and assortment of products required for daily
household needs. The ‘specialty’ formats are: ‘Reliance Digital’, a consumer
durables & information technology concept, ‘Reliance Trends’, an apparel &
accessories concept, ‘Reliance Wellness’, a health, wellness & beauty concept, ‘I
Store by Reliance Digital’, an exclusive Apple products concept, ‘Reliance
Footprint’, a footwear concept, ‘Reliance Jewels’, a jewelers concept, ‘Reliance
Time Out’, a books, music & entertainment concept, ‘Reliance AutoZone’, an
automotive products & services concept and ‘Reliance Living’, a home ware,
furniture, modular kitchens, furnishings concept.

RRL rapidly expanded the stores network it operates through strategic

partnerships with world-class companies such as Marks & Spencer and Pearl
49
Europe. RRL also entered into an exclusive distribution arrangement with Asics
Corporation Japan to market Asics brands of shoes. and accessories in India. RRL
has recently opened its flagship store under its franchise agreement with Hamleys
and plans to expand the store network in the coming year. RRL has also expanded
its presence in business-to business office supplies through its joint venture with
Office Depot.

Through ‘Reliance One’, RRL’s loyalty membership program, RRL enjoys the
patronage of over 5.5 million customers. In the coming year, RRL will continue on
its mission to delight the customers every visit. RRL will continue to provide
unprecedented value to customers across all its formats and stores.

CONTROVERSY

Recently their stores in Jharkand faced the ire of mobs comprising of local
vegetable vendors. They vandalised and attacked the stores claiming that they
were stealing their livelihoods.

In August 2007, Uttar Pradesh Chief Minister Mayawati ordered to close 10 new
stores keeping view of Law & order situation. In November 2007, Reliance Fresh
stores are attacked by Bharatiya Janshakti Party supporters headed by Uma
Bharti.

‘Suicide’ squad against Reliance Fresh outlets

Bhubaneswar/Cuttack: Traders and roadside vendors opposing the opening of

Reliance Fresh outlets in Orissa on Saturday formed a “suicide” squad.

“As many as 100 youth today joined the squad as they prefer to die while fighting
rather than facing starvation,” All-Orissa Roadside Vendors and Small Shop
Owners Association president Pratap Sahu said.

Reports said the vendors formed the squad soon after a meeting. — PTI

But some vegetable vendors don't want a job at Reliance, if offered one, because
they want to be their own boss.

50
KEY EXECUTIVES

MANAGEMENT TEAM Mukesh D. Ambani - Chairman & Managing Director

Nikhil R. Meswani

Executive Director Hital R. Meswani

Executive Director H.S.Kohli

Executive Director Ramniklal H. Ambani

Mansingh L. Bhakta Yogendra P. Trivedi

Dr. D. V. Kapur

M. P. Modi

S. Venkitaramanan

Prof. Ashok Misra Prof. Dipak C Jain

Dr. Raghunath Anant Mashelkar

FUTURE PLANNING

Company plans to have a pan-India presence by opening stores in 784cities 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 programmed -Reliance One
- to deliver customized benefits to frequent shoppers. Currently, it has 200,000
loyalty customers across Hyderabad, Jaipur and Chennai.

51
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 crores.

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 crores venture and it
plans to add more stores across different geographies, and eventually have a pan-
India footprint by year 2011.

The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice
bars and dairy products and also will sport a separate enclosure and supply-chain
for non-vegetarian products.

Currently, selling through company-owned stores currently totals just$8 billion in

India. Industry estimates say that the country’s retail industry is worth $300 billion,
that is about Rs 13, 50,000 crores. This stands a chance to blossom to $427 billion
in the next four years.

FARM TO FORK MODEL OF RELIANCE RETAIL

The Reliance retail company sources say it is setting aside Rs 50,000 crores to
build its farm- to-fork linkage. Reliance has drawn up plans for a presence in 784
towns and6,000 mandi (wholesale market) towns with 1,600 rural business hubs
to service these. It has already rolled out 177 Reliance Fresh stores across major
towns in 11states. According to a company report, RIL is targeting a turnover of
Rs 40,000 crores in the next few years.

52
TRADITIONAL MODEL OF RETAIL RELIANCE FARM TO FORK

CORPORATE SOCIAL RESPONSIBILITY

Today when most of the companies are busy in making profits by any means, there
are few Ones who are focused to return this society, a part of what they have
earned through this society. Reliance retail is one of them. Following efforts of
reliance retail are aimed at benefiting the society making reliance socially
responsible:

1. Reliance Retail aims at recruiting people from the under privileged

community in society. "Hence, we are planning to train students from
corporation schools and schools run by NGOs. And, we consider this as a
part of our corporate social responsibility, "he said. Asked whether the
company will take students on an employment basis and pay them a stipend

53
 during the course period, he said that actually, it is planning to charge a
"small fee" from those who want to join the course "as we want to bring in
some discipline and regularity among the students", and will reimburse that
once they are inducted into service
2. Farming in India is highly fragmented and subject to harsh climatic
conditions: once harvested, it is very difficult to keep fruits and vegetables
fresh. To secure high quality, Reliance Retail is directly sourcing fresh
agricultural produce from thousands of farmers from villages through
Collection Centers. With this concept, Reliance has built a business model
generating shared value that links the company supply chain more closely
to poor farmers in Indian villages. Reliance is providing a guaranteed market
for the farmers’ produce, reducing transaction costs and training the farmers
in better and sustainable farming practices. This initiative results in higher
income and upgrading of skills for the farmers, and reduced spoilage of
produce (up to35 percent) and better-quality products f or Reliance retail
stores.
3. Reliance retail has adopted “farm to fork” theory which means it is procuring
directly from the farmers thus offering them quite reasonable prices for their
produce as now no intermediaries are involved. In return Reliance is giving
farmers information about how can farmers improves their productivity.
They have centers in villages who apart from providing information make
farmers aware of market rates of different crops so that farmers can choose
crops they want to sow to become profitable. Farmers are provided
technical help as well like information about quality of seeds and fertilizers.

54
 CHAPTER 3

THEORETICAL PERSPECTIVE

55
CHAPTER 3: THEORETICAL PERSPECTIVE

India’s service sector has matured considerably during the last few years and has
been globally recognized for its high growth and development. The Indian retail
market, which is the fifth largest retail destination globally, has been ranked as the
most attractive emerging market for investment in the retail sector by AT Kearney's
eighth annual Global Retail Development Index (GRDI), in 2009. As per a study
conducted by the Indian Council for Research on International Economic Relations
(ICRIER), the retail sector is expected to contribute to 22 per cent of India's GDP
by 2010.

In today’s complex business environment, it has become very crucial for

companies to attain high customer satisfaction for long term sustainable growth
and like companies of the other business domains. Retail also considers their
customers as the most important asset, is not just a theory but also an economic
fact. Therefore, in the current scenario, the research on customer satisfaction on
business domain of retail sector is quite important and critical for understanding of
customer satisfaction and retention, it is very crucial for any company to learn what
actually differentiates the satisfied customers from the unsatisfied ones.

In a sharp contrast to the retail sector in developed economies, retailing in India -

though large in terms of size - is highly fragmented and unorganized. With close
to 12 million retail outlets the country has one of the highest retail densities
worldwide. Retailing like rest of the world retailing is one of the largest industries
in India with sales amounting to about $350 billion, but organized retail is estimated
at only US$ 8 billion.

It is country’s largest source of employment after agriculture, has deepest

penetration into rural India and accounts to about 10-11 % of’ India’s GDP and
around 8%of the employment. Inefficiency in the existing supply chains presents
further opportunity for organized players to draw on this large market even as lack
of consumer culture and low purchasing power restricted the development of

56
modern formats. Migration from unorganized to organized retail has been visible
with economic development in most countries.

Thus, the study is conducted to understand the satisfaction level of consumer that
may be influenced by the Price, Quality, and Service Convenience of the products.
The project reveals satisfaction level of the customers on ‘Reliance Fresh’
products, comparison between Kirana shop and the retail outlets, Future trend of
retail sector in India. Customers are moving towards the new trend of retail
shopping in shopping malls. Most of the competitors are existing in the market in
that ‘Reliance Fresh’ is trying occupying market share it shows a good market
potential.

STATEMENT OF THE PROBLEM

Indian organized retailing is under transition today, bringing a lot of changes in

format of retailing. In this regard measuring customer satisfaction in organized
‘Reliance Fresh’ outlets in New Delhi, preferences and experiences will be of use
to shape the retail out lets and their offerings. The changing attitude of consumers
led them to step forward from unorganized Kirana stores to the organized retailing
formats.

LITERATURE REVIEW

India has been rather slow in joining the organized retail revolution that was rapidly
transforming the economics in the other Asian tigers. The food retailing outlets in
India are growing at a very fast rate in every city. The food retailing outlets in the
recent years have shown tremendous impact in buying decision of the consumers.
Retailing is one of the largest in the global economy, is going through a transition
phase in India. The need of catering the shopping experience has been fulfilled by
the shopping malls. They let customers experience their freedom of choice. They
not only offer variety but also executive transparent pricing.

57
Technical, in its “retail outlook October 2007” reports that the total retail market will
grow from $336 billion in 2006 to $590 billion dollar in 2011, which translated to an
annual growth rate to 12%. Even while the share of modern retailing to four-fold
from 4% in 2006 to 16% in 2011 and further to 2016, traditional retail will still grow
in absolute terms from $324 billion dollar in 2006 to $493 billion dollar in 2011.

A study by McKinsey point out that the Indian market for consumer goods is
expected to reach $400 billion by 2010.Indian market is one of the five largest
markets in the world. Liberalization of economy in the 1990’s and the entry of large
players in the retail business have bought the retail industry in spot light.

India's retail industry is the second largest sector, after agriculture, which provides
According to Associated Chambers of Commerce and Industry of India
(ASSOCHAM), the retail sector will create 50,000 jobs in next few years.

OBJECTIVES OF THE STUDY

 To study the latest trends of retailing in India

 To study customer satisfaction in organized retail outlets towards branded
retailing
 To compare branded retailing shops and Kirana stores on the basis of
consumer perception and satisfaction
 Level of satisfaction of ‘Reliance Fresh’ outlet users
 Reasons for dissatisfaction

58
 CHAPTER 4

RESEARCH METHODOLOGY

59
CHAPTER 4: RESEARCH METHODOLOGY

Research is the systematic process of collecting and analyzing information (data)

in order to increase our understanding of the phenomenon about which we are
concerned or interested. Research is a common parlance refers to a search for
knowledge. The urge of understand things may be rightly termed as research, in
other words we can also refer research as a scientific and systematic search of
pertinent information of specific topic. The concept of research is thus closely
linked with human endeavor for better understanding of his evolution, environment
and growth through diverse stages of human history.

Research therefore, has been an integral part of academic pursuits in the past. It
has served two-fold purpose, intellectual sharpening and evolving new theories to
explain diverse phenomenon through which mankind survived with the progress of
modern era. Human curiosity has leads to understand his environment in different
angles. This process of studying this awareness of man manifested in a process
known as research

RESEARCH DESIGN

Descriptive Research is a fact-finding investigation which is aimed at describing

the characteristics of individual, situation or a group (or) describing the state of
affairs as it exists at present. The type of research method used is descriptive. The
aim of descriptive research is to verify formulated hypotheses that refer to the
present situation in order to elucidate it. Descriptive research is used because the
research is primarily concerned with describing the nature and conditions and
degree in detail of the present situation.

A descriptive research is conducted using 100 respondents, where in the detailed

analysis of preference of shopping, preference on organized and unorganized
outlets, latest trend towards branded retail outlets especially on ‘Reliance Fresh’.
Satisfaction level of customers towards more retail outlets. Where in the detailed
analysis of the quality of the service is analyzed with respect to various variables

60
and compared with the competitors to arrive at a conclusion on the basis of finding
and suggestions, which would help the company to provide greater service and
make necessary improvements in the service quality.

TOOLS OF DATA COLLECTION

In present study both primary as well as secondary data will be used, which will
help in identifying the customer satisfaction towards ‘Reliance Fresh’ retail outlets
and towards the ‘KIRANA’ shops and the latest trends of retailing in India.

DATA SOURCES

In present study both primary as well as secondary data is used, which helps in
identifying the customer satisfaction towards ‘Reliance Fresh’ retail outlets and
towards the ‘KIRANA’ shops and the latest trends of retailing in India.

PRIMARY DATA

The primary data for the study will be collected by means of structured
questionnaire and will be distributed personally to the 100 respondents to get their
responses.

SECONDARY DATA

The secondary data will be collected from company websites, lounge books,
referrals, internet browsing, Journals.

DESIGN OF QUESTIONNAIRE

The questionnaire will be designed to collect the data to keep in view the objective
of the study. It will be mostly closed ended and open-ended short questions for the
convenience of respondents.

61
SAMPLING PLAN

Sampling is that part of statistical practice concerned with the selection of a subset
of individual observations within a population of individuals intended to yield some
knowledge about the population of concern, especially for the purposes of making
predictions based on statistical inference.

SAMPLING METHOD: CONVENIENCE SAMPLING

Convenience sampling procedure was adopted for selecting respondents; the

respondents will be mainly from New Delhi city, where the company has its retail
outlets. Samples will be collected by survey method and the response of 100
respondents will be considered for analysis of data & interpretation.

Sampling Unit: The sampling unit will be customers who will shop in the retail
store or the similar store.

Sample Size: Sample size will be taken as 100 respondents with respondents
from inside and outside the similar retail outlet.

PLANNING AND ANALYSIS

The primary data will be collected by means of structured questionnaire from 100
respondents and the secondary data will be collected from websites, company
reports, magazines, referrals and lounge books. The data collected from the study
will be analyzed and will be represented by simple graph, tables, and charts and
will be interpreted for providing relevant recommendation.

FIELD WORK

The data is collected from the people doing shopping in New Delhi city (Aiyappa
temple near Jalahalli cross, Kodigehalli, Ramaiah Layout, Malleshwaram) where
the company has outlets.

62
DATA PRESENTATION AND ANALYSIS

The primary data was collected by means of structured questionnaire from 100
respondents the secondary data was collected from websites, company reports,
magazines, referrals and lounge books. The data collected from the study is
analyzed by simple graph, tables, and charts and interpreted for providing relevant
recommendation.

LIMITATION OF THE STUDY

 This study is restricted to New Delhi city only and therefore, the results
obtained out of this study cannot be generalized to other parts and rural
area of the country.
 Due to time constraints the sample size is restricted to 100 customers.
 The analysis will be based on the current data; as such it may lose its
relevance in the future.
 The response of the respondents may be biased.

SCOPE OF THE PROJECT

 The project aims to reveal the market status & competition for ‘Reliance
Fresh’
 It helps the company in strategy formulation and planning for further
improvements.
 The study aims to reveal the customer satisfaction towards organized retail
outlets.
 To know where ‘Reliance Fresh’ is facing problems and where it is having
new opportunities in retail sector.
 To compare with organized retail outlets and unorganized retailers and to
study the latest trends of retailing in India.

63
 CHAPTER 5

DATA ANALYSIS AND FINDINGS

64
CHAPTER 5: DATA ANALYSIS AND FINDINGS

DATA ANALYSIS

Data collection is the systematic recording of information; data analysis involves

working to uncover patterns and trends in data sets; data interpretation involves
explaining those patterns and trends.

Analyzing survey data is an important and exciting step in the survey process. It is
the time that you may reveal important facts about your customers, uncover trends
that you might not otherwise have known existed, or provide irrefutable facts to
support your plans. By doing in- depth data comparisons, you can begin to identify
relationships between various data that will help you understand more about your
respondents, and guide you towards better decisions. Here data collected on the
basis of questionnaire survey on customer satisfaction on organized retail outlets
is on Reliance in New Delhi.

Walter H De vries, Zeithaml and Berryand Cronin and Taylor (2001). They
conducted a study on Quality of services by considering its various dimensions like
reliability, availability, performance, serviceability, reputation, competent staff,
responsiveness and courtesy, technical facilities, operational facilities, technical
procedure and communication. In contrast “Universal dimensions determining” the
quality of services as received by customers is tangibility, responsiveness,
assurance and empathy

Cronin and Taylor (1992) the conceptualization of service quality as a gap between
expectations and performance is inadequate. The research points out the
confusion is pertaining literature over the relationship between service quality and
customer satisfaction. According to that research, the concept of service quality
should be customer’s attitude towards the service, since the concept of satisfaction
is defined as a gap between expectations and performance or disconfirmations of
expectations.

65
Table 4.1 Age of respondents

Age Group No of respondents Percentage

18-28 58 58%

29-39 22 22%

40-50 12 12%

51-60 8 8%

> 60 0 0%

Total 100 100%

Age of respondent

66
ANALYSIS

From the above graph and table presented above it is evident that majority of the
respondents are of age in between 18-28 years.

INFERENCE

The above figure shows that most of respondents belong to age group between
18-28 years.

Table 4.2 Gender of the Respondents (Gender ratio)

Gender No of Respondents Percentage

Male 68 68%
Female 32 32%
Total 100 100%

Gender Ratio

No of
respondents
No of
respondent
Percentage

Male Female

Gender

INFERENCE

From the table and bar graph presented above, the distribution of the shoppers is
evident. This question was aimed to identify the distribution between the two
genders. It can be deducted that male respondents are more as compared to
female respondents.
67
Table 4.3 Income of respondents

Income Ratio No of Respondents Percentage

< 10,000 34 34%

10000-20000 40 40%

21000-30000 18 18%

>30000 8 8%

Total 100 100%

No of respondents

INFERENCE

From the above graph it is evident that most of respondents are having income
level in between 10000-20000.

68
Table 4.4 Shopping frequency

Particulars No of Respondents Percentage

Daily 10 10%

Weekly 40 40%

Monthly 44 44%

Occasionally 6 6%

Total 100 100%

Frequency of Shopping

6% 10%
Daily
Weekly
44% Monthly
40%
Occasionally

ANALYSIS

From the above graph frequency of shopping is evident. Of the 100 respondents it
shows that 10% of the respondents do shopping daily, 40% of the respondents do
shopping weekly, 44% of the respondents do shopping monthly and 6% of the
respondents shop occasionally.

INFERENCE

The above figure shows that most of the respondents do shopping weekly and
monthly. It can be deduced that people who visit once a month and weekly are

69
those people who visits various stores for their regular needs and also may be
because of the benefits by the stores such as discounts and offers.

Table 4.6 Service of Retail outlets

Particulars No of Respondents Percentage

Excellent 18 18 %

Good 56 56 %

Satisfactory 20 20 %

Not Satisfactory 6 6%

Total 100 100

ANALYSIS

From the above table and graph the satisfaction level respondents is evident with
respect to services provided by the retail outlets. Of the 100 respondents 18% of
the respondents are agreed with excellent rating service. 56% of the respondents
agreed with good rating service. 20% of the respondents agreed with satisfactory
rating service and 6% of the respondents agreed with not satisfactory rating
service.

INFERENCE

From the responses it can be inferred that most of the respondents are happy with
the service provided by the retail outlets and there are very less people who are
not satisfied with the services provided by retail outlets.

70
Table 4.7 Expectation of Gifts and discounts From Company

Preference No of Respondents % Respondents

Yes 86 86 %

No 14 14 %

Total 100 100%

Preference

14%

Yes
No

86%

ANALYSIS

From the above table and graph the expectation of respondents is evident. Of the
100 respondents it shows that 86% of the respondents except to receive free gifts
and discounts offered by the retail outlets and 14% of the respondents do not
expect any free gifts and discounts.

INFERENCE

Majority of shoppers expect free gifts and discounts from the retail outlets. It can
be deduced that free gifts and discounts attracts a greater number of customers.

71
Table 4.8 Perception about ‘Reliance Fresh’ Products

Perception No. of respondents Percentage

Excellent 8 8%

Good 58 58 %

Satisfactory 28 28 %

Not Satisfactory 6 6%

Total 100 100%

ANALYSIS

From the above graph the perception of respondents towards “Reliance Fresh”
products are evident. Of the 100 respondents 8% respondents has excellent
perception about ‘Reliance Fresh’ products, 58% of respondents’ has good
perception about ‘Reliance Fresh’ products, 28% of respondent’s has satisfaction
about ‘Reliance Fresh’ products and 6% of respondents not satisfaction about
‘Reliance Fresh’ products.

72
INFERENCE

Majority of respondents are satisfied with the products available in Reliance Fresh
because of features like price, quality, variety and brand.

Table 4.9 Factors Influence Purchase of Reliance Fresh Products

Number of resp

Factors Very % Imp % Normal % Least % Not % Total Total

Imp Imp Imp. resp.
%

Price 76 76 12 12 6 6 3 3 3 3 100 100

Quality 84 84 10 10 2 2 2 2 2 2 100 100

Convenience 22 22 66 66 6 6 3 3 3 3 100 100

Availability 38 38 54 54 2 2 3 3 3 3 100 100

Brand 34 34 42 42 16 16 4 4 4 4 100 100

Freshness 80 80 12 12 2 2 3 3 3 3 100 100

Image 14 14 52 52 22 22 6 6 6 6 100 100

73
 Chart Title

70

60

50

40

30

20

10

0
Price Quality Convenience Availability Brand Freshness Image
Important Normal Least Important Not Important

ANALYSIS

From the above graph it shows that factors affecting on purchase of more products

Price Factor

76% respondents have rated price very important, 12% rated important, 3% rated
least important, and 3% not important.

Quality factor

84% respondents have rated quality as very important, 10% rated important, 2%
rated normal, 2% rated least important and 2% not important.

Convenience Factor

22% respondents have rated convenience as very important, 66% rated as

important, 6% rated as Normal, 3%rated as least and 3% as not important.

74
Availability Factor

38% respondents have rated availability as very important, 54% rated as

important, 2% rated as normal, 2% rated least important and 2% not important.

Brand Factor

34% of the respondents have rated brand as very important, 42% rated as
important, 16% rated as normal, 4% rated as least important and 4% not important.

Freshness Factor

80% of the respondents have rated freshness as very important, 12% rated as
important, 2% rated as normal, 3% rated as least important and 3% rated as not
important.

Image factor

14% of the respondents have rated image as very important, 52% rated as
important, 22% rated as normal, 6% rated as least important and 6% rated as not
important.

INFERENCE

Majority of the customers prefer quality with lesser price along with availability of
product. The other factors which influence the buying behavior of customers are
brand, convenience of the store, freshness and image. The influencing factors
differ for different customers according to their taste and preferences.

Table 4.10 Employees Behavior

Behaviour No. of respondents Percentage

Strongly agree 16 16%
Agree 72 72%
Somewhat Agree 6 6%
Disagree 6 6%
Total 100 100%

75
 Sales

Behavior
6%6% 16%
Strongly Agree
Agree
Somewhat Agree
72% Disagree

ANALYSIS

From the above table and graph the employee behavior towards customers in
“Reliance Fresh” is evident. Of the 100 respondents 72% respondents agree that
employees in store are polite and friendly, 16% have strongly agreed, 6% have
somewhat agreed and only 6% respondents have disagreed about the employee
behavior.

INFERENCE

Maximum number of customers that is 72% are happy with behavior of employees
in the Reliance Fresh retail outlets.

Table 4.11Factors Influencing purchase

Factors No. of respondents Percentage

Advertisement 11 11 %

Brand ambassador 4 4%

Product display 42 42%

Suggestion from friends & relatives 27 27 %

76
 Others 16 16 %

Total 100 100%

Sales

Advertisement

16% 11%
Brand Ambassador
4%

Product display
27%
Suggestion from
42%
friends & relatives
Other

ANALYSIS

From the table and graph presented above the effect of media towards the
purchase of products is evident. Of the 100 respondents 8% of the respondents
are influenced by advertisement, 4% of the respondents are influenced by brand
ambassador, 42% of the respondents are influenced by product display, 27% of
the respondents are influenced by suggestion from friends and relatives and 17%
of the respondents are influenced by other media.

INFERENCE

The purchase of products is mainly influenced by display of the product and then
it is followed by suggestion from friends and relatives and advertising.

77
Table 4.12 Price Comparison

Price Range No. of Respondents Percentage

High 38 38%
Low 22 22%
Average 40 40%
Total 100 100%

No. of Respondents

40
35
30
25
20
15
10
5
0
High Low Average

No. of Respondents

ANALYSIS

The above table and graph show comparison of Price of Reliance Fresh products
with other retail outlets and Kirana shops. 40% of the respondents have said that
price of Reliance Fresh products is high. 22% of the respondents said that price of
Reliance Fresh products is low and 40% of the respondents have said that price
of Reliance Fresh products is Average.

INFERENCE

Analyzing the responses from customers and above table and graph it can be said
that price of the Reliance Fresh products is average as compared to other similar
retail stores.
78
Table 4.13 Satisfaction parameters on Reliance Fresh outlets

Factors Very % Satis % Unsatis % Very % Total Total

satis Unsati resp %

Overall 29 29 53 53 12 12 6 6 100 100

Quality

Value for 52 52 42 42 3 3 3 3 100 100

money

No.of cash 38 38 54 54 6 6 2 2 100 100

counters

Complaint 8 8 68 68 20 20 4 4 100 100

handling

Assortment 26 26 68 68 3 3 3 3 100 100

Credit 0 0 10 10 30 30 60 60 100 100

79
By analysis of above graph and table we come to know that

Overall quality

From the 100 respondents 29% are very satisfied, 53% are satisfied, 12% are
unsatisfied remaining and 6% are very unsatisfied.

Value for money

Out of 100 respondents 52% are very satisfied, 42% are satisfied, 3% are
unsatisfied and 3% are very unsatisfied.

No of cash counters

Of the 100 respondents 38% are very satisfied, 54% are satisfied, 7% are
unsatisfied and 2% are very unsatisfied.

Complaint Handling

Out of 100 respondents 8% of respondents are very satisfied, 68% of respondents

are satisfied, 20% are unsatisfied, and 4% are very unsatisfied.

Assortment

Of the 100 respondents 26% respondents are very satisfied, 68% are satisfied, 3%
are unsatisfied and 3% are very unsatisfied.

Credit facility

Out of 100 respondents 0% respondents very satisfied, 10% are satisfied, 30% are
unsatisfied and 70% are very unsatisfied.

INFERENCE

Above data shows that most of the respondents are satisfied with quality of the
product, service, and value for money, number of cash counters and assortment
of the product in store. Customers are very unsatisfied with the credit facility
provided by retail outlets.

80
Table 4.14 Satisfaction level

Rating No. of respondents Percentage

Very satisfied 12 12 %

Satisfied 70 74 %

Not sure 11 11 %

Unsatisfied 7 7%

Total 100 100%

Rating

7% 11%
11%
Very Satisfied
Satisfied
Not Sure
Unsatisfied
71%

ANALYSIS

The above graph shows overall satisfaction level of Reliance Fresh products. 12%
of the respondents are very much satisfied with Reliance Fresh products, 70% of
the respondents are satisfied with the Reliance Fresh products, 11% of the
respondents are not sure and 7% of the respondents are unsatisfied with the
Reliance Fresh products.

81
INFERENCE

Analyzing the responses from customers and above table and graph it can be said
that maximum number of customers are satisfied with the ‘Reliance Fresh’
products.

Table 4.15 Service Rate of Kirana shops

Rate No. of respondents Percentage

Excellent 5 5%

Good 17 17 %

Satisfactory 28 28 %

Not Satisfactory 50 50 %

Total 100 100 %

ANALYSIS

The above figure shows the satisfaction level of customers with respect to services
provided by the Kirana shop. Of the 100 respondents 5% rated excellent, 17%
rated as good, 28% rated as satisfactory and 50% respondents rated as not
satisfactory.

82
INFERENCE

From this analysis we come to know that most of the customers are moving
towards retails stores rather than Kirana shops. Service provided by the stores is
better than Kirana shop.

Table 4.16 Price differentiation

Price Range No of respondents % of respondents

High 58 58 %

Low 7 7%

Average 35 35 %

Total 100 100 %

35% High
Low
58%
Average
7%

ANALYSIS

The above graph shows the price differentiation between ‘Reliance Fresh’ retail
outlets and Kirana shops. Of the 100 respondents 58% of respondents rated as
high, 35% rated as average and only 7% respondents rated as low.

83
INFERENCE

From this analysis we come to know that price of retail outlets is more as compared
to kirana stores because of variety, quality and brand availability.

Table 4.17 Future trend in retail sector

Rating No of respondents % of respondents

Strongly agree 41 41%

Agree 44 44%

Somewhat agree 10 10%

Disagree 5 0%

Strongly disagree 0 0%

Total 100 100%

11% 0%
Strongly agree
Agree
43%
Somewhat Agree
Disagree
46%
Strongly Disagree

84
ANALYSIS

From the graph and table presented above future aspect of retail outlets is evident.
Of the 100 respondents 41% of the respondents strongly agree with the future
trend, 44% are agreed, 10% are somewhat agree, 5% disagrees and 0% strongly
disagrees with the future trend.

INFERENCE

Future trend about retail shopping is very high.

Table 4.18: Recommendation of Stores

Stores Respondents Percentage

Reliance Fresh 33 33 %

Nilgiris 14 14 %

Big Bazar 20 20 %

More 24 24 %

Smart 9 9%

85
ANALYSIS

From the above table and chart, it is evident that how many respondents are
satisfied with the store and are willing to recommend the various stores to their
friends and relatives for shopping. Of the 100 respondents 33% recommended
Reliance Fresh, 24% recommended More, 20% recommended Big Bazar, 14%
recommended Nilgiris and 9% respondents recommended Smart for shopping.

INFERENCE

Shoppers visit to many different stores to get more effective price, quality, varieties
and other benefit provided by the stores such as discounts and offers which plays
an important role to provide satisfaction. But they recommend the store when they
get the full satisfaction. The mostly recommended store for shopping is listed in
the following descending order: Reliance Fresh, More, Big Bazar, Nilgiris and
Smart.

86
FINDINGS

In the survey, interviews and study conducted above, I came across many
factors that influence the consumers’ satisfaction on organized Reliance Fresh
retail store and their subsequent shopping and buying decisions. Here, I
present the findings gathered and the suggestions I offer to companies based
on the data gathered and analyzed.

 The number of male respondents was more that is 68% as compared to

the female respondents that was only 38%
 40% of respondents fall under the income category of 10000 to 20000
 70% of the shoppers who visit retail outlets regularly are the youth
between the ages of 18 to 39 years
 The survey indicates that the 44% of the respondents visit the retail store
once a month and 40% of the respondents visit weekly
 The most preferred store by respondents is Reliance Fresh that is 44%
 Compared to competitors Reliance Fresh is the most visited store to
shop
 Due to competition respondents have different favorite stores according
to their taste and preferences
 The highest number of responses is attributed to Reliance Fresh for
attracting people of many income groups
 Mostly customers are satisfied with the service provided by the retail
stores
 Stores performing well in attracting the customers
 Reliance Fresh provides better shopping experience
 86% of the respondents are expecting huge discounts and offers from
Reliance Fresh stores
 Cleanliness and hygiene maintained in the store is up to the mark
 Majority of customers prefer retail outlets for shopping
 Forty four percent of customer prefer to purchase products on Reliance
Fresh retail outlets that indicates customers are attracted towards
Reliance Fresh outlets it indicates it has a good market potential in future

87
 Majority of the respondents are happy with the behavior of the
employees towards customer service
 Service provided by the retail stores is very good as compared to the
Kirana stores
 The majority of customers are aware about Reliance Fresh
advertisements, product display, suggestion from friends and relatives
and there is a lot of scope to promote through print media
 The main parameters for purchase in preferred store are price, quality
and variety
 Many of the people go for unplanned shopping
 Most customers prefer shopping at retail outlet due to the wide
assortment of products available
 Giving gifts, offers and discounts have more effect on consumer buying
decisions
 The study reveals that the employees in the retail stores are not
pressurizing customers to purchase
 It is evident that majority of the respondents are more concerned with
quality and price of the products provided in the retail stores
 Satisfaction towards retail stores is highly dependent on price & quality
of product
 Giving gifts, offers and discounts have more effect on consumer buying
decisions
 Maximum number of the respondents are shopping in retail outlets it
shows that future trend and growth of retail sector is very high
 Satisfaction level of respondents on Reliance products shows that
Reliance Fresh has good quality products
 Customer Service provided by the Kirana stores is satisfactory but most
of the respondents are willing to visit the retail outlet
 Reliance Fresh is the most recommended store by the respondents to
their friends and relatives for shopping.

88
 CHAPTER 6

CONCLUSION AND
RECOMMENDATIONS

89
CHAPTER 6: CONCLUSION AND
RECOMMENDATIONS

RECOMMENDATIONS

 Create awareness & manage home delivery services properly

 There should be proper assortment of various product categories
 Cleanliness and hygiene should be maintained regularly
 Proper training should be provided to sales person so that they can deal
with the customer efficiently and demonstrate about the products
 Various schemes and festival offer, cash discounts on bulk purchase can
be provided to attract new customers
 Providing credit facility to loyal customers it increases sales volume.
 Most of the customers are expecting gifts, discounts, offers so Reliance
Fresh has to introduce special benefits on huge purchase
 Reliance Fresh has to improve promotion strategy
 Selecting the store location is very important. It may include parking
space for vehicles, lighting and fixtures arrangement of merchandise,
location of billing counter
 Quality and variety of the products should be up to the mark, in Retail
stores so that it attracts a greater number of customers
 Different advertising medium should be adopted to bring awareness in
shoppers about the retail store and its product
 There should be proper assortment of various product categories
 In an era of hyper competition retailers could adopt E- retailing which
would benefit to deliver better services, assortments, products
information, speed, price and so on
 International brands could be made available in retail stores.
 The no. of cash counters needs to be increased, keeping in view the
customer traffic intensity

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CONCLUSION

The study is an attempt to measure customer’s satisfaction at Reliance Fresh

outlets in New Delhi. The customers are the main asset for any organization,
without satisfying them no organization can be run well. Customer satisfaction
towards retail stores is affected by various factors. This survey was meant to
identify the customer satisfaction level towards Reliance Fresh retail stores.
Findings of this research suggest that the level of customer satisfaction is
highly affected by the quality and price of the products, wide range of products
and location and conveyance are more attracting customers to visit the retail
outlet.

It is found that most of the customers of Reliance Fresh retail store New Delhi
are satisfied by the quality of service, convenience, complaint handling, and
employee’s behavior availability of products, branded products. But the
customers are not satisfied with the credit facility, high price and lesser number
of outlets. The analysis shows that Reliance Fresh outlets have been fairly
successful with their marketing strategies and customer retention, but they still
have to upgrade services like more efficient billing, better parking facilities and
wider range of product availability to meet the competition.

The store should concentrate more on the F & V (fruits and vegetables) section.
As it is perishable in nature and has a short shelf life, it requires more
concentration. Store should take care of indent because proper indent can
solve half of the problem and the rest can be handled by following various
practices like reducing wastage by the means of proper handling of F&V (fruits
and vegetables). This includes treatment of green vegetables, proper cleaning
etc. and last but not the least by increasing the sales not only of F&V. But also,
for other products which is only possible by retaining our customers by the way
of promotions. From the study and research survey I can conclude that the
Reliance Fresh is a good retail outlet for shopping comparing to other retail
outlets such as More, Big Bazar, Smart, Nilgiris etc.

The strategy of Reliance fresh is very effective as they know very well how to
attract customers, which is reflected in the vast custom they enjoy in relation to
others. A good and friendly behavior of sales personnel’s in the store is also a
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reason for increase in sales. Due to the upsurge of the retail sector,
unorganized sectors are perishing because of their old concepts, poor service,
non - competitive pricing etc. Therefore, they have to upgrade their
performance in order to compete with the big leagues.

To conclude it can be said that most of the Reliance Fresh customers are happy
with the service received. More, Nilgiris, Total, Smart, Big Bazaar are tough
competitors of Reliance Fresh even though Reliance Fresh is trying hard to
attract the customers by introducing new offers schemes etc. to capture the
market share. According to customer there is huge potential for increasing
market share of supermarket. Findings of this research suggest that the level
of customer satisfaction is highly dependent on various parameters such as
price, brand, customer service, quality and variety of the products. Hence it is
very much important for the retail stores to consider all those parameters to
enhance the level of customer satisfaction.

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BIBLIOGRAPHY

BOOKS

 Schiffman Leon.Gand Leslie Lazar Kanuk; Consumer Behavior;

Pearson Education; 7th edition;2002
 Levy Michael;Retailing Management;Tata McGraw-Hill, New Delhi,5th
edition;2004
 Kothari.C.R;Research Methodology;New Age International(P) Ltd. New
Delhi,2nd edition;2009
 Zeithamil Valarie,A,Service Marketing;Newyork McGraw-Hill

WEBSITES

 http://www.wikipedia.com
 http://www.researchindia.com
 http://www.slideshare.net/jas.bhatia/reliancefresh
 http://corporate.reliance.com/home.aspx
 http://retail.about.com/od/location/a/selecting_site_2.htm

MAGAZINES & JOURNAL

 Indian journal of marketing

 Retail Magazine by Abijit Ghosh
 Business line (catalyst)
 Economic Times (Brand Equity)
 Business World

93
ANNEXURE QUESTIONNAIRE

I am Obaid Yaseen, student of PGDM IB (VII) Semester, Jagannath

International Management School, Kalkaji, New Delhi. I am undertaking a
dissertation project work as a part of my academics doing this survey in order
to a study measuring customer satisfaction in Reliance Fresh outlets in New
Delhi. I kindly request you to co-operate with me for few minutes and respond
to the following questions and I assure that the information provided by you will
be kept confidential and will use only for academic’s purpose.

Personal data

Name :

Age :

Sex :

Contact details:

Occupation :

Income:

1) How often do you do your shopping?

i. Daily
ii. Weekly
iii. Monthly
iv. Occasionally
2) Which one do you prefer more?

A) Branded retail outlets, if yes specify

a) Reliance fresh b) More c) Nilgiris d) Big market e) Smart f) Other

B) Kirana shops
If yes then go to Q.no 12 & 13

3) Service provided by retail outlets is

i. Excellent

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 ii. Good
iii. Satisfactory
iv. Not satisfactory
4) Do you expect gifts, discounts etc. from the company?

i. Yes
ii. No
5) What is your perception about ‘Reliance Fresh’ products?

i. Excellent
ii. Good
iii. Satisfactory
iv. Not satisfactory
6) How much importance do you give to the following factors, when you
purchase a “Reliance Fresh’’ retail products?

Very important Normal Least Not

Important important Important
Factors

Price

Quality

Convenience

Availability

Brand

Freshness

Image

7) The employees at the store are polite and friendly

i. Strongly agree
ii. Agree
iii. Somewhat agree

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 iv. Disagree
8) Which of these factors affect your purchase?

i. Advertisement
ii. Brand ambassador
iii. Product display
iv. Suggestion from friends & relatives
v. Others
9) How is the price of ‘Reliance Fresh’ products as compared to the other
retail outlets and kirana shops?

i. High
ii. Low
iii. Average
10) How do satisfied with following parameters of Reliance Fresh outlets

Particulars Very satisfied Satisfied Unsatisfied Very Unsatisfied

Overall Quality

Value for money

No. of cash Counters

Complaint handling

Assortment (Variety&

Choice)

Credit facility

11) Overall how you are satisfied with ‘Reliance Fresh’ outlets

i. Very Satisfied
ii. Satisfied
iii. Not sure
iv. Unsatisfied
12) Service provided by kirana shop is

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 i. Excellent
ii. Good
iii. Satisfactory
iv. Not satisfactory
13) How is the price of Kirana products as compared to the ‘Reliance
Fresh’ retail outlets?

i. High
ii. Low
iii. Average
14) Do you think the future trend – the market share of organized retail
will increase

i. Strongly Agree
ii. Agree
iii. Somewhat Agree
iv. Disagree
v. Strongly disagree
15) Refer the Retail Store.

a) Reliance Fresh
b) More
c) Nilgiris
d) Big Market
e) Smart
16) If any additional comments on Reliance products regarding customer
satisfaction.
…………………………………………………………………………………………
………

…………………………………………………………………………………………
………

…………

Thanking you

97