Customer Buying Behaviour at Reliance Fresh

PROJECT REPORT On

STUDY OF CONSUMER BUYING BEHAVIOR WITH SPECIAL REFERENCE TO RELIANCE FRESH A Report Submitted In Partial Fulfilment of the Requirements For The Award of the Degree of MASTER OF BUSINESS ADMINISTRATION

Collaborative program of M.S.Ramaiah Management Institute with PRIST university BY SHILPA BOHARPI REG.NO:- CM2091860126

Under the guidance of Dr. ASIM BANDYOPADHYAY

PRIST UNIVERSITY Page 1

Vallam, Thanjavur 2010 STUDENT’S DECLARATION I hereby declare that the Project Report conducted at RELIANCE FRESH, BANGALORE Under the guidance of Dr. ASIM BANDYOPADHYAY Submitted in Partial fulfilment of the requirements for the Degree of MASTER OF BUSINESS ADMINISTRATION Collaborative program with PRIST University

TO M.S.RAMAIAH MANAGEMENT INSTITUTE It is my original work and the same has not been submitted for the award of any other Degree/Diploma/Fellowship or other similar titles or prizes.

Place: Bangalore BOHARPI

STUDENT NAME – SHILPA

Date:

Reg. No - CM2091860126

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CERTIFICATE This is to certify that the Project Report at Reliance Fresh on the topic “Study of consumer buying behaviour “ submitted in partial fulfilment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Of PRIST UNIVERSITY In collaboration with M.S.RAMAIAH MANAGEMENT INSTITUTE Is a record of bonafide Training carried out by SHILPA BOHARPI, Reg No - CM2091860126

Under my supervision and guidance and that no part of this report has been submitted for the award of any other degree/diploma/fellowship or similar titles or prizes.

FACULTY GUIDE Signature: Name: Dr. ASIM BANDYOPADHYAY Qualifications: Page 3

ACKNOWLEDGEMENT I extend my special gratitude to our beloved director Shri. ANANDARAM, Our DEAN & our Co-coordinator for inspiring me to take up this project. I wish to acknowledge my sincere gratitude and indebtedness to my project guide Dr. ASIM BANDYOPADHYAY of M.S. RAMAIAH MANAGEMENT INSTITUTE Bangalore for his valuable guidance and constructive suggestions in the preparation of project report.

STUDENT NAME -

SHILPA BOHARPI

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CONTENTS OF PART A

S. NO. TITLE I Sectoral Analysis of Retail Industry Retail Industry in India Scope of Retail sector in India Growth factors Employment generation Challenges facing II About the Company Company profile Reliance Fresh Aspects of the company Corporate Social Responsibility III Organisational Hierarchy IV Customers of Reliance Fresh V Competitors More Big Bazar Spencer’s VI SWOT Analysis

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CONTENTS OF PART B Page 5

S. NO. I

II III IV V VI

TITLE Research Design Title of the research topic Statement of the problem Research Objective Research Methodology Sample Size Data Collection Statistical Tools used for analysis Sampling Technique Limitations of the study Analysis and Interpretation of the data Findings and Conclusions Recommendations And Suggestions Appendices Bibliography

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PART -A ORGANISATIONAL STUDY

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I.

SECTORAL ANALYSIS OF RETAIL INDUSTRY RETAIL INDUSTRY IN INDIA

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 ‘second 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 eyes. With a contribution of 14% to the national GDP and employing 7% of the total workforce (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. An industry which has good representation in Fortune 500 companies list, an industry which is the largest employer just after agriculture. Indian 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 favourable 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. Key Players in this sector are as follows: ➢ Future Group. Page 8

➢ Vishal Retail Ltd. ➢ Shoppers Stop Ltd ➢ Big Bazar ➢ Spencer’s ➢ More

Scope of Retail Sector in India The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The organized retailing sector in India is only 3% and is expected to rise to 30 - 35% by the year 2012. 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 behaviour. 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 favourable. The scope of the Indian retail market is very vast. And for it to reach its full potential the government and the Indian retailers will have to make a determined effort. Retail market in the organized sector in India is growing can be seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian companies are entering the Indian retail market which is giving Indian organized retail market a boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloons are another Indian company which plans to increase its retail space to 30 million square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global giant for a £ 750 million joint venture. A number of global retail giants such as Wal-Mart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market will definitely grow as a result of all this investments.

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The scope of the Indian retail market has been seen by many retail giants and that the reason that many new players are entering the India retail industry. Judging the scope for growth in the India retail industry many global retail giants are also entering the Indian retail market.

They are: ➢ Tesco ➢ Metro AG ➢ Wal- Mart The scope for growth in the Indian retail market is seen mainly in the following cities: ➢ Mumbai ➢ Delhi ➢ Pune ➢ Ahmedabad ➢ Bangalore ➢ Hyderabad ➢ Kolkata

Growth Factors in Indian Organized Retail sector Rise in the working population which is young, pay- packets which are hefty, more nuclear families in urban areas, rise in the number of women working, more disposable income and customer aspiration, western influences and growth in expenditure for luxury items. All these are the factors for the growth in Indian organized retail sector. In fact, Indian retail industry is the fastest growing industry in India and it accounts for 10% of the country's GDP. In 2009, the retail industry in India amounted to US$ 200 billion and out of this the organized retail sector in India amounted to US$ 6.4 billion. By 2012, the Indian organized retail sector is expected to rise to US$ 25 billion. In 2003, the Indian organized retailing sector accounted for more than 4.5 million sq. ft of space absorption by malls. 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$ Page 10

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.

EMPLOYMENT GENERATION BY INDIAN ORGANIZED RETAIL SECTOR

India is going through a radical economic change. Though it is very infant stage, people can feel the climate is changing. The unorganized retailers take the lion's share in the Indian retail sector, but the organized retailers are growing at a good pace, and promises an increase of proportion of 9 - 10% by 2011. This is to be the largest sector after the agricultural sector. The increase in the number of consumers twinned with the introduction of organized sector has brought numerous corporate investments in retail sector. The entry of super markets, enormous departmental stores, and shopping malls has encouraged the retailers to look at new business plans of expansion. An economic growth on a monumental scale is offered by the Indian retail sector, equally in the national and international market which in turn will generate a huge source of employment and a variety of options for the consumers. The present employment in the retail business is nearly 4 crores and around 20 crores depends on this sector. There is a scope of better exposure to the international standards with the entry of transnational companies, which in turn is encouraging more & more retail management programs to open up and help bridging the gap of supply & demand of talented professionals for management. An economic growth on a monumental scale is offered by the Indian retail sector, equally in the national and international market which in turn will generate a huge source of employment and a variety of options for the consumers. The Ernst & Young's report 'The Great Indian Retail Story', anticipates that the Indian retail sector would come up with 2 million employment opportunities within the year 2010. Page 11

Benefits to the economic growth:➢ Better quality products and services would lead to better competition. ➢ More exports bring more foreign direct investments and foreign exchange. ➢ Organized Indian retail sector would encourage tourism. ➢ Along with the employment boom there would be a vast development in the expertise of the human resource. There would remain future scope for improvements in agriculture, small, and medium scaled industry.

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 behaviour 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 lead 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 Page 12

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. 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, WalMart, 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 becoming an accepted practice. This too brings down the profit of the Indian retailers.

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II ABOUT THE RELIANCE FRESH

COMPANY PROFILE RELIANCE “Growth has no limit at Reliance. I keep revising my vision. Only when you can dream it, you can do it.”

Dhirubhai H. Ambani Founder Chairman Reliance Group December 28,1932 – July 06, 2002 Page 14

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest business house. The Group's activities span exploration and production of oil and gas, refining and marketing, petrochemicals, textiles, financial services and insurance, power, telecom and infocom initiatives. The Group exports its products to more than 100 countries the world over. Reliance Group revenue is equivalent to about 3.5% of India's GDP. The Group contributes nearly 10% of the country's indirect tax revenues and over 6% of India's exports. The Reliance Group Companies, acknowledged as one of the best-run companies in the world, include: Reliance Industries Limited, Reliance Capital Limited, Reliance Industrial Infrastructure Limited, Reliance Telecom Limited, Reliance Infocom Limited, Reliance General Insurance Company Limited, Indian Petrochemicals Corporation Ltd. and Reliance Energy Limited. The company’s refinery at Jamnagar accounts for over 25% of India's total refining capacity and their plant at Hazira is the biggest chemical complex in India. The Reliance Group was founded by the legendary Dhirubhai H. Ambani. He has been one among the select Forbes billionaires and has also figured in the Sunday Times list of top 50 businessmen in Asia. In 1975, the company expanded into textiles. Dhirubhai Ambani introduced equity cult in India when Reliance went public with IPO in 1977. Since the launch of its IPO RIL has expanded rapidly and integrated backwards into other industry sectors, most notably the production of petrochemicals and the refining of crude oil. Dhirubhai led the evolution as a global leader in the materials and energy value chain businesses. Today, Reliance Group's activities range from exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals) to textiles and retail. Reliance enjoys global leadership in its businesses. It is the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. Presently, Reliance Group has more than 25,000 employees on its rolls and exports products in excess of US$ 15 billion to more than 100 countries in the world.

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Reliance fresh

MUKESH AMBANI RELIANCE FRESH AAPKA FRESH AAPKE PADOS MEIN

BACKGROUND

We can see many examples of businesses where, first we grow and then think of expanding but Reliance is quite different. Reliance has developed such huge amount of resources and capital over the years that whenever it steps into any segment it is not required to wait for growing signal, that’s why it always thinks of expanding without any boundaries. Reliance retail is next Step by RIL which will be a pan India project. “Reliance Fresh” is the retail chain division of Reliance Industries of India which is headed by Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their Page 16

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 segments, and eventually have a pan-India footprint by year 2011. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian products. Besides, the stores would provide direct employment to 5 lakhs young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs. The company is planning on opening new stores with store-size varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples, FMCG products and dairy products. Each store is said to be within a radius of 1-2 km of each other, in relation to the concept of a neighbour store. However, this is only the entry roll-out that the company has planned. Bangalore is said to have 48 stores in all by the end of the year. In a dramatic change due circumstances prevailing in UP, West Bengal and Orissa, It was mentioned recently in News Dailies that, Reliance Retail is moving out stocking. Reliance Retail has decided to minimize its exposure in the fruit and vegetable business.

The company may not stock fruit and vegetables in some states, Orissa being one of them. 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 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, 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. A typical Reliance Fresh store is approximately 3000-4000 square Feet and caters to a catchment area of 1-2 km. 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. Page 17

RRL launched its first store in November 2006 through its convenience store format ‘Reliance Fresh’. During the year, RRL also focused on building strong relationships in the agri-business value chain and has commenced marketing fruits, vegetables and staples that the company sources directly to wholesalers and institutional customers. RRL provides its customers with high quality produce that has better shelf life and more consistent quality than was available earlier. Through the year, RRL also expanded its supply chain infrastructure. The Company is fully geared to meet the requirements of its rapidly growing store network in an efficient manner. Recognizing that strategic alliances are going to be a key driver to its retail business, RRL established key joint ventures with international partners in apparel, optical and office products businesses. Further, RRL will continue to seek synergistic opportunities with other international players as well. When the store was launched it had some initial problems 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. When the first Reliance Fresh store opened in Hyderabad in 2006, 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 iStore, starting with Bangalore.

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ASPECTS OF THE COMPANY FARM TO FORK The Reliance retail company sources say it is setting aside Rs 50,000 crore to build its farmto-fork linkage. Reliance has drawn up plans for a presence in 784 towns and 6,000 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 11 states. According to a company report, RIL is targeting a turnover of Rs 40,000 crore in the next few years.

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After Future Group, Reliance Retail plans to introduce private label sale to kirana stores

Reliance Retail is understood to be exploring ways to supply its private labels in food and groceries to kirana stores and small retailers in the country. A separate entity, most likely to be named Reliance Foods, will carry out the private label business. Reliance Fresh head Gunender Kapur was made head of private labels business in the company. Once, they entirely cater to the demands of their stores, and then they can certainly look at supplying them to other retailers since they have required infrastructure, process and systems in place. Page 21

It is said that after launching private labels in food and groceries, Reliance Retail is also expected to launch soaps, detergents, cosmetics and non-FMCG products under its private labels segment with a new brand name. The company’s flagship chain Reliance Fresh sells staples and food items under Reliance Select and Reliance Value brands, dairy products under “Dairy Pure” brand. Kishore Biyani Future Group, too, also have plans to sell its private labels to stores outside the group and it has already carried out pilot studies for this venture and is expected to start the business soon. Future Logistics, the logistics arm of the group, also has plans to foray into wholesale distribution of products such as food, apparel, grocery to organized retail chains in the country, which is expected to start from this month. Nearly 2 years ago, Reliance Industries announced an ambitious plan to invest Rs 25,000 crore to expand its stores in the country to take the advantage of organized retail in the country. Initially, the company was planning to open 2,000 stores by 2008, and 5,000 stores by 2010, but due to a delay in delivery of properties, economic downturn and demand slump the company had to scale back its expansion plans. Reliance Retail runs over 850 stores, which include stores for food and grocery, consumer durables, beauty and wellness, jewelry, footwear, among others. Its formats such as apparel chain Reliance Trends, beauty and wellness format Reliance Wellness, consumer durable chain Reliance Digital have private labels or are in the process of launching private labels. The whole idea of private labels is based on pricing and retailers get enough volumes on their shelf at marginal costing. Retailers have an opportunity to sell their private labels to kirana stores. But it depends on their strategy on pricing and marketing right products is said by Naimish Dave, director with OC & C Strategy Consultants. Business consultancy Techno Park Purnendu Kumar says retailers can sell their products to mom-and-pop stores only through their cash and carry ventures as reaching out to individual stores would be tough preposition. Supplying to kiranawalas is a tedious job as you need to have different points of sale, enough manpower and transport and delivery systems. But selling products through cash and carry stores is a viable preposition, said Purnendu Kumar.

Supply chain model of reliance fresh Page 22

Reliance started its retail operations of reliance fresh stores with following supply chain model. Procuring directly from the farmers and operating with moderate margin but mass selling was key to reliance fresh operations for first few months.

The following figure depicts the reliance fresh model –

MODEL 1

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MODEL 2 Whole Sale Trading (WST) Reliance formalized its second supply chain model to shift itself from grocery retailer to grocery supplier by focusing and establishing itself in Mandi’s.

STEPS IN WST MODEL

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1. Reliance has owned farms on contract basis for production of specific crop which is decided after extensive research depending on ➢ Soil conditions. ➢ Climate conditions. ➢ Return over costs incurred.

2. Different vegetables and fruits from such farms are collected through reliance own logistics and brought to collection Processing centres where quality check and other required processing is done. In processing centres workers wearing balaclavas, woollen trousers and bulky jackets work inside a room kept at a constant 30 Celsius, peeling and chopping vegetables, spinning them dry and then heaping them in small plastic packets Page 25

before placing them in plastic transport crates. At the other end of the 5,000-sq-m warehouse, men unload crates of fruits from a truck pulled up to a spotless loading dock. A quality-control expert samples every tenth crate; if the fruits are good a team will ready them for delivery within hours to Reliance fresh stores around different places like U.P and as far away as Hyderabad and even Mumbai (formerly Bombay). If they are not, workers will inspect the entire shipment and discard anything below standard. 3. Merchandise from these collection processing centres are collected and loaded for Wholesale mandi’s. As this merchandise is to be made available by 4 A.M in morning thus deliveries in trucks are sent at time depending upon: TRANSIT TIME. – Time required reaching destination i.e mandi’s. MARGIN TIME. – Time period between a truck reaching mandi and then Unloads. Can be 2 to 3 hours.

4. From mandi’s where the trucks have been unloaded, roadside vendors and pull carters buy fruits and vegetables to supply in households. 5. In case still some vegetables and fruits are not sold reliance logistics own Transportation send them to reliance fresh stores.

Product range of reliance fresh ➢ Vegetables and fruits: This is the specialty of the store as they provide fresh fruits and vegetables at a rate lower than the market price. Page 26

➢ Households Items: In the stores we can get items which are at slight premium rate than market price, but usually of high quality. ➢ Food and Beverages: This area of the product line they stock all the premier brands and also their private label. ➢ Groceries: In this sector reliance is promoting its private label as they are promoting their own brands and they do the packaging of the product and then label it privately and then sell it at premium as compared it to the loose items. ➢ Dairy Products: The dairy products in some locations are procured from the farmers themselves and some places they procure it from the manufacturers. ➢ Refrigerated products: This product line is dominated by the brands available in market and very less private labelling is done. ➢ Non food items: Here we get many petty non food items at a premium than market price.

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 Page 27

society. Reliance retail is one of them. Following efforts of reliance retail are aimed at benefiting the society making reliance socially responsible. I. Reliance Retail aims at recruiting people from the underprivileged community in society. Hence, they are planning to train students from corporation schools and schools run by NGOs. And, they consider this as a part of the corporate social responsibility. The company is planning to charge a "small fee" from those who want to join the course as they want to bring in some discipline and regularity among the students, and will reimburse that once they are inducted into service. II. 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 to 35 percent) and better quality products f or Reliance retail stores. III. 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 improve their productivity. They have centres 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.

III ORGANIZATIONAL HIERARCHY

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IV

➢

CUSTOMERS

The target customers of Reliance Fresh is Middle and Lower Level income group.

➢ Higher level income group also come for fresh merchandise.

➢

Some customers prefer good quality of products and some prefer low price of products.

➢ Some foreign customers also visit Reliance Fresh. ➢ Customers are aware about the products and their prices.

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V COMPETITORS

MORE

The MORE chain of supermarkets are bright and clean stores at convenient locations with layouts that allow ease of navigation. The product display is well organised and it facilitates the customer to choose the product easily. The stores have been designed by Fitch, the leading international retail design firm. The stores promise a range of benefits to consumers and are a solution to the many problems faced by housewives while shopping for their daily needs. The retail offering from the Aditya Birla Group, has been crafted after in-depth research of the needs and expectations of the Indian consumers. MORE is the answer to the shopping needs of the Indian housewives who wants a modern and convenient option in her neighbourhood with an attractive and consistent range of products ,more assures consumers the security of knowing that they are paying the best price in the market for good quality products. Page 31

BIG BAZAAR

Big Bazar , is the chain of retail stores of the big banner Pantaloon Retail (India) Ltd., which in turn is a segment of Kishore Biyani, regulated Future Group of Companies. Moreover the customer friendly ambiance and the organized retailing of products also makes Big Bazar one of the successful retail companies in India. Big Bazar, a part of the Pantaloon Group, is a hypermarket offering a huge array of goods of good quality for all at affordable prices. Big Bazar with over 50 outlets in different parts of India, is present in both the metro cities as well as in the small towns. The significant features of Big Bazar: Shopping in the Big Bazar is a great experience as one can find almost everything under the same roof. The following are few of the sections at Big Bazar: 1. Books 2. Cameras 3. Computers & Peripherals 4. Electronics 5. Gift Vouchers 6. Health and Fitness 7. Home & Kitchen 8. Jewellery 9. Memory & Storage 10. Mobiles & Phones 11. Movies & Videos 12. Watches 13. Women’s wear 14. Men’s wear 15. Children’s wear 16. Others.

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SPENCER’S

Spencer’s Retail is India’s largest chain of supermarkets, offering food, apparel, appliances, electronics, digital gadgets, home decor and accessories, books, and music. Established in 1996, the retail chain has become a popular destination for shoppers in India with hypermarkets, supermarkets, and groceries spread all over India.

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VI SWOT ANALYSIS The Indian retail market accounted for $ 200 billions. Food accounts for over two-thirds of the $200 billions Indian retail market. Yet it has seen less than 1% penetration by modern retail so far. Reliance industries which always looking for new business opportunities just started a new era with its introduction of new concepts stores named Reliance Fresh with the opening convince store in high streets of Banjara Hills of Hyderabad. Reliance Fresh is very different from what modern retail has offered in India so far and with this Reliance is planning to establish strong retail network in India in food and Farm sector. Let’s do SWOT Analysis on the Reliance Fresh –

STRENGTHS Reliance is the first enter into this unorganized sector of vegetables and fruits. According to them its intentions to have 100% farm fresh foods in their new retail stores. It is also adding shortly a juice bar, and even a large counter for Puja flowers. In fact, over 60 per cent of the floor space has been dedicated to fresh fruits and vegetables, the rest to other food products like staples, spices, bakery etc. But reliance has decided not to add any bar soap or toothpaste and detergent in its shelves. So by using this strategy they are positioning themselves different from other players of the industries like Food world, Big Bazaar and Nilgiris. But overcome the short comings of these specialized stores they are also introducing new Reliance full-fledged supermarket called Shakhari Bhandar which offers each and everything Page 34

from the staple to soap. Most of the staples are under its own private label brand — ‘Reliance Select’. Reason: private labels offer far better profit margin to the retailer than branded products of FMCG companies.

WEAKNESS This is definitely an interesting business venture but it may miss out the opportunity to capture a greater share of the customer’s wallet. For the customers also this could be hectic as they would have to visit another store to pick up essentials. Reliance could easily overcome this problem by adding a few small counters for some basic non-food products. According to their official this format is not final one they are accepting the new changes which will attract the large number of customers.

OPPORTUNITIES Reliance wants to build a high-profitability business and food is perhaps the best venture to start. That is because the Indian food supply chain is grossly inefficient. There are several intermediaries, each of whom adds his own profit margin to the cost. Besides, there is huge amount spent in transit. This offers potential for savings and profits. To reduce the cost and increase the profit it has been sourcing out its requirements from the farmers. For example, the leafy vegetables, brinjals, tomatoes and green chillies in the Banjara Hills outlet were sourced directly from farmers in Vantimamdi, Chevella and nearby Mandals in Ranga Reddy district of Andhra Pradesh. The supply chain already has been backed by few hundred farmers the number is estimated to touch million in next five years. The main aim of the reliance is to eliminate the intermediaries in the sector and reduce the cost. Smaller stores have two advantages- they bring down the cost of real estate and increase profits- it is easier

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to find space for small convenience stores in a quiet neighbourhood than for supermarkets in high streets.

THREATS – This model is engineered to clock a faster turnover of inventory — Reliance expects consumers to visit the store at least twice a week for their top-up groceries. Each store will have an investment of Rs 50 lakhs to Rs 60 lakhs. Unlike global retailers who operate on less margins, Reliance Retail is looking at a fairly high-margin business model. Deliberately stopped short of being a full-fledged supermarket rather, it has limited itself to a food and grocery convenience store. They also have a threat from the existing supermarkets which provides all the services to its customers. For Example, Food world and Nilgiris also provides food and beverages with other personal care products. These convince are not existed in the present Reliance retail stores.

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PART B Project report

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I

RESEARCH DESIGN

TITLE OF THE RESEARCH TOPIC

Study of Consumer Buying Behaviour with special reference to Reliance Fresh, Bangalore.

STATEMENT OF THE PROBLEM Consumer behaviour has occupied a prominent place in today’s business. It is very important to study how the consumers behave in a particular situation and what might be the responsible factors etc. In this context it is better to study the consumer behaviour towards retail industry with special reference to reliance fresh industry.

RESEARCH OBJECTIVE . ➢

To know about the consumer awareness towards Reliance Fresh.

➢ To study consumer buying behaviour of customers in Reliance Fresh Bangalore.

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RESEARCH METHODOLOGY ➢ Research Problem To make a comprehensive study of Reliance Fresh & know the buying behavior of Reliance Fresh customers.

➢ Type of Research Descriptive type research has been used to complete the project. This research is based on fact finding enquires and the variables are totally independent and uncontrollable.

SAMPLE SIZE ➢ 100 respondents have been selected as sample size for research.

DATA COLLECTION ➢ Primary Data Primary data of research are collected from direct resources i.e customer of Reliance fresh through a questionnaire.

➢ Secondary Data

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Secondary Data which are used for research to know the history and scope of Retail industry are collected from already available resources like the net and other sources.

STATISTICAL TOOLS USED FOR ANALYSIS

➢ Through Graphs, Pie-Charts, Tables etc.

SAMPLING TECHNIQUE ➢ Random sampling is used for research project. I have given equal weightages to my all respondent and chose them randomly without any bias like gender, age, income culture.

LIMITATIONS OF THE STUDY ➢ The project has some limitations because it is totally based on efforts of individuals. ➢ Peoples may be careless and may not give correct answer to the questions, because of so many reasons. ➢ It is totally based on personal efforts of individuals. Some of the consumers are unable to understand the questionnaire. ➢ Some consumers are not interested in filling the Questionnaire.

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II

ANALYSIS AND INTERPRETATION OF DATA

ANALYSIS ➢ Understanding the consumer buying behaviour in reliance fresh

DEFINITION – Purchase decision making pattern that is a complex amalgam of needs and desires and is influenced by factors such as the consumer’s – ➢ Societal role (parent, spouse, worker etc.) ➢ Social and cultural environment and norms. ➢ Aspirations and inhibitions. Buying Behaviour is in the advertising, marketing, sales and purchasing and Procurement subjects.

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INTERPRETATION

1. Gender of the Consumer -

MALE FEMALE 43 57

DATA COLLECTED – ➢ Data collected for this questionnaire to know the gender of customer of reliance fresh.

A N A LYSIS – ➢ Data collected for project from 100 responded in which 57 are female and 43 are male of total respondents.

INTERPRETATION – ➢ From the total respondent it analyses that most of the customers in this store is female and their demand always consider at the time of taking the decision. Company should try to attract new male customer by provide new scheme to their customer.

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1. Which age group do you belong?

10-30 37

31-50 49

51 & above 14

DATA COLLECTED – ➢ Data collected for this questionnaire to know the age of customer of Reliance Fresh.

ANALYSIS – ➢ Data collected for project from 100 responded in which 37 are the age between 10 – 30 and 49 are between age of 31 – 50 and 14 are the age of 51 & above of total respondents.

INTERPRETATION – ➢ From the total respondents it analyses that most of the customers are youth. In my observation it was found that mostly people believe in convenience shopping. It helps the organisation to keep employees in such a way to understand the problem of customer easily and rectify the problem effectively. 1.

How do you come to know about Reliance Fresh?

Advertisement 45

Friends 35

Relatives 15

Others 5

DATA COLLECTED -

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➢ Data collected for this questionnaire to know that how people come to know about Reliance Fresh.

ANALYSIS – ➢ Data collected for project from 100 responded in which 45 customers said through advertisement, 35 through friends and 15 and 5 through relatives and others respectively of total respondents.

INTERPRETATION – ➢ It analyses that many customers came to know about Reliance Fresh through advertisement (newspaper) because it is the best medium to reach the maximum customers. 1. What is your perception about Reliance in general?

Excellent 35

Good 45

Fair 15

Poor 5

DATA COLLECTED – ➢ Data collected for this questionnaire to know the perception about Reliance in general.

ANALYSIS – ➢ Data collected for project from 100 responded in which 35 customers said that their perception towards Reliance Fresh is excellent, 45 customers said that it is good and 15 and 5 said that it is fair and poor respectively of total respondents.

INTERPRETATION – ➢ From my research it was analysed that most of the customer’s perception towards Reliance Fresh is good and some said that it is excellent so they should bring some Page 44

innovative ideas and provide better services and products to the customers so that their perception towards Reliance Fresh would be excellent. 1. How often do you shop in Reliance Fresh?

Daily 10

Weekly 45

Fortnightly 20

Once in a Month 25

DATA COLLECTED – ➢ Data collected for this questionnaire to know the shopping behaviour of customer of Reliance Fresh.

ANALYSIS – ➢ Data collected for project from 100 responded in which 10 are like to purchase daily and 45 are purchase weekly and 20 are purchase fortnightly and 25 are like to purchase once in a month of total respondent.

INTERPRETATION – ➢ From the total respondent it analysed that most of the customer are likely to purchase on weekend. In my observation it was found that more scheme should be provided on weekend. 1. What do you mostly shop at mentioned store?

Fruits & Vegetables 48

Grocery 25

Food Items 17

Non-Food Items 10

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DATA COLLECTED – ➢ Data collected for this questionnaire to know the products which are like to purchase by the customer.

ANALYSIS – ➢ Data collected for project from 100 responded in which 48 customers are like to purchase Fruits & Vegetables and 25 are like to purchase Grocery and 17 and 10 are like to purchase Food Items and Non – Food Items respectively.

INTERPRETATION – ➢ From the total respondent it was analysed that most of the customer are like to purchase Fruits & Vegetables from the store. Company should try to retain the customer and should increase the variety of non – food items. 1. Preference of shopping?

Quality 25

Brand 35

Price 10

One Stop Shop 30

DATA COLLECTED – ➢ Data collected from this questionnaire is to know the preference of shopping.

ANALYSIS – ➢ Data collected for project from 100 responded in which 30 customers are like to prefer One Stop Shop, 25 customers are like to purchase quality product and 35 customers believe in reliance brand and only 10 like to prefer price of the product.

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INTERPRETATION – ➢ From the total respondents it was analysed that most of the customers are believe in reliance brand like to purchase qualitative product in one stop shop. Here it was observed that people want to purchase fresh and original product and want better service. 1. Which store do you keep in preference for purchasing?

Reliance Fresh Spencer 30 20

Big Bazar More Super Market 25 15

Others 10

DATA COLLECTED – ➢ Data collected from this questionnaire to know the preference of the purchasing (comparison of store to other).

ANALYSIS – ➢ Data collected for project from 100 responded in which 20 customers like to purchase from Spencer, 25 prefer Big-Bazaar, 30 customers give preference to Reliance Fresh and 15 and 10 are like to purchase from More Super Market and Others respectively of total respondent.

INTERPRETATION – ➢ In my observation it was found till today organised retail sector didn’t penetrate the market. Company should try to open new convenience store and provide more scheme and good service to customer to penetrate the market. Initial it may be costlier, but it will give long term benefit.

9. Do advertisement and promotion influence your shopping decision?

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Yes 65

No 35

DATA COLLECTED – ➢ Data collected from this questionnaire to know the effect of promotion scheme on purchasing.

ANALYSIS – ➢ Data collected for project from 100 responded in which 65 customers are like promotion scheme and 35 are those people which say promotion scheme doesn’t effect on purchasing.

INTERPRETATION – ➢ In my observation it was found that promotion scheme is must to sustain customer attract customer and influence the purchasing.

1. Which form of advertisement do you think is most effective?

Print / Newspaper 35

Television 20

Radio 10

Telephone 35

DATA COLLECTED – ➢ Data collected from this questionnaire to know the better advertisement mode of promotion.

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ANALYSIS – ➢ Data collected for project from 100 responded in which 20 customer say TV and 35 say print or newspaper, 10 say radio and 35 customer are say telephone.

INTERPRETATION – ➢ According to respondents’ result company can choose either telephone or print or newspaper as best for advertisement.

11. Did you get help from CSA (Customer Service Associates) / Staff when Asked?

Yes 45

No 20

Sometimes Never 30 5

DATA COLLECTED – ➢ Data collected from this questionnaire to know about CSA performance.

ANALYSIS – ➢ Data collected for project from 100 respondent in which 45 customer say yes and 20 say no, 30 say sometimes and 5 say never.

INTERPRETATION – ➢ According to the respondent customers are not fully satisfied with the CSA’s performance, company should recruit some new skilled employee for better performance.

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12. Any suggestions?

➢ Maintain the hygiene. ➢ More air conditioners should be there. ➢ Rent outlet should be spacious. ➢ Maintain the manpower for the better service to the customers. ➢ Ambience should be more customers friendly.

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III

FINDINGS AND CONCLUSIONS

➢ Majority of customers here is female. ➢ Majority of customers are young. ➢ Majority of customers like to purchase Fruits and Vegetables from Reliance fresh. ➢ Customers like Brands and one stop shopping. ➢ Reliance Fresh and Big Bazar are the first choices of customer. ➢ Advertisement is the biggest way to attract the customer. ➢ Promotion scheme is not so easy to understand for customer but advertisement is easy for them to understand. ➢ Most of customer is not fully satisfied with store. ➢ Issuing Pamphlets is the best way for attracting the customer. ➢ More and more skilled workers should be appointing for the better work.

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IV

RECOMMENDATIONS & SUGGESTIONS

➢ More promotion scheme should be used to penetrate the market. ➢ Skilled employees should be hired because mostly customers are young. ➢ Promotion scheme should be in such way that customer can understand easily. ➢ Service of store should be provided in such a way that to fulfil the needs of the customer.

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V APPENDICES

QUESTIONNAIRE

Name - ………………………………………. Contact No. - …………………………………

1. Gender of the Consumer? Male

( )

Female

( )

2. Which age group do you belong? 10 – 30

( )

31 – 40

( )

41 – 50

( )

50 above

( )

3. How do you come to know about Reliance Fresh? Advertisement

( )

Friends

( )

Relatives

( )

Others

( )

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4. What is your perception about Reliance in general? Excellent

( )

Good

( )

Fair

( )

Poor

( )

5. How often do you shop in Reliance Fresh? Daily

( )

Weekly

( )

Fortnightly

( )

Once in a Month

( )

6. What do you mostly shop at mentioned store? (You can tick more than one) Fruits & Vegetables

( )

Grocery

( )

Food Items

( )

Non-Food Items

( )

7. Preference of shopping? Quality

( )

Brand

( )

Price

( )

One Stop Shop

( )

8. Which store do you kept in preference for purchasing? Reliance Fresh

( ) Page 54

Spencer

( )

Big Bazaar

( )

More Super market

( )

Others

( )

9. Do advertisement and promotion influence your shopping decision? Yes

( )

No

( )

10. Which form of advertisement do you think is most effective? Print / Newspaper

( )

Television

( )

Radio

( )

Telephone

( )

11. Did you get help from CSA (Customer Service Associates) / Staff when asked? Yes

( )

No

( )

Sometimes

( )

Never

( )

12. Any Suggestions ?

…………………………………………. ………………………………………….

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Thanks for giving your precious time

VI BIBLIOGRAPHY

➢ www.google.com ➢ www.reliancefresh.com

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