PROJECT REPORT ON RELIANCE

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MBA SUMMER TRAINING

Report(For the session 2009-11)

onStudying Staples Category Management and Consumer Behavior and

CompetitionSubmitted in partial fulfillment of the requirement for MBA Degree

Program of GautamBuddha Technical University,Lucknow

In

Reliance Fresh Limited

Submitted By:- Submitted to:-

NARENDRA PRAKASH Mr. JUNAID RIZAVI (MBA SEM-III) MBA FACULTY

GALGOTIA INSTITUTE OF MANAGEMENT & TECHNOLOGY

KNOWLEDGE PARK PHASE-II

G. NOIDA

CERTIFICATE

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DECLARATION

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ACKNOWLEDGEMENT

The outstanding support of the entire Staples Category department at Reliance Fresh helped me complete this project.

My industry guide and mentor Mr. Sanjay Prakash guided and encouraged me throughout the project. And I would like to show my gratitude towards Mr. Ashish Srivastava, Mr. Ashish Sharma, Mr. Sanjay Pandey, Mr. Amit Katara. I owe special debt to them.

I would like to thank all the Store Managers, DC Manager, the QA team, Head of PCS who provided me all the necessary information I needed.

My summer internship programme - with Reliance Fresh - has made me industry ready rather industry specific to take on the corporate world with excellence.

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PREFACE

Industry Exposure is the most crucial part of the management studies in which a student is

Able to synchronize his technical knowledge with practical knowledge gained in the any of the

Organization.I choose the project title “STUDYING STAPLES CATEGORY MANAGEMENT AND CONSUMER BEHAVIOUR AND COMPETITION “ in RELIANCE FRESH .which is a great learning experience

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TABLE OF CONTENTS

CHAPTER NO. TITLE

PAGE NO.

ABSTRACT 1 INTRODUCTION 12

1.1 COMPANY PROFILE 12

1.1.1 Reliance Group 16

1.1.2 Reliance Retail Limited 18

1.1.3 Reliance Fresh Ltd. 25

2 OBJECTIVE 27

3 RESEARCH METHDOLOGY 28

3.1 RETAIL SCENARIO IN INDIA 28

3.2 SWOT ANALYSIS OF RETAIL INDUSTRY IN INDIA 32

3.3 CATEGORY 36

3.4 STAPLES 39

3.5 SURVEY FOR STUDYING CONSUMER BEHAVIOR 64

3.5.1 Introduction 64

3.5.2 The North and Central Cluster 65

3.5.3 The East Cluster 67

3.5.4 Recommendations 69

3.5.5 Presentation of Data analysis 71

4 PRICE BENCHMARKING 87

4.1 Introduction 87

4.2 Activity 89

4.3 Finding and Analysis 90

4.4 Recommendations 95

5 ASSORTMENT AND PLANOGRAMMING 96

6 PROMOTIONS 103

6.1 Introduction 103

6.2 Finding and Analysis 104

6.3 Conclusions 105


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7 PROCESSING OF STAPLES 106

7.1 Introduction 106


8. CONCLUSION 109

9 Appendix 110

10 ABBREVIATIONS 120

11 BIBLIOGRAPHY 120

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ABSTRACT

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in the materials and energy value chain businesses.

Reliance Retail is the retail business wing of the Reliance business. Many brands like Reliance Fresh, Reliance Footprint, Reliance Time out, Reliance digital, Reliance Wellness, Relaince Trendz and Reliance Jewel come under the Reliance Retail brand. In November 2007, Reliance announced its foray into the branded jewelry market.

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. There are 124 stores in Delhi and NCR and lot more to come.

Delhi and NCR are divided into four clusters- the North and Central cluster, the East cluster, the South and Faridabad cluster and the West and Gurgaon cluster. For the survey on consumer behavior, the North and Central and the East clusters were covered. Objective was to find the satisfaction level of customers with the stores considering parameters like assortment, quality, pricing, promotions and service. A study about the competition was also done. Competition study was done for both the organized and unorganized sector. The major competitors are KBs Fair Price, Big Apple, more., Sabka Bazaar, Spencers’, 6 Ten, Big Bazaar, Vishal Mega Mart.

Primary data was collected through questionnaires. In the North and Central cluster, 14 stores were surveyed and in the East, 16 stores were done.

The major findings of the survey are:

Customers are satisfied with the assortment Customers think that our prices are higher than that of the wholesale and

local grocery stores.

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Customers are satisfied with the quality of most of the private label SKUs. The customers want more attractive offers in staples category. Private label is used by a smaller segment but its demand can be increased. All SKUs are not available all the time. Customers are not aware of the difference between the quality of the loose

and packed SKUs. Customers want better quality in loose SKUs. In loose, sugar is the highest selling SKU.

Recommendations:

Planogram should be strictly adhered to in every store. Store managers should check daily for stock levels and most important for

KVIs More varieties in loose should be introduced, especially rice. SELs should be changed regularly as old SELs misguide the customers. The store manager should brief the staff about the major promos at the

beginning of promo cycle. All the promos should be properly executed and they should be put up in

both Hindi and English. Lal Quila and Kohinoor Basmati rice brands have good demand. They

should be introduced in A catchment stores. Large packs of dry fruits should be removed. 500g packs of CTC (spices) MBQs should be raised. Brands of lower prices for 5l Mustard oil should be introduced. Fortune Soya 5l and 15l stock should be available in the stores, especially

in the beginning of the month. All POS should be made functional in all the stores to improve the billing

process.

Then, category functions like assortment, planogramming, promotions decision and execution, price benchmarking were studied.

The DC visit helped understand the back-end process. How the inventory levels are maintained. In DC, three processes are involved- Inbound, Replenishment and Outbound. The staples DC are Kirti Nagar (for Delhi stores) and pataudi (for NCR stores).

A visit to the packing centre, in Jamalpur (Haryana) was also done. There, the whole process of the cleaning, sorting and packing of own label takes place.

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The process is both manual and automated. Rice, pulses, spices and dry fruits are packed.

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1.1. INTRODUCTIONINTRODUCTION1.1 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 Founder Chairman Reliance Group December 28, 1932 - July 6, 2002

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of USD 22 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber producer in the world and

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among the top five to ten producers in the world in major petrochemical products.The Group exports products in excess of USD 11 billion to more than 100 countries in the world. There are more than 25,000 employees on the rolls of Group Companies. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail limited), Indian Petrochemicals Corporation Limited and Reliance Industrial Infrastructure Limited.

Vision

"Growth has no limit at Reliance. I keep revising my vision.Only when you can dream it, you can do it."

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Dhirubhai H. AmbaniFounder Chairman Reliance Group

December 28, 1932 - July 6, 2002

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in the materials and energy value chain businesses. He is credited to have brought about the equity cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to dream and learn to excel'.The US$ 20 billion Reliance Group is a living testimony to his indomitable will, single-minded dedication and an unrelenting commitment to his goals.

Mission

”Growth through Commitments”We care about :-

Quality

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Research & Development Health, Safety & Environment Human Resource Development Energy Conservation Corporate Citizenship

Reliance believes that any business conduct can be ethical only when it rests on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Caring. The essence of these commitments is that each employee conducts the company's business with integrity, in compliance with applicable laws, and in a manner that excludes considerations of personal advantage.We do not lose sight of these values under any circumstances, regardless of the goals we have to achieve. To us, the means are as important as the ends.

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For Reliance…

Growth is care for good health

Reliance's occupational health centers carry out pre-employment and periodic medical checkups as well as other routine preventive services. Specialised tests like biological monitoring, health risk assessment studies and audits for exposure to various materials are also performed. Health education and awareness form an integral part of the health care programme at Reliance

Growth Is Care for SafetyWe believe that the safety of each employee is the responsibility of the individual as well as of the whole community of employees

Growth is care for the environmentReliance believes that a clean environment in and around the workplace fosters health and prosperity for the individual, the group and the larger community to which they belong. Environmental protection is an integral part of the planning, design, construction, operation and maintenance of all our projects.

Growth is conservationAt Reliance, energy conservation efforts seek to reduce the unit cost of fuels and to improve efficiencies in energy intensive processes.

Growth is betting on our peopleReliance builds with care a workplace that proactively fosters professional as well as personal growth. There is freedom to explore and learn; and there are opportunities that inspire initiative and intrinsic motivation. We believe that people must dream to achieve, that these dreams will drive the company's excellence in all its businesses. Reliance thinks, behaves, lives and thrives with a global mindset, encouraging every employee to reach his / her full potential by availing opportunities that arise across the group.

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1.1.1 RELIANCE GROUP

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in the materials and energy value chain businesses. He is credited to have brought about the equity cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to dream and learn to excel'.

The US$ 125 billion Reliance Group is a living testimony to his indomitable will, single-minded dedication and an unrelenting commitment to his goals.Group's annual revenues are in excess of US$ 34 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.

All of Reliance Group production and services ventures have one common feature – global scale operations employing state-of-the-art technology in all fields. The company is truly emerging as a well diversified conglomerate with global competence in technology, management and financial capabilities to meet the needs of a rapidly growing Indian market.

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail.

Reliance enjoys global leadership in its businesses, being 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.

The Group exports products in excess of US$ 20 billion to 108 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited) and Reliance Industrial Infrastructure Limited.

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1.1.2 RELAINCE RETAIL LIMITED

Mr. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited (RIL)

Reliance Retail is the retail business wing of the Reliance business. Many brands like Reliance Fresh, Reliance Footprint, Reliance Time out, Reliance digital, Reliance Wellness and Reliance Jewel come under the Reliance Retail brand. In November 2007, Reliance announced its foray into the branded jewelry market.

On June 26, 2006, Mukesh Ambani (Ambani), Chairman and Managing Director, Reliance Industries Limited (RIL), announced his company's plans to foray into the retail sector with an initial investment of US$5.6 billion. Calling this an idea which has the potential to revolutionize the Indian socio-economic framework, he said "Conceptually, Reliance is creating a virtuous circle of prosperity by bringing farmers, small shopkeepers and consumers in a win- win partnership.'' He was speaking at the 32nd annual general meeting of the company, here.

"A new company, Reliance Retail Ltd. (RRL) will spearhead this revolution. Reliance Industries will have a 100 per cent stake in RRL, save for employee stock options," Reliance Industries stated in a press release.

Given the overarching nature of this initiative, RRL would entail an equity investment to the extent of Rs. 10,000 crore ($2.24 billion). It would have to expend more than Rs. 25,000 crore ($5.60 bilion) in the years to come.

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"Organised retailing is a new business initiative of Reliance that signifies a defining point in its history. This marks the full flowering of RIL's basic philosophy: share and prosper. With this new initiative, Reliance will forge strong and enduring bonds with millions of farmers and transform its relationship with consumers to a new level.

Organized Retailing, along with the next generation distribution system, is at the core of this transformational initiative. This idea evolves from the new paradigm in the consumption of products and services in India,'' said Mr. Ambani

Reliance Retail would build a business that would focus on "competitive offerings'' to Indian consumers across several verticals: Integrated food and grocery, items of daily household consumption, apparels and footwear, electronic goods, lifestyle products and services, home essentials and improvements, farm implements and inputs, distribution of energy products and services, distribution of travel and financial services, entertainment and leisure experiences, health and well-being products and services and educational products and services. It would develop partnerships to bring the best of luxury brands from all over the world to India and it would also develop linkages with opportunities in agriculture and food processing.

The company would have a pan-India footprint covering 1,500 cities and towns and embracing all strata of the society.

Reliance's retail venture was expected to be India's equivalent of Wal-Mart Stores Inc. (Wal-Mart), as it planned to cover the entire retail ambit. RRL was expected to have its presence across India.

Reliance proposed to acquire 10,000 hectares of land in Haryana and planned to extend its reach across 1,500 Indian cities with different retailing formats such as warehouse clubs, hypermarkets, supermarkets, specialty stores, and convenience stores.

Reliance also had plans to open restaurant outlets within its stores. Reliance expected a revenue target of US$ 20 billion through its retail operations by 2010. Over a span of five years, RRL expected a 20 percent return on investment.4 Reliance also had plans to enter the personal finance services through its retail arm in order to tap the growing consumer loan segment. In November 2006, RRL launched its first set of 11 retail stores under the 'Reliance Fresh' format at Hyderabad.

The 'Reliance Fresh' store would have an average space of 2,300 sq. ft and 19

provide fresh fruits, vegetables, groceries and dairy products to consumers. Gunender Kapur (Kapur), President and Chief Executive, Foods Business, RIL, said, "Our intention is to bring high quality fresh food to the customers at an affordable price."

. Most of the staples and dairy products are under its own private label brands — ‘Reliance Select’. Now it has even launched R- select Noodles which are priced lesser than the competitor Nestle’s Maggi. Private labels offer far better profit margin to the retailer than branded products of FMCG companies. 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 wastage 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. 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 to find space for small convenience stores in a quiet neighborhood than for supermarkets in high streets.

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Targets 90,000 Crore Turnover by 2010

RIL has set a revenue target of Rs 90,000 crore (US$ 20 billion) from its retail operations by year 2010, almost 10 per cent the size of the current organised retail business in the country. It dwarfs India's current numero uno in organised retail chain, Pantaloon Retail, which currently has an annual turnover of US$ 240 million from its 84 outlets spread over 30 cities and has projected revenues of US$ 2 billion by 2009.

RIL's plans include a pan-India footprint of its stores, across multiple formats and categories, in more than 800 cities and towns, and in record time.

Multiple Formats with Investment of Rs 30,000 Crore

The brains behind the mega retail venture have been able to ideate and develop a low cost pan-India supply-chain model that will involve massive economies of scale.

The strategy is to set up a chain of hypermarkets, supermarkets, discount stores, speciality stores, and convenience store formats in 800-odd cities and towns across the length and breadth of the country at an investment of around Rs 30,000 crore (US$ 8 billion).

The retail foray will have almost all the leading Indian and international brands, and possibly a sizeable presence of private labels as well, and would clearly try and build a loyal customer base with tens of millions of consumers from across the country.

While the sheer scale of operations will ensure Reliance's retail business a 20 per cent return on investment over a span of five years, its rural low cost-high return investment will ensure sufficient competitive edge vis-à-vis purely urban retail operators.

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First Phase: 1,575 Outlets by March 2007

The first phase will see around 1,575 retail outlets coming up in just three months – between December 2006 and March 2007. The first of these outlets will be opening around September this year, either in Mumbai or Ahmedabad.

Reliable sources say that the retail business would start with 20 destination points in A-class cities in India, and soon expand to over 100 destinations in a very short span of time. On an average, each of these retail centres could be spread over 100 acres of land that would house leisure and entertainment facilities, small hospital complex, eateries and a big mall. RIL insiders are, of course, tight-lipped about everything.

Further, it has been reported in the media circles that initially the company has targeted the five states of Maharashtra, Gujarat, Punjab, West Bengal and Andhra Pradesh for the first phase of retail rollout.

Gradually, in the next two to three years, Reliance Retail plans to establish a pan-India presence of all its formats, targeting not only the major metros and cities, but also the second-tier towns and semi-urban and even rural centres. Quite clearly then, the number – 800 towns and cities – has been very strategically and meticulously worked upon.

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F&B to Generate 40% Sales Revenue, Direct Employment to Over 5 Lakh

It is internally estimated that the food and beverages category will account for as much as 40 per cent of the total revenue generated from the Reliance Retail venture and that the company plans to give direct employment to more than five lakh people. About 23 CEOs across multiple functions and categories will oversee the retail operations.

The popular format in towns and rural settings will be hypermarkets, which will be warehouse-style stores spread over 150,000 sq.ft and will be selling products ranging from consumer electronics and groceries to fresh food and clothes. There will also be smaller 75,000 sq.ft supermarkets.

RIL has roped in leading retail consulting firm, Technopak Advisors, and management consulting firm AT Kearney to provide specific and specialised strategic inputs, and advise the top management of Reliance Retail during the entire planning, design and implementation, and execution stages of the massive retail foray, reports say.

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Evaluation of Category Mix & Formats

Reliance Retail has studied the potential of all possible categories of products and services retailing. In fact, it is keen on capturing market leadership in every possible retail category, once it has rolled out and consolidated its retail operations.

The market insights and intelligence derived from this effort has helped Reliance to evaluate each category on its market-size, growth rate and potential as being one of the main determinants for its retail rollout operations. This can clearly be taken as a precursor to Reliance's understanding of the retail market in India, in terms of clear understanding of:

• The primary sources of procurement of products• Average inventory (retail and warehouse) that is normally maintained at retail stores across various categories• Seasonal sales variation in categories across different regions in the country• Shrinkage and wastage of products and percentage of returns thereon• The number of SKUs across brands and categories• The credit details (in terms of the number of days and cash) that retailers normally get from their supplier across various product categories; and• The average gross margin (percentage of MRP) that the retailer generally gets on its products. Apart from food and grocery, which will contribute 40 percent to total sales, the company is strongly looking at apparel, lifestyle, consumer durables, and leisure and entertainment operations as its major drivers of business. It is considering the establishment of both multi-brand as well as exclusive brand outlets for certain categories of operations.

While most of outlets will be company-owned, the convenience-store format could possibly be the only exception to be operated through a franchisee route in collaboration with mom-and-pop kirana shop-owners, which in itself is a novel concept that could work very well in the Indian context.

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1.1.3 RELIANCE FRESH

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. The (Reliance Fresh) store is for everyone... Prices are affordable for everyone," Reliance Industries Ltd president and chief executive (foods business) Gunender Kapur told reporters after unveiling the Reliance Fresh brand.

The first Reliance fresh store was opened in Hyderabad in November 2006. Reliance Fresh outlets are in Bangalore, Chennai, New Delhi, Gurgaon, Faridabad, Hyderabad, Jaipur, Mumbai, Madurai, Cochin, Trichur, Calicut, Chandigarh, Ludhiana.

The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add more stores across different g, and eventually have a pan-India footprint by year 2011. Reliance Fresh stocks fresh fruits and vegetables, staples, fast moving consumer goods and dairy products. The stores are already selling over 1,000 tonnes of fresh produce daily and also 250 categories of commodities. The company is approaching farmers directly for the procurement of produce, seeking to reduce the 40% wastage that occurs through the traditional supply chain. Besides, the stores provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs.

The Reliance Fresh stores are convenience stores with an area of about 1000 to 4000 sq ft. In Reliance Fresh stores, the commodities are classified into various categories like Staples, Fruits and Vegetables (F n V), Dairy, Processed Foods (PF), Food and Beverages, House ware, Personal Care etc. Few stores have apparel section also which has very low priced range and good quality clothes.

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2. Objective of the study

The objective of the study is to evaluate consumer needs and behavior with respect to retail stores in NCR for Reliance Retail ltd. and to give recommendations for the betterment of customer service. Any project work to be carried out in any organization or in any fieldwork in the market has certain per decided and specified objective, which is to be attained. The whole survey or fieldwork is designed in accordance with that objective .The whole survey is broken down in four various parts like four clusters- the North and Central cluster, the East cluster, the South and Faridabad cluster and the West and Gurgaon cluster. which individually contribute to that project's objective. The objective laid down helps to solve the problems that exist in the organization. This problem provides the foundation for the project and the projective.The various things that are to be done in any survey, the various components of the problem and the project objective provide the base for deciding the scope of the project. The scope of the project varies from project to project, the scope are the limit with in which the person carrying out the project has to work. It provides the person various things that are to be done. Under project it is basically the subdivision of the project objective.

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3. RESEARCH METHDOLOGY

3.1 RETAIL SCENARIO IN INDIA

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.

The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, modern retail is likely to increase its share in the total retail market to 22 per cent by 2010.

Continuing the robust growth of the organized retail in India, according to the Credit Rating and Information Services of India, the industry raked in US$ 25.44 billion turnover in 2007-08 as against US$ 16.99 billion in 2006-07, a whopping growth rate of 49.73 per cent.

India has one of the largest numbers of retail outlets in the world. Of the 12 million retail outlets present in the country, nearly 5 million sell food and related products. Thought the market has been dominated by unorganized players, the entry of domestic and international organized players is set to change the scenario.

Organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011.

For a long time, organised retail in India remained the attraction of only a few enterprising Indian entrepreneurs, who took the plunge into the deep sea of a hitherto uncharted territory. It is only in the last 10-15 years that the retail sector's inherent attractiveness started catching the attention of large corporate houses in

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India, like the Raheja Group, RPG Enterprises, the Piramal Group etc. But with due respect to all of them, their vision has remained conservative and they have been modest in scaling up their retail business models to take it to the next level of operations with a pan-India presence.

What clearly lacked was the level of investments; the slow pace of consolidation and indecisiveness in experimenting and migrating between multiple formats, categories and channels. This has prevented them from reaping the true benefits of modern retailing.

What is it that we can label as the compelling drivers of this new retail thrust in India with a large corporate house like Reliance Industries announcing big, not to mention international retail giants who are getting impatient to enter India?

The first driver is a self-sustaining buoyant Indian economy that is growing at eight per cent a year.

The second is that as the economy grows and expands, the consumption habits and patterns of people also change – and it is changing real fast in India.

The third important driver of organized retail is the country's demography – India is home to the largest and the youngest population in the world. India's 300 million-odd middle-class, the real consumers, is catching the attention of the world.

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TOTAL AND ORGANIZED RETAIL MARKET SIZE IN INIDA

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3. 2 SWOT ANALYSIS OF RETAIL INDUSTRY IN INDIA

Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centres, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof.

Strengths Huge population, increasing per-capita income and changing consumer

habits - all these developments have culminated in the booming of the retail sector in India.

Increasing per-capita income has led to the boom of retail sector in India. The changing consumer buying behavior and the increasing number of

shaopping malls and other format stores is another strength of the Indan retail industry.

The huge population and the diversified culture is also one factor for the growth of the sector.

A large young working population with median age of 24 years. The retail industry is providing employment generation. The assortment is getting better. People are exposed to different cultures

and they want to try different products and this has led to the introduction of variety of products in the induatry.

India retail industry is expanding itself most aggressively. By 2010, it is estimated that India may have 600 shopping malls.

The awareness and the acceptability about hre retail market is increasing. In the Indian retailing industry, food is the most dominating sector and is

growing at a rate of 9% annually.

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Weaknesses

Retail is still not a recognized industry in India. According to a study in 2006, total retail sales is Rs. 930,000 Crores, out of which the organized retail sales only of Rs. 3000 Crores.

The real estate sector is increasing the property’s prices and this is affecting the overall profits.

Because of the heavy initial investments required, break even is difficult to achieve and many of these players have not tasted success so far.

FDI is not allowed in Retail and the foreign players like Walmart, Carrefour are entering by joining hands with Indian retailers.

The lack of infrastructure and manpower is one of the challenges faced by organized retail in India. This sector lacks skilled and trained manpower.

The organised retail in India is facing stiff competition from the local kiranas and the wholeasalers. Consumers still prefer them as the better option for saving their pocket.

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Opportunities

The Indian retailing 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.

Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment.

The organised retail sector is expected to grow to US $ 70 billion by 2010. Indian retailers like Reliance Retail, Pantaloons etc. are strengthening the

retail sector. Reliance Retail, for instance, has chalked out a plan to roll out about 5,500

stores of all kinds in 800 cities, 85 logistics centres and 1,600 farm supply hubs.

AV Birla Group is looking at pumping in Rs 15,000-20,000 crore (Rs 150-200 billion) -- with an initial investment of Rs 5,000 crore (Rs 50 billion) in the next few years.

Many foreign retailers like Wal-Mart, Tesco are entering Indian retail industry.

The market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations.

A number of foreign brands including French Connection, Sanrio of Hello Kitty fame, Jimmy Choo, La Pearla and Calvin Klein among others have already lined up for permission to infuse foreign direct investment through the single-brand retail window.

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Threats

Retailing is a low-margin, high-volume, commodity business where profitability gets strained as competition intensifies. And if wrong choices are made regarding the location or the formatting of the store, woes betide the retailer.

Another threat is the vexingly high real estate prices, the loosely-knit distribution networks in India's hinterland.

The near-absence of any modern supply chain logistics, shortage of skilled personnel, and a regulatory system that resembles a patchy quilt more than anything else.

Availability of quality retail space will be a key determinant for the growth of the sector. With most Indian cities undergoing rapid urbanisation, spiralling rental costs has most retailers worried already.

The political intervention in this sector may hinder its groeth. As in the case of Reliance Fresh, its stores were closed down in Noida, UP because of Mayawati.

The competition from the unorganized retail is stiff. Customers have been shopping from the local stores and wholesalers, mainly in Food sector for decades and still have not accepted the organized retail completely.

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3.3 CATEGORY

The major categories in Reliance Fresh stores are:

Staples Processed Foods Fruits and Vegetables (FnV) Food and Beverages Dairy Personal Care (PC) House ware Cosmetics Home Care Confectionary

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Category-wise contribution in the sales of Relaince Fresh

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Sub-categories

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FOOD

PROCESSED FOOD

FRUITS & VEGETABLES

DAIRY FOOD &BEVERAGES

NON

VEGETERIAN

STAPLES

3.4 STAPLES

A. INTRODUCTION A staple food is a food that forms the basis of a traditional diet. Staple foods vary from place to place, but are typically inexpensive starchy foods of vegetable origin that are high in food energy (Calories) and carbohydrate and that can be stored for use throughout the year. The staple food of a specific cuisine may commonly be served as part of every meal. Most staple foods derive either from cereals such as wheat, barley, rye, maize, or rice, or starchy root vegetables such as potatoes, yams, taro, and cassava. Other staple foods include pulses (dried legumes) etc. In India, Rice and Pulses are most commonly eaten as cooked entire grains; wheat and some other cereal are milled into flour. In simple language, Staples are nothing but products that we use on a daily basis. These products are raw in nature. We need to cook staples to consume them, except dry fruits. Basic food products such as Rice, Wheat, Oils, Pulses (Dals) Spices, Salt, Sugar and Dry Fruits are grouped under one big umbrella called STAPLES.

Overview of Staples market: Staples Market Size - Rs.2,70,000 crores Staples business will exceed Rs.15,000 crores by 2010

Importance of Staples:• It is the largest business in foods as it consists of items that are consumed

in every meal.• In India, culture is diversified and so are the eating habits. So, there’s a

demand of huge variety in staples market.• Staples category is one of the sections that consumers can’t do without. So,

it can be sold in each and every market.• There’s a huge private label opportunity.

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40

Value of the staples sub-categories in market

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B. SUB-CATEGORIES OF STAPLES

1) Rice2) Pulses3) Wheat and Flour4) Salt and Spices5) Edible Oils6) Sugar7) Dry Fruits

1) RICE

Rice is a cereal foodstuff which forms an important part of the diet of many people worldwide. Rice is a staple for a large part of the world's human population, especially in tropical Latin America, and East, South and Southeast Asia, making it the second-most consumed cereal grain.[3] A traditional food plant in Africa, Rice has the potential to improve nutrition, boost food security, foster rural development and support sustainable landcare.[4] Rice provides more than one fifth of the calories consumed worldwide by humans.[5] In early 2008, some governments and retailers began rationing supplies of the grain due to fears of a global rice shortage.[6][7] Rice is the staple food for 65% of the total population in India. The Indian population was about 1 billion people in 2000 and is still growing at a high rate (1.7% per year). Although the country exports several varieties of rice, many scientists have expressed concern that current Indian rice production techniques cannot sustain the growing domestic population. India has a large number of rice dishes and many of them are very simple to prepare.

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Share of Major States in the Total Production of Rice

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15%

14%

13%

11%9%6%

5%

27%

West Bengal U.P A.P Punjab Tamilnadu Bihar Orissa Others

Classification of Rice:Rice is broadly classified into Basmati and Non-basmati. These two are further sub-divided into raw, par-boiled, boiled, flavored etc.

The quality is decided based on three parameters: Life- Longer the life better is the quality & hence higher price for same

rice when aged. Aroma- Varieties like Basmati, Jeerasar, Ambemohar, Cinor, etc. are

considered rice with aroma / scented or flavor Grain Length – Longer the grain – better the quality eg. Basmati Rice

2) WHEAT AND FLOUR

Wheat is the dominant grain of world commerce. It is easily transported and stored and it is used to produce a large variety of foods that include many kinds and types of breads, cakes, noodles, crackers, breakfast foods, biscuits, cookies, and confectionary items. Wheat is the staple food of millions of people. It is also an important part of the daily diet of many millions more. Only rice challenges wheat for the title of most important food grain in the world.

Wheat is a worldwide cultivated grass from the Levant area of the Middle East. Globally, after maize, wheat is the second most produced food among the cereal crops; rice ranks third. Wheat grain is a staple food used to make flour for leavened, flat and steamed breads; cookies, cakes, pasta, noodles and couscous; and for fermentation to make beer, alcohol, vodka or biofuel. Wheat is planted to a limited extent as a forage crop for livestock, and the straw can be used as fodder for livestock or as a construction material for roofing thatch.

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Production Scenario:

The world wheat market is enormous. Annual global wheat consumption is in excess of 550 million tonnes (20 billion bushels). Farmers of the world produce almost 20 times as much wheat as is produced in Canada to satisfy this growing appetite. Approximately two-thirds of the wheat produced in the world is used for human food and about one-sixth is used for livestock feed. Industrial uses, seed requirements, and post-harvest losses account for the remaining withdrawals from the world wheat granaries.

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Wheat - Different Classes for Different Uses• Hard Red Winter Wheat and Hard Red Spring Wheat

– Produce a high-grade flour used to make bread, hamburger buns and biscuits.

• Soft Wheat– Produces flour that is desirable for baked goods that have a tender,

flaky or crisp texture, like cakes, doughnuts, cookies and crackers.• White wheat

– Is a soft wheat that produces flour used for cereals, cookies and cakes • Durum

– Which contains more protein than any other class -- produces a coarse, golden amber product called semolina that is mixed with water to form a dough to make pasta products like spaghetti, noodles and macaroni.

Flour In India, the flour consumption is concentrated more on Atta or Wheat flour. The other flours used are maida, sooji, rice flour, ragi flour, besan, urad flour, jowar / bajra flour, wheat broken etc.

Varieties of Flour Maida is a by product of wheat which contains the bulk of endosperm and

the innermost wall. Ground into a very fine white powder, this is highly refined flour with all carbohydrate and very little of fibre, minerals and the vitamins.

Rava is the coarsely ground wheat product – with the fibre rich wall and the endosperm.

The Broken Wheat has the full grain broken coarsely into 5-8 pieces with no refinement.

Besan is Powdered Channa Dal – it is protein rich flour. Idly Rava (Boiled rice) for making the idly / dosa batter & also Upma. Upma Sooji – which is medium sized grain for making upma

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3) PULSES

Pulses are defined by the Food and Agricultural Organization of the United Nations (FAO) as annual leguminous crops yielding from one to twelve grains or seeds of variable size, shape and color within a pod. Pulses are used for food and animal feed.The term pulses, as used by the FAO, is reserved for crops harvested solely for the dry grain. This therefore excludes green beans and green peas, which are considered vegetable crops. Also excluded are crops that are mainly grown for oil extraction (oilseeds like soybeans and peanuts), and crops which are used exclusively for sowing (clovers, alfalfa). Pulses are important food crops due to their high protein and essential amino acid content. Like many leguminous crops, pulses play a key role in crop rotation due to their ability to fix nitrogen. Indian pulse market is very price sensitive market.

Production Scenario

World Scenarioo Dry Edible Beans account for 30% of world pulse tradeo Field Peas account for 40% of world pulse tradeo Canada is emerging as a major exporter in world

World Production Data

Pulse type Percentage of total output

Dry edible beans 33

Field peas 20

Chick Peas 13

Broad Beans 7

Lentils, Cowpeas, Pigeon peas 6

Others 21

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Indian Scenario

Share of Major States in the total Area under Pulses

Varieties Of Pulses & Their Uses Whole Pulses / Dals – The pulses / dals that are consumed in whole form.

e.g.. Channa, Rajma, Moong, Masoor, Groundnut, Urad, Lobia-chawli, etc. for making channa masala, rajma masala, etc.

Split Pulses / Dals – The Pulses / dals that are consumed in split form e.g. Toor Dal, Channa Dal, Urad Dal, Moong Dal, Bengal Fried Gram

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29%

21%16%

16%

6%6% 6%

M.P U.P Maharashtra Rajasthan Karnataka Gujarat Bihar

4) SPICES A spice is a dried seed, fruit, root, bark or vegetative substance used in nutritionally insignificant quantities as a food additive for the purpose of flavoring, and sometimes as a preservative by killing or preventing the growth of harmful bacteria[1]. Pungent or aromatic seasonings obtained from the Bark, Buds, Fruit, Roots, Seeds or Stems of various plants & trees. Herbs usually come from the leafy part of a plant. Spices add aroma, flavour, taste to foods and act as preservative. In the kitchen, spices are distinguished from herbs, which are leafy, green plant parts used for flavoring purposes. Herbs, such as basil or oregano, may be used fresh, and are commonly chopped into smaller pieces. Spices, however, are dried and often ground or grated into a powder. Small seeds, such as fennel and mustard seeds, are used both whole and in powder form.

Classification of Spices Whole Spices- Coriander, Chilies, Turmeric, Cumin, Black Pepper,

Mustard, Black Cardamom, Cinnamon, Tamarind, etc. Whole Spices – Powder- Red chilly powder, Coriander powder, Turmeric

powder, Black pepper powder Spice Masala / Blend- Chaat Masala, Channa Masala, Rajma Masala,

Sambar Masala, Rasam Masala, Biryani Masala, Ginger Garlic Paste, etc. Other Spices- Herbs e.g. Tej Patta (Bay Leaf)

Varieties Of Spices Fruit Spices – Cardamom, Paprika Bark Spices – Cinnamon, Leaf / Herbs Spices – Bay Leaf, Basil, Parsley, Oregano, Rosemary, Mint Flower Buds / Spices – Cloves, Saffron Root Spices – Ginger, Turmeric Seed - Nutmeg, Cumin, Black Pepper, Fenugreek, Mustard

Spices overview in India•India Largest Producer & Major Exporter Of Spices •India produces around 2.5 million tonnes of different spices •Valued at approximately US $ 3 billion and holds the premier position in

the world•Climates - From tropical to sub-tropical to temperate-almost all spices are

grown in this country.

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•Produced by all of the 25 states and seven union territories of India, at least one spice is grown in abundance.

•Spices exports are consistently moving up during the last one decade thanks to the activities of the Spices Board.

5) EDIBLE OILS• Oil is an essential requirement of body system as it provides Calories.• Oils are essential cooking medium, used for Frying, Deep Frying, Salad

Dressing, Seasoning, etc. • Oils are also called as “Edible oils”, further classified as:– Filtered Oil– Refined Oil

Difference Of Filtered and Refined Oil:

Filtered Oil- Raw oil is obtained simply through mechanical pressing. The solids are filtered to prepare filtered oil. For example: groundnut oil, mustard oil, til (gingely) oil, coconut oil & olive oil

Refined Oil - Refined oil is freed from impurities by giving various treatments to raw oil. Refined oil is virtually tasteless and odourless & colourless. For example: sunflower oil, Soya oil, Kardi oil, Blend oil, Rice Bran oil and Palm Oil.

According to the USDA, the total world consumption of major vegetable oils in 2000 was:

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Oil source

World consumption(million tons)

Notes

Soybean 26.0Accounts for about half of worldwide edible oil production.

Palm 23.3The most widely produced tropical oil. Also used to make biofuel.

Rapeseed 13.1One of the most widely used cooking oils, Canola is a (trademarked) variety (cultivar) of rapeseed.

Sunflower seed

8.6 Common cooking oil, also used to make biodiesel.

Peanut 4.2 Peanut oil Mild-flavored cooking oil.

Cottonseed 3.6A major food oil, often used in industrial food processing.

Palm Kernel

2.7 From the seed of the African palm tree

Olive 2.5Used in cooking, cosmetics, soaps and as a fuel for traditional oil lamps

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As shown in the below given graph, world oilseed production has been increasing

5) SUGAR Sugar is a class of edible crystalline substances including sucrose, lactose, and fructose. Common table sugar (sucrose) is made from sugar beets or sugar cane. Human taste buds interpret its flavor as sweet. Sugar as a basic food carbohydrate primarily comes from sugar cane and from sugar beet, but also appears in fruit, honey, sorghum, sugar maple (in maple syrup), and in many other sources.

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World Scenario

World Sugar Balance

(m tonne, raw value) 2007/08 2006/07 Change

in mt in %

Production 170.308 166.030 4.278 2.58

Consumption 159.169 154.985 4.184 2.70

Surplus / Deficit 11.139 11.045

Import demand 45.496 46.070 -0.574 -1.25

Export availability 49.768 46.077 3.691 8.01

End Stocks 74.716 67.849 6.867 10.12

Stocks/Consumption ratio in%

46.94 43.78

Indian scenario

India has been known as the original home of sugar and sugarcane. Indian mythology supports the above fact as it contains legends showing the origin of sugarcane. India is the second largest producer of sugarcane next to Brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tonnes per hectare.

India is the largest single producer of sugar including traditional cane sugar sweeteners, khandsari and Gur equivalent to 26 million tonnes raw value followed by Brazil in the second place at 18.5 million tonnes. Even in respect of white crystal sugar, India has ranked No.1 position in 7 out of last 10 years.

Traditional sweeteners Gur & Khandsari are consumed mostly by the rural population in India. In the early 1930’s nearly 2/3rd of sugarcane production was utilised for production of alternate sweeteners, Gur & Khandsari. With better standard of living and higher incomes, the sweetener demand has shifted to white sugar. Currently, about 1/3rd sugarcane production is utilised by the Gur & Khandsari sectors. Being in the small scale sector, these two sectors are completely free from controls and taxes which are applicable to the sugar sector.

The advent of modern sugar processing industry in India began in 1930 with grant of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in the year 1930 - 31 to 135 in the year 1935-36 and the production during the same

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period increased from 1.20 lakh tonnes to 9.34 lakh tonnes under the dynamic leadership of the private sector.

Market Size : Rs. 50,000 Crores Demand : Sugar - 18 million tons (growing @4%/year)

Jaggery / Khandsari – 9 million tons (growing @2%/year) No. of Sugar Mills – 566; Operational in current year – 453 2/3rd Sugar produced in 3 states (U.P., Maharashtra, Tamilnadu) Sugarcane Land 4.15 Million Hectares; Land Productivity 66 tons / Hectare (best in India

90 tons / Hectare) Livelihood to 5 Crores people 280 million tons Sugarcane 180 million tons to Sugar 11 million tons to Khandsari; 59 million tons to Jaggery; 30 million tons for

Seed

Types of Sugar:

Granulated Sugar - There are many different types of granulated sugar. Most of these are used only by food processors and professional bakers and are not available in the supermarket. The types of granulated sugars differ in crystal size. Each crystal size provides unique functional characteristics that make the sugar appropriate for the food processor's special need.

"Regular" Sugar, Extra Fine or Fine Sugar- "Regular" sugar, as it is known to consumers, is the sugar found in every home's sugar bowl and most commonly used in home food preparation. It is the white sugar called for in most cookbook recipes. The food processing industry describes "regular" sugar as extra fine or fine sugar. It is the sugar most used by food processors because of its fine crystals that are ideal for bulk handling and are not susceptible to caking.

Fruit Sugar- Fruit sugar is slightly finer than "regular" sugar and is used in dry mixes such as gelatin desserts, pudding mixes and drink mixes. Fruit sugar has a more uniform crystal size than "regular" sugar. The uniformity of crystal size prevents separation or settling of smaller crystals to the bottom of the box, an important quality in dry mixes and drink mixes.

Bakers Special- Bakers Specials crystal size is even finer than that of fruit sugar. As its name suggests, it was developed specially for the baking

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industry. Bakers Special is used for sugaring doughnuts and cookies as well as in some commercial cakes to produce fine crumb texture.

Superfine, Ultrafine, or Bar Sugar- This sugar's crystal size is the finest of all the types of granulated sugar. It is ideal for extra fine textured cakes and meringues, as well as for sweetening fruits and iced-drinks since it dissolves easily. In England, a sugar very similar to superfine sugar is known as caster or castor, named after the type of shaker in which it is often packaged.

Confectioners ( Powdered ) Sugar- This sugar is granulated sugar ground to

a smooth powder and then sifted. It contains about 3% corn starch to prevent caking. Confectioners sugar is available in three grades ground to different degrees of fineness. The confectioners sugar available in supermarkets is the finest of the three and is used in icings, confections and whipping cream. The other two types of powdered sugar are used by industrial bakers.

Coarse Sugar- The crystal size of coarse sugar is larger than that of "regular" sugar. Coarse sugar is normally processed from the purest sugar liquor. This processing method makes coarse sugar highly resistant to color change or Inversion (natural breakdown to fructose and glucose) at high temperatures. These characteristics are important in making fondants, confections and liquors.

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6) SALT Salt is a dietary mineral essential for animal life, composed primarily of sodium chloride. Salt flavor is one of the basic tastes, and salt is the most popular food seasoning. Salt is also an important preservative. Salt for human consumption is produced in different forms: unrefined salt (such as sea salt), refined salt (table salt), and iodized salt. It is a crystalline solid, white, pale pink or light grey in color, normally obtained from sea water or rock deposits. Edible rock salts may be slightly greyish in color due to this mineral content.

World Scenario(Million metric tons, includes salt in brine)

Country 2006 2005 2004 2003 2002 2001 2000

United States 46.0 45.1 46.5 43.7 43.9 44.8 45.6

China 48.0 44.6 37.1 32.4 35.0 31.0 31.3

Germany 18.6 18.7 16.0 15.7 15.7 15.7 15.7

India 16.0 15.5 15.0 15.0 14.8 14.5 14.5

Canada 15.0 14.5 14.1 13.3 13.0 12.5 11.9

Australia 12.4 12.4 11.2 9.8 10.0 9.5 8.8

France 7.0 7.0 7.0 7.0 7.1 7.0 7.0

Brazil 7.3 6.7 6.5 6.1 7.0 6.0 6.0

United Kingdom 5.8 5.8 5.8 5.8 5.8 5.8 5.8

All Other 55.4 58.5 40.6 53.2 64.5 69.3 58.5

Totals 240.0 238.0 208.0 210.0 225.5 225.0 214.0

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Indian Scenario I

India is the fourth largest country in salt production, with U.S. and China contending for the first place and Germany being the second. India produces 16 million tonnes yearly. Households consume 8 million tonnes and the Industry consumption is 6 million tonnes and the rest is exported earning 2000 crores. Among the 11 salt making states, only three states, Gujarat, Tamilnadu(mainly because of Tuticorin) and Rajasthan(mainly because of Sambhar Lake) produce surplus salt than they consume. Gujarat produces 11 million tonnes or 71%, Tamilnadu makes 16%, Rajasthan makes 9% and the rest of other states make 4%. Classification of Salts

• Table Salt – A fine grained refined salt with additives free flowing, is mainly used in

cooking and as natural consumption. • Iodized salt

– Table salt with added iodine– Particularly important in areas that lack natural iodine– Important for preventing hyperthyroidism (Goiter).

• Crystal Salt – Sharp in nature, Highly Salty

• Rock Salt – Sold in large crystals, rock salt has a grayish hue because it is

unrefined.– Makes a great bed for serving oyster and clams or combine it with ice

to make ice cream in hand cranked ice cream makers. – Not recommended for cooking and table.

• Sea Salt – Available in both fine and coarse grains– Comes at a higher cost than table salt– Made from evaporated sea water. – Tends to include several naturally present trace minerals such as iodine,

magnesium and potassium, which give sea salt a fresher, lighter flavor than standard table salt.

National Brands

Brand Company57

• Tata Salt Tata Chemicals ltd• Annapurna Hindustan Lever Ltd• Nirma Shudh Nirma Chemicals ltd• Captain Cook Hindustan Lever Ltd• Ashirvaad ITC Foods Ltd

7) DRY FRUITS Dried fruit is fruit that has been dried, either naturally or through use of a machine, such as a food dehydrator. Raisins, almonds, cashewnuts, walnuts, apricots, prunes, and dates are examples of popular dried fruits. Drying preserves fruit, even in the absence of refrigeration, and significantly lengthens its shelf life. When fresh fruit is unavailable, impractical, or out of season, dried fruit can provide an alternative. It is often added to baking mixes and breakfast cereals.

Classifications Of Dry Fruits Whole Dry Fruits – Cashew, Almond, Kishmish, Pista, Walnuts, Figs,

Dates, Coconut, Melon seed, Water melon seeds Split Dry Fruits – Cashew nuts, Badam, Pista, Akhrot, Kajoor in Small

pieces Roasted & Salted Dry Fruits – Cashew, Badam, Pista

Dry Fruits KVI’s South India - Cashews, Pista Salted, Almonds California, Raisins Indian,

dates, Walnut North India - Cashews, Pista Salted, Almonds, Raisins, Walnuts, Pista Green,

Other Dry Fruits (Afghan)

C. STAPLES IN RELIANCE FRESH

The staples category in Reliance Fresh stores on an average has 25-30% contribution in sales of the stores. In Reliance Fresh stores, except oils, the other sub-categories have many SKUs (stock keeping units) i.e., a product, produced under reliance’s own labels-Value and Select. Oils have the major contribution in the sales of staples and Fortune Soya is the highest selling SKU.

RICE

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In rice, many varieties like parmal, dubar, tibar, sella, ponni, pulav etc. are available. In other brands, India Gate, Kohinoor, Noor Jahan, Hello can be found in the store.

Details of Rice in RR Matured Scented Rice - Rice like Basmati which are used to prepare

special rice dishes Matured Rice- Rice like Sona Masuri, Parmal & Ponni which are Old

rice, gives more quantity after cooking Standard- Rice like Sona Masuri, Parmal, Ponni, Idly Rice, Pongal Rice,

etc., Par Boiled / Boiled Rice- Regular Par- Boiled & Boiled rice eg., Dosa,

Idly rice, Puttu Rice, etc.

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Sample – Reliance’s Own Label SKU’s

Brick Item descriptionPUFFED RICE RELIANCE PUFFED RICE 200 G BOILED RICE RELIANCE SELECT IDLY RICE 1KG

BOILED RICERELIANCE PONNI BOILED RICE 1KG, 5KG

BOILED RICERELIANCE RED BOILED RICE 1KG, 5KG

RAW RICERELIANCE SELECT SONA MASURI (MAT) 1KG , 5KG

RAW RICERELIANCE SELECT SONA MASURI (STD.) 1KG, 5KG, 25KG

RAW RICERELIANCE SELECT SONA MASURI (MAT) 1 KG

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WHEAT AND FLOURFlour has Select atta, sooji, maida etc. and Aashirvaad, Shakti Bhog,

rajdhani, Raama Bhoj are other brands available.

Reliance’s Own Label SKU’s

Brick Item description

WHEATRELIANCE SELECT SHARBATI WHEAT 2KG

WHEATRELIANCE SELECT LOKWAN WHEAT 5KG

WHEATRELIANCE SELECT SHARBATI WHEAT 5KG

MAIDA RELIANCE SELECT MAIDA 500 GM WHEAT RELIANCE BROKEN WHEAT 1KG RAVA RELIANCE SELECT IDLY RAWA 1KG MAIDA RELIANCE SELECT MAIDA 1KG RAVA RELIANCE SELECT SOOJI RAWA 1KG

And there’s Reliance Select Atta which is a good selling SKU.

PULSESIn pulses, varieties like chana dal, arhar dal, moong chilka, mooong, lobia,

kabuli chana, rajma chitra etc. are available. In few stores, Divine organic pulses are available

Reliance’s Own Label SKU’s

Brick Item descriptionOTHER DALS

RELIANCE BLACK EYED BEANS 200 G

OTHER DALS

RELIANCE SELECT RED RAJMA 200 G

OTHER DALS RELIANCE SOYA BEANS 200 GURAD RELIANCE URAD DAL CHILKA 2OOG

CHANARELIANCE SELECT CHANNA BROWN 500G

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CHANARELIANCE CHANNA BROWN SMALL 500 G

CHANARELIANCE SELECT CHANNA DAL 500 G

CHANA RELIANCE CHANNA DAL 500 GOTHER DALS

RELIANCE SELECT GREEN PEAS 500 G

CHANARELIANCE SELECT KABULI CHANA 500G

CHANARELIANCE KABULI CHANA SMALL 500 G

OTHER DALS

RELIANCE SELECT MASOOR WHOLE 500 G

MOONGRELIANCE SELECT MOONG DAL 500 GM

SPICESSpices have both Value and Select label SKUs. In other brands, MDH,

Everest, PRS, Sahiba are few to name.

EDIBLE OILSOils have major brands like Fortune, Saffola, Sundrop, Nature Fresh,

Nutrela, Dhara etc.

SUGAR

Reliance’s Own label SKUs

Brick Item description

JAGGERYRELIANCE JAGGERY VALUE 500 G

JAGGERYRELIANCE JAGGERY VALUE 1000 G

SUGARRELIANCE SELECT SUGAR 1KG and 5KG

SUGARRELIANCE VALUE SUGAR 1KG and 5KG

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SALTIn Salt, Tata, Saffola along with Select label.

DRY FRUITS Dry Fruits are available only in the private labels Value and Select.

Californian Prunes and some roasted varieties are also available.

LOOSEIn loose, rice varieties like parmal, duabr, tibar, sella etc., pulses like toor

dal, chana dal, rajma chitra, kabuli channa nad sugar are available.

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3.5 SURVEY FOR STUDYING CONSUMER BEHAVIOR AND COMPETITION

3.5.1 INTRODUCTION

Delhi and NCR are divided into four clusters- the North and Central cluster, the East cluster, the South and Faridabad cluster and the West and Gurgaon cluster. For the survey on consumer behavior, the North and Central and the East clusters were covered. The survey helped understand consumers’ preferences for different SKUs and satisfaction level for Reliance Fresh stores and also where it stands in market as compared to its competitors in customers’ view. The major competitors are KBs Fair Price, Big Apple, more., Sabka Bazaar, Spencers’, 6 Ten, Big Bazaar, Vishal Mega Mart. The recommendations for both the cluster are common, so given at the end.

OBJECTIVES: To determine the satisfaction levels of consumers with Reliance Fresh

stores’ service and other parameters like SKU’s quality, availability, the whole assortment and pricing

To find the KVIs in all the sub-categories. To study preferences of consumers for private label over other brands. To find any new SKUs that consumers want the stores to have. To study the competition from both organized and unorganized retailing.

METHODOLGY: Primary data was collected. Questionnaire was designed. Respondents were selected randomly. The survey was done for both the clusters separately.

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SAMPLING PLAN: Sampling unit: Customers at Reliance Fresh stores were selected Sample size: 30 customers Sampling procedure: Customers were selected randomly and were given

questionnaire or just asked the questions.

3.5.2 THE NORTH AND CENTRAL CLUSTER No. of stores covered: 14 Findings and Analyses:

1) KVIs in all sub-categories and competition o Rice- In packed, India Gate and Lal Quila are the most selling brands

(around 35%) and private label is preferred by 15% and loose parmal and tibar are the most bought varieties. But more than 50% of consumers buy rice from Naya Bazaar and Khari Baoli as there are more varieties at lesser price.

o Sugar- Around 40% buy Value sugar and 30% like loose sugar’s quality.o Pulses- Around 30% buy packed pulses, Value more than Select and 20%

prefer loose SKUs. In this cluster, around 40% customers still prefer their local grocery stores or the wholesale market.

o Flour- Around 40% use Aashirvaad and Shakti Bhog and private label is used by 20%. But a large segment still prefers mill’s flour like Rapid, Dinesh.

o Edible oil- Around 45% use Fortune Soyabean oil, followed by Nutrela Soyyum, Nature Fresh. In mustard oil, fortune is the most selling brand. Saffola and Sundrop are used mainly in A catchment or by health conscious people as they are low cholesterol oils.

o Spices- Around 40% use MDH, followed by Everest. Private label are used by around 15% but in this cluster, majority of customers prefer the local grocery stores own label packed spices like Sardaara di Hatti (Pitampura) and Khari Baoli and Naya Bazaar market.

o Salt- Around 55% use Tata Salt and private label is used by only 15% consumers.

o Dry Fruits- Consumers prefer the nearby grocery stores and the wholesale markets. A major competitor is Sardaara di Hatti (Pitampura) and the Naya Bazaar market. A very small segment (less than 5%) buy private label SKUs.

2) Quality

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o In packed, there are no complaints about quality but in loose, around 10% are not satisfied with the quality of Parmal.

o Only 10% do not like loose sugar and no complaints against packed.o In loose, Arhar, Kabuli Chana’s quality was not satisfactory.o Around 5% of the customers who used Reliance Select Atta did not like its

quality and the rest are satisfied.o There are no complaints about the quality of spices and salt.o Customers are satisfied with the quality of dry fruits.

3) Assortment and Availability o Overall assortment is fine but few more varieties in loose rice and larger

packs of major spices should be available.o All the SKUs are not available all the time.

4) Pricing o Around 25% of the customers feel that shopping for their whole month

grocery from Reliance Fresh would cost them Rs.100-150/- more than from a wholesale market.

o In organized, KBs Fair Price, 6 Ten are giving competitiono The prices of oils, dry fruits, pulses are high.o Around 35% of the customers are satisfied with the prices.

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3.5.3 THE EAST CLUSTER The East cluster is very much diversified. At one end, it has catchment A stores like the Preet Vihar, Krishna Nagar and then, there are stores in Zaffarabad, Maujpur Gondha, Seemapuri etc., which are typical C catchment stores.

No. of stores covered: 16 Findings and Analyses:

1) KVIs in all sub-categories and competition :o Rice- In packed, India Gate, Lal Quila and Kohinoor are the most

preferred brand (around 35%) and private label is preferred by 20% and loose parmal and tibar are the most bought varieties. In Zaffarabad, Seemapuri and few other stores, there’s a huge demand of Sella rice (around 45%). The Jheel wholesale market and KBs Fair Price and 6 Ten give strong competition due to their lower prices.

o Sugar- Around 45% like loose sugar’s quality, 30% buy Value sugar and 15% like Select sugar.

o Pulses- Around 30% buy packed pulses, Value more than Select and 40% prefer loose SKUs. In this cluster, around 30% customers still prefer their local grocery stores or the wholesale market.

o Flour- Around 40% use Aashirvaad and Shakti Bhog and private label is used by 35%. Raama Bhoj is also used by a smaller segment (around 5%).

o Edible oil- Around 45% use Fortune Soyabean oil, followed by Nutrela Soyyum, Nature Fresh. In mustard oil, fortune is the most selling brand, followed by Nature Fresh and P Mark. Saffola and Sundrop are used mainly in catchment A stores or by health conscious people.

o Spices- Around 40% use MDH, followed by Everest. Private label are used by around 15% but in this cluster, majority of customers prefer the local grocery stores in their areas like Zaffarabd, Seemapuri, Laxmi Nagar etc. and the wholesale market like in Jheel

o Salt- Around 60% use Tata Salt and private label is used by only 15% consumers. Saffola Lite is used by 10% respondents.

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o Dry Fruits- Consumers prefer the nearby grocery stores and the wholesale markets. A very small segment (less than 8%) buy private label SKUs.

2) Quality o In packed, there are no complaints about quality but in loose, around 25%

are not satisfied with the quality of Parmal.o Around 15% do not like loose sugar and no complaints against packed.o In loose, Arhar, Kabuli Chana’s quality was not satisfactory.o Around 5% of the customers who used Reliance Select Atta did not like its

quality and the rest are satisfied.o There are no complaints about the quality of spices and salt.o Customers are satisfied with the quality of dry fruits.

3) Assortment and Availability o Overall assortment is fine but few more varieties in loose rice and larger

packs of major spices should be available.o All the SKUs are not available all the time.

4) Pricing o Around 28% of the customers feel that shopping for their whole month

grocery from Reliance Fresh would cost them Rs.100-150/- more than from a wholesale market.

o In organized, 6 Ten and KBs, Big Bazaar are the major competitors.o The prices of oils, dry fruits, pulses are high.o Around 28% of the customers are satisfied with the prices.

Conclusions:1) In the East cluster, both the unorganized and organized sectors are giving

competition.2) Wholesale markets like Jheel and the major markets of Laxmi Nagar are

giving strong competition in unorganized retail.3) In organized retailing, KBs Fair Price, Big Apple, Big Bazaar, 6 Ten are

giving major competition.4) Though 6 Ten has lesser variety but its prices are competitive.5) Majority find our prices higher than the local grocery stores and the

wholesale market.6) Customers are satisfied with the assortment. Earlier, kutti mirch was not in

stores but now PRS label has been introduced. Jeera powder and coriander powder are also in much demand but not available in stores.

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7) Customers are satisfied with the quality of most of the private label SKUs.8) Customers want better quality in loose SKUs.9) Loose parmal, kabuli chana and toor dal do not have good quality.10) The customers want more attractive offers in staples category.11) Private label’s demand is increasing.12) Stores’ service not much satisfactory as per expectations but can be

improved by appointing more efficient CSAs.13) Common problem while billing, mainly at peak hours.14) Customers want the oil bay to be cleaner as they expect a high quality

service in Reliance Fresh stores.15) All SKUs are not available all the time. Major problem with besan, sooji,

Fortune soya 5l jar etc.16) Customers are not aware of the difference between the quality of the loose

and packed SKUs.17) Chander Nagar store, Maujpur Gondha, Brahmpuri stores have good

mechandising. In loose, sugar is the highest selling SKU.

3.5.4 RECOMMENDATIONS

1) Planogram should be strictly adhered to in every store.2) Store managers should check daily for stock levels and most important

for KVIs3) More varieties in loose should be introduced, especially rice.4) CSAs should take care of merchandising and check if the SKUs are

arranged properly in shelves.5) A dedicated CSA for staples section should be made mandatory in all the

stores.6) SELs should be changed regularly as old SELs misguide the customers.7) The store manager should brief the staff about the major promos at the

beginning of promo cycle.8) All the promos should be properly executed and they should be put up in

both Hindi and English.9) Announcements should be made about the major promos in the store.10) Attractive posters can be put up at entrance and outside the store.11) If a particular promo’s stock is not available, then it should not be

executed and the store manager should inform about it.12) In loose section, the prices should be there on each bin rather than

making a list. It confuses the customers.

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13) In flour palette, all the SKUs should be numbered and the list should be in Hindi having the entire SKUs name along with their number.

14) CSAs should check for mixing of the loose SKUs, for example, pulses in rice bin etc. It should be done immediately.

15) More attractive promos should be introduced as the competition is very wide in this cluster.

16) Lal Quila and Kohinoor Basmati rice brands have good demand. They should be introduced in A catchment stores.

17) Large packs of dry fruits should be removed.18) 500g packs of CTC (spices) MBQs should be raised.19) Brands of lower prices for 5l Mustard oil should be introduced.20) Fortune Soya 5l and 15l stock should be available in the stores,

especially in the beginning of the month.21) All POS should be made functional in all the stores to improve the

billing process.

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3.5.5 PRESENTATION OF DATA ANALYSIS OF BOTH THE CLUSTERS

The data analysis is done sub-category wise and three aspects are covered foe each sub-category: Brands preferred by consumer Type of market (organized or unorganized i.e., wholesale or local grocery

store)

1) EDIBLE OILS

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72

73

2) RICE

74

75

3) PULSES

76

77

4) WHEAT AND FLOUR

78

79

5) SPICES

6) SALT80

81

82

7) DRY FRUITS

83

84

8) SUGAR

85

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4 PRICE BENCHMARKING

4.1 INTRODUCTION

In price benchmarking, KVIs and then the major competitors in the state are selected and the price of each SKU in each competitor’s store is obtained. Then, as per competitor’s price and considering the margin on that particular SKU, its price is decided. The price benchmarking process is explained as follows:

In the beginning, SKUs to be classified based on consumer behavior for each city

Category A: Known Value Items- Crowd Pullers

• Basic consumption items – customers know the market price• Contributing 25-30% of staples sales• To be priced lower than the competition• To be monitored and benchmarked every week (against similar SKUs

in identified competitors)• KVI Selling Price = Wholesale rate + repacking cost + logistics charges

+ 5-10% margin (depending on category need)• Matching the lowest priced competitor after State Head’s approval in

case above formula doesn’t give most competitive price• E.g. Sugar, CTC (Spices), Pulses, local rice varieties

Category B: Major staples items except Cat A

• Customers have a rough idea about the price• To be priced at par with competition• To be monitored and benchmarked every fortnight• Contributing 60-65% of staples sales• Selling price= Cost + targeted Margin• Simultaneously, to be perceptibly lower than organized retail stores• E.g. Rest of pulses, Few Oils

Category C: Others

• To be priced on cost plus basis87

• To be monitored every month (correction if required)• Contributing 10% of staples sales• Selling price= Cost + targeted Margin• E.g. Blended spices, Dry fruits

Zone based Pricing :

To deliver better margin and also to ensure competitive pricing, stores are classified under two zones (A and B).• Zone A – The competition is primarily modern formats & catchment is

Section A and B population• Zone B – The competition is primarily Wholesale / Semi-wholesale /

Local retailer & Catchment is Section B and C population Differential Pricing between two zones will be adopted only for Top 7

SKUs of Category A SKUs based on the competition

Price Benchmarking Process:

Benchmarking is done on a weekly basis The competitive stores are selected once and if a new store comes in the

market then can be added. In case the SKU is on promotion in competition stores, the details of the

promotion to be captured in the report. The State merchandizing team to circulate price benchmarking report in

standard format by every Tuesday to staples product heads and State Fresh head.

Staples product heads to discuss with state merchandising team and confirm price changes by Wednesday evening.

State merchandising team to update the price in SAP by Thursday so that the price is effective at store by Friday.

The benchmarking process have been advanced by one day to ensure any price issue (system or otherwise) is addressed within a day so that weekend sale is not affected.

Importance of Benchmarking:

Benchmarking gives a deeper and clearer idea about the market. Having knowledge about competitor’s prices help decide prices for own

stores considering the competition and margin. It provides measures to improve and sustain in market.

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As the competition is increasing, so benchmarking should be done to survive in the market by being competitive in pricing, quality etc.

4.2 ACTIVITYOBJECTIVE:

To price benchmark the KVIs of the various sub-categories, which would help decide their prices considering competitor’s prices and own margin.

METHODOLOGY:

The competitors in the organized retailing were selected and benchmarking was done in every two weeks. One of the benchmarking reports is given in Appendix 2.

The price benchmarking was done on 24th May, 2nd June and 18th June.

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4.3 FINDING AND ANALYSIS:

The comparative analysis of the prices of the various SKUs sub-category wise is given as follows:

EDIBLE OILS

90

SUGAR

91

FLOUR

92

LOOSE

93

RAJMA AND CHANA

PACKED DALS

CONCLUSIONS:94

1) As was found during benchmarking the CSAs in Reliance Fresh stores did not know the prices of the KVIs.

2) Proper SELS were not there.3) We have competitive price in most of the SKUs.4) 6 Ten and KBs Fair Price are giving competition in pricing.5) Reliance Fresh stores’ assortment is satisfactory.6) Many competitors’ stores do not have Nutrela Soyyum oil.7) Packed Parmal and Dubar are available in very few stores.8) In loose, prices are higher except for sugar. 9) The price of Fortune Soya oil 5l jar is higher than that of most of the stores.

4.4 RECOMMENDATIONS:1) CSAs should know the prices of the KVIs.2) Benchmarking can be done for some other variety in rice.3) In loose, rice SKUs can be benchmarked for pricing.4) Price benchmarking can be done for major wholesale market and the local

grocery store of a particular area to have a deeper idea.5) In loose, along with the price, quality benchmarking can also be done just

through visual observation.

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5 ASSORTMENT AND PLANOGRAMMING

OBJECTIVE: To study the assortment and planogramming processes.

ASSORTMENTAssortment can be defined as the starting point for optimum use of store and shelf space thereby determining the optimal product offering that achieves target consumer fulfillment and enhanced business results for retailers and suppliers. Assortment is finalized after the following three processes are carried out.

1) Catchment study:A study of the store’s catchment should be done. This helps in the assortment and thus becomes easier to decide which SKUs should be kept in the store. For Reliance Fresh stores, three types of catchments have been identified.

Catchment A - The store is in an area which has majority of the customers of high income group and the competition is moderate. In such catchment, premium SKUs’ MBQ are generally kept high.

Catchment B - The store is in a middle class dominated area and with a fair competition. A high class area can also be included in this catchment if the competition is very strong, for example, Rani Bagh is a high income group area but the store is surrounded by all three types of competitors- organised, wholesaler and local grocery stores.

Catchment C - The store is in an area where the majority of the population is of lower middle class group and the competition is also strong.

It is not necessary that a Catchment A would have a large size store and a Catchment C store can have a large size store.

2) Assortment: After catchment’s study, the assortment is finalized for the store and it depends on two factors- catchment and the size of the store. In a catchment A large-sized store, along with premium SKUs, other can also be kept as the

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store would have enough space. But, the premium SKUs’ (like Saffola Gold, India Gate Classic) MBQ should be high. But in a catchment A small-sized store only the KVIs and the premium SKUs should be kept. The small space should be utilized in best way possible. In a Catchment C large-sized store, the core and regular SKUs’ MBQ should be high and premium SKUs can be kept but with low MBQ. But in a small-sized store, the premium SKUs like Olive Oil should not be kept. And then based on the number of bays allocated to the category, the assortment is decided upon.

3) Store Manager’s output: The store manager should conduct a kitchen audit of the area. Kitchen audit means to study the demographic pattern of the area. India has a much diversified culture. People from different regions have different eating habits and thus this makes this audit necessary. Some areas may be dominated by a particular region people and thus in that store, the assortment should be according to the population of that area. For example, some areas in Delhi are dominated by Punjabis, so in such areas rajma, kabuli chana, blended spices variety should be kept. Kitchen audit helps in specifying and ultimately finalizing the assortment.

PLANOGRAMMING Planogramming is a method of inventory control and merchandise display that allows a retailer to maintain shelf inventory for maximum efficiency. A planogram is prepared after the assortment is finalized for that particular store. And for an already existing store, refit planogram is made. If a particular SKU is not in the POG and it has to be kept in the store then a label saying NOP (Not in Plano) is put.

Planogram- A planogarm is a schematic drawing of fixtures that illustrate product placement. It is also known as POG, P-O-G, Plan-o-gram.

Merchandise Planning- it is a systematic approach. It is aimed at maximizing return on investment, through planning sales and inventory in order to increase profitability. It does this by maximizing sales potential and maximizing losses from mark-downs and stock-outs.

Philosophy of a good planogram: Must make shopping easier for the consumer. This must extend to the flow of sub-category as well. Must promote impulse trials and migration. Must be dynamic and should represent buying behavior of the consumer.

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Top Sheet The top sheet shows the bricks that are to be assigned to each shelf. It is within this that the SKUs are to be aligned in the POG. It is the skeleton of the POG.

Plano guidelines Study the store layout and customer circulation before making the POG Visualize the bays Use top sheets Allocate shelves by bricks Pack the shelves- go for stacking (horizontal or vertical) Adjust shelf height to maximize space utilization.

POG rules for Staples category1) Items which cannot be placed on the same or adjacent shelf• Oils + Flours• Spices + Dry fruits (at least 2 bays difference)

2) Items which should preferably be mixed because of space constraints• Spices/Salt• Dry Fruits/Sugar

3) Adjacency Sugar + dry fruits (in same bay) Dry Fruits and spices will be at the two ends of the staples category.

Dry Fruits OR Spices will be nearest to cash till All cereals in adjacent shelves Spices + Oil in adjacent shelves

4) Eyelevel placement/visibility provided to following categories/SKUs: Spices Dry Fruits Basmati Specially flours

5) Bottom shelf occupied by HIGHER WEIGHT FACTOR SKUs Salt Sugar

6) Private labels1) Eyelevel

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2) Next to brand leader3) Equal facing to top seller

7) Items with similar weight factor should be placed on the same shelf

Making a POG The concept team allocates bays to all the categories. A fixture plan having the category-wise bay allocation is provided Then, the category team makes the POG for the allocated bays. For staples, minimum 10 bays have to be allocated. If the store is very

small, then lesser number bays can be given. In customer flow, oil bay should come first as they have the major

contribution and when shopping for whole month grocery, customer goes there first.

In an oil bay, the premium SKUs (Saffola gold, Olive oil) are kept in the first bay, then the popular oils like Fortune Soya oil, followed by Mustard oil.

The promo SKUs are kept in the end cap. Bulk packs of rice and flour are stacked on palettes.

Steps in making a POG: Assortment to be made for the city (larger store)

Space allocation to be ascertained from the layout

Assortment to be made for the store Make the Top Sheet

Set the MBQ

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Make the POG in Excel Sheet

Key Elements of a POG Article Code- bar code given by Relaince Fresh EAN code- product code given by the manufacturer SKU description Depth- No. of packs from front to the back of the shelf. Facings (horizontal)- No. of times a SKU is kept next to each other

horizontally facing the customer. Stacking (vertical) - No. of times a SKU is kept one above the other in

vertical position. MBQ- total number of the packs of the SKU kept in the shelf

Sample top sheet for oils

Bay 4 bay 3 Bay 2 Bay1Low Priced Oil Popular Oil Popular Oil premium OilOther oils Sunflower/Soya/GN Sunflower Olive/Blended

Shelf 5 Bottles/Pet

RICE BRAN/gingelly 0.2/0.5/1L

OIL PROMO SHELVES

OIL PROMO SHELVES Olive oil

Shelf 4 Pouches Mustard 1L Sunflower 1L

Sunflower 1L pet

Saffola/Sundrop 1L

Shelf 3 Pouches Vanaspati 0.5.1L Soya 1L

Sunflower 1L pet

Saffola/Sundrop 1L/ 2L

Shelf 2 Pouches/Rigids

Cotton seed/Mustard 5L Groundnut 1L

Sunflower 1L/2L

Saffola/Sundrop 5L

Shelf 1 Large packs Rice Bran/Mustard 5L

Soya/Groundnut 5L Sunflower 5L

Saffola/Sundrop 5L

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Sample POG for Popular Oils

BAY ID/Desc

Article No. EAN Code SKU Name

Shelf No. Depth

Facing- horizontal Stacking

Shelf MBQ

top-top MBQ

Total MBQ

TUG20(3ft) 490000061 8901512110503SUNDROP NUTRILITE 1 LTR PP 6 7 3 1 21 21

TUG20(3ft) 490006674 8906006330726NATURE FRESH ACTILITE OIL 1L PP 6 7 4 1 28 28

TUG20(3ft) 490005534 8906007280037FORTUNE SOYA OIL 1 LTR PP 5 7 7 1 49 71 120

TUG20(3ft) 490000537 8904032000439NUTRELA SOYYAM OIL 1LTR PP 4 7 7 1 49 11 60

TUG20(3ft) 490017425 8906009411101GOODHEALTH SOYA OIL 1 LTR PP 3 7 7 1 49 11 60

TUG20(3ft) 490017427 8906009410333 VITAL SOYA OIL 1 LTR PP 2 7 2 1 14 14

TUG20(3ft) 490071437 490071437DHARA FIT N FINE 1 LTR PP 2 7 1 1 7 7

TUG20(3ft) 490052677 890601464017DALDA SOYABEAN 1 LTR PP 2 7 2 1 14 14

TUG20(3ft) 490016184 490016184FORTUNE PURE GROPUND NUT OIL 1 LTR PP 2 7 1 1 7 7

TUG20(3ft) 490005642 8901512110800SUNDROP NUTRILITE SOYABEAN OIL 5L JAR 1 4 1 1 4 4

TUG20(3ft) 490005533 8906007280068FORTUNE SOYA OIL 5 LTR JAR 1 4 2 1 8 15

TUG20(3ft) 490006676 8906006330627NATURE FRESH ACTILITTE OIL 5L PP 1 4 1 1 4 4

6 PROMOTIONS

6.1 INTRODUCTION Promotion involves disseminating information about a product, product

line, brand, or company. Every month a promo cycle starts, in which new promos for every categories are execute in stores.

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In retail, promotions are designed to promote the goods and services offered in the business district and to directly generate retail sales. The promotions should be used as part of a broader promotional strategy, which also can include special events and image-building promotions. Promotions can either be discount-oriented sales events or targeted, non-sale promotional events. Retail events can promote general services (e.g. invited hours for regular customers), convenience and special attractions, rather than using reduced prices to draw shoppers.

Process in deciding promotions and their execution in Reliance Fresh:1) The National category team decides the promos for own private labels and

for other brands, as per vendors’ decisions.2) Then, the information is given to the state category head.3) The state head pass the information to the clusters’ head.4) Then the promos list is further passed on to the DMs and SMs.5) The DMs and SMs do the execution at store level.

Staples promos for the promo cycle of 26th June-31st July:1) Buy spices worth Rs. 99/- and get rs. 7/- off on Potato Economy2) Buy spices worth Rs. 149/- and get R Value Sugar 1 kg free3) Buy 1 Get 1 Free in Picric Basmati Everyday rice 1kg and 5kg4) Oil promos from 28.06.2008-08.07.2008

a. Nutrela Soyyum oil 1l Rs. 75.75/- for Rs. 74.49/-b. Fortune soyabean Oil 15l jar- Rs. 1173.25/- for Rs. 1129.99/-c. Nature Fresh Sunflower Oil 1l- Rs. 89/- for Rs. 85.90/-

Objective: To check the promo execution for the promo cycle of 26th June-31st July in the allotted stores and suggest ways to improve the merchandising.

Methodology: Four stores were allotted- Zaffarabad, Preet Vihar, Acharya Niketan and Madhuban Chowk. The promos were executed in all the stores where stock was available. It was done in both Hindi and English. 6.2 FINDING AND ANALYSIS:

1) Zaffarabada. Picric 1kg stock was not available.b. Promos were not executed properly.c. SM was not aware about the oil promos.d. As the promos were put up in English, many customers were not able to

understand them.

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2) Preet Vihar

a. Promo execution poor. b. Picric 1kg and 5kg stock was not availablec. Fortune Soyabean oil15l jar was not availabled. SM and the supervisor did not know any of the promos.

3) Acharya Niketana. Promos execution was good.b. Fortune soya 15l jar was not available and cluster head was not

informed about it.

4) Madhuban Chowka. Promo execution was good.b. Picric 1kg rice was not available in the store.c. Spices Rs. 99/- and Rs. 7/- off on Potato Economy was not coming in

POS.d. Fortune Soyabean oil15l jar was not available

6.3 CONCLUSIONS:1) SMs are not aware about all the promos though there are very few promos

in staples.2) Stock availability is a major problem.3) SMs do not inform the category about the stock unavailability.4) SMs and CSAs do not take the promos execution seriously.5) Customers are not able to understand all the promos.6) The execution is not attractive enough and the customer sometimes doesn’t

notice it.

6.4 RECOMMENDATIONS:1) A meeting for each cluster should be held before every promo cycle, to

brief all the SMs about the promos in every category.2) The SMs should brief all the CSAs and the ASMs about the top promos of

each category.3) The SMs should check for promo SKU’s stock availability regularly.4) Category team should be informed about stock updation.5) Promos should be executed in attractive manner.6) Attractive posters can be put up at the entrance.7) Announcements should be made about the top promos.8) Promo execution should be in both Hindi and English.9) CSAs should convince customers about the promotions.

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10) The promo SKUs should be kept at eye level or noticeable locations.11) Promo SKUs should never be kept at top or the lower shelves.

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7 PROCESSING CENTRE FOR STAPLES

7.1 INTRODUCTION

Location: Jamalpur Village, HaryanaArea: 1, 05,000 sq. ft.Capacity: can process 280 tones/dayVarieties: Rice, Pulses, Dry Fruits, Sugar, Spices

There are two types of processing methods:

1) Semi-automated (manual intervention) In this process, cleaning, sorting and packing are done manually. It is done for packs of 200g- 5 kg.

2) Automated (fully mechanized) In this process, there’s a full mechanized system and is mainly done for rice, pulses and spices. Packs of 500g-35kg are packed by this method. Through this method, 4 tonnes can be packed in an hour.

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The process of the cleaning, sorting and packing consists of following steps:

The stock is manually dumped into the Bucket Conveyor

Pre-cleaning to remove coarse impurities(The drum has two sieves having different sized holes)

Passed on to the Weigher(can allow 2.5 tonnes/hr)

Separator(to remove small impurities)

Destoner(has magnet also to remove iron matter)

Combinator (optional)(has both separator nad destoner)

Grader or Classifier(separate grains on the basis of their size i.e., large or small)

Sortex Z+

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(system based machine. Separates discoloured grains. The required colour quality is fed into the system and then discolored grains are recognized and separated by

a beam)

Polisher (optional)(both water and oil polish)

BINS Ready for packing in

Value and Select Labels

7.2 RECOMMENDATIONS: In manual packing, the workers must wear gloves. Proper hygiene conditions should be maintained while packing.

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8 CONCLUSIONS

1) In the North and Central cluster, the major competition is from unorganized retail as there are major wholesale markets like Khari Baoli, Naya Bazaar and the local grocery stores are decades old and consumers are habitual of shopping there.

2) In the East cluster, wholesale markets like Jheel and the major markets of Laxmi Nagar are giving strong competition in unorganized retail.

3) In organized retailing, KBs Fair Price, Big Apple, Big Bazaar, 6 Ten are giving major competition.

4) Majority find our prices higher than the local grocery stores and the wholesale market.

5) Customers are not willing to switch to organized retail stores for their grocery shopping as they are very particular about the taste and price of the wholesale market products.

6) Customers are satisfied with the assortment also. Earlier, kutti mirch was not in stores but now PRS label has been introduced. Jeera powder and coriander powder are also in much demand but not available in stores.

7) Customers are satisfied with the quality of most of the private label SKUs.8) The customers want more attractive offers in staples category.9) Private label is used by a smaller segment but its demand can be increased.10) Stores’ service not much satisfactory but can be improved by appointing

more efficient CSAs.11) Common problem while billing, mainly at peak hours.12) Model Town and Pitampura stores have the best service.13) Customers want the oil bay to be cleaner as they expect a high quality

service in Reliance Fresh stores.14) All SKUs are not available all the time.15) Customers are not aware of the difference between the quality of the loose

and packed SKUs.16) Customers want better quality in loose SKUs.17) In loose, sugar is the highest selling SKU.

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9 APPENDIXES

QUESTIONNAIREFOR

STUDYING CONSUMER BEHAVIOUR AND THE COMPETITION IN THE “STAPLES” CATEGORY

FOR RELIANCE FRESH

Cluster: ________________________________

Store Location: __________________________

Date: _______________

Time: _______________

ABOUT THE CUSTOMER:

Name: ____________________________________________

Age: ________

Occupation: ______________________

Monthly shopping of staples from Reliance Fresh: ___________________

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Please answer the following questions:

0) Are you a member of Reliance Fresh?

Yes No

1) Are you a regular customer? Yes No

2) How often do you come to Reliance Fresh? Daily Twice or thrice in a week Once a week

Twice or thrice in a month Once a month First time 3) Which brand or variety do you prefer for the following?

Rice: _______________________________________________________

___________________________________________________________

Edible Oils: __________________________________________________

Sugar: ______________________________________________________

Flour: ______________________________________________________

Salt and spices: _______________________________________________

4) Please mark as per your choice against the below given aspects about the “Staples Section” of the store:

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Excellent Good Average Bad

a) Quality: i) Rice ii) Pulses iii) Wheat n Flour

iv) Edible Oils v) Sugars vi) Salts vii) Spices viii) Dry Fruits

b) Variety: i) Rice ii) Pulses iii) Wheat n Flour

iv) Edible Oils v) Sugars vi) Salts vii) Spices

viii) Dry Fruits

Excellent Good Average Bad

c) Availability of products:

i) Rice ii) Pulses iii) Wheat n Flour

iv) Edible Oils v) Sugars vi) Salts vii) Spices viii) Dry Fruits

d) Service:

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Are CSAs always there to attend you? Yes No

Was he/she able to help you?

Yes No

If No, then what was the problem? _____________________________________

_____________________________________________________________________

Was he/she able to explain you the promotional offers clearly?

Yes No

Do they behave nicely?

Yes No

If No, then please mention the problem. _________________________________

__________________________________________________________________

How is the billing process?

Good Bad

If Bad, then what is the problem? ______________________________________ _________________________________________________________________ e) Promotions:

How are the various promotional offers?

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Good Bad

O.K. Don’t bother

How did you come to know about the offer?

_____________________________________________________-___________

5) Pricing of staples in Reliance Fresh as compared to the Organized retail (the

other retail stores) and the Unorganized retail (the local grocery store):

High Low Similar

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a) Rice

i) Org. ii) Unorg. If price higher, then mention

Variety or the brick: ________________________________

Name of the store: _________________________________ b) Pulses



Name of the store: _________________________________ c) Wheat n Flour



Name of the store: _________________________________

High Low Similar

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d) Edible Oils i) Org.

ii) Unorg. If price higher, then mention


Name of the store: _________________________________

e) Sugars i) Org.



Name of the store: _________________________________

f) Salts i) Org.



Name of the store: _________________________________

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g) Spices i) Org.



Name of the store: _________________________________

h) Dry Fruits i) Org.



Name of the store: _________________________________

6) Would you like Reliance Fresh to introduce any new product in staples?

Rice __________________________________________________________

Pulses ___________________________________________________ Wheat n Flour ___________________________________________________

Edible Oils ___________________________________________________

Sugars ____________________________________________________

Salts __________________________________________________________

Spices _________________________________________________________

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Dry Fruits _______________________________________________________

7) Views about Reliance Fresh store as compared to other retail stores:

1) ______________________________________________ Better Worse Similar i) Quality ii) Variety iii) Avail. of products iv) Promotions v) Service

2) ___________________________________________________ i) Quality ii) Variety iii) Avail. of products iv) Promotions v) Service 3) ___________________________________________________ i) Quality ii) Variety iii) Avail. of products iv) Promotions v) Service

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4) ___________________________________________________ i) Quality ii) Variety iii) Avail. of products iv) Promotions v) Service

5) ___________________________________________________

i) Quality ii) Variety iii) Avail. of products iv) Promotions v) Service

How can we serve you better? ________________________________________________________________

Will you visit the store again? Yes No

If no, then please give reason: __________________________________________

THANK YOU!

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10 ABBREVIATIONS

SKU- Stock Keeping Unit

SEL- Shelf Edge Label

KVI- Key Value Items

POG- Planogram

CSA- Customer Service Associate

11 BIBLIOGRAPHIESReferred Sites:-

www.reliance.com

www.google.com

Referred Books:-o Marketing Research-Paneerselvamo Research Methodology-C.R. Kothario Principle of marketing-Philip Kotler

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http://www.google.com/

http://www.reliance.com/

PROJECT REPORT ON RELIANCE

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