Reliance Fresh Retail Assignment A

Assignment Assessment Report

Campus: PUNE Year/semester 2010-2012

Level: PCL-I Assignment Type Assignment A

Module Name: Retail Assessor’s Name Binika Ramesh

Student’s Name: Anisha Sen Reqd Submission Date 29/9/2011

e-mail id & Mob [email protected]

Actual Submission Date29/9/2011

Stream BUSINESS Submitted to :

Certificate by the Student:

Plagiarism is a serious College offence.

I certify that this is my own work. I have referenced all relevant materials. (Student’s Name/Signatures)

Expected Outcomes

Assessment Criteria Grade based on D,M,P,R system

Feedback

General Parameters

Clarity Clear understanding of the concept

Analytical Thinking Ability to analyze the problem realistically and take required actions

Research and innovative approach

Research carried out to reach the outcome and innovative methods used

Formatting & Presentation-

Concise& clear thinking along with presentation

Subject Specific Parameters

ClarityUnderstanding about the requirements for finding the locations of the retail store

Analytical ThinkingAbility to analyze the catchment area

Research and innovative approach

Research carried out to understand the customer profile and its relation to the store location

Grades Grade DescriptorsAchieved Yes/No (Y / N)

PA Pass grade is achieved by meeting all the requirements defined.

MIdentify & apply strategies/techniques to find appropriate solutions

D Demonstrate convergent, lateral and creative thinking.

Assignment Grading Summary (To be filled by the Assessor)

OVERALL ASSESSMENT GRADE:

TUTOR’S COMMENTS ON ASSIGNMENT:

SUGGESTED MAKE UP PLAN

(if applicable)

REVISED ASSESSMENT GRADE

TUTOR’S COMMENT ON REVISED WORK (IF ANY)

Date: Assessor’s Name / Signatures:

Assignment A

PCL-I Marketing

Retail

Reliance Fresh (Retail Outlet)

Company Profile:

Brief History

Reliance Retail is the Retail subsidiary of Reliance Industries Limited. RIL’s expansion

strategy includes its foray into the nascent yet lucrative retail sector of India.

Reliance Retail was setup to revolutionize the retailing industry in India. Towards this end,

Reliance is aggressively worked on introducing a pan-India network of retail outlets in

multiple formats.

Reliance Retail provides a world class shopping environment, state of art technology, a

seamless supply chain infrastructure, a host of unique value-added services and an

unmatched customer experience. Reliance Retail is committed to ensure better returns to

Indian farmers and manufacturers and greater value for the Indian consumer, both in

quality and quantity. It boasts of a seamless supply chain infrastructure, unprecedented

even by world standards. Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer and supplier.

There are many subsidiaries under this business such as Reliance Fresh, Reliance iStore,

Reliance Home Kitchens, Reliance Time Out, Reliance Digital, Reliance Wellness, Reliance

Trendz etc.

Reliance Fresh is the most prominent of these subsidiaries and was opened as a concept of

the ‘Neighbourhood’ store. Since its inception in Hyderabad in 2006, Reliance Fresh stores

have increased in numbers and stand at about 560 stores in all currently. Reliance Fresh

followed the strategy of opening stores and testing its strategy in South India first; using a

Controlled entry into South India. After opening its first store in Hyderabad, the stores then

opened in Chennai and spread to the rest of south India before opening up in the rest of the

country. During its opening, Reliance Fresh faced problems and protests in some Indian

states like Orissa, West Bengal and UP; following which it decided not to sell fruits and

vegetables in these select states. Reliance Fresh sells fresh fruits and vegetables, staples,

FMCG and dairy products. The majority of staples are sold under the brand – ‘Reliance

Select’ which fetches it higher margins. Apart from distribution supply to consumers,

Reliance Fresh also distributes to other small outlets.

Expansion Strategy

Reliance Retail plans to invest Rs 2,000 crore to add 3 million sq. ft. retail spaces in 2010-11.

Reliance Retail recorded sales of Rs 4,500 crore in the financial year ended March 2010. It

operates nearly 1,150 stores in 86 cities across 14 states which span just over 4.5 million

sq. ft. space across India. In 2009-10, the company had added around 1 million sq ft retail

space.

The company has also focused greatly on its plan of luxury brands to India with Reliance

Brands. The last two months have seen the launch of Hamleys and Diesel stores. Reliance

Retail is now in talks with US fashion brand Kenneth Cole and Italian bag maker Mandarina

Duck to open their exclusive outlets in India.

Reliance Retail plans to add around 30 hypermarkets and 250 specialty stores this financial

year. Around 1.5 million sq. ft. will be added in hypermarkets while 1.5 million sq. ft. will be

in specialty stores and Reliance Fresh.

This expansion strategy is in resonance with Mukesh Ambani’s plans of a 10-fold growth in

revenue of Reliance Retail over the next five years to become a Rs 45,000-crore entity (as

announced by Mukesh Ambani at the 36th AGM).

Just five months after Mukesh Ambani spelt out his retail plans, Reliance's retail foray has

moved at breakneck speed to open its first store in its fresh food format- Reliance Fresh in

Hyderabad. CNBC-TV18 takes a look at the new store. Reliance's Rs25,000 crore retail

foray is being pitched as a friendly neighbourhood store. Dominated by fresh produce,

dairy and bread, Reliance Fresh is a compact 2000 sq ft store.

Gunender Kapur, president and CEO, Foods Business, RIL, says, "In this format the focus in

on fresh fruits and veggies and staple products that consumers buy very frequently from

the shop." The efficiency of Reliance's much talked about farm to folk supply chain is being

put to test with this retail launch. This particular store is directly procuring from the

farmers of Andhra Pradesh, Karnataka and Tamil Nadu giving it a quality and pricing

advantage, something that Reliance hopes will fuel its success. Private labels across

multiple categories are expected to drive Reliance's retail formats. And with this new store

comes the company's food brand 'Reliance Select'. Kapur further adds, "At this point of time

we have displayed in stores private labels in staples like rice, dhal, spices

So we have got a wide range of categories in which Reliance Select will be available, and in

fullness of time we will get into other categories." Next in line is Fresh Plus — Reliance's

second retail format likely to be launched next month that will also house a pharmacy, and

section for apparel and consumer durables. And six months later, Reliance hopes to roll out

its hypermarket format — 75,000 square feet of multiple brands of apparel, FMCG,

groceries and white goods. For now, the spotlight remains on Reliance Fresh — 40 similar

stores are being planned in Hyderabad, 11 of which will open their doors to customers on

November 3. After ITC's Choupal Fresh and Landmark's Max Retail stores, Reliance joins

the list of retailers who chose Hyderabad to test waters. The city offers real estate at a price

that doesn't quite pinch 

Mission

To generate inclusive growth and prosperity for farmers, vendor partners, and consumers,

Reliance Retail Limited (RRL), a subsidiary of RIL, was set up to lead Reliance Group’s foray

into organized retail.

Sub Industry of Reliance Fresh:

Bakery products: Various types of Breads (Burger Breads, Pizzza Breads, Buns, Sweet Buns, etc...)

Cereals: Rice, Dal (Toor dal, Masoor Dal, etc...)

Non-Veg Products- Chicken, Meat & Meat Products(Nuggets, Sausages, Salami) Fish

Vegetables

Fruits

Soft drinks

Frozen Food- Green peas, Parathas, French fries

Canned Juices

Crockery

A) The location of the retail store.

Ans) Reliance Fresh is one of the best retail outlets which helps the housewives to get all

house hold crockery in one store. Reliance fresh is a combination of Super market and

Merchandise Retail outlet. Fresh vegetables & cheap grocery is a major part of Reliance

Fresh Business because they have products which are used on a day to day basis but they

also have some supporting products (Deo, Diwali Gifts & Decorative items which depends

on seasons to seasons) which help them to stay ahead from their competitors.

Supermarket

A retail store which generally sells food products and household items, properly

placed and arranged in specific departments is called a supermarket. A supermarket

is an advanced form of the small grocery stores and caters to the household needs of

the consumer. The various food products (meat, vegetables, dairy products, juices

etc) are all properly displayed at their respective departments to catch the attention

of the customers and for them to pick any merchandise depending on their choice

and need.

Location of Reliance fresh:

It is situated in the heart of the city Kothrud( which has a mix crowd), it is an

residential area for students and families. The simple reason behind reliance fresh

working very well in this area because they have the right target audience whom

they are targeting like colleges going girls, working professional, maximum number

of small hotels , and housewife’s. They have also tied up with IT and some small

companies nearby Reliance Fresh where they have given them free coupons which

help them to attract working professional for the 1st time. Later they keep on

buying products later on from Reliance Fresh.

Catchment area analysis:

Name:  Reliance Fresh Kothrud

Address:  Geetai Shopping Mall, Ideal Colony, Paud Road, Kothrud, Pune 411038.

Landmark:  Opposite Raj Motors

Phone:  20-25454733 

Facilities Offered: All credit cards accepted without any extra charge. Sudoku meal coupons are accepted.

After doing a small survey in Reliance fresh I could figure out that people prefer Reliance fresh as compared to other retail outlet is because all the house hold materials are very cheap in reliance fresh as compared to DMart , Spenciers & More which is just 2km from Reliance Fresh .

Reliance Fresh supermarket in Kothrud Pune is designed in a colorful manner. Reliance fresh is always full with men and women shopping for their household needs. Reliance Fresh has various household essentials available including cereals, pulses, oil and ghee, personal care products, deodorants, frozen food, kitchenware, dairy products and other groceries. Relaince fresh give really fresh items.

b) The size and shape of the retailer’s trade area?

Reliance Fresh Kothrud Area and Space:

Reliance retail store Kothrud is largely like a Super market set up or like a convenience store format with their stores ranging from 1100 to 7500 sq. ft. Also, Food and perishables form a large share of their product offerings.

The store is usually spotted in a Neighborhood location as stand-alone stores. The reason for such a strategy could be to provide customers with proximity and also have high visibility to cut out competition from stores like Spencers, More, & Dmart.

Reliance Retail 2006

Reliance initially launched stores in two formats i.e. 2,000-5,000 Reliance Fresh convenience stores and the wholesale cash-and-carry Ranger Farms to supply small grocers and retailers.

The Reliance Fresh stores are focused on food (its private label brand being Reliance Select for staples and groceries) but also launched larger stores that stock both food and non-food items (Reliance Fresh Plus).

Reliance Retail unveiled its organized retail foray in Nov 2006 with the launch of convenience stores in the southern Indian city of Hyderabad.

Reliance ramped up its presence primarily through Reliance Fresh and ended FY 2007 with about 1000 stores.

Investment plans are of US $5 bn, revenue of US $ 25 bn, targeting 100 mn Sq. feet of store space across 1500 cities.

Reliance’s proven project-execution skills will be crucial to the success of this venture.

The company has already established a presence in the National Capital Region (NCR), Jaipur, Ranchi, Chennai, Ahmedabad and Bangalore, since its first launch in Hyderabad.

The company has also launched its RelianceOne loyalty program, which comes with free accident insurance and free home delivery.

Reliance Retail 2011

RRL operates several ‘value’ & ‘specialty’ formats.

The ‘value’ formats offer a wide range and assortment of products required for daily household needs. The ‘value’ formats that RRL operates are.

1. Convenience store - ‘Reliance Fresh’, a neighbourhood concept.

2. Hypermarket - ‘Reliance Mart’, an all under one roof supermarket concept.

3. Supermarket - ‘Reliance Super’, a mini-mart concept.

The ‘specialty’ formats are:

1. ‘Reliance Digital’, a consumer durables & information technology concept.

2. ‘Reliance Trends’, an apparel & accessories concept.

3. ‘Reliance Wellness’, a health, wellness & beauty concept.

4. ‘I Store by Reliance Digital’, an exclusive Apple products concept.

5. ‘Reliance Footprint’, a footwear concept.

6. ‘Reliance Jewels’, a jewellery concept.

7. ‘Reliance TimeOut’, a books, music & entertainment concept.

8. ‘Reliance AutoZone’, an automotive products & services concept.

9. ‘Reliance living’, a home ware, furniture, modular kitchens, furnishings concept.s

C) Describe the positive and negative aspects of its location?

Positive Aspects:

Reliance fresh has opened its retail outlet near Spencers, More etc. so it helps them

to attract those customers also.

Reliance fresh being in the same locality (radius of 2km) of More, Spencers etc.. it

has a added advantage of low price of the products.

Reliance fresh has products which are fresh and customers are satisfied.

Reliance fresh has a huge customer base.

Customer profile of Reliance Fresh Kothrud:

Females between age from 35 to 50 (Housewives & working females and they buy

products as vegetables, bakery products, cereals, fruits etc....) they buy the products

for 2-3 weeks.

Senior Citizen( Fruits, Vegetables, Breads etc)

College students (Undergraduate students & post graduates who buy frozen foods, canned Juices, soft drinks, meat Products, fish products, etc...) they buy the product for 2 to 3 days .

All the above category of customer visit reliance fresh because they get products very cheap.

Customer perception:

Very cheap

Easy to get everything in one store

Best price in the market.

Why Reliance Fresh (Customer)?

Fresh Stock of vegetables on a daily bases.

Cheap price of products

Easy to find everything in the store

Good customer support

Good customer relation.

Negative Points Of Reliance Fresh:

Competitions of Spencer and More.

Variety of products as compared to reliance fresh

Have Non- veg products which Reliance Fresh doesn’t have.

Sometimes Reliance Fresh has outdated products.

D) Compare the store’s location with the location of two of its competitors?

Ans)

Reliance fresh against its competitors like Spencers, More, DMart in Kothrud.

Strategy Used by Reliance Fresh against its Competitors:

Location:

Reliance retail stores are largely like a Super market set up or like a convenience

store format with their stores ranging from 1100 to 7500 sq. ft. Also, Food and

perishables form a large share of their product offerings. These stores are usually

spotted in a Neighborhood location as stand-alone stores. The reason for such a

strategy could be to provide customers with proximity and also have high visibility

to cut out competition from stores like Spencers, Big Bazaar, Subhiksha etc.

It is situated in the heart of the city Kothrud which is an residential area for students

and families ( We have MIT College, BVP College , we have small IT Companies, we

have vanaz Company which is very famous in this particular area and all middle

class people of pune are situated & due to so many colleges in this area they have a

advantage of many hotels where they can give their products in Kothrud )this is the

simple reason behind reliance fresh working very well in this area because they

have the right target audience whom they are targeting like colleges going girls,

working professional , maximum number of small hotels , and housewife’s. They

have also tied up with IT and some small companies nearby Reliance Fresh where

they have given them free coupons which help them to attract working professional

for the 1st time and they later keep on buying products later on from Reliance Fresh.

Merchandise Assortment:

Width: Medium to High

They offer considerable number of product lines ranging for example, Processed

Food, Non-vegetarian, Hard-line, Homecare, Personal care, Baby Care, Beverages,

Dairy, Non Food, Fresh Fruits & Vegetables, Bakery and Stationary

Depth: Low

For each of these product lines mentioned above they offer not more than 2-3

brands or variants. So, we consider their depth of stores to be low.

Pricing:

Reliance Fresh claims to offer Affordable Pricing but we find their pricing strategy to

be:

a) Discount pricing: As they offer spot discounts on membership cards. Also, they

offer discounts on volume purchases for example Rs 10 off on a 5kg pack etc.

b) Competitive Pricing: Their product price range is wide and they offer

competitive price i.e. a little lower (marginally lower) than the identified

competition.

c) Also, they mark price in “Paisa” to make it appear as low priced.

Communication Mix:

Reliance Fresh communicates largely about its promotions. The communication is

observed in the following ways:

a) Through advertising in Newspapers: About location of their stores or opening up

of new stores, product range, festive offers.

b) Through Fliers: About product range, current promotions.

c) Through Events: To spread awareness.

d) In store promotions: Largely Sales promotion for example, spot discounts, live

announcements, free gifts on a minimum purchase/bill amount. There are also

point of Sale displays as we can see in the picture below:

Store Design and Display:

Reliance Fresh like other organized retailers in food & grocery has a Grid Layout

format. This could be because of the following reasons:

a) They get more shelves to stock products

b) Lesser space is wasted in Aisles

c) Customer Familiarity

d) Higher Space productivity

Also, we found that following displays are usually spotted in a Reliance Fresh store:

a) Jackets in corners: These are stands which have Hot Offer written on the white

boards

b) Alligators, Racks, Bins

c) It also has a section of Open Chiller with a White Board display which rate of

perishables written on it.

d) Weighing Machine next to racks

e) Customer Service Desk

f) POS with frequent Promotion displays on it as well

Customer Service:

There are 3 levels of employees in any Reliance Fresh Store as shown in the figure

below:

There is a Customer Desk in each Reliance Fresh store which is operated by

Customer Service Associates. But our secondary research and understanding

through personal experiences suggest that Customer Service Staff needs training as

they lack focus on solving customer problems and are also a little apprehensive

about receiving customer complaints. The finance and accounts manager sits in the

same store, they keep a check on a regular sale and they try to predict the future

sales with the help of the sale team in the store depending upon the up coming

seasons and they try to buy the goods accordingly .

That is why People prefer Reliance Fresh then DMrat More, Etc…