O
“CUSTOMER LOYALTY PROGRAMME
OF RELIACE FRESH”
PU E – 411037
2007-2009
1. EXECUTIVE SUMMARY I
2. CHAPTER-1 INTRODUCTION. 1
5. CHAPTER -4 CONCLUSIONS.
6. BIBLOGRAPHY 79
INTRODUCTION
Evolution of Retail
Retail, according to Concise Oxford English Dictionary, is “the sale of
goods to the public for use or consumption rather than for resale”.
The barter system was first known retail form; then the currency
changed hands; we had the handcart vendor selling goods in the
streets; of late we have a pop & mom stores which compliment the
neighborhoods stores.
The first retailer in India includes Bata, Pantaloon, Bombay Dyeing,
Spencers, and Nilgiris & Higginbotham. The current retail scenario is
controlled by the likes of Shoppers’ Stop, Brand Outlets, Big Bazaars
etc.
The top 4 world players include Wal-Mart, Carrefour, Tesco and
Metro.
The opportunities as mentioned are aplenty with close to 15000000
sq.feet of retail space is under construction for various malls &
shopping centers across the country.
Retailing consists of the sale of goods or merchandise, from a fixed
location such as a department store or kiosk, in small or individual lots
for direct consumption by the purchaser. Retailing may include
subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a retailer buys goods or products in large
quantities from manufacturers or importers, either directly or through
a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the
2. Move
It can be easily said but the processes that are involved in the “move”
part are complex but simple. From the product stage through the
processing stage to the packed ones the move stage would continue.
Various levels that involves in “move” part are:
The buyer shortlists the product, places the order.
The vendors receives the order, process the same, packs and send it to
the distribution center from where it reaches the store for the
customer to buy.
One of the fast picking up aspects of the logistic in India is the COLD
CHAIN. More and more organizations are looking for various aspects
of cold chain to ensure that the products where temperature plays a
vital role is maintained and sustained till such time the sale happens.
The Merchandising and Category management is another important
function of the retail industry. In this we have to opt for right product,
place, quantity, quality, mix, price and time. Each of the stores would
operate on certain basic business projection and all others will follow a
typical pattern. For this pattern to be arrived, the merchandise
management plays a big role. The merchandise can make or break an
organization of its profitability.
When we say category management, it would amply the assortments
of products the customer sees as reasonable substitutes for each other
with similar characteristics. It also covers the process of managing
merchandise in a retail business with the objective of maximizing sales
IBSAR Pune (satishpgoyal@yahoo.co.in) Page 8
and profits of a category. The category manager is also responsible for
developing assortment plans for the entire category, buying pricing
and coordinating promotions.
3. Sell
Finally of the Buy, Move & Sell comes the selling part of it which
involves a running of a retail stores. Operations as it is known are the
crucial functions, which derive its strength from various other
faculties.
The beginning of the day is done with the store being opened by the
competent person. The first activity to happen will be the
housekeeping activities followed by the staff scheduling. The
morning’s meetings happen chaired by the head of the store. The stock
outs are established and the replenishments happen as the day
progresses, though it is suggested that replenishments of the stock
should always happen when the customer is not there. The head of the
store usually inspects any one or all the departments of the store,
which is otherwise called the “FLOOR WALK”.
The cashier would ensure that all the cashiers have enough and correct
float cash, whether the POS role, card swap machine and pen is in
place or not. In starting of the day head cashier gives all cashiers a sum
of Rs.1500 as loan. Having set everything in place, the store would
then be opened for the customers.
The department’s heads in turn would brief their team on the
achievements of the previous day and set target of the day. During this
brief any incidents worth mention would also be discussed and the
promotion offers, which are current, will also be taken up. Orders will
be placed for all the stock out SKU follows up will also be done for
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those articles, which are delivered during the day. Cleaning of the self
and also ensuring that the stocks are kept as per the planogram are
checked. It’s just not the duties mentioned above but selling also
happen simultaneously.
At the end of day the process of concluding the activities is called the
“END OF THE DAY” activities. As the person who is in charge of
closing the store goes around checking whether the locks are in place
or not; the high value merchandise counters are properly secured;
check for any person hidden in the change rooms or cloaks rooms; the
cashier would ensure that all the money that has been given as float
tallies apart from the money that need to be submitted by the
respective cashiers. There will be a checklist that needs to sign off
together by the security as well as the in charge for having checked for
conformity at the end of the day.
These six factors clubbed with a co-coordinated logistics make the sale
happen. As in any industry there is a social commitment also to be
fulfilled. These can be recapitulated as under:
Quality products
Competitive prices
Wide range to choose from
Employment opportunities that are created
The economy would experience sea of change and
Would mean a WIN WIN situation to everyone
Support Functions:
The entire operation is possible with the help of a support team. This
support team consists of the following:
Human Relation-Involves itself in recruitment, training and welfare
apart from their
regular activities
Good Receiving-This department is responsible not just for the receipt
of goods but also checking for their conformity and returns goods to
the suppliers as need arises.
Maintenance-The entire stores furniture and fixtures are taken care of
by the maintenance team
Alike any other industry the retail industry also has a wide range of
terminologies, which are in use on a day-to-day basis. Few samples of
them would include the following:
Till - The cash point
Tender - The type of payment the customer is making
SKU - Stock keeping unit
Merchandise Credit - Credit note
Assortment - Range of products and so forth
Maximum Bay Quantity (M.B.Q.) - It is the maximum quantity of
each
product, which can be placed on each shelf.
Maximum Display Quantity (M.D.Q.) – It is the number of SKUs,
which can
be directly seen by the customer in the front side.
Retail types
There are three major types of retailing. The first is the market, a
physical location where buyers and sellers converge. Usually this is
done on town squares, sidewalks or designated streets and may
involve the construction of temporary structures (market stalls). The
second form is shop or store trading. Some shops use counter-service,
where goods are out of reach of buyers, and must be obtained from the
seller. This type of retail is common for small expensive items (e.g.
jewelry) and controlled items like medicine and liquor. Self-service,
Retail pricing
REVIEW OF
LITERATURE
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RETAIL SCENARIO IN INDIA
As the corporate – the Piramals, the Tatas, the Rahejas, ITC Ltd,
S.Kumar’s, RPG Enterprises, Shopper’s Stop, Pantaloons, Reliance
Retail, Vishal Mega Mart, Aditya Birla Group, Subhiksha, Landmark
Group, True Mart race to revolutionize the retailing sector, retail as an
industry in India is coming alive.
Across the country, retail sales in real terms are predicted to rise more
rapidly than consumer expenditure during 2003-08. The forecast
growth in real retail sales during 2003- 2008 is 8.3% per year,
compared with 7.1% for consumer expenditure. Modernization of the
Indian retail sector will be reflected in rapid growth in sales of
supermarkets, departmental stores and hyper marts. Sales from these
large-format stores are to expand at growth rates ranging from 24% to
49% per year during 2003-2008, according to a latest report by Euro
monitor International, a leading provider of global consumer-market
intelligence.
A. T. Kearney Inc. places India 6th on a global retail development
index. The country has the highest per capita outlets in the world - 5.5
Malls:
The largest form of organized retailing today. Located mainly in
metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft
to 7,00,000 sq ft and above. They lend an ideal shopping experience
with an amalgamation of product, service and entertainment, all
under a common roof.Examples include Shoppers Stop, Piramyd,
Pantaloon.
Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai
books retailer Crossword, RPG's Music World and the Times Group's
music chain Planet M, are focusing on specific market segments and
have established themselves strongly in their sectors.
Discount Stores:
As the name suggests, discount stores or factory outlets, offer
discounts on the MRP through selling in bulk reaching economies of
Department Stores:
Large stores ranging from 20000-50000 sq. ft, catering to a
variety of consumer needs. Further classified into localized
departments such as clothing, toys, home, groceries, etc.
Department Stores:
Departmental Stores are expected to take over the apparel
business from exclusive brand showrooms. Among these, the biggest
success is K Raheja's Shoppers Stop, which started in Mumbai and
now has more than seven large stores (over 30,000 sq. ft) across India
and even has its own in store brand for clothes called Stop!.
Hyper marts/Supermarkets:
Large self service outlets, catering to varied shopper needs are
termed as Supermarkets. These are located in or near residential high
streets. These stores today contribute to 30% of all food & grocery
organized retail sales. Super Markets can further be classified in to
mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large
supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a
strong focus on food & grocery and personal sales.
Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near
residential areas. They stock a limited range of high-turnover
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convenience products and are usually open for extended periods
during the day, seven days a week. Prices are slightly higher due to the
convenience premium.
MBO’s:
Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy
market places and Metros.
RELIANCE GROUP
Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002
Shri Dhirubhai Ambani was an exceptional human being and an
outstanding leader. He dared to dream on a scale unimaginable before
IBSAR Pune (satishpgoyal@yahoo.co.in) Page 24
in Indian industry. His life and achievements prove that backed by
confidence, courage and conviction, man can achieve the impossible.
From a humble beginning, he went on to create an enviable business
empire within a span of just 25 years. The US$ 54 billion Reliance
Group is a living testimony to his indomitable will, single-minded
dedication and an unrelenting commitment to his goals.
The Group's track record of consistent growth is unparalleled in
Indian industry and perhaps internationally too. Today, the Group's
turnover represents nearly 3 percent of India's GDP.
The corporate philosophy he followed was short, simple and succinct -
"Think big. Think differently. Think fast. Think ahead. Aim for the
best". He inspired the Reliance team to do better than the best - not
only in India but in the world. He was probably the first Indian
businessman to recognize the strategic significance of investors and
discover the vast untapped potential of the capital markets and
channelise it for the growth and development of industry. He was
supremely confident that finance would never be a constraint in
executing his projects because, as he said proudly, Indian investors
would provide him with the necessary resources. For him, his people
were his most important asset.
He scouted around for the best and most talented professionals,
nurtured them and continuously propelled them to aim for still higher
goals. These highly motivated people comprise the core of what he
named: "The Reliance Family".
Shri Dhirubhai Ambani visualized the growth of Reliance as an
integral part of his grand vision for India. He was convinced that India
could become an economic superpower within a short period of time
and wanted Reliance to play an important role in realizing this goal.
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The Bhagavad Gita states, "The actions of a great man are an
inspiration for others. Whatever he does, becomes a standard for
others to follow." This certainly applies to Shri Dhirubhai Ambani.
The Reliance Group 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 among the top five
to ten producers in the world in major petrochemical products.
The Group exports products in excess of USD 7 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.
Reliance Digital
Mukesh Ambani's Reliance Industries Ltd launched a second group of
retail stores called RELIANCE DIGITAL which will sell consumer
electronics and other household appliances. Reliance Digital Store has
been launched five months after the company first introduced its fresh
food format outlets, Reliance Fresh, that stock its own label of
groceries under the brand, Reliance Staple.
The first of the stores was unveiled at the Shipra Mall at Indirapuram
in Ghaziabad on the outskirts of the national capital
New Delhi April 24 Reliance Retail Ltd, the mega retail venture from
the Mukesh Ambani stable, marked its foray into speciality retail with
Reliance Fresh
Future Planning:-
Company plans to have a pan-India presence by opening stores in 784
cities and 600 small towns and achieve a target of Rs.10 billion
revenue by 2010 by which time it hopes to complete Phase 1. In the
first phase company plans to employ 500,000 people. It is following
an all-inclusive model giving the right affordability across all income
groups. Company is aggressively partnering farmers by following a
farm-to-fork strategy in its supply chain management model and
ensures that it delivers fresh fruits and vegetables at affordable prices
IBSAR Pune (satishpgoyal@yahoo.co.in) Page 40
to consumers. Currently, Reliance Fresh has over 100 stores across the
country.
Reliance Fresh also offers a membership and loyalty programme -
Reliance One - to deliver customized benefits to frequent shoppers.
Currently, it has 200,000 loyalty customers across Hyderabad, Jaipur
and Chennai.
Reliance Retail, the 100% subsidiary of Reliance Industries, on
October 28 unveiled Reliance Fresh, the first of its multi-format retail
foray involving an investment of Rs 25,000 crore.
Reliance Fresh is the company’s brand for neighborhood fresh-food
outlets. It will also sell kitchen equipment and other edibles.
Besides, it has planned hypermarkets, supermarkets, discount stores,
department stores, convenience stores and specialty stores, to be
unveiled shortly.
The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore
venture and it plans to add more stores across different geographies,
and eventually have a pan-India footprint by year 2011.
The super marts will sell fresh fruits and vegetables, staples, groceries,
fresh juice bars and dairy products and also will sport a separate
enclosure and supply-chain for non-vegetarian products.
Currently, selling through company-owned stores currently totals just
$8 billion in India. Industry estimates say that the country’s retail
industry is worth $300 billion, that is about Rs 13, 50,000 crore. This
stands a chance to blossom to $427 billion in the next four years.
Organized retail accounts for just over Rs 35,000 crore. Reliance
Fresh bids to tap the potential for organized retail in the country.
Farmers
Collection center
CHAPTER -3
WORK DONE
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PROJECT INTRODUCTION
What is Loyalty?
The degree to which customers are predisposed to stay with one
company and resist competitive offers.
2. QUALITY CONTROL
“You never get a second chance to make a first impression” was the
tagline for ‘Head and Shoulders’ shampoo years ago. Impeccable
service too cannot save you if you do not deliver a good quality product
each and every time. This is true especially for restaurants, where the
food served has to be of the same quality time and again to keep
customers coming back to you. Here, quality is conveyed via word-of-
mouth. One bad experience is enough to ruin the impression forever.
Another good way of assuring customers value the quality of your
product is to get an outside agency or someone else to endorse the
results. For instance, Colgate Toothpaste continually reminds the
customer that it is endorsed by IDA, the Indian Dental Association and
it is the brand trusted by most dentists. HLL gets customers to talk
about their “Pond’s Age Miracle” range of cosmetics and Dove soaps in
their television ads, to endorse the quality of their products. That is
also the psyche behind prompting a customer to try out the product. If
a Vim Bar is a good dishwashing bar for Mrs X, a housewife, it has to
be good for you too! If others say that your product is good, it’s gotta
be good!
3. CONSTANT INNOVATION
90
80
70
60
50
Loyalty Sales %
40
30
20
10
0
I II III IV V VI VII VIII
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There was a questioner, which was filled by me from the customer to
know the feedback of the customer about the “Cut Fruits &
Vegetables” which was put in the chiller section of the store.
The format of questioner is as follows:
QUESTIONNAIRE
Name:
_______________________________________________
1. Quality of Fruits & Vegetables Of Reliance Fresh
a. Excellent b. Good c. Average d. Poor
2. If the answer of question no. 1 is C or D then name the Fruits &
Vegetables which is not satisfying you.
________________________________________________
______________________________________________
3. Are you getting all the products, which you want?
a. Yes b. Almost c. No
4. If the answer of question no. 2 is B or C then name the products
which is not satisfying you
a. Fruits & Vegetables b. Processed Foods c. F.M.C.G.
d. Dairy e. Bakery
5. Whether we are fulfilling your requirement timely.
a. Always b. Not Every time c. No
8. If the answer of question no. 7 is C then why you are not buying.
a. Quality b. Price c. Not Attractive
9. If in future Reliance Fresh gives you more cut Fruits & Vegetables
then you will purchase it.
a. Yes b. Not sure c. No
10. If the answer of question no. 9 is A or B then at which price you
will like to buy 250 grams of food
a. 10-15 b. 15-20 c. 20-25
60%
55%
50%
40%
35%
30%
20%
10%
10%
0%
Yes Almost No
90%
80%
80%
70%
60%
50%
40%
30%
20% 15%
10% 5%
0%
Regular Not Regular No
100% 88%
90%
80%
70%
60%
50%
40%
30%
20% 7%
10% 5%
0%
y
e
lit
ic
tiv
Pr
ua
ac
Q
ttr
A
ot
N
First Name
Last Name
Address Line 1*
Address Line 2
Landmark
City\ Taluka*
Pincode*
Date D D M M Y Y Y Y Signature
MSR Code
MSR Signature
First Name
Last Name
This is to inform you that my Reliance One membership card is lost/ damaged. I
have been issued a replacement card with card number
I declare that I have surrendered the damaged card at the customer service
desk
I declare that I will destroy the lost card if found.
Date D D M M Y Y Y Y Signature
MSR Code
MSR Signature
Scope
To study and re-engineer the existing Planogram.
Purpose
• To communicate how to set the merchandise.
• To increase customer purchases.
• To adjusting the visibility, appearance and presence of products
• To make them look more desirable.
• To ensure sufficient inventory levels on the shelf or display.
• To use space effectively whether floor, page or virtual.
• To optimize short- and long-term returns on investment into retail
space.
• To provide a logical, convenient and inspiring product-customer
interface.
• To make right selection of products available.
• To facilitate communication of retailer’s brand identity.
• To maximize profit per centimeter of shelf space.
• Understand the relationship between space, sales and profit
Auto Indenting
MBQ of each SKU is already stored in the system of DISTRIBUTION
CENTRE. (D.C. is the place from where the required quantity of stock
is sent to the respective stores.)
As & when sales of a particular SKU takes place it is automatically
recorded in the system.
Within 3 days D.C. dispatches the required quantity of each SKU to
the store, to maintain the MBQ level of each shelf.
Manual Indenting
Before closing the store daily CSA of each category identify
therequirement of each SKU and communicate it to supervisor and
finally it is feed to SAP or mailed to Distribution Centre (D.C.) to
maintain the required level of inventory.
Step 1: Per day sales of each SKU was obtained. The SKUs list
of Reliance Fresh which contains approximately 6000 SKUs/products
of all different categories (Fruits & Vegetables, Staples, Process Food,
Non-Food Fast Moving Consumer Goods, House wares, Beverages,
Dairy, Backery, Frozen, etc.) is provided by the head office. With the
help of this list, at store, daily sales of each SKU was obtained from
CSAs by interviewing them in depth. The probable demand of those
SKUs which were not in the Planogram of the store were also obtained
so that these could also be introduced if found appropriate.
Methodology Used
For re-engineering Planogram, following research was done:
1. Research Design
Research Design is the overall plan to conduct research. It covers:
• data collection methods
• sampling decisions
• data analysis methods
Often constraints on resources limit research design so that it is less
ideal.
For e.g. smaller sample size. The purpose of research design is to
decide approach that answers our problem in best way, given
constraints on resources.
2. Exploratory Research
Following designs (methods) are used for exploratory research:
I. Secondary data
II. Focus groups
III. Depth interviews
Projective techniques: It consists of following techniques
I. Word Association
II. Sentence completion
III. Third person & Role playing
IV. Thematic Apperception Test
The tool used for research required in re-engineering Planogram is
Depth interview.
3. Depth Interview
Principle of Depth Interview
Respondent will reveal truth about sensitive issue after taking
him in
confidence.
Respondent’s answer will be obtained by probing
Collection of Data
Secondary Data
Secondary data is the data gathered by someone else prior to the
current needs of the researcher. It is already available to the
researcher before he starts conducting his research work.
Advantages of secondary data
Quickly available
Economical
Dependable
Easy to Use
Accessible
Understandable
Primary Data
The researcher originates the primary data. The primary data for re-
engineering Planogram was collected as follows:
Feedback from
CSA
FDM
Franchisee
Customer (limited to people known)
Customer demographics
Strengths Opportunities
• Easily Reachable
Weaknesses Threats
CONCLUSION
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Page 82
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be utilized.
Empty Shelves
120
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80 Contribution
To Gross
60 Margin
40
Contribution
20 to Total Sales
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3) Websites:
- www.ril.com
- www.businessworldindia.com
- www.ORG-GFK.com
- www.india-reports.com
- www.wikipedia.org
- www. economictimes.indiatimes.com
4) Magazine
Business Today
Business World