INTRODUCTION

Consumer behaviour is the study of when, why, how, and where people do or do not buy
a product. It blends elements from psychology, sociology, social anthropology and economics. It
attempts to understand the buyer decision making process, both individually and in groups. It
studies characteristics of individual consumers such as demographics and behavioural variables
in an attempt to understand people's wants. It also tries to assess influences on
the consumer from groups such as family, friends, reference groups, and society in general.
Customer behaviour study is based on consumer buying behaviour, with the customer playing
the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for
customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of
marketing through the re-affirmation of the importance of the customer or buyer. A greater
importance is also placed on consumer retention, customer relationship management,
personalisation, customisation and one-to-one marketing. ocial functions can be categori!ed
into social choice and welfare functions.
"ach method for vote counting is assumed as social function but if Arrow#s possibility theorem
is used for a social function, social welfare function is achieved. ome specifications of the
social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity
and weak and strong $areto optimality. %o social choice function meets these re&uirements in an
ordinal scale simultaneously. 'he most important characteristic of a social function is
identification of the interactive effect of alternatives and creating a logical relation with the
ranks. (arketing provides services in order to satisfy customers. )ith that in mind, the
productive system is considered from its beginning at the production level, to the end of the
cycle, the consumer.
*ften, we take cultural influences for granted, but they are significant. An American will
usually not bargain with a store owner. 'his, however, is a common practice in much of the
)orld. Physical factors also influence our behavior. )e are more likely to buy a soft drink
when we are thirsty, for e+ample, and food manufacturers have found that it is more effective to
advertise their products on the radio in the late afternoon when people are getting hungry.
A person#s self-image will also tend to influence what he or she will buy,an upwardly mobile
manager may buy a flashy car to pro-ect an image of success. Social factors also influence what
the consumers buy,often, consumers seek to imitate others whom they admire, and may buy the
same brands. 'he social environment can include both the mainstream culture .e.g., Americans
are more likely to have corn flakes or ham and eggs for breakfast than to have rice, which is
preferred in many Asian countries/ and a subculture .e.g., rap music often appeals to a segment
within the population that seeks to distinguish itself from the mainstream population/. 'hus,
sneaker manufacturers are eager to have their products worn by admired athletes. 0inally,
consumer behavior is influenced by learning,you try a hamburger and learn that it satisfies
your hunger and tastes good, and the ne+t time you are hungry, you may consider another
hamburger.
Consumer Choice and 1ecision (aking2 $roblem Recognition. *ne model of consumer
decision making involves several steps. 'he first one is problem recognition,you reali!e that
something is not as it should be. $erhaps, for e+ample, your car is getting more difficult to start
and is not accelerating well. 'he second step is information search,what are some alternative
ways of solving the problem3 4ou might buy a new car, buy a used car, take your car in for
repair, ride the bus, ride a ta+i, or ride a skateboard to work. 'he third step involves evaluation
of alternatives. A skateboard is ine+pensive, but may be ill-suited for long distances and for
rainy days.
0inally, we have thepurchase stage, and sometimes a post-purchase stage .e.g., you return a
product to the store because you did not find it satisfactory/. In reality, people may go back and
forth between the stages. 0or e+ample, a person may resume alternative identification during
while evaluating already known alternatives.
Consumer involvement will tend to vary dramatically depending on the type of product. In
general, consumer involvement will be higher for products that are very e+pensive .e.g., a home,
a car/ or are highly significant in the consumer#s life in some other way .e.g., a word processing
program or acne medication/.
It is important to consider the consumer#s motivation for buying products. 'o achieve this goal,
we can use the (eans-"nd chain, wherein we consider a logical progression of conse&uences of
product use that eventually lead to desired end benefit.
'hus, for e+ample, a consumer may see that a car has a large engine, leading to fast acceleration,
leading to a feeling of performance, leading to a feeling of power, which ultimately improves the
consumer#s self-esteem. A handgun may aim bullets with precision, which enables the user to
kill an intruder, which means that the intruder will not be able to harm the consumer#s family,
which achieves the desired end-state of security. In advertising, it is important to portray the
desired end-states. 0ocusing on the large motor will do less good than portraying a successful
person driving the car.
OBJECTIVES OF THE STUDY
The objective of the study is to evaluate consumer needs and behavior with
respect to retail stores for Reliance Retail ltd. and to give recommendations
for the betterment of customer service.
To study the competition from both organized and unorganized retailing.
To study preferences of consumers for private label over other brands.
To determine the satisfaction levels of consumers with Reliance Fresh stores
service
The whole survey or fieldwork is designed in accordance with that objective .
The objective laid down helps to solve the problems that exist in the
organization.
'his problem provides the foundation for the pro-ect and the pro-ective.
NEED OF THE STUDY
ow a days retail industry is growing sector there so many companies which
entered into retail industry. consumer behavior is most important which explains
the consumer expectations and perceptions and explains the reasons for growth of
retail industry.
SCOPE OF THE STUDY
To know the consumer behavior at reliance fresh. ! large number of new players
have entered the market to gain market share in this rapidly improving market. The
study deals with Reliance in focus and the study then goes on to evaluate and
analyse the findings so as to present a clear picture of trends in the retail sector.
RESEARCH METHODOLOGY
The study deals mainly with studying the buying pattern in the industry with a
special focus on Reliance Fresh.
"xploratory # descriptive experimental research
The research is primarily both exploratory as well as descriptive in nature. The
sources of information are both primary # secondary.
! well$structured %uestionnaire was prepared and personal interviews were
conducted to collect the customers perception and buying behavior& through this
%uestionnaire.
'!()*+, ("T-./.*.,0
'amplingTechni%ue1
Initially, a rough draft was prepared keeping in mind the ob-ective of the research. A pilot study
was done in order to know the accuracy of the 5uestionnaire. 'he final 5uestionnaire was
arrived only after certain important changes were done. 'hus my sampling came out to be
-udemental and convinent
'ample size1
The sample size was restricted to only 233& which comprised of mainly people from
-yderabad due to time constraints.
'ampling !rea 1
The area of the research was -yderabad& +ndia.
)rimary data was collected.
Respondents were selected randomly.
'!()*+, )*!1
'ampling unit1 4ustomers at Reliance Fresh stores were selected
'ample size1 233 customers
'ampling procedure1 4ustomers were selected randomly and were given
%uestionnaire or just asked the %uestions.
LIMITATIONS OF THE STUDY
2. The research is confined to -yderabad only.
5. 'ome respondents were reluctant to divulge personal information
which can affect the validity of all responses.
6. The environmental changes are vital to be considered in order to
assimilate the findings.
INDUSTRY PROFILE
India retail industry is the largest industry in India, with an employment of around 67 and
contributing to over 897 of the country's :1$. Retail industry in India is e+pected to rise ;<7
yearly being driven by strong income growth, changing lifestyles, and favorable demographic
patterns.
'he Indian retail market, which is the fifth largest retail destination globally, according to
industry estimates is estimated to grow from the => ??9 billion in ;99@ to => A;@ billion by
;989 and => B?@ billion by ;98<. imultaneously, modern retail is likely to increase its share in
the total retail market to ;; per cent by ;989.
Continuing the robust growth of the organi!ed retail in India, according to the Credit
Rating and Information ervices of India, the industry raked in => ;<.AA billion turnover in
;99@-96 as against => 8B.CC billion in ;99B-9@, a whopping growth rate of AC.@? per cent.
India has one of the largest numbers of retail outlets in the world. *f the 8; million retail
outlets present in the country, nearly < million sell food and related products. 'hought the market
has been dominated by unorgani!ed players, the entry of domestic and international organi!ed
players is set to change the scenario.
*rgani!ed retail segment has been growing at a blistering pace, e+ceeding all previous
estimates. According to a study by 1eloitte Daskins and ells, organi!ed retail has increased its
share from < per cent of total retail sales in ;99B to 6 per cent in ;99@. 'he fastest growing
segments have been the wholesale cash and carry stores .8<9 per cent/ followed by supermarkets
.899 per cent/ and hypermarkets .@<-69 per cent/. 0urther, it estimates the organi!ed segment to
account for ;< per cent of the total sales by ;988.
For a long time& organised retail in +ndia remained the attraction of only a few
enterprising +ndian entrepreneurs& who took the plunge into the deep sea of a
hitherto uncharted territory. +t is only in the last 23$27 years that the retail sector8s
inherent attractiveness started catching the attention of large corporate houses in
+ndia& like the Raheja ,roup& R), "nterprises& the )iramal ,roup etc. 9ut with due
respect to all of them& their vision has remained conservative and they have been
modest in scaling up their retail business models to take it to the next level of
operations with a pan$+ndia presence.
:hat 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.
:hat is it that we can label as the compelling drivers of this new retail thrust
in +ndia with a large corporate house like Reliance +ndustries announcing big& not to
mention international retail giants who are getting impatient to enter +ndia<
The first driver is a self$sustaining buoyant +ndian economy that is growing at
eight per cent a year.
The second is that as the economy grows and expands& the consumption
habits and patterns of people also change = and it is changing real fast in
+ndia.
The third important driver of organized retail is the country8s demography =
+ndia is home to the largest and the youngest population in the world. +ndia8s
633 million$odd middle$class& the real consumers& is catching the attention of
the world.
'*'AE A%1 *R:A%IF"1 R"'AIE (ARG"' IF" I% I%I1A
':.T !!*0'+' .F R"T!+* +/>'TR0 + +/+!
Retailing in +ndia is gradually inching its way toward becoming the next boom
industry. The whole concept of shopping has altered in terms of format and
consumer buying behavior& ushering in a revolution in shopping in +ndia. (odern
retail has entered +ndia as seen in sprawling shopping centres& multi$storeyed malls
and huge complexes offer shopping& entertainment and food all under one roof.
'trengths
-uge population& increasing per$capita income and changing consumer
habits $ all these developments have culminated in the booming of the retail
sector in +ndia.
+ncreasing per$capita income has led to the boom of retail sector in +ndia.
The changing consumer buying behavior and the increasing number of
shaopping malls and other format stores is another strength of the +ndan
retail industry.
The huge population and the diversified culture is also one factor for the
growth of the sector.
! large young working population with median age of 5? years.
The retail industry is providing employment generation.
The assortment is getting better. )eople 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.
+ndia retail industry is expanding itself most aggressively. The awareness and
the acceptability about hre retail market is increasing.
+n the +ndian retailing industry& food is the most dominating sector and is
growing at a rate of @A annually.
:eaknesses
Retail is still not a recognized industry in +ndia. !ccording to a study in 533B&
total retail sales is Rs. @63&333 4rores& out of which the organized retail sales
only of Rs. 6333 4rores.
The real estate sector is increasing the propertys prices and this is affecting
the overall profits.
9ecause of the heavy initial investments re%uired& break even is difficult to
achieve and many of these players have not tasted success so far.
F/+ is not allowed in Retail and the foreign players like :almart& 4arrefour
are entering by joining hands with +ndian retailers.
The lack of infrastructure and manpower is one of the challenges faced by
organized retail in +ndia. This sector lacks skilled and trained manpower.
The organised retail in +ndia is facing stiff competition from the local kiranas
and the wholeasalers. 4onsumers still prefer them as the better option for
saving their pocket.
.pportunities
The +ndian retailing sector is at an inflexion point where the growth of
organized retailing and growth in the consumption by the +ndian population is
going to take a higher growth trajectory.
Retail is +ndias largest industry& accounting for over 23 per cent of the
countrys ,/) and around eight per cent of the employment.
The organised retail sector is expected to grow to >' C D3 billion by 5323.
+ndian retailers like Reliance Retail& )antaloons etc. are strengthening the
retail sector.
Reliance Retail& for instance& has chalked out a plan to roll out about 7&733
stores of all kinds in E33 cities& E7 logistics centres and 2&B33 farm supply
hubs.
!F 9irla ,roup is looking at pumping in Rs 27&333$53&333 crore GRs 273$533
billionH $$ with an initial investment of Rs 7&333 crore GRs 73 billionH in the
next few years.
(any foreign retailers like :al$(art& Tesco are entering +ndian retail industry.
The market is growing& government policies are becoming more favorable
and emerging technologies are facilitating operations.
! number of foreign brands including French 4onnection& 'anrio of -ello Iitty
fame& Jimmy 4hoo& *a )earla and 4alvin Ilein among others have already
lined up for permission to infuse foreign direct investment through the single$
brand retail window.
Threats
Retailing is a low$margin& high$volume& commodity business where
profitability gets strained as competition intensifies. !nd if wrong choices are
made regarding the location or the formatting of the store& woes betide the
retailer.
!nother threat is the vexingly high real estate prices& the loosely$knit
distribution networks in +ndia8s hinterland.
The near$absence of any modern supply chain logistics& shortage of skilled
personnel& and a regulatory system that resembles a patchy %uilt more than
anything else.
!vailability of %uality retail space will be a key determinant for the growth of
the sector. :ith most +ndian cities undergoing rapid urbanization& spiraling
rental costs has most retailers worried already.
The competition from the unorganized retail is stiff. 4ustomers have been
shopping from the local stores and wholesalers& mainly in Food sector for
decades and still have not accepted the organized retail completely.
COMPANY PROFILE
'he Reliance :roup, founded by 1hirubhai D. Ambani .8C?;-;99;/, is India's largest private
sector enterprise, with businesses in the energy and materials value chain. 1hirubhai Ambani
founded Reliance as a te+tile 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. (any brands like
Reliance 0resh, Reliance 0ootprint, Reliance 'ime out, Reliance digital, Reliance )ellness,
Relaince 'rend! and Reliance Hewel come under the Reliance Retail brand. In %ovember ;99@,
Reliance announced its foray into the branded -ewelry market.
Reliance Fresh is the retail chain division of Reliance +ndustries of +ndia which is
headed by (ukesh !mbani. Reliance has entered into this segment by opening new
retail stores into almost every metropolitan and regional area of +ndia.
The Reliance ,roup& founded by /hirubhai -. !mbani G2@65$5335H& is +ndia8s largest
private sector enterprise& with businesses in the energy and materials value chain.
,roup8s annual revenues are in excess of >'/ 55 billion. The flagship company&
Reliance +ndustries *imited& is a Fortune ,lobal 733 company and is the largest
private sector company in +ndia.
Iackward vertical integration has been the cornerstone of the evolution and growth of Reliance.
tarting with te+tiles in the late seventies, Reliance pursued a strategy of backward vertical
integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil
and gas e+ploration and production - to be fully integrated along the materials and energy value
chain.
'he :roup's activities span e+ploration and production of oil and gas, petroleum refining and
marketing, petrochemicals .polyester, fiber intermediates, plastics and chemicals/, te+tiles and
retail.
Reliance en-oys 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 ma-or
petrochemical products.
'he :roup e+ports products in e+cess of =1 88 billion to more than 899 countries in the world.
'here are more than ;<,999 employees on the rolls of :roup Companies. (a-or :roup
Companies are Reliance Industries Eimited .including main subsidiaries Reliance $etroleum
Eimited and Reliance Retail limited/, Indian $etrochemicals Corporation Eimited and Reliance
Industrial Infrastructure Eimited.
Vision
J:rowth has no limit at Reliance. I keep revising my vision.
*nly when you can dream it, you can do it.J
1hirubhai Ambani founded Reliance as a te+tile company and led its evolution as a global leader
in the materials and energy value chain businesses. De is credited to have brought about the
e&uity cult in India in the late seventies and is regarded as an icon for enterprise in India. De
epitomi!ed the spirit 'dare to dream and learn to e+cel'.
'he => ;9 billion Reliance :roup is a living testimony to his indomitable will, single-minded
dedication and an unrelenting commitment to his goals.
Mission
K:rowth through CommitmentsK
:e care about 1$
Kuality
Research # /evelopment
-ealth& 'afety # "nvironment
-uman Resource /evelopment
"nergy 4onservation
4orporate 4itizenship
Reliance believes that any business conduct can be ethical only when it rests on the nine core
values of Donesty, Integrity, Respect, 0airness, $urposefulness, 'rust, Responsibility,
Citi!enship and Caring.
'he 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 e+cludes considerations of
personal advantage.
)e do not lose sight of these values under any circumstances, regardless of the goals we have to
achieve. 'o us, the means are as important as the ends.
0or RelianceL
:rowth 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. pecialised tests like biological monitoring, health
risk assessment studies and audits for e+posure to various materials are also performed. Dealth
education and awareness form an integral part of the health care programme at Reliance
:rowth Is Care for afety
)e believe that the safety of each employee is the responsibility of the individual as well as of
the whole community of employees
:rowth is care for the environment
Reliance 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.
"nvironmental protection is an integral part of the planning, design, construction, operation and
maintenance of all our pro-ects.
:rowth is conservation
At Reliance, energy conservation efforts seek to reduce the unit cost of fuels and to improve
efficiencies in energy intensive processes.
:rowth is betting on our people
Reliance builds with care a workplace that proactively fosters professional as well as personal
growth. 'here is freedom to e+plore and learnM and there are opportunities that inspire initiative
and intrinsic motivation. )e believe that people must dream to achieve, that these dreams will
drive the company's e+cellence in all its businesses. Reliance thinks, behaves, lives and thrives
with a global mindset, encouraging every employee to reach his N her full potential by availing
opportunities that arise across the group.
R"*+!4" ,R.>)
The Reliance ,roup& founded by /hirubhai -. !mbani G2@65$5335H& is +ndia8s largest
private sector enterprise& with businesses in the energy and materials value chain.
/hirubhai !mbani founded Reliance as a textile company and led its evolution as a
global leader in the materials and energy value chain businesses. -e is credited to
have brought about the e%uity cult in +ndia in the late seventies and is regarded as
an icon for enterprise in +ndia. -e epitomized the spirit 8dare to dream and learn to
excel8.
'he => 8;< billion Reliance :roup is a living testimony to his indomitable will, single-
minded dedication and an unrelenting commitment to his goals.:roup's annual revenues are in
e+cess of => ?A billion. 'he flagship company, Reliance Industries Eimited, is a 0ortune
:lobal <99 company and is the largest private sector company in India.
All of Reliance :roup production and services ventures have one common feature O
global scale operations employing state-of-the-art technology in all fields. 'he 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.
Iackward vertical integration has been the cornerstone of the evolution and growth of
Reliance. tarting with te+tiles in the late seventies, Reliance pursued a strategy of backward
vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum
refining and oil and gas e+ploration and production - to be fully integrated along the materials
and energy value chain.
'he :roup's activities span e+ploration and production of oil and gas, petroleum refining
and marketing, petrochemicals .polyester, fibre intermediates, plastics and chemicals/, te+tiles
and retail.
Reliance en-oys 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 ma-or
petrochemical products.
'he :roup e+ports products in e+cess of => ;9 billion to 896 countries in the world.
(a-or :roup Companies are Reliance Industries Eimited .including main subsidiaries Reliance
$etroleum Eimited and Reliance Retail Eimited/ and Reliance Industrial Infrastructure Eimited.
RELAINCE RETAIL LIMITED
(r. (ukesh !mbani& 4hairman and (anaging /irector& Reliance +ndustries
*imited GR+*H
Reliance Retail is the retail business wing of the Reliance business. (any brands like
Reliance 0resh, Reliance 0ootprint, Reliance 'ime out, Reliance digital, Reliance )ellness and
Reliance Hewel come under the Reliance Retail brand. In %ovember ;99@, Reliance announced
its foray into the branded -ewelry market.
*n Hune ;B, ;99B, (ukesh Ambani .Ambani/, Chairman and (anaging 1irector,
Reliance Industries Eimited .RIE/, announced his company's plans to foray into the retail sector
with an initial investment of =><.B billion.

Calling this an idea which has the potential to
revolutioni!e the Indian socio-economic framework, he said JConceptually, Reliance is creating
a virtuous circle of prosperity by bringing farmers, small shopkeepers and consumers in a win-
win partnership.'' De was speaking at the ?;nd annual general meeting of the company, here.
JA new company, Reliance Retail Etd. .RRE/ will spearhead this revolution. Reliance Industries
will have a 899 per cent stake in RRE, save for employee stock options,J Reliance Industries
stated in a press release.
:iven the overarching nature of this initiative, RRE would entail an e&uity investment to
the e+tent of Rs. 89,999 crore .>;.;A billion/. It would have to e+pend more than Rs. ;<,999
crore .><.B9 bilion/ in the years to come. J*rganised retailing is a new business initiative of
Reliance that signifies a defining point in its history. 'his marks the full flowering of RIE's basic
philosophy2 share and prosper. )ith this new initiative, Reliance will forge strong and enduring
bonds with millions of farmers and transform its relationship with consumers to a new level.
*rgani!ed Retailing, along with the ne+t generation distribution system, is at the core of
this transformational initiative. 'his idea evolves from the new paradigm in the consumption of
products and services in India,'' said (r. Ambani
Reliance Retail would build a business that would focus on Jcompetitive offerings'' to
Indian consumers across several verticals2 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 e+periences,
health and well-being products and services and educational products and services. It would
develop partnerships to bring the best of lu+ury brands from all over the world to India and it
would also develop linkages with opportunities in agriculture and food processing.
'he company would have a pan-India footprint covering 8,<99 cities and towns and
embracing all strata of the society.
Reliance's retail venture was e+pected to be India's e&uivalent of )al-(art tores Inc. .)al-
(art/, as it planned to cover the entire retail ambit. RRE was e+pected to have its presence
across India.
Reliance proposed to ac&uire 89,999 hectares of land in Daryana and planned to e+tend
its reach across 8,<99 Indian cities with different retailing formats such as warehouse clubs,
hypermarkets, supermarkets, specialty stores, and convenience stores.
Reliance 0resh is the retail chain division of Reliance Industries of India which is headed by
(ukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost
every metropolitan and regional area of India. 'he .Reliance 0resh/ store is for everyone... $rices
are affordable for everyone,J Reliance Industries Etd president and chief e+ecutive .foods
business/ :unender Gapur told reporters after unveiling the Reliance 0resh brand.
'he first Reliance fresh store was opened in Dyderabad in %ovember ;99B. Reliance
0resh outlets are in Iangalore, Chennai, %ew 1elhi, :urgaon, 0aridabad, Dyderabad, Haipur,
(umbai, (adurai, Cochin, 'richur, Calicut, Chandigarh, Eudhiana.
The Reliance Fresh supermarket chain is R+*s Rs 57&333 crore venture and it plans
to add more stores across different g& and eventually have a pan$+ndia footprint by
year 5322. Reliance Fresh stocks fresh fruits and vegetables& staples& fast moving
consumer goods and dairy products. The stores are already selling over 2&333
tonnes of fresh produce daily and also 573 categories of commodities.
The company is approaching farmers directly for the procurement of produce&
seeking to reduce the ?3A wastage that occurs through the traditional supply
chain. 9esides& the stores provide direct employment to 7 lakh young +ndians 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
%uality services for part$time jobs.
The Reliance Fresh stores are convenience stores with an area of about 2333 to
?333 s% ft. +n Reliance Fresh stores& the commodities are classified into various
categories like 'taples& Fruits and Fegetables GF n FH& /airy& )rocessed Foods G)FH&
Food and 9everages& -ouse ware& )ersonal 4are etc. Few stores have apparel
section also which has very low priced range and good %uality clothes.
CONCEPTUAL FRAME WORK
Reliance's understanding of the retail market in India, in terms of clear understanding of2
P 'he primary sources of procurement of products
P Average inventory .retail and warehouse/ that is normally maintained at retail stores across
various categories
P easonal sales variation in categories across different regions in the country
P hrinkage and wastage of products and percentage of returns thereon
P 'he number of G=s across brands and categories
P 'he credit details .in terms of the number of days and cash/ that retailers normally get from
their supplier across various product categoriesM and
P 'he average gross margin .percentage of (R$/ that the retailer generally gets on its products.
Apart from food and grocery, which will contribute A9 percent to total sales, the company
is strongly looking at apparel, lifestyle, consumer durables, and leisure and entertainment
operations as its ma-or drivers of business. It is considering the establishment of both multi-
brand as well as e+clusive brand outlets for certain categories of operations.
)hile most of outlets will be company-owned, the convenience-store format could
possibly be the only e+ception 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 conte+t.R"EIA%C" 0R"D
'he study of consumers helps firms and organi!ations improve their marketing strategies by
understanding issues such as how
'he psychology of how consumers think, feel, reason, and select between different
alternatives .e.g., brands, products, and retailers/M
'he psychology of how the consumer is influenced by his or her environment .e.g.,
culture, family, signs, media/M
'he behavior of consumers while shopping or making other marketing decisionsM
Eimitations in consumer knowledge or information processing abilities influence
decisions and marketing outcomeM
Dow consumer motivation and decision strategies differ between products that differ in
their level of importance or interest that they entail for the consumerM and
Dow marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
*ne JofficialJ definition of consumer behavior is J'he study of individuals, groups, or
organi!ations and the processes they use to select, secure, use, and dispose of products, services,
e+periences, or ideas to satisfy needs and the impacts that these processes have on the consumer
and society.J
Although it is not necessary to memori!e this definition, it brings up some useful points2
Iehavior occurs either for the individual, or in the conte+t of a group .e.g., friends
influence what kinds of clothes a person wears/ or an organi!ation .people on the -ob
make decisions as to which products the firm should use/.
Consumer behavior involves the use and disposal of products as well as the study of how
they are purchased. $roduct use is often of great interest to the marketer, because this
may influence how a product is best positioned or how we can encourage increased
consumption. ince many environmental problems result from product disposal .e.g.,
motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at
landfills/ this is also an area of interest.
Consumer behavior involves services and ideas as well as tangible products.
'he impact of consumer behavior on society is also of relevance. 0or e+ample,
aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have
serious repercussions for the national health and economy.
'here are four main applications of consumer behavior2
'he most obvious is for marketing strategy,i.e., for making better marketing campaigns.
0or e+ample, by understanding that consumers are more receptive to food advertising
when they are hungry, we learn to schedule snack advertisements late in the afternoon.
Iy understanding that new products are usually initially adopted by a few consumers and
only spread later, and then only gradually, to the rest of the population, we learn that .8/
companies that introduce new products must be well financed so that they can stay afloat
until their products become a commercial success and .;/ it is important to please initial
customers, since they will in turn influence many subse&uent customers# brand choices.
A second application is public policy. In the 8C69s, Accutane, a near miracle cure for
acne, was introduced. =nfortunately, Accutane resulted in severe birth defects if taken by
pregnant women. Although physicians were instructed to warn their female patients of
this, a number still became pregnant while taking the drug. 'o get consumers# attention,
the 0ederal 1rug Administration .01A/ took the step of re&uiring that very graphic
pictures of deformed babies be shown on the medicine containers.
ocial marketing involves getting ideas across to consumers rather than selling
something. (arty 0ishbein, a marketing professor, went on sabbatical to work for the
Centers for 1isease Control trying to reduce the incidence of transmission of diseases
through illegal drug use. 'he best solution, obviously, would be if we could get illegal
drug users to stop. 'his, however, was deemed to be infeasible. It was also determined
that the practice of sharing needles was too ingrained in the drug culture to be stopped.
As a result, using knowledge of consumer attitudes, 1r. 0ishbein created a campaign that
encouraged the cleaning of needles in bleach before sharing them, a goal that was
believed to be more realistic.
As a final benefit, studying consumer behavior should make us better consumers.
Common sense suggests, for e+ample, that if you buy a BA li&uid ounce bottle of laundry
detergent, you should pay less per ounce than if you bought two ?; ounce bottles. In
practice, however, you often pay a si!e premium by buying the larger &uantity. In other
words, in this case, knowing this fact will sensiti!e you to the need to check the unit cost
labels to determine if you are really getting a bargain.
'here are several units in the market that can be analy!ed. *ur main thrust in this course is
the consumer. Dowever, we will also need to analy!e our own firm#s strengths and weaknesses
and those of competing firms. uppose, for e+ample, that we make a product aimed at older
consumers, a growing segment. A competing firm that targets babies, a shrinking market, is
likely to consider repositioning toward our market.
'o assess a competing firm#s potential threat, we need to e+amine its assets .e.g., technology,
patents, market knowledge, awareness of its brands/ against pressures it faces from the market.
0inally, we need to assess conditions .the marketing environment/. 0or e+ample, although we
may have developed a product that offers great appeal for consumers, a recession may cut
demand dramatically.
Reliance Industries has stunned India's Retail Sector by announcing a gigantic investment
of over Indian Rupees 25,000 rores !roughly e"uivalent to #S$ % 5&5 'illion( in their
proposed Reliance Retail greenfield pro)ect in India&
*his +ill also entail an investment of half a million people and have a physical presence
in more than ,,500 geographic locations spread across India&
In Indian business ne+spapers, Mr& Mu-esh .mbani , theReliance hairman has been
"uoted saying that /&&& Reliance Retail +ill partner +ith farmers, logistics
operators,small shop-eepers and traders&&& /
Industry e+perts are sensitive to the point that local markets have an edge over the retail investors
in India as they have uni&ue advantages such as an understanding of local needs and e+tended
service like home delivery. As the 01I influence on the Indian retail sector sets in, the total si!e
of the retail trade is e+pected to grow e+tensively in the coming years and the consumer
segments patroni!ing the big malls will create fren!y for organi!ed retailing predicting a growth
of ;<-?9 per cent per annum over the ne+t decade. (oreover, Indian retail chains would get
integrated with global supply chains since 01I will bring in technology, &uality standards and
marketing thereby, leading to new economic opportunities and creating more employment
generation.
Industry trends for retail sector indicate that organi!ed retailing has ma-or impact in controlling
inflation because large organi!ed retailers are able to buy directly from producers at most
competitive prices. )orld Iank attributes the opening of the retail sector to 01I to be beneficial
for India in terms of price and availability of products as it would give a boost to food products,
te+tiles and garments, leather products, etc., to benefit from large-scale procurement by
international chainsM in turn, creating -obs opportunities at various levels.
As foreign investors e+ploring their potentials in the retail sector, are keen on developing malls
in India, the si!e of organi!ed retailing is e+pected to touch >?9 billion by ;989 or appro+imately
89 per cent of the total. 'his has initiated market-entry announcement from some retailers and
has signaled to international retailers about India#s seriousness in promoting the sector. )hile
there are reports of international retailers like )al-(art analy!ing business opportunities in
IndiaM Reliance, the largest Indian conglomerate is investing >?.A billion to become India#s
largest contemporary retailer. 'here are also reports of investments for QDypercity Retail# by
G.Rahe-a :roup to establish << hypermarkets by ;98<. All these factors will contribute in taking
Indian retail business to une+pected growth based on the consumer preference for shopping in
congenial environs and also availability of &uality real estate.
'usiness Strategies for Retail Stores
Iusiness trategies for Retail tores
o Retail business strategies are a reflection of your personal retail philosophy.
:eneric solutions to your strategic issues may not be appropriate for your
particular store. 'his checklist provides a general framework for addressing the
more important strategic issues confronting retail stores. =sing the framework,
you have the fle+ibility to develop your business strategies to grow loyal
customers and achieve competitive advantage within the parameters of your retail
philosophy.
Advertising trategies
o 8. Customer $rofile. Iuild a profile of your target customer before you develop
strategies for that customer. 'he content of your appeal should be specific and
relevant to your target customer.
;. Advertising2 0ew retail stores survive without advertising. Relying on word-of-mouth to drive
store traffic is risky. %ew store advertising should focus on creating store awareness. hift your
advertising to promotional advertising as soon as you are satisfied you've established a presence
in the market.
?. Iest ways to advertise2 =se media that effectively reaches your target audience for the least
amount of e+penditure. (ass media could be useful during the start-up phase of your campaign.
It helps to achieve broad reach and build awareness with a mass audience. =se more targeted
media for continuity advertising that will allow you to !ero in on your customer base with
messages relevant to your base.
Include the 4ellow $ages phone books in you media mi+. 'his is the go-to source for shoppers
looking for specific types of stores. Consider using the online edition of your local newspaper. It
is ine+pensive. $op-up banner ads are annoying because they alienate more than they promote.
$lace your ads in the news,sports or leisure sections. 4ou get more mileage for the dollars with
far less clutter.
Consider having your own website. 4our website gives you an ongoing way to communicate
with your customers. Geep your website content fresh to keep your customers coming back to
see what's newM nothing is worse than a website with stale content.
A. )hen to advertise2 chedule your advertising to start two to three weeks prior to a scheduled
promotional event. 'his gives your customers sufficient time to plan ahead. 1o not push the
advertising out too far as it will lose the sense of immediacy and customers tend to be forgetful.
1o not start you advertising too late because that increases the likelihood your customers will not
see your ad before it's too late to react.
It makes good sense to schedule your promotions to coincide with gift-giving and
seasonal holidays. If considering monthly sales events, beware of the wear-out factorR
$romotions should be special events. )hen you train your customers to accept you are always on
promotion, they may not react with any sense of urgency. (any retailers schedule their
promotions to coincide with paydays and ta+ refunds when customers have money to spend.
<. Dow much should you spend on advertising3 (any e+perts in the industry use a rule of thumb
figure of between < and 89 percent of annual sales. Another approach is based on affordability. It
uses a formula that takes into consideration your fi+ed rent e+pense. 'he affordability approach
drives your ad budget closer to the <7 figure rather than the 897.
4our advertising investment ultimately resolves around your retail philosophy. Check your
industry averages to see what your competitors are spending.
(erchandising trategies
o 8. $ricing strategy. $ricing is a function of your retail philosophy relative to what
your competitors will allow. 4our options are to price to yield profit margins
below, at or above the competition. Regardless of your retail philosophy, you
have no choice but to generate profit margins sufficient to cover your operating
e+penses. 'emper your retail philosophy with an awareness of the reality of your
competitive position in the market. :iven a strong competitive position, you can
pursue the low price option to harass your competitorsM or the high price option to
ma+imi!e profit.
(any retailers with strong competitive positions and a view toward the long term opt to harass
their competitors. )hen your competitive position is average to weak, avoid the high price
option altogether as you run the risk of having no customers. 'he e+ceptions are uni&ue items
.impulse items/ that defy comparison but yet are not your main attraction. $rice these items at
whatever the market will support
1etermine and independently confirm the strength of your competitive position and the demands
of your market prior to e+ecuting a pricing strategy that may not be appropriate.
;. (anaging your inventory2 'ypical retail store inventory should turn over an average of < to B
times a year. 'his general average will vary by industry. Check to see what the average turnover
rate is for your industry. 'ake active steps to clear out slow-moving stock when your turn rates
are lower than your industry average. 'his re&uires a good inventory control system and an
effective strategy for stock rotation.
Eower the prices on slow movers on a gradual basis until the inventory is gone. 0or e+ample, if
the normal retail on a slow mover is >< and your cost is >;.<9, lower the price to >A.;< for a
month. After a month, reduce the price further. 'hen, keep reducing until the item is finally sold.
Calculate your 8;-month inventory turnover with the following formula2
Cost of :oods oldNCurrent inventory S Inventory 'urnover
"+ample2 Cost of :oods old S >8,999M Current Inventory S >8@<M Inventory 'urnover S <.@.
?. ales per s&uare foot2 Average sales per s&uare foot of retail selling space will vary by
industry. Check to see what your industry averages are and use these as guides to keep score on
your performance relative to your industry averages.
A. pace allocation2 tore layout and design is as much a science as it is an art. )hen done
poorly, it will hasten the death of your retail store. If you are unsure of your merchandising
abilities, consult with a professional merchandiser. 'his could be the best investment you make.
'he following are a few merchandising basics to guide your thinking2 8. ecurity2 strategically
install video cameras and fish-eye mirrors to prevent shoplifting. Geep small and e+pensive
items in glass cases under lock and key. ;. (ost important items2 give these items prime store
locations. ?. Digh margin impulse items2 give these items high-traffic locations. A. Related items2
promote coordinated purchases by displaying related items ne+t to each other. <. Related
departments2 group related departments together to promote coordinated purchases. B. tore
atmosphere2 considerations such as store dTcor, lighting and fi+tures, music and scent should
come together as a unified whole to make the shopping e+perience invigorating and delightfulM to
encourage return visits.
Retail pricing strategies
'here are many outside influences that affect profitability and a retailer's bottom line. etting the
right price is a crucial step toward achieving that profit. Retailers are in business to make a
profit, but figuring out what and how to price products may not come easily.
Iefore we can determine which retail pricing strategy to use in setting the right price, we must
know the costs associated with the products. 'wo key elements in factoring product cost is
the cost of goods and the amount of operating e+pense.
'he cost of goods includes the amount paid for the product, plus any shipping or handling
e+penses. 'he cost of operating the business, or operating e+pense, includes overhead, payroll,
marketing and office supplies.
Regardless of the pricing strategy used, the retail price of the products should more than cover
the cost of obtaining the goods plus the e+penses related to operating the business. A retailer
simply cannot succeed in business if they continue to sell their products below cost.
Retail $ricing trategies
%ow that we understand what our products actually cost, we should look at how our competition
is pricing their products. Retailers will also need to e+amine their channels of distribution and
research what the market is willing to pay.
(any pricing strategies e+ist and each is used based on particular a set of circumstances. Dere
are a few of the more popular pricing strategies to consider2
(ark-up $ricing
(arkup on cost can be calculated by adding a pre-set .often industry standard/ profit margin, or
percentage, to the cost of the merchandise.
(arkup on retail is determined by dividing the dollar markup by retail.
Ie sure to keep the initial mark-up high enough to cover price reductions, discounts, shrinkage
and other anticipated e+penses, and still achieve a satisfactory profit. Retailers with a varied
product selection can use different mark-ups on each product line.
Uendor $ricing
(anufacturer suggested retail price .(R$/ is a common strategy used by the smaller retail
shops to avoid price wars and still maintain a decent profit. ome suppliers haveminimum
advertised prices but also suggest the retail pricing. Iy pricing products with the suggested retail
prices supplied by the vendor, the retailer is out of the decision-making process. Another issue
with using pre-set prices is that it doesn't allow a retailer to have an advantage over the
competition.
Competitive $ricing
Consumers have many choices and are generally willing to shop around to receive the best price.
Retailers considering a competitive pricing strategy will need to provide outstanding customer
service to stand above the competition.
$ricing below competition simply means pricing products lower than the competitor's price. 'his
strategy works well if the retailer negotiates the best prices, reduces costs and develops a
marketing strategy to focus on price specials.
$restige pricing, or pricing above competition, may be considered when location, e+clusivity or
uni&ue customer service can -ustify higher prices. Retailers that stock high-&uality merchandise
that isn't available at any other location may be &uite successful in pricing their products above
competitors.
$sychological $ricing
$sychological pricing is used when prices are set to a certain level where the consumer perceives
the price to be fair. 'he most common method is odd-pricing using figures that end in <, @ or C.
It is believed that consumers tend to round down a price of >C.C< to >C, rather than >89.
*ther $ricing trategies
Geystone pricing is not used as often as it once was. 1oubling the cost paid for merchandise was
once the rule of pricing products, but very few products these days allow a retailer to keystone
the product price.
(ultiple pricing is a method which involves selling more than one product for one price, such as
three items for >8.99. %ot only is this strategy great for markdowns or sales events, but retailers
have noticed consumers tend to purchase in larger amounts where the multiple pricing strategy is
used.
1iscount pricing and price reductions are a natural part of retailing. 1iscounting can
include coupons, rebates, seasonal prices and other promotional markdowns.
(erchandise priced below cost is referred to as loss leaders. Although retailers make no profit on
these discounted items, the hope is consumers will purchase other products at higher margins
during their visit to the store.
As you develop the best pricing model for your retail business, understand the ideal pricing
strategy will depend on more than costs. It also depends on good pricing practices.
It is difficult to say which component of pricing is more important than another. Hust keep in
mind, the right product price is the price the consumer is willing to pay, while providing a profit
to the retailer.
E-mail Strat!"
"mail marketing can be a very effective tactic for today#s retail store. In an economy where
competition is intense, email marketing can give you the e+tra boost you need to get people into
your store and increase sales. Iest of all, it is simple to add into your Qmarketing mi+#. "mail
marketing is highly cost effective, and there is very little to learn. A little bit of brainstorming is
re&uired, but once you#ve done that, you#re ready to goR
'his article will assist you in deploying an email marketing strategy for your retail store. As you
ac&uire more e+perience with email marketing you will be able to ad-ust your strategy to make
sure you always get the biggest possible benefit.
tep 82 tart Iuilding 4our (ailing Eist
'he entire process starts with building your mailing list. 'his is a vital step because the results
you achieve will heavily be based on the &uality and si!e of your mailing list. Remember, you
don#t want to be labeled a spammer, so make sure you get permission to email them before they
are added to your mailing list.
'here are several ways you can get people to share their email address to help build your contact
list.
(any retail stores will ask customers for their email during the check-out process. imply
having your staff at the cash say2 VCan I have your email address so we can occasionally email
you special promotions3K can really go a long wayR Consumers usually respond positively to
special offers and most will be willing to give their email address to you if you are willing to
give something back .coupons, invites to e+clusive in-store events, other special promotions,
etc/.
(any retail stores also stage contests where people can win a pri!e. 'he pri!e can be anything
you think will entice your customers, from store items, to a free give-a-way, to anything else you
can imagine. *n the ballot that people fill out enter the contest, you can ask for their email
address. (ake sure you have a check-bo+ on the ballot asking customers if it is ok to send them
emails. 'hen, you -ust type everyone#s email address from all the ballots and bingoR 4ou#ve got
a lot of new people to add to your contact list.
Iuilding your mailing list for email marketing is not something that will be accomplished
overnight, so don#t be worried if it takes a little bit of time to really build up a substantial list
si!e. o, while you may be super e+cited to send your message out to thousands of people,
remember that building your mailing list is an ongoing process, and it may take several days or
weeks or months to get your mailing list to that si!e.
tep ;2 Ilast *ut 4our "mail (arketing Campaign
*ne of the most important parts of setting up your email marketing campaign is to determine
what your goals are and what specifically you want to promote. After all, if you do not have
defined goals, then it will be very difficult to know whether anything has been accomplished.
1o you want to encourage people to visit your store in person3 1o you want to get people calling
into your store3 1o you want people to be purchasing a specific item3 1o you want people to
talk to their friends about your store3 "tc.
'here are a variety of goals you can have, but once you have determined what you want to
achieve, you can start taking steps towards setting up your email marketing campaign. *ne &uick
suggestion is that the top performing email marketing campaigns are the ones that have one
specific ob-ective. 1on#t try to do everything at once, as that will hurt your email#s success.
(ost retail stores have the ob-ective of generating traffic in their store, which makes sense, since
patrons in your store can lead to new sale. Assuming that is the case, then you can ask yourself,
V)hat would make someone visit my store3K
'he answer for a lot of retail stores is to include coupons or other discount offers in their email
marketing campaign. Iy sending out an email coupon, you are encouraging your customers to
print the coupon at home, and then bring the coupon into your store to redeem it. 'he important
thing is that your email marketing campaign is giving your customer a reason to come back into
your store.
(any retail stores also benefit from the viral nature of email marketing, which helps spread the
word even more.
tep ?2 1o An Analysis *f 4our "mail (arketing Results
After you#ve sent out your campaign, it is important that you analy!e the results. 'his will allow
you to be better at email marketing down the road because you will have a good understanding
of what works better with your specific audience and what is not as effective.
)ith most email marketing software packages, you can see who specifically opened your email,
who clicked on one or more links, who forwarded it to their friends, and more. 'hese numbers
will help you measure the effectiveness of your campaign.
Iy using your reporting numbers you can answer &uestions like VAre my campaigns more
effective when I send them )ednesday morning or 0riday afternoon3K, V1o more people open
my campaign when I mention a specific discount in the sub-ect3K, V1o more people come into
the store if my email has an offer that only lasts a limited-time3K, "tc. 'here are a wide variety of
&uestions you can ask. And, with the reports at your fingertips through your email marketing
software, you can actually create highly scientific answers pretty easily.
A little bit of studying the reports can go a long way towards boosting your future email
marketing efforts.'ons of retail stores across the planet have started using the power of email
marketing to help achieve their goals. )ith it#s low price tag, ease of use, and high R*I, it is no
surprise that many stores have stopped traditional paper mailings altogether in favor of email. o,
prepare to take the plunge and boost your retail store#s marketing to the ne+t level.
0ffective mar-eting strategy in retail
'he retail sector is one of the most competitive in the business world, and so effective marketing
strategy is needed in order to be successful. Dowever, many retailers get caught up in the day-to-
day running of their companies and don't use all their business strategy e+pertise to push their
business forward. If you are in the retail business, then you need to wake up and think carefully
about your current marketing strategy. If you don't you could find yourself trailing behind the
competition and losing business to other retailers. If you want to improve your retail marketing
strategy, then here is some advice to get you started.
#se the Internet
)ith the Internet increasing in popularity all the time, it is e+tremely important to use Internet
marketing as a way to improve market share. In order to improve your access to customers,
create a web site where customers can view your merchandise and possibly buy products online.
elling your products online is a great way of e+panding your business without having to spend
lots of money on new premises or retail locations. Dowever, if you don't want to develop online
business, then you can still advertise your business online. "ffective marketing strategy should
use all mediums available to improve business e+posure, and with online advertising a low cost
and effective medium it makes sense to take advantage of the opportunity.
1ffer a promotion
Retail business is e+tremely competitive, and so even the smallest of promotions can give you an
edge over your competitors. 4our business strategy should be to come up with regular and
innovative promotions to entice customers into your store. 'hese promotions can range from
offering a free gift with certain products to a competition entry when certain items are purchased.
If you keep your marketing strategy fresh with new promotions then you will definitely remain
competitive and will attract customers to your products.
Signage and storefront are important
Although you can use plenty of comple+ marketing strategy techni&ues to attract customers,
nothing is simpler and more effective than having a bold and effective storefront and signage. If
you have a shop window, then keep the displays up to date and imaginative. Change the display
each season and alter your sign every few years to keep things looking good. Dowever, make
sure that you keep the signage them constant so that your brand and store are easily recognisable.
(ake sure your sign can be seen from as far a distance as possible. ometimes, the simplest
marketing strategies are the best, and keeping your store bright and attractive is one such
method.
.s- customers +hat they +ant
4our marketing strategy ideas might be great, but if you really want to improve your business
then you need to ask the people that matter most - the customers. "ffective marketing strategy
should always begin by asking customers what sort of products, services and promotions they
want. 'his will give you a better idea of how to market your products and improve your
customer base. If there is one thing you should learn about effective business strategy, it is to
listen to your loyal customers and then cater to their needs through effective marketing strategy.
2o+ *o 'uild . 3reat Retail 'usiness Mar-eting Strategy
'his is something that you will already have an idea about when you write your business plan.
%othing is better for an emerging retail business than a really good marketing strategy. 'his is
when all of your research will work to your advantage. In order to build a good marketing
strategy you must first2
Correctly assess your competition and what they are doing to market their businesses.
4ou have to offer your consumers something that is fresh and different if you want to get
their attention.
urvey your potential market beforehand so that you can establish what your consumers
are missing in their current needs as consumers. 4ou want to know what they need and
give it to them.
Eearn what types of advertisements work best in your business# locale. ometimes
commercials are best whereas other area get a better response by utili!ing the local
newspaper or pennysaver.
Iegin your promotion before you plan to open so that you can garner an interest in your
merchandise before you open. Iuilding up some interest ahead of time can help to ensure
a good grand opening.
$romotions and discounts are a necessity to running a successful retail business. 4ou
must make sure that you are in a position to compete in this manner. 4our Vgrand
openingK will run a lot better if you begin with a special promotion.
'he key to successful marketing will be your ability to meet the basic supply and demand
of your community. Ie sure to stay on top of this because these things are always
changing.
4ou should be able to keep up with market changes and try to anticipate them beforehand
because it keeps you a step ahead of the average consumer. 'his will prove invaluable to
you later.

2o+ *o Incorporate 4our Retail 'usiness
'here are three basic types of business structures that you will have to choose from when you are
considering the start of your own retail store. 'hey are as follows2
ole $roprietorship
A sole proprietorship is a business that has only one owner. 'here can be many benefits and
pitfalls to running your business as a sole proprietor.
'he Ienefits2
4ou can keep more of your businesses money#s earned.
'here are less hassles than there might be with other proprietors.
4ou can run the business in any manner that you please.
It is the least costly way of starting a business.
It is easier to get your business started and apply for your permits, licensees etc.
1ealing with the issue of ta+es is less complicated and cheaper.
$itfalls2
It is more costly when the business is faced with losses.
All responsibility falls solely upon the proprietors shoulders.
All of the costs that go along with maintaining the business keeping it running smoothly
are solely the owner#s.
All decisions are made at the owner#s discretion.
Iasically, everything is the owner#s responsibility.
'here are many reasons why you should consider running a business on your own. Dowever, you
do have other options.
$artnership
'here are many types of partnerships that you can delve into. 'he most commonly chosen are
general partnerships and limited partnerships. :eneral partnerships can be entered into with a
mere oral agreement or you can have lawyers draw up legal and binding partnership documents.
If you are considering the idea of having a partnership you should know that signing a legal
partnership agreement is the best way to go about it. 'he legal fees for these documents are more
costly than a sole proprietorship, but not as e+pensive as in a corporation.
)hen you decide to enter into a partnership, you should be certain to add only the specifics of
the agreement that you can both agree to. Dere is a list of some of the other things that you
should have placed in a partnership agreement.
'he type of business that you plan to run.
'he correct amount of e&uity that both parties will invest.
Dow you will divide your profits and losses.
Dow much you will each be compensated.
Dow you will divide your profits and losses.
Dow long will plan to be in business together.
et up provisions for any changes made and closing down.
1ispute settlement clause.
Restriction of authority and e+penditures.
A reasonable settlement in case one partner dies or is incapacitated.
As you can see, there are a great many things to consider when starting a partnership. As with
running a sole proprietorship, there are a lot of benefits and pitfalls as well. I have listed them
here for you.
Ienefits2
'he cost of investing in the business is cheaper since they are divided among two people
instead of one.
'he money needed to process legal fees and everything else that re&uires money is
cheaper.
'here is assistance in dealing with the everyday tasks like, merchandising, employee
issues, general dealings with the public, and all general business concerns.
)ith two people running the business, each can have more time with their families and
friends.
Eegal matters are cheaper for both.
A partnership generally makes the profits and revenue much higher.
Eosses are shared by both and are thus actually easier to deal with.
$itfalls2
Complications may arise if both parties are not in agreement about decisions.
$rofits must be divided among the two and are therefore may be lower for each if sales
are sluggish.
*ne partner may wish to be let out of the business if things are not running smoothly .this
can be a problem if you are only using an oral agreement/.
$artners may not agree on when to end the business.
Compensation problems can occur if one partner puts up more e&uity in the business and
the other wants to be compensated in the same manner.
Corporation
A corporation can make the start of a new business very much easier, but it also takes a great
deal more money and much more paperwork in order to make it happen. :enerally, it is best
when beginning a retail business to avoid starting up as a corporation.
=sually corporations do not run with any specific person claiming themselves as the owner. In a
corporation, control generally depends on whoever owns the most stock. It is most common that
you must own at least <87 of the stock in the corporation in order to have control of the
company.
'here are also many more rules that you must follow in order to run any business as a
corporation as well. In a corporation you must hold regular meetings of the board of directors
which generally consists of 89 people. All of whom are to make decisions regarding the
business.
4ou must also host stockholder#s meetings as well and keep viable records of all the decisions
that are made. 'here can be any number of stockholders present for these meetings.
Corporations are best left for e+tremely large retail business ideas because of the complications
that can arise in running a corporation. ome of these problems can be as follows2
Constant battling over stocks.
Iackbiting is always a problem when so many people are involved in a business deal.
$eople are often trying to buy out other stockholders so as to gain control over the
businesses decisionsM especially if it is successful.
As corporations are generally formed with the intent on becoming a chain of retail outlets
or franchises, it can be a very costly venture to take for the average business owner.
5 ommon Mista-es 6e+ Retail 'usinesses Ma-e
At least 697 of new businesses fail within their first year of being open. 'here are many reasons
why businesses tend to fail, and it is best to list them here so that you can try to avoid making
these common mistakes when you open your retail business.
Advertising
(any new businesses fail to advertise properly. It wouldn#t occur to most business owners that
insufficient advertising might cause a problem with keeping their business afloat, but during
tough times, advertising might be your best weapon.
)hen the economy is running badly, you should have enough money put aside to advertise
special promotions and sales to your customers. )hen you do advertise, you should try to be
everywhere. 4ou want people to see your businesses name no matter where they turn. Dere are
some of the ways that you can advertise to ensure that you cannot be forgotten.
%ewspaper and maga!ine ads
%ewspaper, and direct mailbo+ inserts
0lyers and posts
Commercial and media ads
)ebsites, complete with online store
4ou should know that these do not have to cost you an arm and a leg. Commercials can be
costly, but these others don#t have to be. Running a website can be free or cheap, and the
software to host your own online store can also be cheap or free. 4ou -ust need someone that can
keep track of orders for you.
Improper advertising can leave the community not knowing that your business e+istsM especially
during hard times. 4ou want to stay available to all of your customers because if you disappear
from view, so will your customers.
Improper bookkeeping
It doesn#t matter what you do to keep your business running at its best. If you do not keep proper
track of your money#s coming and goings, you will eventually be left with none.
If it is at all possible, do your own bookkeeping so that you know e+actly where your money is
going. If you do not know much about it, you should hire someone that does, but also someone
that you can trust. If you must, hire someone -ust to watch the bookkeeper so that you don#t get
ripped off.
As the business owner, you need to know e+actly how much money that your business has. 4ou
should know e+actly how much profit that you are bringing in each month so that you can use
your money wisely. It is not always easy to keep track of all of your money, especially if you are
generating a lot of business, but it doesn#t have to be impossible.
"ven with a good bookkeeper, you should look into popular accounting software like
5uickbooks and (icrosoft (oney because they do most of the work for you. All you really have
to do yourself is add the right numbers and let the software add and subtract for you.
"very year many businesses go under due to bad bookkeeping. 'hey spend money they don#t
have or they make errors processing payroll deposits. 1on#t let that happen to you.
Credit $roblems
'he worst thing that a business owner can do is to run it on too much credit. "ach day it gets
easier and easier for new businesses to gain credit accounts and credit cards from various
companies. All too often, these companies run up more credit than they can repay.
It -ust goes to say that you have to live and run your business within your means. All too often
business owners find themselves buying things that the business simply doesn#t need. 'hey also
buy things for themselves on company credit. 'his is a big no-no in the business world.
*nce a business spends too much money on credit, they learn all too late that the interest rates on
credit cards can force hundreds of e+tra dollars in e+penses. %ew and small retail businesses -ust
can#t afford to pay them. 'here is also the fact that over buying supplies and merchandise can be
a far bigger problem than businesses e+pect.
*ver paying employees can run any business into the ground if they are not keeping up with
their regular e+penses properly. Any successfully run business owner knows that you start off
small, and hopefully build your way up. 'hat is impossible if you are living and running your
business above your means.

$.*. I6*0R7R0*.*I16
0re&uency of customers' visit at store
Interpretation8
I was mainly concerned about those customers who come at the store often. o,
according to my ob-ectives I asked them first how fre&uently heNshe visits the
store.
In response I got this statistics-
?97 of the customers come at least once in a week.
;C7 of them come twice in a week or more fre&uently.
;87 come once in every month.
8A7 come twice in a month.
B7 come thrice in a month.
2o+ customers get to -no+ about Reliance 9resh
Interpretation8
%e+t I asked them how they got to know about Reliance 0resh and I saw
that-
<?7 of the respondents live in the same locality and so they automatically
get to know about Reliance 0resh as they share the same locality.
;;7 of them have come to know through their friends and relatives.
867 have come to know from news papers.
<7 have got to know through brochure.
Uery few people got to know through mail and other sources, i.e. 87 each.
Satisfaction regarding display of products
Interpretation8
It is very important to make a proper display of the product. 1isplay of the
product means presenting the product in an attractive way. A planogram of the
store comes from the office but it is the duty of store to give it a good look and to
set a good display of the store.
)hen I asked customers whether they are satisfied with the display of
products, I got the following replies-
<<7 of the customers are satisfied.
8A7 are highly satisfied.
;<7 think they are moderately satisfied.
<7 are dissatisfied.
And a very negligible number of people, i.e., 87 are highly dissatisfied.
Satisfaction regarding availability of daily needs
Interpretation8
It is necessary to know that whether the customers are satisfied with the
availability of the products at the store. Availability of the products means all
variety of products which the store sells.
)hen I asked customers whether they are satisfied with the availability of products
in the store, almost half of the respondents fall in satisfied category .both satisfied
and very satisfied/ and thus I got-
A87 are satisfied.
897 are highly satisfied.
??7 are moderately satisfied.
8<7 are dissatisfied.
87 is highly dissatisfied.
Satisfaction regarding price : offers
Interpretation8
According to the survey, ma-ority of the respondents are satisfied with the price
and offers available at store. I got-
A?7 are satisfied.
897 are highly satisfied.
?<7 are moderately satisfied.
897 are dissatisfied.
;7 are very dissatisfied.
6o& of customers availing bas-et offers
Interpretation8
0irst I need to know what basket offer actually is. Iasket offer actually means
combo offers. 'his includes some specific combination products at a discounted
price, like <kg $illsbury Atta, ? liters %ature 0resh Actilite oybean oil and ; kg
R-value ugar can be bought for Rs. ?ACN-, but the (R$ is more than Rs. A99. 'his
is a basket offer.
)hen I asked how many customers avail basket offers I observed- most of them
do not avail these offers.
B97 of the respondents don#t avail it.
A97 of them avail basket offers.
Satisfaction regarding combination of bas-et offers
Interpretation8
%ow the &uestion comes if customers are satisfied with combination of products of
basket offers.
Almost half of them, i.e., A67 are satisfied.
??7 are dissatisfied.
Iut 8C7 of the respondents are not aware of the combinations offered.
Satisfaction regarding price : "uality of Reliance
7rivate ;abel products
Interpretation8
"arlier it has been mentioned what Reliance $rivate Eabel products are.
)hen I asked if customers are satisfied with Reliance $rivate Eabel products
regarding price and &uality-
?C7 said they are satisfied.
@7 are highly satisfied.
;97 are moderately satisfied.
8<7 are dissatisfied.
A very few are highly dissatisfied, like ;7.
Iut almost 8N<
th
, i.e., 8@7 are not aware of it.
Satisfaction regarding billing speed during rush hour
Interpretation8
0rom the survey it can be said that customers are very satisfied with the billing
speed during rush hour. (ore than half of them fall in satisfied category-
A;7 are satisfied.
;97 are highly satisfied.
)hereas ;?7 think it is moderate.
8;7 are dissatisfied.
?7 are highly dissatisfied.
'he problem with Reliance is that it has two cash tills, but only one till is working
and the other is not working for a long time.
Satisfaction regarding home delivery system
Interpretation8
Reliance also offers home delivery facility free of cost. Iut the chart says that <97
of the respondents do not avail home delivery facility. 'his may be because of two
reasons- first, customer has to shop for at least Rs. @99 and second, it offers home
delivery within ; km distance.
Among those who avail this facility-
;97 are satisfied.
897 are highly satisfied.
B7 say it#s moderate.
897 are dissatisfied.
A7 are highly dissatisfied.
Satisfaction regarding customer service
Interpretation8
Reliance 0resh scores good in terms of customer satisfaction.
<97 of them are satisfied.
;?7 are very satisfied.
867 are moderately satisfied.
A7 are dissatisfied.
<7 are very dissatisfied.
losest competitor of Reliance 9resh
Interpretation8
)hen I asked the customers who they think is the closest competitor of Reliance
0resh, I got to know that-
(a-ority of the customers almost ?C7 think that pencer is the closest
competitor.
0ollowed by Iig Ia!ar .;67/.
0ood Ia!ar .8<7/.
A very few respondents supported pinach and (ore .87 each/.
ome of them voted for two, like-
?7 voted for 0ood Ia!ar and pencer.
;7 for Iig Ia!ar and pencer.
A7 for Iig Ia!ar and pencer.
87 of them supported all three of 0ood Ia!ar, Iig Ia!ar and pencer.
Iut some of the respondents .B7/ could not answer the &uestion as they are
not aware of other stores well.
9I6$I63S
<?7 of the customers who come to Reliance 0resh .1$/ are mainly local
people. It means local people are very much aware of this store rather than
outside of the locality.
<C7 of the customers prefer to visit the store once in a week or twice in a
week. 'hat means they prefer to visit the store fre&uently. 'hey buy their
products on weekly basis.
<87 of the customers are satisfied with the products available, though A67
of total customers fall on the dissatisfaction category and they need more
variety of brands.
BC7 of the customers are satisfied with the display of products. 'hat means
they find their products very easily when they visit the store.
<?7 of the customers are satisfied with the price and offers provided by the
store, though A<7 of total customers are not satisfied fully. 'hey think more
discounts should be provided on products.
B97 of the customers don#t avail basket offers. Iut those who avail it are
satisfied with the combination of products. ome customers are not aware of
the combinations offered.
?C7 of the customers are satisfied with the price and &uality of Reliance
$rivate Eabel products. Iut 8@7 of the customers are not availing it. (any
of the customer said that the price of private label product is high compared
to other brands.
<97 of the customers don#t avail home delivery facility. *ne reason is that,
reliance provides home delivery facility within ;km around the store. o, the
customers who do not live within ;km of radius from the store can#t avail
this facility. Another reason is, if customers shop for at least Rs. @99N- then
only they can avail this facility. Iut ?B7 of total customers are satisfied
with this facility.
B;7 of the customers are satisfied with the billing speed and check out time.
S#330S*I16S
According to the findings I want to suggest some recommendations.
Reliance 0resh should increase their store awareness among the e+isting
customers and try to attract new customers by doing different types of
promotional activities, like competitions, game shows, distributing leaflets
etc.
tore should introduce more discounts W offers, as A<7 of the customers
think they should have more discount and offers. tore can introduce offers
on those products that have high profit margin. It will attract more
customers.
'he store can offer good combination of products and make customers
aware of basket offers by more promotion and display of it, as8C7 of the
customers are not aware of the combinations of products in a basket offer. I
have seen many people do not avail basket offers as they do not like the
combination offered. tore can observe which products are high in demand
and make basket offers with those products so that more customers buy it.
"arlier I have mentioned that during rush hour customers have to stand in a
&ueue and it creates dissatisfaction among customers. 'he closed till should
be repaired immediately to make the billing speed faster and reduce check
out time.
tore can again start to sale those products which were available earlier but
not available now.
tore can talk to Eocal Ia!ar to start selling non-veg items in store.
tore can provide more tele calling and sms to make the customers aware of
the offers going in the store.
$lanogram and position of bays should not be changed fre&uently.
ome staffs of the store need more training on customer service and push
selling. "ach staff should be made aware of the offers and prices available at
the store to provide better customer service.
taffs should be motivated by fre&uent praises and appraisals.
tore can try to sale fresh fruits and vegetables as customers often complain
about the &uality of fruit and vegetable.
Reliance 0resh can keep the price at par with local market to gain
competitive advantage over local stores.
Reliance 0resh can introduce more variety of products to satisfy customers#
need.
16;#SI16
'here are some products which were available in the store earlier but it is no
more available now, like 1osa rice, 1udheshwar rice etc. 'hough these
products still has demands.
(any Customers want non-veg products at the store. 'here is a high demand
for non-veg food product.
(any customers are not aware about the offers which are going on at the
store. 'hey want more tele calling and sms from the store, so that they can
know about the offers.
Customers face problem if the planogram are changed fre&uently and they
complain for this.
Customers often complain about the &uality of fruits and vegetables. 0ruits
and vegetables are often not fresh and rotten.
Customers often complain that price in Reliance 0resh is higher compared to
local market and other organi!ed retails provide more discounts than our
store.
According to the customers local market and other organi!ed retail have
more variety of products.
@?7 are satisfied with the overall customer service at the store.
'I';I13R.724
<0' SI*0S8=
http2NNen.wikipedia.orgNwikiNRelianceX0resh
http2NNwww.reliancefresh.infoN
%")$A$"R2
o 'imes of India
o 'he Dindu
I**G2
o (arketing (anagement, 1r. .E. Uarshney and
1r. R.E. :upta, 'hird Revised "dition,
ultan Chand and ons.