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Satish Prakash Goyal


PU E – 411037


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Acknowledging the debt is not easy to me as so many people. I will take this
opportunity in expressing the fact that this project report is the result of an
unbelievable amount of encouragement, cooperation, willing to help and
moral support that I have received from others.

It is beyond my literal and material means to express my heartfelt thanks to

Mr. Gopalkrishna Adhikarla, Director IBSAR College Pune for his
assiduous guidance, continuance encouragement and aspiring suggestion
during the Project study.

I am thankful to Prof. Sumit Roy & Prof. Vilas Chaudhary -- faculty

Guide for enlightening me on this subject with his valuable guidance from
time to time in completing this project.

I am grateful to my project Guide Mr. Dipesh Rai, MFT Area manager,

Reliance Retail Ltd, Jaipur
I am also thankful to Mr. Manish Sharma, Area Manager, in operation dept
of Reliance Retail Ltd Jaipur for his special guidance in completing this

I am also thankful to Mr. Puneet Sharma and Miss.Preety Yadav MSR,

Reliance Fresh, Bhawani singh marg jaipur, for their valuable suggestions.
Finally, once again I would like to thank all without whom I would not have
been able to do this project.

Satish Prakash Goyal

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The project was undertaken as a part of summer training in MFT

Department at Reliance Retail for 90 days. The project studies were
conducted at Reliance Fresh convenience store of Reliance Retail
situated at Bhawani singh marg, Jaipur.
The objectives of the project were as follows:
 To study & Increase the “Loyalty Sales Percentage”
 Better utilization of resources
 Increasing Loyalty Sales Percentage
 Aware customer about Reliance One Membership card
 Increasing store profit
 To study and evaluate the stock movement of Non Food Fast
Moving Consumer Goods (NF FMCG) & high value SKUs esp.
large chocolates and house wares and suggest appropriate low
value NF FMCG product mix.
 To study the correlation between the Maximum Bay Quantity
(MBQ) level of all SKUs (Fruits &Vegetables, Staples, Process
Food, FMCG etc.) and sales & suggesting the optimum level of
MBQ for each SKU for maximum sales.
 To study the effective utilization of Planogram of the store.

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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
The top 4 world players include Wal-Mart, Carrefour, Tesco and
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

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end of the supply chain. Manufacturing marketers see the process of
retailing as a necessary part of their overall distribution strategy.
What is retailing?
 The sale of goods or commodities in small quantities directly to
 Buy, Sell & Move

Buy, Move & Sell

Having gone through some of the terminologies in retail and having

seen a broad outline of retail now let’s look into the 3 basic things,
which govern the retail market.
1. Buy
Buying would involve the following activities, which would mean
setting the guiding principles for all the merchandise decisions that a
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retailer makes. It should reflect target market desires, retailer’s
institutional type, market place positioning, defined value chain,
supplier capabilities, costs, competitors & product trends.

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
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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
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.

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The Indian Retail market is worth a whooping 930000 crores. If one

has to divide between the organized and unorganized sectors the
major contribution comes from the unorganized sector, which
contributes close to 98% of the total retail market. The balance of 2%
amounts anywhere between 18-2000 crores.
The difference between organized and unorganized sectors in the US &
some of the Far East Asian countries are pretty low unlike in India.
With the advent of seasoned players in the field of retail in India, the
gap is likely to be abridged in the coming years.
The difference between them is 85:15 in favor of organized sector in
the US and 81:19 in the favor of the organized sector in Taiwan.
The employment opportunities in retail is pretty high. But again the
ratio of organized and unorganized is skewed towards the unorganized
sector. While the organized retail sectors deploys 500000 people & the
unorganized sector deploys close to 80 times the workforce.
Factors that influence the growth in retail
The DINK/HINK families, working women, working parents and the
rising disposable income has contributed to the growth of Retail
across. The middle-income group is the fastest growing segment in the
country today. Further the electronic media is also aiding the growth
of the Retail industry.
To summarize the top 6 factors that drive the growth of the retail
industry in India would be as follows:
 The Demographics

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 Needs and Desires
 Shopping Attitudes and Behavior
 Retailers action
 Environmental Factors

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

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Accounts-the department, which receives all the cash, charge slips and
other types of tenders; keeps a tag on the local store expenditure and
also monitors any deviation in the transactions.
Housekeeping- Mostly it’s an outsourced agency, which does the work.
They keep the premises clean and tidy at all levels.
Security-They are responsible for safeguarding men and material of
the organization.
VM-This department maintains the displays and the signage across
the stores.
CSD-Otherwise known as the customer service desk takes care of the
customer complaints and issuance of merchandise credit and taking
care of the loyalty programmed.
IT-The IT department takes care of all the Networking, data
maintenance and upkeep of all the tills.

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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
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,

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where goods may be handled and examined prior to purchase, has
become more common since the Twentieth Century. A third form of
retail is virtual retail, where products are ordered via mail, telephone
or online without having been examined physically but instead in a
catalog, on television or on a website. Sometimes this kind of retailing
replicates existing retail types such as online shops or virtual
marketplaces such as eBay or Amazon.

Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This

involves adding a markup amount (or percentage) to the retailers cost.
Another common technique is suggested retail pricing. This simply
involves charging the amount suggested by the manufacturer and
usually printed on the product by the manufacturer.
In Western countries, retail prices are often so-called psychological
prices or odd prices: a little less than a round number, e.g. $6.95. In
Chinese societies, prices are generally either a round number or
sometimes a lucky number. This creates price points.
Often prices are fixed and displayed on signs or labels. Alternatively,
there can be price discrimination for a variety of reasons. The retailer
charges higher prices to some customers and lower prices to others.
For example, a customer may have to pay more if the seller determines
that he or she is willing to. The retailer may conclude this due to the
customer's wealth, carelessness, lack of knowledge, or eagerness to
buy. Price discrimination can lead to a bargaining situation often
called haggling — a negotiation about the price. Economists see this as
determining how the transaction's total surplus will be divided into
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consumer and producer surplus. Neither party has a clear advantage,
because the threat of no sale exists, whence the surplus vanishes for
Retailers who are overstocked, or need to raise cash to renew stocks
may resort to "Sales", where prices are "marked down", often by
advertised percentages - "50% off" for example."Sales" are often held
at fixed times of the year, for example January sales, or end-of-season
sales, or Blue Cross Sale.

Global Retail Scenario

Retail has played a major role world over in increasing productivity

across a wide range of consumer goods and services .The impact can
be best seen in countries like U.S.A., U.K., Mexico, Thailand and more
recently China. Economies of countries like Singapore,
Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted by
the retail sector. Retail is the second-largest industry in the United
States both in number of establishments and number of employees. It
is also one of the largest worldwide. The retail industry employs more
than 22 million Americans and generates more than $3 trillion in
retail sale annually. Retailing is a U.S. $7 trillion sector.

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Global Retail (Source: CSO, MGI Study)

Top Retailer Worldwide

Rank Retailer Home Country
1 Wal-Mart Stores, Inc. U.S.A.
2 Carrefour Group France
3 The Kroger Co. U.S.A.
4 The Home Depot, Inc. U.S.A.
5 Metro Germany
(Source: Stores/Deloitte Touche Tomahatsu)

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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
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

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outlets per 1000 population. Around 7% of the population in India is
engaged in retailing, as compared to 20% in the USA.

The factors responsible for the development of the retail

sector in India can be broadly summarized as follows:
 Rising incomes and improvements in infrastructure are
enlarging consumer markets and accelerating the convergence of
consumer tastes.
 Looking at income classification, the National Council of Applied
Economic Research (NCAER) classified approximately 50% of
the Indian population as low income in 1994-95; this has
declined to 17.8% in 2006-07.
 Liberalization of the Indian economy which has led to the
opening up of the market for consumer goods has helped the
MNC brands like Kellogg, Unilever, Nestle, etc. to make
significant inroads into the vast consumer market by offering a
wide range of choices to the Indian consumers.
 Shift in consumer demand to foreign brands like McDonalds,
Sony, Panasonic, etc.
The internet revolution is making the Indian consumer more
accessible to the growing influences of domestic and foreign retail
chains. Reach of satellite T.V. channels is helping in creating
awareness about global products for local markets. About 47% of
India’s population is under the age of 25; and this will increase to 55%
by 2015. This young population, which is technology-savvy, watch
more than 50 TV satellite channels, and display the highest propensity
to spend, will immensely contribute to the growth of the retail sector
in the country. As India continues to get strongly integrated with the
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world economy riding the waves of globalization, the retail sector is
bound to take big leaps in the years to come.

The Indian retail sector is estimated to have a market size of about $

180 billion; but the organized sector represents only 3% share of this
market. Most of the organized retailing in the countr y has just
started recently, and has been concentrated mainly in the metro cities.
India is the last large Asian economy to liberalize its retail sector. In
Thailand, more than 40% of all consumer goods are sold through the
super markets and departmental stores. A similar phenomenon has
swept through all other Asian countries. Organized retailing in India
has a huge scope because of the vast market and the growing
consciousness of the consumer about product quality and services.
A study conducted by Fitch, expects the organized retail industry to
continue to grow rapidly, especially through increased levels of
penetration in larger towns and metros and also as it begins to spread
to smaller cities and B class towns. Fuelling this growth is the growth
in development of the retail-specific properties and malls. According
to the estimates available with Fitch, close to 25mn sq. ft. of retail
space is being developed and will be available for occupation over the
next 36-48 months. Fitch expects organized retail to capture 15%-20%
market share by 2010.
A McKinsey report on India says organized retailing would increase
the efficiency and productivity of entire gamut of economic activities,
and would help in achieving higher GDP growth. At 6%, the share of
employment of retail in India is low, even when compared to Brazil
(14%), and Poland (12%).

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Total Private Consumption Expenditure in India – 375 Billion USD
Retail Sale – 205 Billion USD
Organized Retail – 6.2 Billion USD (3%)
Retailing – 35% of GDP


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,

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

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scale or excess stock left over at the season. The product category can
range from a variety of perishable/ non perishable goods.

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.

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.


Founder Chairman of Reliance Group

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

Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002
Shri Dhirubhai Ambani was an exceptional human being and an
outstanding leader. He dared to dream on a scale unimaginable before
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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.

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Mr. Mukesh Ambani
Chairman & Managing Director
Mr. Mukesh D. Ambani, age 49, is a Chemical Engineer from the
University of Bombay and pursued MBA from Stanford University,
USA. He is the son of Mr. Dhirubhai H. Ambani, Founder Chairman of
the Company
Mukesh Ambani is the chairman, managing director and the largest
shareholder of Reliance Industries, India's largest private sector
company and a Fortune 500 Company. His personal stake in Reliance
Industries is 48%. His wealth is US$ 20.1 billion as of March 2007,
making him the world's 14th richest person and the second richest
person in India. Mukesh and younger brother Anil are sons of the late
founder of Reliance Industries.
Mukesh Ambani joined Reliance in 1981 and initiated Reliance's
backward integration from textiles into polyester fibres and further
into petrochemicals. In this process, he directed the creation of 60
new, world-class manufacturing facilities involving diverse
technologies that have raised Reliance's manufacturing capacities
from less than a million tonnes to twelve million tonnes per year.

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Mukesh Ambani is also steering Reliance's initiatives in a world scale,
offshore, deep water oil and gas exploration and production program,
a pan-India petroleum retail network involving 5,800 outlets and a
research-led life sciences initiative covering medical, plant and
industrial biotechnology.
Mr. Mukesh D. Ambani joined Reliance in 1981 and initiated
Reliance's backward integration from textiles into polyester fibers and
further into petrochemicals. In this process, he directed the creation of
several new and large world-class manufacturing facilities involving
diverse technologies that have raised Reliance's petrochemicals
manufacturing capacities from less than a million tones to over
thirteen million tones per year. He directed and led the creation of the
world's largest grassroots petroleum refinery at Jamnagar, India, with
a present capacity of 660,000 barrels per day (33 million tones per
year) integrated with petrochemicals, power generation and port and
related infrastructure. He had set up the Reliance's communications
technology initiative that is the largest and most complex information
and communications technology initiative in the world.
Mr. Ambani is steering Reliance's initiatives in a world scale, offshore
and onshore oil and gas exploration and production program, creation
of a pan-India petroleum retail network and setting up of a new export
oriented refinery through RIL's subsidiary Reliance Petroleum
Limited (RPL) with a capacity of approximately 580,000 barrels per
stream day integrated with a 0.9 MMTPA polypropylene plant.
Mr. Ambani's Achievements include:
Conferred 'ET Business Leader of the Year' Award by The Economic
Times (India) in the year 2006.

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Had the distinction and honor of being the co-chair at the World
Economic Forum Annual Meeting 2006 in Davos, Switzerland.
Ranked 42nd among the 'World's Most Respected Business Leaders'
and second among the four Indian CEOs featured in a survey
conducted by Pricewaterhouse Coopers and published in Financial
Times, London, November 2004.
Conferred the World Communication Award for the 'Most Influential
Person in Telecommunications in 2004' by Total Telecom, October
Chosen 'Telecom Man of the Year 2004' by Voice and Data magazine,
September 2004.
Ranked 13th in Asia's Power 25 list of 'The Most Powerful People in
Business' published by Fortune magazine, August 2004. 30 Growth is
Conferred the 'Asia Society Leadership Award' by the Asia Society,
Washington D.C., USA, May 2004.
Ranked No.1 for the second consecutive year, in The Power List 2004
published by India Today, March 2004.
Mr. Mukesh D. Ambani is the Chairman of Indian Petrochemicals
Corporation Limited, Reliance Petroleum Limited and Reliance Retail
Limited. He is member of the Shareholders'/ Investors' Grievance
Committee of the Company.

Major Subsidiaries & Associates:-

The Reliance Industries Limited is the flagship company of Reliance
Group which has ownership interest in the following subsidiaries &

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Major Subsidiaries
Reliance Petroleum Limited
Reliance Netherlands BV (including Trevira)
Reliance Retail Limited
Ranger Farms Private Limited
Retail Concepts and Services Private Limited
Reliance Retail Insurance Broking Limited
Reliance Dairy Foods Limited
Reliance Retail Finance Limited
RESQ Limited
Reliance digital Retail Limited
Reliance Service Solutions Limited
Reliance Jamnagar Infrastructure Limited
Reliance Haryana SEZ Limited
Reliance Industrial Investment & Holdings Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Exploration & Production - DMCC
Reliance Industries (Middle East) DMCC
Reliance Global Management Services (P) Limited
Reliance Commercial Associates Private Limited
RIL (Australia) Pty Limited
Major Associates
Indian Petrochemicals Corporation Limited
Reliance Industrial Infrastructure Limited


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Growth through Value Creation

Reliance is gearing up to revolutionize the retailing industry in India.

Towards this end, they are aggressively working on introducing a pan-
India network of retail outlets in multiple formats. A world class
shopping environment, state of art technology, a seamless supply
chain infrastructure, a host of unique value-added services and above
all, unmatched customer experience, is what this initiative is all about.
The retail initiative of Reliance will be without a parallel in size and
spread and make India proud. Ensuring better returns to Indian
farmers and manufacturers and greater value for the Indian consumer,
both in quality and quantity, will be an integral feature of this project.
By creating value at all levels they will actively endeavor to contribute
to India's growth.
The project will boast of a seamless supply chain infrastructure,
unprecedented even by world standards. Through multiple formats
and a wide range of categories, Reliance is aiming to touch almost
every Indian customer and supplier.
The magnitude and strategy of RIL's retail foray is sure to have far
reaching social and economic implications by directly influencing the
lifestyles of hundreds of millions of consumers, besides indirectly
impacting the livelihood of tens of millions. This indirect impact will
be on those engaged in a wide range of economic activities including
farming, consumer goods manufacturing, and a host of myriad other
services that bring hundreds of categories of goods and services from
the producers to the final consumers.
Business analysts feel that Mukesh Ambani's advantage is his huge
financial strength coupled with a track record of implementing mega
IBSAR Pune ( Page 31
projects in record time, at globally competitive capital costs. Mukesh
Ambani has learned to dream big from his great visionary father, the
late Dhirubhai H Ambani, who is acknowledged as one of India's
tallest, most ambitious and successful business leaders for his sharp
business acumen and skilled people management ability. If the
announced retail project is any indication, Mukesh Ambani has indeed
inherited all these skills from his father. Re-writing the rules of
business has been the forte of Dhirubhai and Mukesh is attempting
the same in retail.
Quite clearly, RIL is now all set and ready to conquer the organized
retail domain. The Indian retail scene is now going to witness some
real fast-paced action, with the consumer – as always – having the
best deal.
So, as they say, let the action begin!

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

IBSAR Pune ( Page 32

the launch of its first consumer durable outlet, Reliance Digital, in the
NCR region.
Reliance is planning to open a total of 150 Reliance Digital stores
across 70 cities with investment of Rs 1,000 crore over the next three
to four years
One-stop shops
The stores size approx 15,000-30,000 sq. ft, will function as one-stop
shops for all technological solutions in the consume durables and IT
telecommunications segment to cater to the tastes and requirement of
Reliance Digital stores would sell everything from TV sets, home
theatres, refrigerators, cooking ranges, dishwashers to computers and
mobile phones from across brands. Each store would be set up at an
investment of Rs4 to Rs7 crore and also provide after-sales services
On private labels, RELIANCE DIGITAL has on offer of more than
4,000 products from over 150 brands. As part of their overall business
strategy they will have their own consumer durable private labels, but
not immediately. With its own labels in the consumer durables
segment, Reliance Retail will be fighting for a share of the $5.6-billion
domestic market, which is dominated by South Korean brands LG and
Samsung and Japan's Sony.

The domestic consumer electronics market is growing by 10 per cent

annually and is split between imported South Korean brands such LG
and Samsung and Japan’s Sony on the one hand and Indian market
leaders like Videocon and BPL

IBSAR Pune ( Page 33

The prices being offered at the Reliance Digital stores will be most
competitive and if any consumer finds a cheaper product in the market
within 30 days they will not hesitate to match the offer.
Besides, the stores will also provide pre- and post sales services
through its in-house RelianceresQ vertical.
The stores will also offer finance schemes for consumers for which the
retail majors are in talks for tie-ups with several financial institutions,
Citi Financial being one of them.
Reliance Digital will also be offering customers Reliance One, a
common membership and loyalty Programme across all its formats,
which means users, would be able to redeem points earned on
purchases. Other formats of Reliance Retail such as supermarkets and
hypermarkets are soon to launch.
Reliance Industries had last year announced an investment of Rs
25,000 crore for the retail business, which it hopes would help the
company earn around Rs 100,000 crore revenues in the next five
years, 10-15 per cent of which will be contributed through retailing of
consumer durables at its Reliance Digital stores and hypermarkets.
Industry estimates suggest India's retail market is worth $320 billion,
of which organized retail accounts for $7.5 billion and expected to
grow to $21.5 billion by 2010.

Reliance Fresh

Reliance Industries launched its first retail format called Reliance

Fresh in Hyderabad. Spread over 2,000-5,000 sq ft, 11 such Reliance
Fresh neighborhood convenience stores were come up in the city.
IBSAR Pune ( Page 34
These stores sell fresh fruit and vegetables besides staples (dal, atta,
rice) as well the company’s in-house brand Reliance Select and
Reliance Value.
Reliance is gearing up to revolutionize the retailing industry in India.
Towards this end, we are aggressively working on introducing a pan-
India network of retail outlets in multiple formats. A world class
shopping environment, state of art technology, a seamless supply
chain infrastructure, a host of unique value-added services and above
all, unmatched customer experience, is what this initiative is all about.
The retail initiative of Reliance will be without a parallel in size and
spread and make India proud. Ensuring better returns to Indian
farmers and manufacturers and greater value for the Indian consumer,
both in quality and quantity, will be an integral feature of this project.
By creating value at all levels, we will actively endeavor to contribute
to India's growth.
The project will boast of a seamless supply chain infrastructure,
unprecedented even by world standards. Through multiple formats
and a wide range of categories, Reliance is aiming to touch almost
every Indian customer and supplier.
The Fresh stores at Hyderabad are part of a pilot project, which will
help company understand customer needs. The pilot for this format
will be taken to many other cities over the next few months. Next on
the company’s list are bigger cities including Delhi and Mumbai
RIL intends to invest close to Rs 25,000 crore over the next five years
in the retail business. The company plans to establish 4,000 retail
outlets across various formats by then, and is eyeing sales of Rs
1,00,000 crore over the 5-year period from the retail business.

IBSAR Pune ( Page 35

Besides Reliance Fresh, the company also plans to launch larger
format stores called “Feel Fresh Plus” which will be spread over
10,000-15,000 sq ft. The Fresh Plus stores will stock fruit and
vegetables as well as apparel, consumer electronics, FMCG items and
even medicines. From Hyderabad, these stores will travel to Mumbai
and Delhi where Reliance has identified up to 80 locations each.
But even as the retail debut kicks off with fruit and vegetables, it seems
the company is doing a rethink on whether to get into the larger
formats such as hypermarkets and supermarkets. These two formats
require over 1 lakh sq ft of space and may not come up at prime city
locations. Instead, Reliance is contemplating tapping alterative sites
such as the SEZs for opening hypermarket
The strategy is to open one Reliance Fresh store in a radius of three to
four km to serve 1,000-2,000 families. This means about 30-40 stores
in the major metros. Reliance Fresh is selling vegetables and fruits
sourced from farmers through the company’s agri hubs.
Reliance Fresh would carry fresh fruits and vegetables, staples, top-up
grocery, non-food items and dairy products and a whole lot of other
categories at very competitive prices. All the stores opened have an
average area of about 1,800 sq ft and an average of about 20 sales
associates attending to customers in each store open from 8 a.m. to 10
p.m. on all seven days of the week.
A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010
with a planned investment of Rs 30,000 crore over the next five years
– that's the retail vision of Mukesh Ambani and his RIL retail team.
RIL's retail venture seems all set to achieve the status of being the flag-
bearer of India Retail Inc, and that too in record time!

IBSAR Pune ( Page 36

Culling information from all possible sources, Images F&R Research
attempts to put the Reliance Retail jigsaw in order and see how the
concept and strategy differentiates from the existing competition, how
it impacts the intermediaries and consumers, and more interestingly,
how will it stand up to the real competition from global retail
powerhouses like Wal-Mart, Carrefour, Target, Metro, Sears and Tesco
that are eager to enter the Indian retail arena once the FDI barrier is
lifted. Read on for the full story…
It's been in the news for quite some time now. Earlier, about a year
ago, it was only whispered in close industry circles. Slowly the
whispers become louder, and the word gained ground that India's
largest private sector company, Reliance Industries Limited (RIL), is
entering the Indian retail sector in a real big way.
But with virtually nothing coming from anyone in the know inside RIL
about their retail plans, this has to be one of the most closely guarded
secrets of India's corporate story.
Amidst all sorts of speculations in the media circles about RIL's
intended retail foray, the word finally came out on January 23, 2006,
when the Mukesh Ambani-controlled Reliance Industries Limited
presented the mega retail initiative plans to its board of directors who
subsequently gave their consent to pursue the retail business through
a wholly-owned subsidiary of the company – likely to be christened
Reliance Retail Limited.
The Reliance Retail blueprint envisages nation-wide chains of
hypermarkets, supermarkets, discount stores, department stores,
convenience stores and specialty stores, in about 800-odd cities and
towns across the length and breadth of India. The RIL board of

IBSAR Pune ( Page 37

directors approved the initial phase of the retail foray at an estimated
cost of Rs 3,350 crore (US$ 750 million).
That was big news for both the national and international media,
which went all agog again with intense speculation. Giving full respect
to the importance of this announcement, more than one leading
international daily – chiefly, The Financial Times – gave this news a
front-page treatment, speculating (like many others) that this
investment could just be an initial tranche of a much larger
commitment from Reliance Industries towards the retail project.
Just how big and grand this investment is for the Indian retail sector
can be gauged by the simple fact that the entire Indian retail sector is
estimated to be at Rs 1050,000 crore (US$ 233 billion) – growing at
five per cent annually – and the estimated share of organised retail is
only Rs 36,000 crore (US$ 8 billion), at present, albeit growing at over
30 per cent every year.
That makes Reliance Retail's proposed investments equivalent to
about 10 per cent of India's organised retail market – such a level of
investment in the Indian retail arena has been unprecedented in the
country's most promising sunrise industry – retail.
So much so, projections by the Images-KSA India Retail Report 2005
of an organised retail market of Rs 100,000 crore (US$ 22 billion) by
2010 now appears conservative, likely to be achieved much earlier
than 2010.
If Indian retail was lacking a whole-hearted and full-blooded thrust
from a big and large corporate house (apart from the lukewarm
investments made by the Tatas and ITC), it is now all set to change.
Mukesh Ambani, who has been nourishing retail ambitions for quite

IBSAR Pune ( Page 38

some time now, has clearly positioned himself in to the role of
redefining the entire landscape of Indian retail.
RIL Set To Become World's Largest Real Estate Property Owner
What is even more interesting is that Reliance Industries Limited will
far out-surpass the Catholic Church in becoming the world's largest
owner of real-estate property by virtue of its mega Retail and Satellite
Township plans, in the next two to three years!
Now what exactly does this mega retail plan portend for the Indian
retail sector? In fact, what exactly are RIL's plans, in terms of retail
strategy? How will RIL differentiate its stores and concept from
existing players who have already moved into the retail space earlier,
and have already established a good foothold? How will this impact
the existing retail majors – the likes of Pantaloon Retail, Trent India,
Shoppers' Stop, RPG, etc? How will the consumer benefit from RIL's
venture and how will intermediaries like traders, suppliers and
farmers all along the supply chain network benefit? What will be the
USP of Reliance Retail?
And, more significantly, how will this impact the major international
retailers who plan to enter the Indian retail market? Reliance Retail is
in fact giving India for the first time a real feel of the scale at which
these global retail powerhouses actually operate, it is preparing India
to stand up to the ensuing competition and in the process, allow
consumers the full benefits of modern retail.

Retail Will Become Core Business of RIL

Reliance Industries Limited is the largest and one of the fastest
growing private sector companies in India, with business activities
encompassing almost all major growth sectors of the Indian economy.
IBSAR Pune ( Page 39
The company manufactures and markets a wide range of products
with market leadership in almost all its businesses.
All of Reliance Group production and services ventures have one
common feature – global scale operations employing state-of-the-art
technology in all fields. The company is truly emerging as a well
diversified conglomerate with global competence in technology,
management and financial capabilities to meet the needs of a rapidly
growing Indian market.
With domestic market shares ranging from 40-80 per cent, RIL is also
ranked among the top 10 producers globally, for all its major product
segments. It is one of India's largest business conglomerates with total
revenues of Rs 1,00,650 crore (US$ 22.6 billion).
It is being speculated within the industry that the ROIs made by RIL
in the retail space will far out-shadow its existing core flagship
businesses – and very soon retail will become the core business for the
Mukesh Ambani-controlled Reliance empire.

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 ( Page 40
to consumers. Currently, Reliance Fresh has over 100 stores across the
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.

Point of Sale Software System

IBSAR Pune ( Page 41
Retalix StoreLine is an open-standards, fully integrated and cross-
functional Point of Sale (POS) and store management software system.
Its uniqueness is in the functionality, world-wide install base, and
hardware independence.
Multi-Concept Functionality that delivers a fully integrated POS
solution to meet all of your business needs
Open by Design supports industry standards and is hardware
independent plus integration with other third-party retail applications
is straightforward, affordable and low risk
Advanced Promotion Features enable a single point of update for
pricing and promotions across all retail formats
Graphical, Easy to Use flexible intuitive user interface, touch-screen
capabilities and even graphical customer screens, means that cashier
training is minimal and customer interaction is effortless
Quick Service Deli, provides a powerful method of managing fresh-
made sandwiches and deli items
Fuel provides full support for operating an onsite fuel station,
supporting a full range of fuel station and supermarket services
Retalix BackOffice is tightly integrated with Retalix StoreLine, and
offers POS item management and reporting, DSD receiving, label and
sign printing, handheld RF communications, host communications
and in-store ordering
Retalix PocketOffice is a mobile platform that enables users to manage
store operations anywhere in the store, taking the application to the
business decision point, while on the sales floor or receiving dock.
Retalix StoreLine is installed in more than 250,000 POS terminals
worldwide, and is the selected POS solution of top-tier retailers such

IBSAR Pune ( Page 42

as Tesco, Publix, Sainsbury's, Woolworths Australia, Delhaize Group,
Hy-Vee, and the A.S. Watson Group.

Supply Chain Management

A supply chain is a network of facilities and distribution options that
performs the functions of procurement of materials, transformation of
these materials into intermediate and finished products, and the
distribution of these finished products to customers. Supply chains
exist in both service and manufacturing organizations, although the
complexity of the chain may vary greatly from industry to industry and
firm to firm.

Collection center

Reliance Fresh Distribution center

From the above pictorial representation of supply chain management

of reliance fresh it is clear that raw material is procured from vendors,
transformed into finished goods in a single step, and then transported
to distribution centers, and ultimately, customers. Realistic supply
chains have multiple end products with shared components, facilities
and capacities. The flow of materials is not always along an arbores

IBSAR Pune ( Page 43

cent network, various modes of transportation may be considered, and
the bill of materials for the end items may be both deep and large.


IBSAR Pune ( Page 44

The project was undertaken as a part of summer training in MFT

Department in Reliance Retail for 90 days. The project was done at
Reliance Fresh convenience store of Reliance Retail situated at
Bhawani singh marg, and Jaipur.
Other stores were also visited to understand the operations of an
organized retail store. The stores are at following locations:

Vaishali nagar store

Vidhyadhar Nagar
Khirni phatak store
Khatipura store
Kings road store
IBSAR Pune ( Page 45
New Sanganer road
Malviya Nagar

This project is all about to increase the Loyalty Sales Percentage

of the individual stores.

What is Loyalty?
The degree to which customers are predisposed to stay with one
company and resist competitive offers.

Six Ways in Building Customer Loyalty

The mantra for marketing professionals is service, service and more
service! That’s right! One of the best ways of ensuring your customers
keep coming back to you is providing impeccable service. This includes
everything from service at the point of sale to after-sales service, which
builds a lasting relationship with the customer. Most manufacturers of
white goods understand relationship marketing like no one else. The
peculiarity lies in the product itself, where it might need to be serviced
long after it is bought. Moreover, the purchase might have taken place
somewhere different from where the service is required. Companies
like Eureka Forbes and Whirlpool pride themselves on superb
customer service satisfaction levels. They manufacture a wide range of
durables which can be serviced at various locations throughout the
IBSAR Pune ( Page 46
country. Remember, the customer is smart. He will judge your
company even on small things like whether the salesperson reached in
time. If he is late, the customer will never trust any claims of “zero
error” quality made by you. So, watch out for service, the buzzword of
the industry.

“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!


IBSAR Pune ( Page 47

“Once a customer, always a customer”, is no longer true in these days
of fluctuating brand usage. Customers now have more choices than
before and are more willing to try out new brands. This fickle-minded
buying warrants a constant focus on the changing mindset of the
customer. The brand too has to change with customer tastes. Nestle
India does it best with its brand of Maggi food products. They now
have variants for their instant noodles like ‘Dal Atta Noodles’ and ‘Rice
Noodle Mania’. Their competitors in the food segment, HLL
(Hindustan Lever Limited, now called Hindustan Unilever Limited)
tickled the Indian palate by making multiple variants of the traditional
Tomato Ketchup in flavors like mint, tamarind and chilli. Amul, which
has a strong presence in the ice-cream segment, sensed the need to
keep the health-conscious customer in its kitty by adding the new
Probiotic range of sugar free ice-creams! Kellogg’s Chocos are now
available in a new flavour – Chocos Toffee to keep the children happy
and dedicated! Innovation is the name of the game and timing is


If a customer feels that Dove Soap is the best for her skin, why not
make her think the same way about shampoos as well? That’s exactly
why the brand name has now been extended to shampoos in the
Indian market. Stretch the loyalty and benefits associated with a brand
to include other similar products.
Lotus Herbals, for instance, makes chemical-free skincare products
like creams, lotions and sunscreens. It has a strong base of happy
customers because of its USP - ‘herbal ingredients’. Now, it has also
launched its ‘herbal’ range of cosmetics on the shelves. So the same
IBSAR Pune ( Page 48
customers have a choice of using herbal preparations for their lipsticks
and eye shadows as well. Chances are, they will be only too eager to try
them out! Even when it comes to food products, brand loyalties can be
stretched further. Knorr Soups, manufactured by HLL, extended their
“instant soup powder” mixes to include “instant make-a-meal”
powders for Chinese recipes. They now offer instant Chinese
Manchurian, Hot & Sour, Chilli and other preparations for a quick
meal at home. Amul too capitalized on its distribution network to
deliver different products to its customers. They started from milk and
now provide butter, ghee, cheese and even ice-creams.


If I want to buy a product, it must simply be available. For fast moving
consumer items, it means availability at the nearest grocer. From
personal experience, I can tell you how important this is. I like Nestle’s
Munch chocolate a lot, but many a time I end up coming home with a
Cadbury’s Perk in hand, due to unavailability of the other brand. Perk
tastes just as good, and pretty soon I ended up asking for Perk at the
local grocery shop instead of Munch. This shows how just availability
or lack of it can affect the customer’s brand choices forever. For a long
period Amul faced a similar problem with its products. Originating
from Gujarat, the availability of its products was restricted to the
home state and a few neighboring ones. Consciously, after a lot of
effort Amul successfully expanded its distribution chains throughout
IBSAR Pune ( Page 49
the country. An effective media campaign helped pass this advantage
on to the customers. If you want people to keep buying your brands,
make sure the grocery store around the corner stocks it.


Lastly, after people have tried your product, tell them that they have
made the right decision. What better example to give you than the
Pepsi ad which said, “Yehi hee hai right choice baby, aha!” You will
have customers hanging on to you forever. The human mind looks for
signals to reinforce the decision made by it, to tell itself that yes, you
were correct! It’s no wonder then that the L’Oreal ad shows Aishwarya
Rai spouting the phrase “Because you’re worth it!
Customer loyalty towards your brand can give you the advantage of
decreased cost of advertising. You can also increase the price of your
brand to capitalize on the same. So, go ahead and take the plunge into
the world of brand loyalty!
•Customer loyalty towards your brand can give you the advantage of
decreased cost of advertising.
•You can also increase the price of your brand to capitalize on the

Loyalty Sales % = Sales through the Loyalty Card X 100

Total Sales

Customer Loyalty programs need to stay fresh, be easy to administer,

and tightly integrate with the central price file and all the customer
touch points. Successful Loyalty programs pinpoint value to a specific
IBSAR Pune ( Page 50
group of consumers. The continuous change in programs keeps
consumers engaged and avoids the attitude of entitlement.
The Retalix customer loyalty application suite, however, is not your
run-of-the-mill solution. It is comprehensive, easy to administer, and
Retalix Loyalty is a real time, online, centralized system that manages
the Loyalty and Promotional marketing campaigns for Grocery and
Convenience Store Retailers.
Coupled with the Retalix 1-to-1 Targeted Marketing Analysis tool, a
retailer can easily reward customers according to their specific taste
and loyalty level via a multitude of reward programs to keep it fresh
and fun. Moreover, through a tight integration with the Pricebook,
POS and Fuel Pumps, electronic rewards can be fulfilled for the
consumer right at their purchase location.

Retalix Loyalty includes:

 Integrated POS and Pump interface to collect data, print Loyalty
program information on the receipt, display messages to the
cashier and customer, discount items, and redeem e-gift
certificates, tender credits, and loyalty points

 Net-based online communications architecture

 Multiple set of basic programs (Charity, Continuity,
Sweepstakes, e-Coupons, Points)
 Tiered pricing rewards (electronic discounts) including fuel,
according to loyalty levels
 Reports to measure loyalty not only by gross spending but also
by gross profit
IBSAR Pune ( Page 51
 Reports to measure program participation by store and chain
 Net-based Centralized Management System
 Retalix 1-to-1, Targeted Marketing

Why the card is not being used?

 Customer forgets their card.

 Customer doesn’t know the benefits of card.
 Quality of temporary card is very poor.
 Cashier forgets to ask about the card.
 Many unwanted details are to be filled in form by customer.
Target given to us is to increase the loyalty sales up to 75% from 53%
within the period 2 months


Loyalt 53.4 56. 59.6 60.4 65. 68. 76. 79

Loyalty Sales %
IBSAR Pune ( Page 52
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:


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

IBSAR Pune ( Page 53

6. If the answer of question no. 6 is B or C then why you are not getting
the product at right time.
a. Not available in the store b. Bad quality c. Price d. Any
7. Are you consuming our packed Fruits & Vegetable?
a. Regular b. Not regular 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

Findings of the questionnaire

Quality of Fruits & Vegetables Of Reliance Fresh

IBSAR Pune ( Page 54

Excellent Good Average Poor

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Are you getting all the products, which you want?







Yes Almost No

IBSAR Pune ( Page 56

Are you consuming our packed Fruits & Vegetable?

20% 15%
10% 5%
Regular Not Regular No

IBSAR Pune ( Page 57

Why you are not buying cut F & V?

100% 88%
20% 7%
10% 5%






The result of the survey is that, any of the customers no like

to buy cut F & V from Reliance Fresh. Major reasons for this
are Quality, Indian Culture & Price.


IBSAR Pune ( Page 58

This is a card which was given to the customer at free of cost. This card
helps to increase the loyalty sales percentage of the store. Benefits of
this card are:
Customer will get 1% point of his purchasing amount added to his\her
membership card.
When these points will become 25, it means that 25 points is
equivalent to 25/-. He\she will be able to redeem his\her points & get
a discount of 25/-
With this card customer will get “Accidental Death Insurance” of
50000/- by default.
If customer will recharge their Hutch, Reliance, Airtel & Idea mobile
from CSD then also 15 point of the amount he recharge will be added
to his card.
In starting customer will get temporary card, which is valid for 180
days. Within 180 days customer will get permanent card, which is look
like plastic card at postal address given by the customer in the form for
issuing of RelianceOne Membership Card. Conditions for eligibility of
permanent card are as follows:
Customers have to do a purchasing of 1500/- with the help of card
within 3 months from the issuing date OR he have to scan his card at
least 10 times.
If above criteria is not fulfill then in next 2 months customers have to
do a purchasing of 600/- with the help of card OR he have to scan his
card at least 6 times.

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If customer wants to change his Postal address, Telephone Number or

Email ID then customer have to fill the “Customer Information
Change request”.
Process to be followed for change of Customer Information
Take a printout of the Customer Information Change Request form.
The customer has fill up all the required details mentioning his
Reliance One Membership card number. The customer has to sign the
request form and hand it over to the MSR. The MSR checks for the
following on the form
Reliance One membership number
First Name
Last Name
Information regarding change request
Customer Signature
The MSR then fills up the information in the “FOR OFFICE USE”
space. The format for request ID is store code- date in DDMYY- serial
number stating from 0001. The MSR fills up the MSR code and signs
in the space provided. This entire request should be filled separately
and kept at the store under lock and key. Once the system for making
these changes is live, all these forms have to be sent to the data entry
center for the processing. The data for dispatch will be notified later.
The format of Customer Change Request Form is:
Customer Information Change request
Please incorporate the following changes in my RelianceOne
membership details
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(Please tick the appropriate box)
The format of Customer Change Request Form is:
Customer Information Change request
Please incorporate the following changes in my RelianceOne membership details
(Please tick the appropriate box)

Reliance One Membership No.

First Name

Last Name

I have moved to a new house. Please send all communication to my new

address given below

Address Line 1*

Address Line 2


City\ Taluka*


My Phone Number has changed

Std Code Phone (Res)


Std Code Phone (Off)

I have a new email address


Date D D M M Y Y Y Y Signature


Store Code

Request ID: CIC - D D M M Y Y -

Store code Date Serial No

MSR Code

MSR Signature

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Replacement Card Request

If the card of the customer is damaged or lost then he has to fill a

“Application Form for Request for Replacement Card”.
Process to be followed for Request for Replacement Card
1. Take a printout of the Application form for request for
Replacement Card.
2. The customer has fill up all the required details mentioning his
RelianceOne Membership card number, first name and last
3. The MSR has to handover the new temporary card to the
customer and fill up the new card number in the space provided.
The MSR has to destroy the corresponding application form by
tearing it.
4. The customer has to sign the request form and hand it over to
the MSR.
5. The MSR checks for the following on the form
a. RelianceOne membership number
b. First Name
c. Last Name
d. If the card is damaged, the MSR has to collect the damaged
card and tick the appropriate option on the application
form. If the card is lost, then the appropriate option is
e. Date
f. Customer Signature

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6. The MSR has to inform the customer that he\she will not be able
to earn points using the old card since it will be deactivated.
7. The MSR should inform the customer that he\she would be able
to use the new card with immediate effect. However, the
customer can start redeeming only after a period of 21 working
days, which are required for processing the replacement request.
8. The MSR then fills up the information in the “FOR OFFICE
USE” space.
9. The format for request ID is store code- date in DDMYY- serial
number stating from 0001.
10. The MSR fills up the MSR code and signs in the space
11. All these damaged cards and application for replacement cards
should be filled separately and kept at store under lock and key.
12.Once the system for making these changes is live, all these forms
have to be sent to the data entry center for the processing. The
data for dispatch will be notified later.
The format of Application Form for Request for Replacement Card is:
Application Form for Request for Replacement Card

Reliance One Membership No.

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

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I request you to deactivate my old card and transfer all the points to my new card
number mentioned above. I understand that I would not earn any points on usage
of my old card.

I declare that I have surrendered the damaged card at the customer service
I declare that I will destroy the lost card if found.

Date D D M M Y Y Y Y Signature


Store Code

Request ID: RRC - D D M M Y Y -

Store code Date Serial No

MSR Code

MSR Signature

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A planogram is a diagram of fixtures and products that illustrates how

and where retail products should be displayed, usually on a store shelf
in order to increase customer purchases. It is an arrangement of
different products in the most appropriate order with optimum
utilization of available space. It also shows the exact quantity of each
product in the store as well as its position on a particular bay & shelf.
They may also be referred to as plannograms, plano's, plano-grams,
plan-o-grams, schematics (archaic) or POGs. A planogram is often
received before a product reaches a store, and is useful when a retailer
wants multiple store displays to have the same look and feel. Often a
consumer packaged goods manufacturer will release a new suggested
planogram with their new product, to show how it relates to existing
products in said category.
Planograms differ significantly by retail sector. Fast-moving consumer
goods organizations and supermarkets largely use text and box based
planograms that optimize shelf space, inventory turns, and profit
margins. Apparel brands and retailers are more focused on
presentation and use pictorial planograms that illustrate "the look"
and also identify each product.
Since the purpose of a planogram is to communicate how to set the
merchandise to increase customer purchases, much research often
goes into the layout of a planogram. Attention is given to adjusting the
visibility, appearance and presence of products to make them look

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more desirable, or to ensure sufficient inventory levels on the shelf or
display. There are some consulting firms which specilize in retail space
layout and planogramming. Some chain stores and wholesalers also
create and maintain planograms for their stores.
Planogramming is a skill developed in the fields of merchandising and
retail space planning. A person with this skill can be referred to as a

To study and re-engineer the existing Planogram.

• 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
• To provide a logical, convenient and inspiring product-customer
• 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

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Merchandising refers to the methods, practices and operations
conducted to promote and sustain certain categories of commercial

Visual Merchandising (VM) is the art of presentation, which puts the

merchandise in focus. It educates the customers, creates desire and
finally augments the selling process.
Visual Merchandising helps in:
 Educating the customers about the product/service in an
effective and creative way.
 Establishing a creative medium to present merchandise in 3D
environment, thereby enabling long lasting impact and recall
 Setting the company apart in an exclusive position.
 Establishing linkage between fashion, product design and
marketing by keeping the product in prime focus.
 Combining the creative, technical and operational aspects of a
product and the business.
 Drawing the attention of the customer to enable him to take
purchase decision within shortest possible time, and thus
augmenting the selling process.

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Sample Planogram Image

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The whole system of RELIANCE FRESH is connected through an ERP

SOFTWARE i.e. SAP and the replenishment procedure is based on
auto indenting & manual indenting.

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.

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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.

Step 2: Per day sales was then multiplied by 3 so as to

maintain the required stock level for 3 days. After getting the
daily sales of each SKU, it was then multiplied by 3. Since, the supply
of SKUs other than Fruits & vegetables and Dairy from Distribution
Center is made after every 3 days and in order to maintain the
required MBQ level the sales figure is multiplied by 3.
For example, the daily sales of Parle Krackjack 75-
gram biscuit were 5 units approximately told by the CSA. This
projection of MBQ level was totally based on the judgments of CSAs
and on the previous month’s sales report. Therefore, its required MBQ
level should be 5x3, i.e., 15 units in the store. This approach was
applied for all SKUs of each category in order to adjust the MBQ level
of all SKUs of Planogram.

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Step 3: Figure obtained in step 2 was then compared with
MBQ figure of current planogram for each SKU. The figure so
obtained for all the SKUs, by applying the same approach, was then
compared with the actual MBQ level of respective SKUs in the
Planogram. By this comparison the difference between actual and
obtained MBQ level was found. This difference was then used to adjust
the MBQ level.
For example, the MBQ level as per current Planogram of
FORTUNE SOYA OIL 1 LT POLY PACK was 56 units but actual per
day sales of this were 32 units, therefore, according to this sales figure
MBQ level should be 96 units. But this figure is more then actual MBQ
level, therefore, its MBQ level was increased to 96 units by providing it
single facing and double vertical stacking.

Step 4: MBQ level of each SKU was adjusted by either

increasing or decreasing its quantity. Similarly the MBQ level of
each SKU was adjusted by either increasing or decreasing its quantity
which was required for the optimum utilization of available bay space
and better inventory management. This approach helped in better
visibility of the SKUs and raising the profitability of the store. This
step resulted in the empty spaces on the different bays.

Step 5: Empty spaces obtained because of step 4 was then

filled by new SKU which was obtained in consultation with
CSAs, FDM, Franchisee Manager, on the basis of our
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judgment & based on feedback from store staff . After getting
the empty shelves, those SKUs were finalized in consultation with
CSAs, FDM, and Franchisee manager and on the basis of our own
judgments, which were mostly demanded by customers other than
those SKUs which were available in the store. This helped in
introducing some new SKUs in Planogram.

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
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.

Types of Research Design

There are three types of research designs:
1. Exploratory research design
Used for discovering ideas and insights
2. Descriptive research design – longitudinal and cross-sectional
Used for describing characteristics of population
3. Causal research design

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Used for proving cause-effect relationship

The research design used in re-engineering Planogram is Exploratory


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
 Respondent’s answer will be obtained by probing

Characteristics of Depth Interview

 An unstructured interview of the respondent is taken
 Only one respondent is interviewed at a time
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 Usually conducted by experienced researcher
 Interviewer’s role is extremely important since the emphasis is
on probing
 For re-engineering Planogram, the respondents selected were
CSAs, store supervisors, FDM, Franchisee manager & customers.

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
 Easy to Use

While conducting study for re-engineering Planogram, the secondary

data was collected as follows:
 Analyse the following data from Management Information
Systems (MIS)
 Current Plano gram
 Category vise Net Sales
 SKU vise Net Sales
 Category vise unit sales
 SKU vise unit sales
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 Maximum Bin/Bay Quantity (MBQ)

Primary Data
The researcher originates the primary data. The primary data for re-
engineering Planogram was collected as follows:
 Feedback from
 Customer (limited to people known)
 Customer demographics

Feed Back Questions asked from CSAs

1. Which SKUs have the maximum queries?
2. Which SKUs have maximum complains?
3. Which SKUs customers are happy with?
4. Are there any SKUs that you suggest as a substitute?
a.) For what SKUs?
b.) What is the substitute?
5. Do you receive any queries for any SKUs which are not
6. How much does each SKU is being sold on daily basis?
7. Is the customer satisfied with the quality of products
available in the store?
8. Is the customer happy with the pack size available
(especially for staples, ghee
& vegetable oil) or they need big or small one?
Feedback received from CSAs
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 Maximum demand is for Fruits & Vegetables (F&V)
 Customers are happy with F&V and Process Food (P.F.)
but for P.F. introduce some more products.
 Substitute suggested is mainly for staples and P.F.
category. For example:- Customer demanded a particular
brand of atta but sometimes due to unavailability of stock,
atta of other brand was offered.
 Customers query more about NF FMCG & toiletries
(Currently this category of SKUs is not available in the
 Sometimes customers complain about the freshness of
F&V as they find it rotten and also fresh ones mixed with
rotten ones.
 Some customer also asks for smaller pack size for staple
All the findings were communicated to Franchisee
Manager for which necessary steps were taken.

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Strengths Opportunities

• Brand Name •Potential Market

• Strong Financial Backup

• Good employee base

• Easily Reachable

• First Mover advantage

Weaknesses Threats

• More time in billing •Local retailers

• Fruits & Vegetables are not •Opposition by Govt.

always fresh
•Big retailers are entering
• Offer’s announcements are
not proper

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 Lack of professionalism in the behavior of CSAs.

 Customers are not aware with the benefits of the card.
 Customer forgets their card at home.
 Customer has no time.
 MSR not asking for the cards major of the time.
 No one is there who give card number from Membership Master
 Time taken in recharging.
 Rigid ness to follow planogram in spite of non-availability of
 Place for Mobile counter is not proper.
 Dummy of some mobile handsets were not available.
 Required SKUs were not available in the store, as these SKUs
were not sending by the D.C. instead of repeated demand by the
 Customers feel inconvenience to purchase wheat without seeing
& touching its sample.
 Store becomes too congested during peak hours.
 Many a times fresh F&V are mixed with rotten ones.
 Non-availability of NF FMCG (Toiletries etc.).
 Consistency in quality in case of F&V is not maintained.
 Planogram of F&V changes as per its supply & sorting, therefore,
its planogram changes frequently.

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 Planogram of staple, P.F., beverages, dairy etc. exits for longer
duration, therefore, these are emphasized.
 Some items were not available in the store given in planogram.
 Sorting of F&V was not done at right time.

 Customers` feel inconvenience to purchase wheat without seeing

& touching it’s sample.
 Non-Planogram SKUs were continuously sent by the D.C. to
 Required SKUs were not available in the store as these SKUs
were not send by the D.C. instead of repeated demand by the
 The problem of storage space was solved in time, which helped
in effective inventory management.
 The store has ample but unorganized parking space.
 There are possibilities of introducing NF FMCG & toiletries in
the store as customer frequently ask about these and required
space for these can also be created.

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Page 82

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 Empty Shelves



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 Announcement for the Membership card should be there.

 Effective utilization of storage space is possible.
 Rigidity in following planogram should be avoided.
 Possibility of Non-Food FMCG
 Effective utilization of empty Shelves
 Consistency in quality should be maintained.
 Proper training should be imparted to CSAs.
 Effective utilization of space should be done.
 Mark down of SKUs especially for Fruits & Vegetables should be
done at proper time.
 Sample of wheat and other staple items can be kept for better
 Consistency in quality should be maintained
 Proper training should be imparted to CSA’s
 Effective utilization of space should be done
 Mark down of SKU’s, especially for Fruits & Vegetable should
be done at proper time.
 Sample of wheat & other staples items can be kept for better
 Fine Line Product Differentiation of SKUs should be
done.Announcement for the Membership card should be
there.Effective utilization of storage space is possible.Rigidity in
following planogram should be avoided.
 Possibility of Non-Food FMCG.

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 Bhawani Singh Marg is a price sensitive area. People prefer

smaller quantities and good quality products. There are less
retail shops nearby the store. Instead some small grocery stores
and local vegetable mandies at V.T. road and SFS are situated at
some distance.
 There is always a gap analysis between Retailer & customer.
 Customers are ready to buy even at same rate or more than as
compared to outside if we provide them a quality.
 Customer has no time. They don’t want to waste their time in
selecting good vegetables.
 By analyzing the primary and secondary data it was identified
that majority of sales is from F&V category instead of mandi
near to store only in the case when quality is good. While for
other categories some changes like introducing more variety and
keeping competitive prices can be done to increase their sales.
 Data gathered through sales report and CSAs were analyzed to
adjust the MBQ level of each SKU and to increase the store
 Reliance Fresh needs to adjust its Planogram according to the
tastes and preferences of customer. Since store does not offer NF
FMCG and toiletries most of the customers are switching to
other players.

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1) Kotler Philip,” Marketing Management”, New Delhi, Pearson

Education Inc, 2006.

2) Kothari,C.R,Research Methodology methods and techniques

,New Delhi, New Age International (p) Ltd,1990.

3) Websites:

- www.

4) Magazine

 Business Today
 Business World

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