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PROJECT REPORT On STUDY OF CONSUMER BUYING BEHAVIOR WITH SPECIAL REFERENCE TO RELIANCE FRESH A Report Submitted In Partial Fulfilment of the Requirements For The Award of the Degree of MASTER OF BUSINESS ADMINISTRATION Collaborative program of M.S.Ramaiah Management Institute with PRIST university BY SHILPA BOHARPI REG.NO:- CM2091860126 Under the guidance of Dr. ASIM BANDYOPADHYAY PRIST UNIVERSITY Page 1

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Page 1: Customer Buying Behaviour at Reliance Fresh

PROJECT REPORT

On

STUDY OF CONSUMER BUYING BEHAVIOR WITH

SPECIAL REFERENCE TO RELIANCE FRESH

A Report Submitted In Partial Fulfilment of the RequirementsFor The Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION Collaborative program of M.S.Ramaiah Management

Institute with PRIST university

BY

SHILPA BOHARPI REG.NO:- CM2091860126

Under the guidance ofDr. ASIM BANDYOPADHYAY

PRIST UNIVERSITY

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Vallam, Thanjavur2010

STUDENT’S DECLARATION

I hereby declare that the Project Report conducted atRELIANCE FRESH, BANGALORE

Under the guidance ofDr. ASIM BANDYOPADHYAY

Submitted in Partial fulfilment of the requirements for theDegree of

MASTER OF BUSINESS ADMINISTRATION Collaborative program with PRIST University

TO

M.S.RAMAIAH MANAGEMENT INSTITUTE It is my original work and the same has not been submitted for the award of any other Degree/Diploma/Fellowship or other similar titles or prizes.

Place: Bangalore STUDENT NAME – SHILPA BOHARPI

Date: Reg. No - CM2091860126

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CERTIFICATE

This is to certify that the Project Report at Reliance Fresh on the topic “Study of consumer buying behaviour “ submitted in partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Of PRIST UNIVERSITY

In collaboration with

M.S.RAMAIAH MANAGEMENT INSTITUTE

Is a record of bonafide Training carried out by SHILPA BOHARPI,Reg No - CM2091860126

Under my supervision and guidance and that no part of this report has been submitted for the award of any other degree/diploma/fellowship or similar titles or prizes.

FACULTY GUIDE

Signature:

Name: Dr. ASIM BANDYOPADHYAY

Qualifications:

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ACKNOWLEDGEMENT

I extend my special gratitude to our beloved director Shri. ANANDARAM,

Our DEAN & our Co-coordinator for inspiring me to take up this project.

I wish to acknowledge my sincere gratitude and indebtedness to my project

guide Dr. ASIM BANDYOPADHYAY of M.S. RAMAIAH

MANAGEMENT INSTITUTE Bangalore for his valuable guidance and

constructive suggestions in the preparation of project report.

STUDENT NAME -

SHILPA BOHARPI

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CONTENTS O F PART A

CONTENTS OF PART B

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S. NO. TITLE PAGE NO.I Sectoral Analysis of Retail Industry

Retail Industry in India 8 Scope of Retail sector in India 9 Growth factors 10 Employment generation 11 Challenges facing 12

II About the Company Company profile 14 Reliance Fresh 16 Aspects of the company 20 Corporate Social Responsibility 27

III Organisational Hierarchy 28IV Customers of Reliance Fresh 29V Competitors

More 30 Big Bazar 31 Spencer’s 32

VI SWOT Analysis 33

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S. NO. TITLE PAGE NO.I Research Design

Title of the research topic 37 Statement of the problem 37 Research Objective 37 Research Methodology 38 Sample Size 38 Data Collection 38 Statistical Tools used for analysis 39 Sampling Technique 39 Limitations of the study 39

II Analysis and Interpretation of the data 40III Findings and Conclusions 53IV Recommendations And Suggestions 54V Appendices 55VI Bibliography 58

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PART -A

ORGANISATIONAL STUDY

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I. SECTORAL ANALYSIS OF RETAIL INDUSTRY

RETAIL INDUSTRY IN INDIA

Retailing is the interface between the producer and the individual consumer buying for

personal consumption. This excludes direct interface between the manufacturer and

institutional buyers such as the government and other bulk customers. A retailer is one who

stocks the producer’s goods and is involved in the act of selling it to the individual consumer,

at a margin of profit. As such, retailing is the last link that connects the individual consumer

with the manufacturing and distribution chain. The retail industry in India is of late often

being hailed as one of the sunrise sectors in the economy. AT Kearney, the well-known

international management consultancy, recently identified India as the ‘second most

attractive retail destination’ globally from among thirty emergent markets. It has made India

the cause of a good deal of excitement and the cynosure of many foreign eyes. With a

contribution of 14% to the national GDP and employing 7% of the total workforce (only

agriculture employs more) in the country, the retail industry is definitely one of the pillars of

the Indian economy.

An industry which has good representation in Fortune 500 companies list, an industry which

is the largest employer just after agriculture.

Indian retail industry is the largest industry in India, with an employment of around 8% and

contributing to over 10% of the country's GDP. Retail industry in India is expected to rise

25% yearly being driven by strong income growth, changing lifestyles, and favourable

demographic patterns. It is expected that by 2016 modern retail industry in India will be

worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries.

Key Players in this sector are as follows:

➢ Future Group.

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➢ Vishal Retail Ltd.

➢ Shoppers Stop Ltd

➢ Big Bazar

➢ Spencer’s

➢ More

Scope of Retail Sector in India

The scope of the Indian retail market is immense for this sector is poised for the highest

growth in the next 5 years. The organized retailing sector in India is only 3% and is expected

to rise to 30 - 35% by the year 2012. There are under construction at present around 325

departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a

tremendous scope for growth in the Indian retail market. The growth of scope in the Indian

retail market is mainly due to the change in the consumer’s behaviour. For the new

generation have preference towards luxury commodities which have been due to the strong

increase in income, changing lifestyle, and demographic patterns which are favourable. The

scope of the Indian retail market is very vast. And for it to reach its full potential the

government and the Indian retailers will have to make a determined effort.

Retail market in the organized sector in India is growing can be seen from the fact that 1500

supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian

companies are entering the Indian retail market which is giving Indian organized retail

market a boost. One such company is the Reliance Industries Limited. It plans to invest US$

6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets.

Pantaloons are another Indian company which plans to increase its retail space to 30 million

square feet with an investment of US$ 1 billion.

Bharti Telecoms an Indian company is in talks with Tesco a global giant for a £ 750 million

joint venture. A number of global retail giants such as Wal-Mart, Carrefour, and Metro AG

are also planning to set up shop in India. Indian organized retail market will definitely grow

as a result of all this investments.

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The scope of the Indian retail market has been seen by many retail giants and that the reason

that many new players are entering the India retail industry. Judging the scope for growth in

the India retail industry many global retail giants are also entering the Indian retail market.

They are:

➢ Tesco

➢ Metro AG

➢ Wal- Mart

The scope for growth in the Indian retail market is seen mainly in the following cities:

➢ Mumbai

➢ Delhi

➢ Pune

➢ Ahmedabad

➢ Bangalore

➢ Hyderabad

➢ Kolkata

Growth Factors in Indian Organized Retail sector

Rise in the working population which is young, pay- packets which are hefty, more nuclear

families in urban areas, rise in the number of women working, more disposable income and

customer aspiration, western influences and growth in expenditure for luxury items. All these

are the factors for the growth in Indian organized retail sector.

In fact, Indian retail industry is the fastest growing industry in India and it accounts for

10% of the country's GDP. In 2009, the retail industry in India amounted to US$ 200 billion

and out of this the organized retail sector in India amounted to US$ 6.4 billion. By 2012, the

Indian organized retail sector is expected to rise to US$ 25 billion. In 2003, the Indian

organized retailing sector accounted for more than 4.5 million sq. ft of space absorption by

malls. Pantaloons have decided to increase its retail space to 30 million square feet with an

investment of US$ 1 billion. Reliance Industries Limited is targeting for annual sales of US$

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25 billion by 2011. It is planning to invest US$ 6 billion in order to open 1,500 supermarkets

and 1000 hypermarkets. Bharti Telecoms is planning a joint venture with Telco a global

retail giant worth £ 750 million.

EMPLOYMENT GENERATION BY INDIAN ORGANIZED RETAIL

SECTOR

India is going through a radical economic change. Though it is very infant stage, people can

feel the climate is changing. The unorganized retailers take the lion's share in the Indian

retail sector, but the organized retailers are growing at a good pace, and promises an increase

of proportion of 9 - 10% by 2011. This is to be the largest sector after the agricultural sector.

The increase in the number of consumers twinned with the introduction of organized sector

has brought numerous corporate investments in retail sector. The entry of super markets,

enormous departmental stores, and shopping malls has encouraged the retailers to look at

new business plans of expansion. An economic growth on a monumental scale is offered by

the Indian retail sector, equally in the national and international market which in turn will

generate a huge source of employment and a variety of options for the consumers.

The present employment in the retail business is nearly 4 crores and around 20 crores

depends on this sector. There is a scope of better exposure to the international standards with

the entry of transnational companies, which in turn is encouraging more &

more retail management programs to open up and help bridging the gap of supply & demand

of talented professionals for management.

An economic growth on a monumental scale is offered by the Indian retail sector, equally in

the national and international market which in turn will generate a huge source

of employment and a variety of options for the consumers. The Ernst & Young's report 'The

Great Indian Retail Story', anticipates that the Indian retail sector would come up with 2

million employment opportunities within the year 2010.

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Benefits to the economic growth:-

➢ Better quality products and services would lead to better competition.

➢ More exports bring more foreign direct investments and foreign exchange.

➢ Organized Indian retail sector would encourage tourism.

➢ Along with the employment boom there would be a vast development in the

expertise of the human resource.

There would remain future scope for improvements in agriculture, small, and medium scaled

industry.

Challenges facing the Indian Organized Retail sector

The challenges facing the Indian organized retail sector are various and these are stopping

the Indian retail industry from reaching its full potential. The behaviour pattern of the

Indian consumer has undergone a major change. This has happened for the Indian consumer

is earning more now, western influences, women working force is increasing, desire for

luxury items and better quality. He now wants to eat, shop, and get entertained under the

same roof. All these have lead the Indian organized retail sector to give more in order to

satisfy the Indian customer.

The biggest challenge facing the Indian organized retail sector is the lack of retail space.

With real estate prices escalating due to increase in demand from the Indian organized retail

sector, it is posing a challenge to its growth. With Indian retailers having to shell out more

for retail space it is affecting their overall profitability in retail. Trained manpower shortage

is a challenge facing the organized retail sector in India. The Indian retailers have difficulty

in finding trained person and also have to pay more in order to retain them. This again brings

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down the Indian retailers profit levels. The Indian government has allowed 51% foreign

direct investment (FDI) in the India retail sector to one brand shops only. This has made the

entry of global retail giants to organized retail sector in India difficult. This is a challenge

being faced by the Indian organized retail sector. But the global retail giants like Tesco, Wal-

Mart, and Metro AG are entering the organized retail sector in India indirectly through

franchisee agreement and cash and carry wholesale trading. Many Indian companies are also

entering the Indian organized retail sector like Reliance Industries Limited, Pantaloons,

and Bharti Telecoms. But they are facing stiff competition from these global retail giants. As

a result discounting is becoming an accepted practice. This too brings down the profit of the

Indian retailers.

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II ABOUT THE RELIANCE FRESH

COMPANY PROFILE

RELIANCE

“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 06, 2002

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The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest

business house. The Group's activities span exploration and production of oil and gas,

refining and marketing, petrochemicals, textiles, financial services and insurance, power,

telecom and infocom initiatives. The Group exports its products to more than 100 countries

the world over. Reliance Group revenue is equivalent to about 3.5% of India's GDP. The

Group contributes nearly 10% of the country's indirect tax revenues and over 6% of India's

exports.

The Reliance Group Companies, acknowledged as one of the best-run companies in the

world, include: Reliance Industries Limited, Reliance Capital Limited, Reliance Industrial

Infrastructure Limited, Reliance Telecom Limited, Reliance Infocom Limited, Reliance

General Insurance Company Limited, Indian Petrochemicals Corporation Ltd. and Reliance

Energy Limited. The company’s refinery at Jamnagar accounts for over 25% of India's total

refining capacity and their plant at Hazira is the biggest chemical complex in India.

The Reliance Group was founded by the legendary Dhirubhai H. Ambani. He has been one

among the select Forbes billionaires and has also figured in the Sunday Times list of top 50

businessmen in Asia. In 1975, the company expanded into textiles. Dhirubhai Ambani

introduced equity cult in India when Reliance went public with IPO in 1977. Since the

launch of its IPO RIL has expanded rapidly and integrated backwards into other industry

sectors, most notably the production of petrochemicals and the refining of crude oil.

Dhirubhai led the evolution as a global leader in the materials and energy value chain

businesses. Today, Reliance Group's activities range from exploration and production of oil

and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates,

plastics and chemicals) to textiles and retail. Reliance enjoys global leadership in its

businesses. It is the largest polyester yarn and fibre producer in the world and among the top

five to ten producers in the world in major petrochemical products. Presently, Reliance

Group has more than 25,000 employees on its rolls and exports products in excess of US$ 15

billion to more than 100 countries in the world.

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Reliance fresh

MUKESH AMBANI

RELIANCE FRESH

AAPKA FRESH AAPKE PADOS MEIN

BACKGROUND

We can see many examples of businesses where, first we grow and then think of expanding

but Reliance is quite different. Reliance has developed such huge amount of resources and

capital over the years that whenever it steps into any segment it is not required to wait for

growing signal, that’s why it always thinks of expanding without any boundaries. Reliance

retail is next Step by RIL which will be a pan India project. “Reliance Fresh” is the retail

chain division of Reliance Industries of India which is headed by Mukesh Ambani. Reliance

has entered into this segment by opening new retail stores into almost every metropolitan and

regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their

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retail division and plans to begin retail stores in 784 cities across the country. The Reliance

Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add more stores

across different segments, 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. Besides, the stores would provide direct employment to 5 lakhs young Indians and

indirect job opportunities to a million people, according to the company. The company also

has plans to train students and housewives in customer care and quality services for part-time

jobs. The company is planning on opening new stores with store-size varying from 1,500 sq

ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples, FMCG products and

dairy products. Each store is said to be within a radius of 1-2 km of each other, in relation to

the concept of a neighbour store. However, this is only the entry roll-out that the company

has planned. Bangalore is said to have 48 stores in all by the end of the year.

In a dramatic change due circumstances prevailing in UP, West Bengal and Orissa, It was

mentioned recently in News Dailies that, Reliance Retail is moving out stocking. Reliance

Retail has decided to minimize its exposure in the fruit and vegetable business.

The company may not stock fruit and vegetables in some states, Orissa being one of them.

Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has

decided not to compete with local vendors partly due to political reasons, and partly due to

its inability to create a robust supply chain. This is quite different from what the firm had

originally planned. When the first Reliance Fresh store opened in Hyderabad, not only did

the company said the store’s main focus would be fresh produce like fruits and vegetables at

a much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the

company spoke about was to source from farmers and sell directly to the consumer removing

middlemen out of the way.

A typical Reliance Fresh store is approximately 3000-4000 square Feet and caters to a

catchment area of 1-2 km.

With a vision to generate inclusive growth and prosperity for farmers, vendor partners, small

shopkeepers and consumers, Reliance Retail Limited (RRL), a subsidiary of RIL, was set up

to lead Reliance Group’s foray into organized retail.

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RRL launched its first store in November 2006 through its convenience store format

‘Reliance Fresh’.

During the year, RRL also focused on building strong relationships in the agri-business value

chain and has commenced marketing fruits, vegetables and staples that the company sources

directly to wholesalers and institutional customers. RRL provides its customers with high

quality produce that has better shelf life and more consistent quality than was available

earlier.

Through the year, RRL also expanded its supply chain infrastructure. The Company is fully

geared to meet the requirements of its rapidly growing store network in an efficient manner.

Recognizing that strategic alliances are going to be a key driver to its retail business, RRL

established key joint ventures with international partners in apparel, optical and office

products businesses. Further, RRL will continue to seek synergistic opportunities with other

international players as well.

When the store was launched it had some initial problems Post launch, in a dramatic shift in

its positioning and mainly due to the circumstances prevailing in UP, West Bengal and

Orissa, it was mentioned recently in news Dailies that, Reliance Retail is moving out of

stocking fruits and vegetables. Reliance Retail has decided to minimize its exposure in the

fruit and vegetable business and position Reliance Fresh as a pure play super market

focusing on categories like food, FMCG, home, consumer durables, IT and wellness, with

food accounting for the bulk of the business.

When the first Reliance Fresh store opened in Hyderabad in 2006, not only did the company

said the store’s main focus would be fresh produce like fruits and vegetables at a much lower

price, but also spoke at length about its “farm-to-fork’’ theory. The idea the company spoke

about was to source from farmers and sell directly to the consumer removing middlemen out

of the way.

Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint,

Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various

formats that Reliance has rolled out.

In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of

Apple Specialty Stores branded as iStore, starting with Bangalore.

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ASPECTS OF THE COMPANY

FARM TO FORK

The Reliance retail company sources say it is setting aside Rs 50,000 crore to build its farm-

to-fork linkage. Reliance has drawn up plans for a presence in 784 towns and 6,000 mandi

(wholesale market) towns with 1,600 rural business hubs to service these. It has already

rolled out 177 Reliance Fresh stores across major towns in 11 states. According to a

company report, RIL is targeting a turnover of Rs 40,000 crore in the next few years.

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After Future Group, Reliance Retail plans to introduce

private label sale to kirana stores

Reliance Retail is understood to be exploring ways to supply its private labels in food and

groceries to kirana stores and small retailers in the country. A separate entity, most likely to

be named Reliance Foods, will carry out the private label business. Reliance Fresh head

Gunender Kapur was made head of private labels business in the company. Once, they

entirely cater to the demands of their stores, and then they can certainly look at supplying

them to other retailers since they have required infrastructure, process and systems in place.

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It is said that after launching private labels in food and groceries, Reliance Retail is also

expected to launch soaps, detergents, cosmetics and non-FMCG products under its private

labels segment with a new brand name. The company’s flagship chain Reliance Fresh sells

staples and food items under Reliance Select and Reliance Value brands, dairy products

under “Dairy Pure” brand.

Kishore Biyani Future Group, too, also have plans to sell its private labels to stores outside

the group and it has already carried out pilot studies for this venture and is expected to start

the business soon. Future Logistics, the logistics arm of the group, also has plans to foray

into wholesale distribution of products such as food, apparel, grocery to organized retail

chains in the country, which is expected to start from this month.

Nearly 2 years ago, Reliance Industries announced an ambitious plan to invest Rs 25,000

crore to expand its stores in the country to take the advantage of organized retail in the

country. Initially, the company was planning to open 2,000 stores by 2008, and 5,000 stores

by 2010, but due to a delay in delivery of properties, economic downturn and demand slump

the company had to scale back its expansion plans.

Reliance Retail runs over 850 stores, which include stores for food and grocery, consumer

durables, beauty and wellness, jewelry, footwear, among others. Its formats such as apparel

chain Reliance Trends, beauty and wellness format Reliance Wellness, consumer durable

chain Reliance Digital have private labels or are in the process of launching private labels.

The whole idea of private labels is based on pricing and retailers get enough volumes on

their shelf at marginal costing. Retailers have an opportunity to sell their private labels to

kirana stores. But it depends on their strategy on pricing and marketing right products is said

by Naimish Dave, director with OC & C Strategy Consultants.

Business consultancy Techno Park Purnendu Kumar says retailers can sell their products to

mom-and-pop stores only through their cash and carry ventures as reaching out to individual

stores would be tough preposition. Supplying to kiranawalas is a tedious job as you need to

have different points of sale, enough manpower and transport and delivery systems. But

selling products through cash and carry stores is a viable preposition, said Purnendu Kumar.

Supply chain model of reliance fresh

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Reliance started its retail operations of reliance fresh stores with following supply chain

model. Procuring directly from the farmers and operating with moderate margin but mass

selling was key to reliance fresh operations for first few months.

The following figure depicts the reliance fresh model –

MODEL 1

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MODEL 2

Whole Sale Trading (WST) Reliance formalized its second supply chain model to shift itself

from grocery retailer to grocery supplier by focusing and establishing itself in Mandi’s.

STEPS IN WST MODEL

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1. Reliance has owned farms on contract basis for production of specific crop which is

decided after extensive research depending on -

➢ Soil conditions.

➢ Climate conditions.

➢ Return over costs incurred.

2. Different vegetables and fruits from such farms are collected through reliance own

logistics and brought to collection Processing centres where quality check and other

required processing is done. In processing centres workers wearing balaclavas, woollen

trousers and bulky jackets work inside a room kept at a constant 30 Celsius, peeling and

chopping vegetables, spinning them dry and then heaping them in small plastic packets

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before placing them in plastic transport crates. At the other end of the 5,000-sq-m

warehouse, men unload crates of fruits from a truck pulled up to a spotless loading dock.

A quality-control expert samples every tenth crate; if the fruits are good a team will ready

them for delivery within hours to Reliance fresh stores around different places like U.P

and as far away as Hyderabad and even Mumbai (formerly Bombay). If they are not,

workers will inspect the entire shipment and discard anything below standard.

3. Merchandise from these collection processing centres are collected and loaded for

Wholesale mandi’s. As this merchandise is to be made available by 4 A.M in morning

thus deliveries in trucks are sent at time depending upon:

TRANSIT TIME. – Time required reaching destination i.e mandi’s.

MARGIN TIME. – Time period between a truck reaching mandi and then Unloads.

Can be 2 to 3 hours.

4. From mandi’s where the trucks have been unloaded, roadside vendors and pull carters

buy fruits and vegetables to supply in households.

5. In case still some vegetables and fruits are not sold reliance logistics own Transportation

send them to reliance fresh stores.

Product range of reliance fresh

➢ Vegetables and fruits : This is the specialty of the store as they provide fresh

fruits and vegetables at a rate lower than the market price.

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➢ Households Items : In the stores we can get items which are at slight

premium rate than market price, but usually of high quality.

➢ Food and Beverages : This area of the product line they stock all the premier

brands and also their private label.

➢ Groceries : In this sector reliance is promoting its private label as they are

promoting their own brands and they do the packaging of the product and

then label it privately and then sell it at premium as compared it to the loose

items.

➢ Dairy Products : The dairy products in some locations are procured from the

farmers themselves and some places they procure it from the manufacturers.

➢ Refrigerated products : This product line is dominated by the brands

available in market and very less private labelling is done.

➢ Non food items : Here we get many petty non food items at a premium than

market price.

CORPORATE SOCIAL RESPONSIBILITY

Today when most of the companies are busy in making profits by any means, there are few

Ones who are focused to return this society, a part of what they have earned through this

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society. Reliance retail is one of them. Following efforts of reliance retail are aimed at

benefiting the society making reliance socially responsible.

I. Reliance Retail aims at recruiting people from the underprivileged community in

society. Hence, they are planning to train students from corporation schools and

schools run by NGOs. And, they consider this as a part of the corporate social

responsibility. The company is planning to charge a "small fee" from those who want

to join the course as they want to bring in some discipline and regularity among the

students, and will reimburse that once they are inducted into service.

II. Farming in India is highly fragmented and subject to harsh climatic conditions once

harvested, it is very difficult to keep fruits and vegetables fresh. To secure high

quality, Reliance Retail is directly sourcing fresh agricultural produce from thousands

of farmers from villages through Collection Centers. With this concept, Reliance has

built a business model generating shared value that links the company supply chain

more closely to poor farmers in Indian villages. Reliance is providing a guaranteed

market for the farmers’ produce, reducing transaction costs and training the farmers

in better and sustainable farming practices. This initiative results in higher income

and upgrading of skills for the farmers, and reduced spoilage of produce (up to 35

percent) and better quality products f or Reliance retail stores.

III. Reliance retail has adopted “farm to fork” theory which means it is procuring directly

from the farmers thus offering them quite reasonable prices for their produce as now

no intermediaries are involved. In return Reliance is giving farmers information about

how can farmers improve their productivity. They have centres in villages who apart

from providing information make farmers aware of market rates of different crops so

that farmers can choose crops they want to sow to become profitable. Farmers are

provided technical help as well like information about quality of seeds and fertilizers.

III ORGANIZATIONAL HIERARCHY

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IV CUSTOMERS

➢ The target customers of Reliance Fresh is Middle and Lower Level

income group.

➢ Higher level income group also come for fresh merchandise.

➢ Some customers prefer good quality of products and some prefer low

price of products.

➢ Some foreign customers also visit Reliance Fresh.

➢ Customers are aware about the products and their prices.

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V COMPETITORS

MORE

The MORE chain of supermarkets are bright and clean stores at convenient locations with

layouts that allow ease of navigation. The product display is well organised and it facilitates

the customer to choose the product easily. The stores have been designed by Fitch, the

leading international retail design firm.

The stores promise a range of benefits to consumers and are a solution to the many problems

faced by housewives while shopping for their daily needs. The retail offering from the

Aditya Birla Group, has been crafted after in-depth research of the needs and expectations of

the Indian consumers. MORE is the answer to the shopping needs of the Indian housewives

who wants a modern and convenient option in her neighbourhood with an attractive and

consistent range of products ,more assures consumers the security of knowing that they are

paying the best price in the market for good quality products.

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BIG BAZA A R

Big Bazar , is the chain of retail stores of the big banner Pantaloon Retail (India) Ltd., which

in turn is a segment of Kishore Biyani, regulated Future Group of Companies. Moreover the

customer friendly ambiance and the organized retailing of products also makes Big Bazar

one of the successful retail companies in India.

Big Bazar, a part of the Pantaloon Group, is a hypermarket offering a huge array of goods of

good quality for all at affordable prices. Big Bazar with over 50 outlets in different parts of

India, is present in both the metro cities as well as in the small towns.

The significant features of Big Bazar: Shopping in the Big Bazar is a great experience as one

can find almost everything under the same roof.

The following are few of the sections at Big Bazar: 1. Books 2. Cameras 3. Computers &

Peripherals 4. Electronics 5. Gift Vouchers 6. Health and Fitness 7. Home & Kitchen 8.

Jewellery 9. Memory & Storage 10. Mobiles & Phones 11. Movies & Videos 12. Watches

13. Women’s wear 14. Men’s wear 15. Children’s wear 16. Others.

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SPENCER’S

Spencer’s Retail is India’s largest chain of supermarkets, offering food, apparel, appliances,

electronics, digital gadgets, home decor and accessories, books, and music. Established in

1996, the retail chain has become a popular destination for shoppers in India with

hypermarkets, supermarkets, and groceries spread all over India.

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VI SWOT A NALYSIS

The Indian retail market accounted for $ 200 billions. Food accounts for over two-thirds of

the $200 billions Indian retail market. Yet it has seen less than 1% penetration by modern

retail so far. Reliance industries which always looking for new business opportunities just

started a new era with its introduction of new concepts stores named Reliance Fresh with the

opening convince store in high streets of Banjara Hills of Hyderabad. Reliance Fresh is very

different from what modern retail has offered in India so far and with this Reliance is

planning to establish strong retail network in India in food and Farm sector.

Let’s do SWOT Analysis on the Reliance Fresh –

STRENGTHS

Reliance is the first enter into this unorganized sector of vegetables and fruits. According to

them its intentions to have 100% farm fresh foods in their new retail stores. It is also adding

shortly a juice bar, and even a large counter for Puja flowers. In fact, over 60 per cent of the

floor space has been dedicated to fresh fruits and vegetables, the rest to other food products

like staples, spices, bakery etc. But reliance has decided not to add any bar soap or toothpaste

and detergent in its shelves. So by using this strategy they are positioning themselves

different from other players of the industries like Food world, Big Bazaar and Nilgiris. But

overcome the short comings of these specialized stores they are also introducing new

Reliance full-fledged supermarket called Shakhari Bhandar which offers each and everything

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from the staple to soap. Most of the staples are under its own private label brand —

‘Reliance Select’.

Reason: private labels offer far better profit margin to the retailer than branded products of

FMCG companies.

WEAKNESS

This is definitely an interesting business venture but it may miss out the opportunity to

capture a greater share of the customer’s wallet. For the customers also this could be hectic

as they would have to visit another store to pick up essentials. Reliance could easily

overcome this problem by adding a few small counters for some basic non-food products.

According to their official this format is not final one they are accepting the new changes

which will attract the large number of customers.

OPPORTUNITIES

Reliance wants to build a high-profitability business and food is perhaps the best venture to

start. That is because the Indian food supply chain is grossly inefficient. There are several

intermediaries, each of whom adds his own profit margin to the cost. Besides, there is huge

amount spent in transit. This offers potential for savings and profits. To reduce the cost and

increase the profit it has been sourcing out its requirements from the farmers. For example,

the leafy vegetables, brinjals, tomatoes and green chillies in the Banjara Hills outlet were

sourced directly from farmers in Vantimamdi, Chevella and nearby Mandals in Ranga Reddy

district of Andhra Pradesh. The supply chain already has been backed by few hundred

farmers the number is estimated to touch million in next five years. The main aim of the

reliance is to eliminate the intermediaries in the sector and reduce the cost. Smaller stores

have two advantages- they bring down the cost of real estate and increase profits- it is easier

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to find space for small convenience stores in a quiet neighbourhood than for supermarkets in

high streets.

THREATS –

This model is engineered to clock a faster turnover of inventory — Reliance expects

consumers to visit the store at least twice a week for their top-up groceries. Each store will

have an investment of Rs 50 lakhs to Rs 60 lakhs. Unlike global retailers who operate on less

margins, Reliance Retail is looking at a fairly high-margin business model. Deliberately

stopped short of being a full-fledged supermarket rather, it has limited itself to a food and

grocery convenience store. They also have a threat from the existing supermarkets which

provides all the services to its customers. For Example, Food world and Nilgiris also

provides food and beverages with other personal care products. These convince are not

existed in the present Reliance retail stores.

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PART B

Project report

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I RESEARCH DESIGN

TITLE OF THE RESEARCH TOPIC

Study of Consumer Buying Behaviour with special reference to Reliance Fresh,

Bangalore.

STATEMENT OF THE PROBLEM

Consumer behaviour has occupied a prominent place in today’s business. It is very important

to study how the consumers behave in a particular situation and what might be the

responsible factors etc. In this context it is better to study the consumer behaviour towards

retail industry with special reference to reliance fresh industry.

RESEARCH OBJECTIVE

.

➢ To know about the consumer awareness towards Reliance Fresh.

➢ To study consumer buying behaviour of customers in Reliance Fresh Bangalore.

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RESEARCH METHODOLOGY

➢ Research Problem

To make a comprehensive study of Reliance Fresh & know the buying

behavior of Reliance Fresh customers.

➢ Type of Research

Descriptive type research has been used to complete the project. This research

is based on fact finding enquires and the variables are totally independent and

uncontrollable.

SAMPLE SIZE

➢ 100 respondents have been selected as sample size for research.

D ATA COLLECTION

➢ Primary Data

Primary data of research are collected from direct resources i.e customer of

Reliance fresh through a questionnaire.

➢ Secondary Data

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Secondary Data which are used for research to know the history and scope of

Retail industry are collected from already available resources like the net and other

sources.

STATISTICAL TOOLS USED FOR ANALYSIS

➢ Through Graphs, Pie-Charts, Tables etc.

SAMPLING TECHNIQUE

➢ Random sampling is used for research project. I have given equal weightages to my

all respondent and chose them randomly without any bias like gender, age, income

culture.

LIMITATIONS OF THE STUDY

➢ The project has some limitations because it is totally based on efforts of individuals.

➢ Peoples may be careless and may not give correct answer to the questions, because of

so many reasons.

➢ It is totally based on personal efforts of individuals. Some of the consumers are

unable to understand the questionnaire.

➢ Some consumers are not interested in filling the Questionnaire.

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II ANALYSIS AND INTERPRETATION OF D ATA

ANALYSIS

➢ Understanding the consumer buying behaviour in reliance fresh

DEFINITION –

Purchase decision making pattern that is a complex amalgam of needs and desires

and is influenced by factors such as the consumer’s –

➢ Societal role (parent, spouse, worker etc.)

➢ Social and cultural environment and norms.

➢ Aspirations and inhibitions.

Buying Behaviour is in the advertising, marketing, sales and purchasing and

Procurement subjects.

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INTERPRETATION

1. Gender of the Consumer -

MALE FEMALE43 57

DATA COLLECTED –

➢ Data collected for this questionnaire to know the gender of customer of reliance

fresh.

ANA LYSIS –

➢ Data collected for project from 100 responded in which 57 are female and 43 are

male of total respondents.

INTERPRETATION –

➢ From the total respondent it analyses that most of the customers in this store is female

and their demand always consider at the time of taking the decision. Company should

try to attract new male customer by provide new scheme to their customer.

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1. Which age group do you belong?

10-30 31-50 51 & above37 49 14

DATA COLLECTED –

➢ Data collected for this questionnaire to know the age of customer of Reliance Fresh.

ANALYSIS –

➢ Data collected for project from 100 responded in which 37 are the age between 10 –

30 and 49 are between age of 31 – 50 and 14 are the age of 51 & above of total

respondents.

INTERPRETATION –

➢ From the total respondents it analyses that most of the customers are youth. In my

observation it was found that mostly people believe in convenience shopping.

It helps the organisation to keep employees in such a way to understand the problem

of customer easily and rectify the problem effectively.

1. How do you come to know about Reliance Fresh?

Advertisement Friends Relatives Others45 35 15 5

DATA COLLECTED -

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➢ Data collected for this questionnaire to know that how people come to know about

Reliance Fresh.

ANALYSIS –

➢ Data collected for project from 100 responded in which 45 customers said through

advertisement, 35 through friends and 15 and 5 through relatives and others

respectively of total respondents.

INTERPRETATION –

➢ It analyses that many customers came to know about Reliance Fresh through

advertisement (newspaper) because it is the best medium to reach the maximum

customers.

1. What is your perception about Reliance in general?

Excellent Good Fair Poor35 45 15 5

DATA COLLECTED –

➢ Data collected for this questionnaire to know the perception about Reliance in

general.

ANALYSIS –

➢ Data collected for project from 100 responded in which 35 customers said that their

perception towards Reliance Fresh is excellent, 45 customers said that it is good and

15 and 5 said that it is fair and poor respectively of total respondents.

INTERPRETATION –

➢ From my research it was analysed that most of the customer’s perception towards

Reliance Fresh is good and some said that it is excellent so they should bring some

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innovative ideas and provide better services and products to the customers so that

their perception towards Reliance Fresh would be excellent.

1. How often do you shop in Reliance Fresh?

Daily Weekly Fortnightly Once in a Month10 45 20 25

DATA COLLECTED –

➢ Data collected for this questionnaire to know the shopping behaviour of customer of

Reliance Fresh.

ANALYSIS –

➢ Data collected for project from 100 responded in which 10 are like to purchase daily

and 45 are purchase weekly and 20 are purchase fortnightly and 25 are like to

purchase once in a month of total respondent.

INTERPRETATION –

➢ From the total respondent it analysed that most of the customer are likely to purchase

on weekend. In my observation it was found that more scheme should be provided on

weekend.

1. What do you mostly shop at mentioned store?

Fruits & Vegetables Grocery Food Items Non-Food Items48 25 17 10

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DATA COLLECTED –

➢ Data collected for this questionnaire to know the products which are like to purchase

by the customer.

ANALYSIS –

➢ Data collected for project from 100 responded in which 48 customers are like to

purchase Fruits & Vegetables and 25 are like to purchase Grocery and 17 and 10 are

like to purchase Food Items and Non – Food Items respectively.

INTERPRETATION –

➢ From the total respondent it was analysed that most of the customer are like to

purchase Fruits & Vegetables from the store. Company should try to retain the

customer and should increase the variety of non – food items.

1. Preference of shopping?

Quality Brand Price One Stop Shop25 35 10 30

DATA COLLECTED –

➢ Data collected from this questionnaire is to know the preference of shopping.

ANALYSIS –

➢ Data collected for project from 100 responded in which 30 customers are like to

prefer One Stop Shop, 25 customers are like to purchase quality product and 35

customers believe in reliance brand and only 10 like to prefer price of the product.

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INTERPRETATION –

➢ From the total respondents it was analysed that most of the customers are believe in

reliance brand like to purchase qualitative product in one stop shop. Here it was

observed that people want to purchase fresh and original product and want better

service.

1. Which store do you keep in preference for purchasing?

Reliance Fresh Spencer Big Bazar More Super Market Others30 20 25 15 10

DATA COLLECTED –

➢ Data collected from this questionnaire to know the preference of the purchasing

(comparison of store to other).

ANALYSIS –

➢ Data collected for project from 100 responded in which 20 customers like to purchase

from Spencer, 25 prefer Big-Bazaar, 30 customers give preference to Reliance Fresh

and 15 and 10 are like to purchase from More Super Market and Others respectively

of total respondent.

INTERPRETATION –

➢ In my observation it was found till today organised retail sector didn’t penetrate the

market. Company should try to open new convenience store and provide more

scheme and good service to customer to penetrate the market. Initial it may be

costlier, but it will give long term benefit.

9. Do advertisement and promotion influence your shopping decision?

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DATA COLLECTED –

➢ Data collected from this questionnaire to know the effect of promotion scheme on

purchasing.

ANALYSIS –

➢ Data collected for project from 100 responded in which 65 customers are like

promotion scheme and 35 are those people which say promotion scheme doesn’t

effect on purchasing.

INTERPRETATION –

➢ In my observation it was found that promotion scheme is must to sustain customer

attract customer and influence the purchasing.

1. Which form of advertisement do you think is most effective?

Print / Newspaper Television Radio Telephone35 20 10 35

DATA COLLECTED –

➢ Data collected from this questionnaire to know the better advertisement mode of

promotion.

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Yes No65 35

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ANALYSIS –

➢ Data collected for project from 100 responded in which 20 customer say TV and 35

say print or newspaper, 10 say radio and 35 customer are say telephone.

INTERPRETATION –

➢ According to respondents’ result company can choose either telephone or print or

newspaper as best for advertisement.

11. Did you get help from CSA (Customer Service Associates) / Staff when Asked?

DATA COLLECTED –

➢ Data collected from this questionnaire to know about CSA performance.

ANALYSIS –

➢ Data collected for project from 100 respondent in which 45 customer say yes and 20

say no, 30 say sometimes and 5 say never.

INTERPRETATION –

➢ According to the respondent customers are not fully satisfied with the CSA’s

performance, company should recruit some new skilled employee for better

performance.

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Yes No Sometimes Never45 20 30 5

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12. Any suggestions?

➢ Maintain the hygiene.

➢ More air conditioners should be there.

➢ Rent outlet should be spacious.

➢ Maintain the manpower for the better service to the customers.

➢ Ambience should be more customers friendly.

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III F INDINGS AND CONCLUSIONS

➢ Majority of customers here is female.

➢ Majority of customers are young.

➢ Majority of customers like to purchase Fruits and Vegetables from Reliance fresh.

➢ Customers like Brands and one stop shopping.

➢ Reliance Fresh and Big Bazar are the first choices of customer.

➢ Advertisement is the biggest way to attract the customer.

➢ Promotion scheme is not so easy to understand for customer but advertisement is

easy for them to understand.

➢ Most of customer is not fully satisfied with store.

➢ Issuing Pamphlets is the best way for attracting the customer.

➢ More and more skilled workers should be appointing for the better work.

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IV RECOMMENDATIONS & SUGGESTIONS

➢ More promotion scheme should be used to penetrate the market.

➢ Skilled employees should be hired because mostly customers are young.

➢ Promotion scheme should be in such way that customer can understand easily.

➢ Service of store should be provided in such a way that to fulfil the needs of the

customer.

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V APPENDICES

Q UESTIONNAIRE

Name - ……………………………………….

Contact No. - …………………………………

1. Gender of the Consumer?

Male ( )

Female ( )

2. Which age group do you belong?

10 – 30 ( )

31 – 40 ( )

41 – 50 ( )

50 above ( )

3. How do you come to know about Reliance Fresh?

Advertisement ( )

Friends ( )

Relatives ( )

Others ( )

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4. What is your perception about Reliance in general?

Excellent ( )

Good ( )

Fair ( )

Poor ( )

5. How often do you shop in Reliance Fresh?

Daily ( )

Weekly ( )

Fortnightly ( )

Once in a Month ( )

6. What do you mostly shop at mentioned store? (You can tick more than one)

Fruits & Vegetables ( )

Grocery ( )

Food Items ( )

Non-Food Items ( )

7. Preference of shopping?

Quality ( )

Brand ( )

Price ( )

One Stop Shop ( )

8. Which store do you kept in preference for purchasing?

Reliance Fresh ( )

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Spencer ( )

Big Bazaar ( )

More Super market ( )

Others ( )

9. Do advertisement and promotion influence your shopping decision?

Yes ( )

No ( )

10. Which form of advertisement do you think is most effective?

Print / Newspaper ( )

Television ( )

Radio ( )

Telephone ( )

11. Did you get help from CSA (Customer Service Associates) / Staff when asked?

Yes ( )

No ( )

Sometimes ( )

Never ( )

12. Any Suggestions ?

………………………………………….

………………………………………….

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Thanks for giving your precious time

VI BIBLIOGRAPHY

➢ www.google.com

➢ www.reliancefresh.com

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