Study of Consumer buying behaviour In Reliance Fresh Jaipur

Project Report Submitted in partial fulfillment for the Award of degree of Bachelor of Business Administration

Submitted to: Ms. Ekta Sharma

Submitted by: Sumit Kumar Saini BBA IV SEM

PARISHKAR COLLEGE OF GLOBAL EXCELLENCE (2012-13) Study of Consumer Buying Behaviour In Reliance Fresh
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Executive Summary
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 producers 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 first 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 and domestic eyes. The entry of foreign and Indian retail giants like Wal-Mart, Metro, Reliance, Birla, Tata etc. made Indian market more competitive which is at cut throat level. So how retailers can reach to their end customers, to win the mind share and increase the basket size of each shopping trip. India 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 with
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revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion. The growth of scope in the Indian retail market is mainly due to the change in the consumers 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. Reliance Retail 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 retail division and plans to begin retail stores in 784 cities across the country. The reliance fresh supermarket chain is rils rs 25,000 crore venture and it plans to add more stores across different g, and eventually have a pan-India footprint by year 2011to the company. . AS The twentieth century has come to and we have moved in to third millennium , we can see many development and changes taking place around us with all the industries and firms within each industry trying to keep pace with all the industries and firm within each industries trying to keep pace with the changes and diverse need of people . Marketer have regarded
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customer as the king and evolved all activities to satisfy him or her, this concept gaining more momentum and importance today. More than a century ago, the father of our nation, Mahatma Gandhi, had made visionary and deep meaningful statement at Johannesburg, South Africa in 1980. A customer is the most important visitor of our premises. He is not dependent on us .We are dependent on him He is not interruption on our work. He is the purpose of it and not an outsider on our premises. He is a part of it. We are not doing him favour by serving him. Today the entire firm engaged in a process of creating a life time value and relationship with customers. This report start with discussion on the diversity of consumer behaviour and the need for studying consumer buying behaviour and consumer as a related field of marketing .this can be largely be attributed to the prevailing market situation .Today the company image is built and made known by its customers. Thus success of the firm determined how effective it has been in meeting the diverse consumer need and wants by treating each customer as unique and offering products and services to suit has or her need. Consumer buying behaviour will be a primary force in determining how this transition will evolve. Getting closer to the customer in todays highly competitive landscape is essential for the entire industry and is no longer just a retail issue. It requires all organisations across the supply chain to work as a single enterprise, sensing and responding rapidly to consumer demand in a co-ordinated manner. Detailed analysis of the changing patterns of consumer demand, shopping trends.
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This research report is based on to know the 1- Major factors influencing consumer buying behaviour. 2- Buying decision process. 3- The stage in buying decision process 4- Awareness of consumer towards organised retail sector

Declaration
I hereby declare that this summer project report titled Buying Behaviour/consumer satisfaction of Reliance Fresh customer in Jaipur is the result of my own effort in the training which I did as a part of the curriculum, for the fulfilments of BBA IV SEM. It has not been duplicated from any other earlier works and all information provided in this report is genuine.

This report is submitted for the partial fulfilments of BBA IV SEM. program. It has not been submitted to any other university or for any other degree.

Date: SAINI

SUMIT KUMAR BBA IV SEM.

ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude to the following personalities without whose help and guidance the successful completion of my project work would have been remained a dream.

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I extend my heartfelt thanks to our Mrs. Ekta Madam for the constant and valuable guidance by him through out my course. I would like to take the pleasure of this opportunity to express my heartful gratitude to my guide Professor Mrs Ekta Madam who took personal interest and gave valuable suggestions through out my field work and completion of the project. The importance of the moral support and good wishes of my parents and friends is external and I am very much indebted to them. Finally I thank all my friends who directly or indirectly helped me a lot during my project. SUMIT KUMAR SAINI BBA IV SEM.

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S.N.

INDEX Certificate Executive Summary Declaration Acknowledgement

PAGE NO 4 5 9 11

CHAPTER- 1 1.1 1.2 1.3 1.4 1.5 1.6 CHAPTER-2 2.1 2.2 2.3 2.4 2.5 CHAPTER-3

CHAPTER-4 CHAPTER-5 CHAPTER-6

INTRODUCTION &BACKGROUND Company Overview Popular Profile Supply Chain Model SWOT Analysis Corporate Social Responsibility Major Player RESEARCH METHODOLOGY &DESIGN Objective of Research Type of Research Source of data & Collection tool Sampling Sample size ANALYSIS & INTERPRETATION Meaning of consumer Buying Behaviour Interpretation of collect data RESEARCH FINDING LIMITATION OF RESEARCH SUGGESTION APPENDIX REFRENCES

14 21 27 30 33 35 38 41 41 42 42 44 49 69 71 73 75 77
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RELIANCE
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"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

RELIANCE GROUP The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), 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 27 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, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.

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The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses; The Group exports products in excess of USD 15 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) and Reliance Industrial Infrastructure Limited. Reliance Industries Limited is India's largest private sector conglomerate (and second largest overall) with an annual turnover of US$ 35.9 billion and profit of US$ 4.85 billion for the fiscal year ending in March 2008 making it one of India's private sector Fortune Global 500 companies, being ranked at 206th position (2008). [1] It was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a pioneer in introducing financial instruments like fully convertible debentures to the Indian stock markets. Ambani was one of the first entrepreneurs to draw retail investors to the stock markets. Critics allege that the rise of Reliance Industries to the top slot in terms of market capitalization is largely due to Dhirubhai's ability to manipulate the levers of a controlled economy to his advantage. Though the company's oil-related operation forms the core of its business, it has diversified its operations in recent years. After severe differences between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided between them in 2006. In September 2008, Reliance Industries was the only Indian

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firm featured in the Forbes's list of "world's 100 most respected companies"

RIL

Subsidiaries of

Reliance Petroleum Ranger Farms Limited Retail Concepts and Services (India) Private Limited Reliance Retail Reliance Global Management Services (P) Limited Reliance Biopharmaceuticals Reliance Ghatraj Services Reliance Engineering Associates (P) Limited

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Reliance Retail Limited

Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, Reliance is 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 endeavour to contribute to India's growth.
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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. 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 Groups foray into organized retail. With a 27% share of world GDP, retail is a significant contributor to overall economic activity across the world. Of this, organized retailing contributes between 20% to 55% in various developing markets. The Indian retail industry is pegged at $ 300 billion and growing at over 13% per year. Of this, presently, organized retailing is about 5%. This is expected to grow to 10% by 2011. RRL has embarked upon an implementation plan to build state-of-the-art retail infrastructure in India, which includes a multi-format store strategy of opening neighbourhood convenience stores, hypermarkets, and specialty and wholesale stores across India. RRL launched its first store in November 2006 through its convenience store format Reliance Fresh. Since then RRL has rapidly grown to operate 590 stores across 13 states at the end of FY 2007-08. RRL launched its first Reliance Digital store in April 2007 and its first and Indias largest hypermarket Reliance Mart in Ahmadabad in August 2007. This year, RRL has also launched its first few specialty stores for apparel (Reliance Trends), footwear (Reliance Footprints), jewellery (Reliance Jewels), books, music and other lifestyle products (Reliance Timeout), auto accessories and service format (Reliance AutoZone) and also an
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initiative in the health and wellness business through Reliance Wellness. In each of these store formats, RRL is offering a unique set of products and services at a value price point that has not been available so far to the Indian consumer. Overall, RRL is well positioned to rapidly expand its existing network of 590 stores which operate in 57 cities. 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. RRL has made significant progress in establishing state-of-the-art staples processing centres and expects to make them operational by May 2008. 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, in FY 2007-08, 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. This year, RRL will continue its focus on rapid expansion of the existing and other new formats across India.

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Popular Profiles at Reliance Retail

Management team
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Name Mr. Mukesh Ambani

Designation Chairman&Managing Director Nikhil R Meshwani Executive Director Hital R Meshwani Executive Director Madhumita Mohanti Deputy General Manager Akashay Lokhande Area Manager-Operation &Sales and NSO Devandra Chawla Vice-President-Business Head, Merchandise Head Zubin Nowrojee, State Head Category Mangement

Formats of Reliance RETAIL

Reliance Fresh, Reliance Mart, Reliance Digital,
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Reliance Trendz, Reliance Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super,

RELIANCE fRESH

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APKA FRESH APKE PADAOS ME

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 retail division and plans to begin retail stores in 784 cities across the country. The reliance fresh supermarket chain is rils rs 25,000 crore venture and it plans to add more stores across different g, 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 nonvegetarian products. Besides, the stores would provide direct employment to 5 lakh 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 BACK GROUND 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, thats 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.
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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 retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RILs Rs 25,000 crore venture and it plans to add more stores across different g, 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 lakh 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 neighbor store. However, this is only the entry roll-out that the company has planned. Bangalore is said to have 40 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 and position Reliance Fresh as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT, wellness and auto accessories, with food accounting for the bulk of the business. The company may not stock fruit and vegetables in some states, Orissa being one of them. Though Reliance
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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 last October, not only did the company said the stores 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.

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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.

TRAD

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ITIONAL MODEL OF RETAIL RELIANCE FARM TO FORK SUPPLY CHAIN MODELS of Reliance Retail 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 operation for first few months. The following figure depicts the first Reliance fresh model RELIANCE FRESH

FARMERS CATEGOR Y1

FARMERS CATEGOR Y2

FARMERS CATEGOR Y3

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Fa rm ers

Ow nT

ran s

po r ta

tio n

COLLECTIO N POINT/UNI T
RELIANCE OWN LOGISTICS

Tr wn O ers m r Fa

ion tat r o p ans

nc lia e R

RF tics is og L wn eo

PROCESSIN G UNIT/POINT

Re li

an ce

RF
ow nL

og

ist ics

RELIANCE FRESH OUTLETS

RELIANCE FRESH OUTLETS

RELIANCE FRESH OUTLETS

WHOLESALE TRADING (WST) : Reliance formalized its second supply chain model to shift itself from grocery retailer to grocery supplier by focusing and establishing itself in Mandis. STEPS IN WTS MODEL: 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.
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So as to yield best possible results. 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 3oC, peeling and chopping vegetables, spinning them dry and then heaping them in small plastic packets 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 centers are collected and loaded for Wholesale mandis. 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. mandis. MARGIN TIME. Time period between a truck reaching mandi and then Unloads. Can be 2 to 3 hours.
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LOADING AND UNLOADING TIME. 4) From mandis 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 sends them to reliance fresh stores.

SWOT ANALYSIS
The Indian retail market accounted for $ 200 billions. Food accounts for over two-thirds of the $200-billion Indian retail market. Yet, it has seen less than 1 per cent 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 concept stores named Reliance
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Fresh with 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. They have started with new eleven stores in the last week and they are thinking to add 100 more stores to their feather by the end of this year. Lets do a SWOT analysis on the Reliance Fresh.

Strengths:
Reliance is the first into enter into this unorganized sector of vegetables and fruits. According to them its intentions to have100% 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 over come the short comings of these specialized stores they are also introducing new Reliance fullfledged supermarket called Shakhari Bhandar which offers each and everything from the staple to soap. Most of the staples are under its own private label brand Reliance Select. There is a 500g channa dal pack priced at Rs 28, a 500g urad dal pack for Rs 39, all under Reliances own brand. Excepting a few packets of Nestles Maggi, or MTRs masalas or Pepsis Lays chips, there is very little shelf space given to the big brand owners in the country. Reason: private labels offer far
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better profit margin to the retailer than branded products of FMCG companies. Most of these outlets will need only 2,000-5,000 sq. ft. A supermarket may need as much as 8,000-10,000 sq. ft.

Weakness:
This is definitely an interesting business venture but it may miss out on the opportunity to capture a greater share of the customers wallet. For customers, too, this could be irksome, as they would have to visit another store to pick up essentials. Reliance could easily fix 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 are required to 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 wastage 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 chilies 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
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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 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 lakh to Rs 60 lakh. Unlike global retailers who operate on thin margins, Reliance Retail is looking at a fairly highmargin 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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