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A
Study
On
Marketing of Services
Of
Reliance Fresh
Submitted To: Submitted By:
Prof: Devang Patel Yograj Singh Chauhan
Dheerendra Mishra
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BACKGROUND OF RETAIL
India is a land of retail democracy- hundreds of thousands of weekly haats and bazaars are located
across the length and breadth of our country by peoples own self -organizational capacities. Our
streets are bazaars lively, vibrant, saf e and the source of livelihood f or millions. India has the highest
shop density in the world, with 11 outlets per 1000 people. This does not include the village haats. Our
retail democracy is characterized by:
1. High levels of livelihoods in retail with nearly 40 million employed which accounts
for 8% of the employment and 4% of the entire population.
2. High levels of self - organization.
3. Low capital input
4. High levels of decentralization
Retail in India has started with the concept of weekly markets, where all the traders gather at one big
place to sell their products every week. The people come to these weekly markets to buy the household
items f or the next one week. Village fairs and melas were also common as it had more of an
entertainment value. Once the people started getting busy with their lives and when they turned
entrepreneurial, there emerged the mom and pop shops and the kiranas in the neighbourhood. After
independence, came into existence the system of Public distribution of foods through the ration shops,
where food grains, sugar and oil f or the daily consumption were distributed at subsidized rates through
the government ration shops. The modern corporate retail formats are of the exclusive brand outlets,
hypermarkets and supermarkets, departmental stores and shopping malls. But still the Indian consumer
depends on the self -organized retail shops f or their daily needs. This is largely due to the excellent
food retailing system that was established by the kiranas (mom and-pop) stores that continue meet with
all the requirements of retail requirements albeit without the convenience of the shopping as provided
by the retail chains. The Hawkers/lari galla vendors and the local kiranas are the two main forms of
unorganized retail in the country, which almost account f or 97% of the total retail trade. Giant
corporations like Wal-Mart and Reliance have started to try and take over the Indian retail sector.
Currently the value of the retail market is estimated at around $ 270 billion with a growth rate of 5.7 per
cent per annum according to the Indian retail report. The size of small retail is big, the size of big retail
is small, a mere Rs. 250 billion in 2004 or 3% and Rs. 485 billion or 4.7% per cent of the retail market in
2006. However, the large scale corporate retail is projected to grow at the rate of 28% to 30% per
annum, reaching Rs. 1000 billion or $ 70 billion by 2010 from the current size of US $ 8.7 billion.
The tenfold increase in corporate retail will be at the cost of small scale retail, which employs nearly
10% of Indias population. The strategy here is to define the small scale self -organized retail as
unorganized and the large scale corporate retail as organized. The real difference is however not
unorganized vs organized. But it is self -organized vs. corporate Reliance Fresh is the convenience
store format which forms part of the retail business of Reliance Industries of India which is headed by
Mukesh Ambani. Reliance plans to invest in excess of Rs 25000 crores in the next 4 years in their retail
division.
The company already has in excess of 560 reliance fresh outlets across the country. These stores sell
fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy
Products.
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A typical Reliance Fresh store is approximately 3000-4000 square. feet and caters to a catchment area
of 2-3 km.
History
Post launch, in a dramatic shift in its positioning and mainly due to the circumstances prevaling 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 minimise 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 f or the bulk of the
business. The company may not stock fruit and vegetables in some states. 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 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.
Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends, 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 f or setting up a chain of Apple
Specialty Stores branded as I Store, starting with Bangalore.
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 society. Reliance retail
is one of them. Following efforts of reliance retail are aimed at benefiting the society making reliance
socially responsible:
1) Reliance Retail aims at recruiting people from the underprivileged community in society. "Hence, we
are planning to train students from corporation schools and schools run by NGOs. And, we consider
this as a part of our corporate social responsibility," he said. Asked whether the company will take
students on an employment basis and pay them a stipend during the course period, he said that
actually, it is planning to charge a "small fee" from those who want to join the course "as we want to
bring in some discipline and regularity among the students", and will reimburse that once they are
inducted into service.
2) 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 Centres.
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
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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 f or the farmers, and
reduced spoilage of produce (up to 35 %) and better quality products f or Reliance retail stores.
3) 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.
Service marketing environment
Service marketing environment of reliance fresh can be scanned by considering the six major
environment forces like demographic, economic, socio-culture, natural, technological, and political
legal. As the demographic environment consists of the age mix of population, literacy and education
level. Economic level consists of income distribution of different people. The rich grew by 400% in
urban areas and 200% in rural areas. Socio- cultural environment consists of influence of religion,
languages and customer that shapes the values and attitudes of customer preferences, habits and
behaviour.
Reliance Fresh Marketing Mix (7 Ps)
After segmenting the market, finding the target segment and positioning itself, each company needs to
come up with an offer. The 7 Ps used by Reliance Fresh are:
1. Product
2. Place
3. Price
4. Promotion
5. People
6. Physical Evidence
7. Process
Target Segment what is Reliance fresh for me?
A Family with children, a purchase place to be f or the children.
Urban customer on the move Great taste, quick service without af f ecting the work schedule. But keep
it affordable.
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Product:
Product is the physical product or service offered to the consumer. Product includes certain aspects
such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects
of the product and service. Reliance fresh has intentionally kept its product depth and product width
limited. Reliance Fresh studied the behaviour of the Indian customer and provided a totally different
menu as compared to its International offering. India is the only country where reliance Fresh serve
vegetarian. Even the sauces and cheese used in India are 100% vegetarian.
Place:
The place mainly consists of the distribution channels. It is important so that the product is available to
the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within
a 3 minute drive from a Reliance Fresh outlet. There is a certain degree of f un and happiness that a
customer feels each time he dines at. There are certain value propositions that reliance fresh offer to its
customers based on their needs. Reliance fresh offers hygienic environment, good ambience and great
service. Now Reliance Fresh have also started giving internet facility at their centres and they have
been playing music through radio instead of the normal music. There are certain dedicated areas f or
children where they can play while their parents can have some quality time together.
Price:
Pricing includes the list price, the discount functions available, the financing options available etc. It
should also take into the consideration the probable reaction from the competitor to the pricing strategy.
This is the most important part of the marketing mix as this is the only part which generates revenue. All
the other three are expenses incurred. The price must take into consideration the appropriate demand-
supply equation. Reliance fresh came up with a very catchy punch line Growth through Value
Creation. This was to attract the middle and lower class consumers and the effect can clearly be seen
in the consumer base Reliance fresh has now.
Promotion:
The various promotion channels being used Reliance fresh to effectively communicate the product
information are given above. A clear understanding of the customer value helps decide whether the
cost of promotion is worth spending.
There are three main objectives of advertising f or Reliance fresh are to make people aware of an item,
feel positive about it and remember it. The right message has to be communicated to the right audience
through the right media. Reliance fresh does its promotion through television, hoardings and bus
shelters. They use print ads and the television programmes are also an important marketing medium for
promotion. Some of the most famous marketing campaigns of Reliance fresh are: Food and Fun
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People:
Reliance fresh understands the value of both its employees and its customers. It understands the f act
that a happy employee can serve well and result in a happy customer. Reliance fresh continuously
does Internal Marketing. This is important as it must precede external marketing. This includes hiring,
training and motivating able employees. This way they serve customers well and the final result is a
happy customer. The level of importance has changed to be in the following order (the more important
people are at the top):
1. Customers
2. Front line employees
3. Middle level managers
4. Front line managers
Physical evidences
-Actual Experience evidence
-A good time entry.
-Sign boards.
-Essential eminence of service.
-Good parking place
Process
Process Exist are complex on railways like some processes are:
-ref und process / claim process.
-Communication process.
-Entraining/Detraining Process.
The service segmentation
Reliance Fresh has segmented their service to all class of people like rich, poor by providing standards
of facility in different ways, f or example you can find different items for them these are the service
segmentation of Reliance Fresh by which they are serving different categories of people. In all these
service segmentation Reliance Fresh is providing different facilities and charging same money. Items
at a Glance timetable, I have always used these on booking and have never had a problem, write the
abbreviation in which you want to purchase, next to the word on the purchase form. Organizations are
taking an interest in the international marketing of services because of low cost factors and the ability to
compete in nearby country markets (Bradley 1995); however, international services pose special
challenges f or marketing managers as a result of the intangibility of services, the extent of
customization, and differences in preferences across cultures. Research on international service
offerings has focused on entry-mode choices technology growth geographic roles, service
influences on national competitive advantage and strategic differences across services. Yet the
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marketing literature has not investigated several key components of service strategy, particularly in the
international domain.
Customer Requirements and Customer Expectations
Customers Experience after visiting the store can be said to be not much satisfactory.
1. Choice and Range. Reliance Retail is primarily a super market store. So, one expects a wide range
of goods available across various categories, brands and price ranges. Hardly there is any range
available. Not even, any categories of goods. Just one or two we can easily live without.
2. Super Markets like Nilgiris, Trinethra (recently bought by Birlas), Subhikhsa, and Modern Market
especially the last one has a superb range and Reliance Fresh is nowhere in comparison to them.
3. The Ambiance in the shop is good, but as I said nothing much different from the other super market
chains.
4. The staff is cordial and friendly very much eagerly looking forward to help. After I made the payment,
the staff greeting me by saying a Namaste. This I liked a lot. Especially after horrible experiences of
visiting shops in Kolkata. I do not know why but shop keepers in Salt Lake have this tendency of
looking at you as if why do these customers keep bothering us, when u visits them.
5. They accept card payment even f or payments less than a hundred rupees.
6. They have this membership card option with a free insurance thrown in, just to ensure that you show
loyalty to them. As they go through the reviews by the members, they observe that the same points
they have quoted above are bothering them too. Some more reading, browsing and research made me
understand some of the aspects related to it-
1. Customer is the last person in the minds of these supermarket chains. Though it might be surprising,
thats the fact sprightly put. What matters the most is the number. The more the number of stores
opened, the more is the number of people visiting them, the more the chances of success.
2. The commission they get f or selling a product. They are least bothered about providing a range of
goods and brands to the Customer. In contrary, the companies that pay them the highest commission
get to sell their goods from them. When they have the numbers, companies cannot afford to ignore
them courtesy, the large number of customers visiting them. But why are the Customers visiting them,
when they are not getting what they want?
3. The feel good f actor. The goods we buy here can be easily bought at any other grocery store round
the corner. Then why do we f lock to them? Just because, we feel good. We f eel happy becoming a
part of another India, which looks great much unlike the India we have grown in. We love the ambience.
We like being greeted.
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4. By making a right balance between the numbers and the f eel good f actor, they achieve their targets
sometimes much beyond the expectations they have set. We are just part of the market grind that is
happening right now!
Service recovery strategies
-Improving the after sales services.
-Admit and apologies.
-rectification of any error
-Compensate
-Minor performance lapse need monitoring
Quality concern
Quality means watching the services from customer prospective. The main quality concern of Reliance
Fresh is: To provide hygienic condition inside the stores. Avoiding as much as possible the delay in the
schedule. Freshness is also one of the concern f or Reliance fresh. Improving the infrastructure to world
class level of standards.
Integrated gap model of service quality
Revenue%
The central focus of gap model is the customer gap, the difference between customer expectations and
perceptions.
GAP-1 Not knowing what customer expect i.e. what are the expectation of customer of Reliance Fresh
which can be due to inadequate marketing research.
GAP-2 Not selecting the right service design and standards. Reliance Fresh have a good service
design but not reached to that level of standards to meet all customer expectations.
GAP-3 Not delivering to service designs and standards. This can be due to deficiency of human
resource policy of Reliance Fresh. And may be due to failure in meeting supply and demand. Because
of the huge population of India.
GAP-4 Not matching performance to promises. This can be due to lack of integrating services
marketing communication and ineffective management of customer expectation by Reliance Fresh. In
this way the gap between expected quality and perceived quality can be calculated by Reliance Fresh.
Blueprint of Reliance Fresh
Entering path
Tracks for purchase of goods
Tracks for purchase of goods
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Billing counter
Gate keeper
Entrance to Reliance Fresh
This is the blueprint of reliance fresh. Customer when comes to this store firstly the gate keeper will
check it and keep the bag if he has with him. The billing counter is first right of entrance. When
customer enters it the tracks whether for seeing of goods and if he liked something than he can put it in
trolley and then he can go the billing counter. If he needs some help than he also can ask f or it but
telling the nearest salesman. After selecting the good he can go to billing and go back to gate keeper.
Gate keeper now demands for the receipt f or just the security purpose.
Pricing Strategies by Reliance Fresh
-Discount pricing strategy
-Wide price range of each items
-Credit card acceptance
-Accept coupons
- Competitive prices.
-Price marked in paisas
-comparable cost.
