Final Report on

“Retail Management project on Supermarket Chain “

In partial fulfillment of course:

Retail Management

Submitted by:

Group 1, Section B

Nilay Nandekar

Shubham Kapoor

Mughalu Yeptho

Karthik Vaggee
Vision of the Retail Chain:
To delight its consumer with each visit and create an environment of inclusive growth and
prosperity for small shopkeepers, vendor partners and farmers.

Objectives:
 To offer unmatched service, quality, convenience and affordability
 To offer the consumers the widest range of food and groceries items at the best prices
in the neighborhood
 To create trust among each of its consumers, high quality unbeatable service
 To safeguard the interest of supply side stake holders like farmers, vendors and small
manufacturers

Target Market Segment:

Demographical Geographical Behavioural Psychographic Segmentation:

Segmentation Segmentation: Segmentation
Gender: Preferably States: Western Benefit seeking Personality: Literate, smart, time
Females and Southern buyers and price conscious
States
Occupation: Cities: Tier 1, Tier Convenience Social Status: Belonging to lower
Homemakers, 2 and Tier 3 cities seeking buyers and middle, middle class family
working professionals
Generation: Higher Usage-
Generation X and oriented
older generation customers

Target Market Size:

Total Available Market Size: Total Addressable Market Size
Approximately 20 million across urban cities of Approximately 5 million in Tier 1, Tier 2 Tier 3
Maharashtra, this includes the working and (Excluding Mumbai)
homemaker females living in urban
Maharashtra

Buying Behavior

 Price sensitive buying, prefer lowers prices than mom and pops shops
 Offer sensitive buying, they are swayed by the discounts and promotional offers
 Buying to stock (mostly for 3-4 days) and regular weekend shopping
 Require a lot of variety and assortment to choose from
 Prefer ambient store atmosphere with proper cleanliness and hygiene
 Appreciate high level of convenience in terms of location, ease of shopping, parking
facility, etc.

Store Format

Categorized as a Supermarket, neighborhood modern retail store will sell household goods and
food items- fresh stock of fruits and vegetables and packaged food items from different brands.
The stores are aimed at everyday Food and grocery shopping consumers who are looking at
ease of buying grocery everyday (Gen X and for family shopping).

1. Product offering: The stores will sell Food and Non-food items
 1. Fruits and Vegetables- Fresh fruits and vegetables, cut packed fruits,
exotic fruits which will be available based on the location of the store
and vegetables
2. Diary- packed branded Milk and milk products
3. Staples-Lentils, spices, dry fruits
4. Packed and processed foods- Non veg foods
5. Fast moving Consumer goods(FMCG)- Lifestyle, Personal care, Health
care
6. Household items

The store by adopting suitable methods will also help farmers such as procuring directly from
thereby removing intermediaries and allowing farmers to earn more on their produce and also
to increase their quality of produce with weekly feedback system in place.

2. Size of stores: Since this type of store caters majorly to Generation X and Families living in a
non-nuclear set up it would be conveniently located in busy residential areas, located in the
radius of 2-3 km. Store sizes will range from 2000-4000 ft. depending on availability,
demand and location. Stores will be present in Tier I, Tier II and Tier III.

Unique Retail Strategy: Reliance Fresh will adopt a customer first approach of doing business.
The stores will provide its customers with “Superior value in terms of Price and Quality”. Prices
would be competitive and less as compared to its competitors.

Model 1:

 Length and breadth of product offering is limited.

 Orders are placed based on demand and supply.
 They are typically self-service stores located in areas where operating costs are lower as
compared to supermarkets and hypermarkets.
 Grocery Stores do less of a volume business and tend to have higher rates as compared
to supermarkets and hypermarkets which can offer better prices for consumers because
of economies of scale.
Model 2:

 Larger and offers more variety and assortment than a convenience store.
 Orders are made in bulk to ensure stock is always available.
 Supermarkets are larger in size as compared to grocery stores. Products are
systematically arranged on the shelves
 Supermarkets are much more organized than a convenience store and are also visually
more appealing.
 Supermarkets have policies like membership cards which give loyalty points, apparently
such policies give customer more and more price reductions on every purchase on the
next visit.

Model 3:

 Largest in size of the three types of Formats.

 Orders are made in bulk to ensure availability at all times.
 One main difference between a hypermarket and a supermarket is that hypermarket
have departmental stores offers Big-Ticket items too such as TV’s, refrigerators, Beds,
Mattresses etc.
 Hypermarkets save costs on in-store service as opposed to supermarkets
 In terms of customer service, Hypermarkets employ many personnel to serve and help
people at the store to buy whatever they need.

Report 2 : Store Location

Sr
no Model 1
1 Target City Tier 2 and Tier 3
2 Catchment Area 4 sq. km
3 Catchment Size 5000 People
4 Store Size 4000 to 5000 sq. feet
5 Location Incoming main roads to large residential areas
6 Distance form Biggest Competitor Greater than 2 km
The point of differentiation between the Model 1 and 2 is on the parameter of catchment area, size and
distance from the competitors. Since in some cases it has been seen that competition can a win- win for
the supermarket retail outlets based upon the principle of “Cumulative Attraction” considering that
customer more options to choose from. To accommodate this change the catchment area and size has
been increased. The consumers would be willing to travel 2 km as they want more choices for their
purchase.

Network Planning
City wise expansion plan is based upon:

i. City Type (Tier 1, Tier2, Tier 3)

ii. City Population ( i.e. one store per 1 to 1.5 lakh population city)

Model 1 Model 2

City No of No of Addressable Addressable Addressable Addressable

Type cities stores Area (Sq Km) Market Size Area (Sq Km) Market Size
Tier 1 1 45 180 225000 360 450000
Tier 2 10 70 6271000 37 148 185000
Tier 3 22 35 27794400 181 1224 1530000
 State: Maharashtra

Sr. no. City City Type Population Number Of Stores

1 Pune and pimpri chinchwad Tier 1 6,600,000 45
2 Nagpur Tier 2 2,900,000 20
3 Nashik Tier 2 1,500,000 10
1.1 9 vasai-virar Tier 2 1,220,000 8

Evaluation of Franchise models:

Initially the company would implement a Company Owned Company Operated Model
(COCO).

 Total control overseeing operation of each store.

 Final decision lies with the company on store location.
 Modify processes timely to have un-matched levels of competitive pricing.
 Cushioning in case of changing market scenarios.
 Have total control over Capex.

Disadvantages of COFO, FOCO and FOFO

 Franchises would dominate the way the business is run.

 Procurement of stock from different vendors at each franchise limits scope of
economies of scale.
 Alienating vendors, frequent changing of vendors.

Categories to be stocked:

 Fruits and Vegetables

 Diary
 Staples
 Packed and Processed foods
 FMCG
  Household items

Most products offered are fast moving SKU’s. Slow moving SKU’s will comprise of about 20% of
the product offering at each store. Focusing mainly on the food and grocery segment,
inventory turnover of 80% of the SKU’s regularly will see consistent cash flow

Evaluation of Franchise models:

Initially the company would implement a Company Owned Company Operated Model
(COCO).

 Total control overseeing operation of each store.

 Final decision lies with the company on store location.
 Modify processes timely to have un-matched levels of competitive pricing.
 Cushioning in case of changing market scenarios.
 Have total control over Capex.

Disadvantages of COFO, FOCO and FOFO

 Franchises would dominate the way the business is run.

 Procurement of stock from different vendors at each franchise limits scope of
economies of scale.
 Alienating vendors, frequent changing of vendors.

Categories to be stocked:

 Fruits and Vegetables

 Diary
 Staples
 Packed and Processed foods
 FMCG
 Household items
Most products offered are fast moving SKU’s. Slow moving SKU’s will comprise of about 20% of
the product offering at each store. Focusing mainly on the food and grocery segment,
inventory turnover of 80% of the SKU’s regularly will see consistent cash flows.

Report 3

Pricing Strategy

Everyday Low Price: In general the prices will be consistently low across the board, throughout all
packaged food departments. Little reliance on promotional pricing strategies such as temporary price
cuts.

Customer Acquisition and Retention Strategies

Sr
Customer Acquisition Strategies Customer Retention Strategies
no
Consistent In-Store advertisement for new
Offering the free of cost samples
1 deals and launches

Providing referral based loyalty programs Setting up of consumer loyalty programs

2
Hosting or sponsoring community event Added services like call ordering and home
3 for local residents delivery
Maintaining ELDP along with running
4 Localized social media campaigns seasonal promotional campaigns

Loyalty Schemes for customer

 Basic points based loyalty scheme with redeemed discounts and freebies
 Tiered points system loyalty program, providing appropriate value to deserving customers
 Referral based loyalty programs to acquire new customers
 Upfront playing loyalty programs with added benefits like phone call ordering or home delivery

Vendor management: We will go with a model consisting of the mix of brand vendor & own private
label vendor. The on-boarding of different contractual vendors with following specifications and
conditions:

 Visiting different product suppliers, selecting one particular type of supplier after quality
inspection and trademark.
 Distribution- single channel owned by us supported by a centre warehouse where all supplies
will be stocked up and later distributed to all our super markets
  Margins will be negotiated with the vendors, selling price will be fixed by us by the supermarket
and promotions will be decided mutually by both the parties.

Merchandising hierarchy:

Our first merchandise hierarchy will be the store, so before merchandise is sold the customer has to reach
the destination, as to why we will be putting up store as the first in our hierarchy. Also, we would classify
the items into different category so that the customers looking for a particular item can be navigated
easily.

We will be placing items like which is perishable, pristine condition and always in stock in the most
visible shelves. And comes the store staff, they must be suitable, well trained, self -motivated Disciplined
etc. to ensure better customer services and lastly billing.

Part 4

Type of Store Layout: Grid Layout

 Rectangular with parallel aisles so as to use available space more efficiently.
 Vertical and horizontal aisles, which also include gondola at the aisle ends.
 Cost reduction by self-service.
 Grid layout with a combination of free standings for hypermarkets.

Visual Merchandising
 Promotional signage for products on sale/new products.
 Highlight Signage(s) to help direct customers in big Hypermarkets.
 Category Signage for locating category of products.
 Point of sale, promo aisle for special offers.
 End caps for promotional offers, freestanding displays/cash wraps at cash counters for
impulse buying.
 
 
Manning requirements at store
Customer service: - Commitment to high-quality service is the ultimate goal to achieve this
training of staff at regular intervals and setting up goals and criteria to measure it.   
Problem-solving: - Availability when a customer needs a person for solutions and providing fair
and quick solutions, language use should be easy to understand and soft.  
Better management of shelf space: - make sure shelf space is not be empty or over crowed with
a single Unit, making sure the offers provided are still valid. 

Manning requirements at backend       

Reach 
 Working on advertisements
 Sales promotion
 Public relations
 Brand building  

Market research:-  
 Reducing the communication gap between 
 Management team and store staff.
 Consumer expectation and management perception of consumer expectation.  
 Targeting customers based on demography helps to get new customers, increasing traffic
during slow periods.
Analytics and inventory team: -  
 Forecasting Future demand
 Studying the effect of different programs on sales
 Availability of the right amount of inventory

Operational checklist 
First impression
 How presentable is the store (1-10)
 Is the temperate optimum 
 Are baskets/carrying bags available near the store? 
 Are restrooms cleaned? 
 How utilized is the shelf space? 
Product 
  Check availability of seasonal products available?
 Are product organized by size/brand/SKU
 Do the actual price and displayed price matches
 Are products damage-free   
Staff 
 Are the greeting the customers? 
 Is service satisfactory?
 Are they knowledgeable about the current promotions? 
 Are the on time for duty?
Training 
 When was the last training provided? 
 Do they need any more training?