INTRODUCTION

Consumer behaviour is the study of when, why, how, and where people do or do not buy

a product. It blends elements from psychology, sociology, social anthropology and economics. It

attempts to understand the buyer decision making process, both individually and in groups. It

studies characteristics of individual consumers such as demographics and behavioural variables

in an attempt to understand people's wants. It also tries to assess influences on

the consumer from groups such as family, friends, reference groups, and society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer playing

the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for

customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of

marketing through the re-affirmation of the importance of the customer or buyer. A greater

importance is also placed on consumer retention, customer relationship management,

personalisation, customisation and one-to-one marketing. Social functions can be categorized

into social choice and welfare functions.

Each method for vote counting is assumed as social function but if Arrow’s possibility theorem

is used for a social function, social welfare function is achieved. Some specifications of the

social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity

and weak and strong Pareto optimality. No social choice function meets these requirements in an

ordinal scale simultaneously. The most important characteristic of a social function is

identification of the interactive effect of alternatives and creating a logical relation with the

ranks. Marketing provides services in order to satisfy customers. With that in mind, the

productive system is considered from its beginning at the production level, to the end of the

cycle, the consumer.

Often, we take cultural influences for granted, but they are significant.  An American will

usually not bargain with a store owner.  This, however, is a common practice in much of the

World.  Physical factors also influence our behavior.  We are more likely to buy a soft drink

when we are thirsty, for example, and food manufacturers have found that it is more effective to

advertise their products on the radio in the late afternoon when people are getting hungry.

  A person’s self-image will also tend to influence what he or she will buy—an upwardly mobile

manager may buy a flashy car to project an image of success.  Social factors also influence what

the consumers buy—often, consumers seek to imitate others whom they admire, and may buy the

same brands.   The social environment can include both the mainstream culture (e.g., Americans

are more likely to have corn flakes or ham and eggs for breakfast than to have rice, which is

preferred in many Asian countries) and a subculture (e.g., rap music often appeals to a segment

within the population that seeks to distinguish itself from the mainstream population).   Thus,

sneaker manufacturers are eager to have their products worn by admired athletes.  Finally,

consumer behavior is influenced by learning—you try a hamburger and learn that it satisfies

your hunger and tastes good, and the next time you are hungry, you may consider another

hamburger.

Consumer Choice and Decision Making: Problem Recognition.  One model of consumer

decision making involves several steps. The first one is problem recognition—you realize that

something is not as it should be.  Perhaps, for example, your car is getting more difficult to start

and is not accelerating well.    The second step is information search—what are some alternative

ways of solving the problem?  You might buy a new car, buy a used car, take your car in for

repair, ride the bus, ride a taxi, or ride a skateboard to work.  The third step involves evaluation

of alternatives.  A skateboard is inexpensive, but may be ill-suited for long distances and for

rainy days.  

Finally, we have thepurchase stage, and sometimes a post-purchase stage (e.g., you return a

product to the store because you did not find it satisfactory).  In reality, people may go back and

forth between the stages.  For example, a person may resume alternative identification during

while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product.  In

general, consumer involvement will be higher for products that are very expensive (e.g., a home,

a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing

program or acne medication).

It is important to consider the consumer’s motivation for buying products.  To achieve this goal,

we can use the Means-End chain, wherein we consider a logical progression of consequences of

product use that eventually lead to desired end benefit. 

Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration,

leading to a feeling of performance, leading to a feeling of power, which ultimately improves the

consumer’s self-esteem.  A handgun may aim bullets with precision, which enables the user to

kill an intruder, which means that the intruder will not be able to harm the consumer’s family,

which achieves the desired end-state of security.  In advertising, it is important to portray the

desired end-states.  Focusing on the large motor will do less good than portraying a successful

person driving the car.

OBJECTIVES OF THE STUDY

The objective of the study is to evaluate consumer needs and behavior with respect to retail

stores for Reliance Retail ltd. and to give recommendations for the betterment of customer

service.

To study the competition from both organized and unorganized retailing.

To study preferences of consumers for private label over other brands.

To determine the satisfaction levels of consumers with Reliance Fresh stores’ service

The whole survey or fieldwork is designed in accordance with that objective .

The objective laid down helps to solve the problems that exist in the organization.

This problem provides the foundation for the project and the projective.

NEED OF THE STUDY

Now a days retail industry is growing sector there so many companies which entered into retail industry.

consumer behavior is most important which explains the consumer expectations and perceptions and

explains the reasons for growth of retail industry.

SCOPE OF THE STUDY

To know the consumer behavior at reliance fresh. A large number of new players have entered the

market to gain market share in this rapidly improving market. The study deals with Reliance in focus and

the study then goes on to evaluate and analyse the findings so as to present a clear picture of trends in

the retail sector.

RESEARCH METHODOLOGY

The study deals mainly with studying the buying pattern in the industry with a special focus on

Reliance Fresh.

Exploratory & descriptive experimental research

The research is primarily both exploratory as well as descriptive in nature. The sources of information

are both primary & secondary.

A well-structured questionnaire was prepared and personal interviews were conducted to collect the

customer’s perception and buying behavior, through this questionnaire.

SAMPLING METHODOLOGY

SamplingTechnique:

Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study

was done in order to know the accuracy of the Questionnaire. The final Questionnaire was

arrived only after certain important changes were done. Thus my sampling came out to be

judemental and convinent

Sample size:

The sample size was restricted to only 100, which comprised of mainly people from Hyderabad due to

time constraints.

Sampling Area :

The area of the research was Hyderabad, India.

Primary data was collected.

Respondents were selected randomly.

SAMPLING PLAN:

Sampling unit: Customers at Reliance Fresh stores were selected

Sample size: 100 customers

Sampling procedure: Customers were selected randomly and were given questionnaire or just

asked the questions.

LIMITATIONS OF THE STUDY

1. The research is confined to Hyderabad only.

2. Some respondents were reluctant to divulge personal information which can affect the

validity of all responses.

3. The environmental changes are vital to be considered in order to assimilate the findings.

INDUSTRY PROFILE

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 favorable demographic

patterns.

The Indian retail market, which is the fifth largest retail destination globally, according to

industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by

2010 and US$ 637 billion by 2015. Simultaneously, modern retail is likely to increase its share in

the total retail market to 22 per cent by 2010.

Continuing the robust growth of the organized retail in India, according to the Credit

Rating and Information Services of India, the industry raked in US$ 25.44 billion turnover in

2007-08 as against US$ 16.99 billion in 2006-07, a whopping growth rate of 49.73 per cent.

India has one of the largest numbers of retail outlets in the world. Of the 12 million retail

outlets present in the country, nearly 5 million sell food and related products. Thought the market

has been dominated by unorganized players, the entry of domestic and international organized

players is set to change the scenario.

Organized retail segment has been growing at a blistering pace, exceeding all previous

estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its

share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing

segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets

(100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to

account for 25 per cent of the total sales by 2011.

For a long time, organised retail in India remained the attraction of only a few enterprising

Indian entrepreneurs, who took the plunge into the deep sea of a hitherto uncharted territory. It is only

in the last 10-15 years that the retail sector's inherent attractiveness started catching the attention of

large corporate houses in India, like the Raheja Group, RPG Enterprises, the Piramal Group etc. But with

due respect to all of them, their vision has remained conservative and they have been modest in scaling

up their retail business models to take it to the next level of operations with a pan-India presence.

What clearly lacked was the level of investments; the slow pace of consolidation and

indecisiveness in experimenting and migrating between multiple formats, categories and channels. This

has prevented them from reaping the true benefits of modern retailing.

What is it that we can label as the compelling drivers of this new retail thrust in India with a

large corporate house like Reliance Industries announcing big, not to mention international retail giants

who are getting impatient to enter India?

The first driver is a self-sustaining buoyant Indian economy that is growing at eight per cent a

year.

The second is that as the economy grows and expands, the consumption habits and patterns of

people also change – and it is changing real fast in India.

The third important driver of organized retail is the country's demography – India is home to the

largest and the youngest population in the world. India's 300 million-odd middle-class, the real

consumers, is catching the attention of the world.

TOTAL AND ORGANIZED RETAIL MARKET SIZE IN INIDA

SWOT ANALYSIS OF RETAIL INDUSTRY IN INDIA

Retailing in India is gradually inching its way toward becoming the next boom industry. The

whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a

revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centres,

multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof.

Strengths

Huge population, increasing per-capita income and changing consumer habits - all these

developments have culminated in the booming of the retail sector in India.

Increasing per-capita income has led to the boom of retail sector in India.

The changing consumer buying behavior and the increasing number of shaopping malls and

other format stores is another strength of the Indan retail industry.

The huge population and the diversified culture is also one factor for the growth of the sector.

A large young working population with median age of 24 years.

The retail industry is providing employment generation.

The assortment is getting better. People are exposed to different cultures and they want to try

different products and this has led to the introduction of variety of products in the induatry.

India retail industry is expanding itself most aggressively. The awareness and the acceptability

about hre retail market is increasing.

In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9%

annually.

Weaknesses

Retail is still not a recognized industry in India. According to a study in 2006, total retail sales is

Rs. 930,000 Crores, out of which the organized retail sales only of Rs. 3000 Crores.

The real estate sector is increasing the property’s prices and this is affecting the overall profits.

Because of the heavy initial investments required, break even is difficult to achieve and many of

these players have not tasted success so far.

FDI is not allowed in Retail and the foreign players like Walmart, Carrefour are entering by

joining hands with Indian retailers.

The lack of infrastructure and manpower is one of the challenges faced by organized retail in

India. This sector lacks skilled and trained manpower.

The organised retail in India is facing stiff competition from the local kiranas and the

wholeasalers. Consumers still prefer them as the better option for saving their pocket.

Opportunities

The Indian retailing sector is at an inflexion point where the growth of organized retailing and

growth in the consumption by the Indian population is going to take a higher growth trajectory.

Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and

around eight per cent of the employment.

The organised retail sector is expected to grow to US $ 70 billion by 2010.

Indian retailers like Reliance Retail, Pantaloons etc. are strengthening the retail sector.

Reliance Retail, for instance, has chalked out a plan to roll out about 5,500 stores of all kinds in

800 cities, 85 logistics centres and 1,600 farm supply hubs.

AV Birla Group is looking at pumping in Rs 15,000-20,000 crore (Rs 150-200 billion) -- with an

initial investment of Rs 5,000 crore (Rs 50 billion) in the next few years.

Many foreign retailers like Wal-Mart, Tesco are entering Indian retail industry.

The market is growing, government policies are becoming more favorable and emerging

technologies are facilitating operations.

A number of foreign brands including French Connection, Sanrio of Hello Kitty fame, Jimmy

Choo, La Pearla and Calvin Klein among others have already lined up for permission to infuse

foreign direct investment through the single-brand retail window.

Threats

Retailing is a low-margin, high-volume, commodity business where profitability gets strained as

competition intensifies. And if wrong choices are made regarding the location or the formatting

of the store, woes betide the retailer.

Another threat is the vexingly high real estate prices, the loosely-knit distribution networks in

India's hinterland.

The near-absence of any modern supply chain logistics, shortage of skilled personnel, and a

regulatory system that resembles a patchy quilt more than anything else.

Availability of quality retail space will be a key determinant for the growth of the sector. With

most Indian cities undergoing rapid urbanization, spiraling rental costs has most retailers

worried already.

The competition from the unorganized retail is stiff. Customers have been shopping from the

local stores and wholesalers, mainly in Food sector for decades and still have not accepted the

organized retail completely.

COMPANY PROFILE

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. Dhirubhai Ambani

founded Reliance as a textile company and led its evolution as a global leader in the materials

and energy value chain businesses.

Reliance Retail is the retail business wing of the Reliance business. Many brands like

Reliance Fresh, Reliance Footprint, Reliance Time out, Reliance digital, Reliance Wellness,

Relaince Trendz and Reliance Jewel come under the Reliance Retail brand. In November 2007,

Reliance announced its foray into the branded jewelry market.

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.

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 22 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500

company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.

Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical

integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil

and gas exploration and production - to be fully integrated along the materials and energy value

chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and

marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and

retail.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber

producer in the world and among the top five to ten producers in the world in major

petrochemical products.

The Group exports products in excess of USD 11 billion to more than 100 countries in the world.

There are more than 25,000 employees on the rolls of Group Companies. Major Group

Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum

Limited and Reliance Retail limited), Indian Petrochemicals Corporation Limited and Reliance

Industrial Infrastructure Limited.

Vision

"Growth has no limit at Reliance. I keep revising my vision.

Only when you can dream it, you can do it."

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader

in the materials and energy value chain businesses. He is credited to have brought about the

equity cult in India in the late seventies and is regarded as an icon for enterprise in India. He

epitomized the spirit 'dare to dream and learn to excel'.

The US$ 20 billion Reliance Group is a living testimony to his indomitable will, single-minded

dedication and an unrelenting commitment to his goals.

Mission

”Growth through Commitments”

We care about :-

Quality

Research & Development

Health, Safety & Environment

Human Resource Development

Energy Conservation

Corporate Citizenship

Reliance believes that any business conduct can be ethical only when it rests on the nine core

values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility,

Citizenship and Caring.

The essence of these commitments is that each employee conducts the company's business with

integrity, in compliance with applicable laws, and in a manner that excludes considerations of

personal advantage.

We do not lose sight of these values under any circumstances, regardless of the goals we have to

achieve. To us, the means are as important as the ends.

For Reliance…

Growth is care for good health

Reliance's occupational health centers carry out pre-employment and periodic medical checkups

as well as other routine preventive services. Specialised tests like biological monitoring, health

risk assessment studies and audits for exposure to various materials are also performed. Health

education and awareness form an integral part of the health care programme at Reliance

Growth Is Care for Safety

We believe that the safety of each employee is the responsibility of the individual as well as of

the whole community of employees

Growth is care for the environment

Reliance believes that a clean environment in and around the workplace fosters health and

prosperity for the individual, the group and the larger community to which they belong.

Environmental protection is an integral part of the planning, design, construction, operation and

maintenance of all our projects.

Growth is conservation

At Reliance, energy conservation efforts seek to reduce the unit cost of fuels and to improve

efficiencies in energy intensive processes.

Growth is betting on our people

Reliance builds with care a workplace that proactively fosters professional as well as personal

growth. There is freedom to explore and learn; and there are opportunities that inspire initiative

and intrinsic motivation. We believe that people must dream to achieve, that these dreams will

drive the company's excellence in all its businesses. Reliance thinks, behaves, lives and thrives

with a global mindset, encouraging every employee to reach his / her full potential by availing

opportunities that arise across the group.

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. Dhirubhai Ambani founded Reliance

as a textile company and led its evolution as a global leader in the materials and energy value chain

businesses. He is credited to have brought about the equity cult in India in the late seventies and is

regarded as an icon for enterprise in India. He epitomized the spirit 'dare to dream and learn to excel'.

The US$ 125 billion Reliance Group is a living testimony to his indomitable will, single-

minded dedication and an unrelenting commitment to his goals.Group's annual revenues are in

excess of US$ 34 billion. The flagship company, Reliance Industries Limited, is a Fortune

Global 500 company and is the largest private sector company in India.

All of Reliance Group production and services ventures have one common feature –

global scale operations employing state-of-the-art technology in all fields. The company is truly

emerging as a well diversified conglomerate with global competence in technology, management

and financial capabilities to meet the needs of a rapidly growing Indian market.

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.

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, being 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.

The Group exports products in excess of US$ 20 billion to 108 countries in the world.

Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance

Petroleum Limited and Reliance Retail Limited) and Reliance Industrial Infrastructure Limited.

RELAINCE RETAIL LIMITED

Mr. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited (RIL)

Reliance Retail is the retail business wing of the Reliance business. Many brands like

Reliance Fresh, Reliance Footprint, Reliance Time out, Reliance digital, Reliance Wellness and

Reliance Jewel come under the Reliance Retail brand. In November 2007, Reliance announced

its foray into the branded jewelry market.

On June 26, 2006, Mukesh Ambani (Ambani), Chairman and Managing Director,

Reliance Industries Limited (RIL), announced his company's plans to foray into the retail sector

with an initial investment of US$5.6 billion. Calling this an idea which has the potential to

revolutionize the Indian socio-economic framework, he said "Conceptually, Reliance is creating

a virtuous circle of prosperity by bringing farmers, small shopkeepers and consumers in a win-

win partnership.'' He was speaking at the 32nd annual general meeting of the company, here.

"A new company, Reliance Retail Ltd. (RRL) will spearhead this revolution. Reliance Industries

will have a 100 per cent stake in RRL, save for employee stock options," Reliance Industries

stated in a press release.

Given the overarching nature of this initiative, RRL would entail an equity investment to

the extent of Rs. 10,000 crore ($2.24 billion). It would have to expend more than Rs. 25,000

crore ($5.60 bilion) in the years to come. "Organised retailing is a new business initiative of

Reliance that signifies a defining point in its history. This marks the full flowering of RIL's basic

philosophy: share and prosper. With this new initiative, Reliance will forge strong and enduring

bonds with millions of farmers and transform its relationship with consumers to a new level.

Organized Retailing, along with the next generation distribution system, is at the core of

this transformational initiative. This idea evolves from the new paradigm in the consumption of

products and services in India,'' said Mr. Ambani

Reliance Retail would build a business that would focus on "competitive offerings'' to

Indian consumers across several verticals: Integrated food and grocery, items of daily household

consumption, apparels and footwear, electronic goods, lifestyle products and services, home

essentials and improvements, farm implements and inputs, distribution of energy products and

services, distribution of travel and financial services, entertainment and leisure experiences,

health and well-being products and services and educational products and services. It would

develop partnerships to bring the best of luxury brands from all over the world to India and it

would also develop linkages with opportunities in agriculture and food processing.

The company would have a pan-India footprint covering 1,500 cities and towns and

embracing all strata of the society.

Reliance's retail venture was expected to be India's equivalent of Wal-Mart Stores Inc. (Wal-

Mart), as it planned to cover the entire retail ambit. RRL was expected to have its presence

across India.

Reliance proposed to acquire 10,000 hectares of land in Haryana and planned to extend

its reach across 1,500 Indian cities with different retailing formats such as warehouse clubs,

hypermarkets, supermarkets, specialty stores, and convenience stores.

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. The (Reliance Fresh) store is for everyone... Prices

are affordable for everyone," Reliance Industries Ltd president and chief executive (foods

business) Gunender Kapur told reporters after unveiling the Reliance Fresh brand.

The first Reliance fresh store was opened in Hyderabad in November 2006. Reliance

Fresh outlets are in Bangalore, Chennai, New Delhi, Gurgaon, Faridabad, Hyderabad, Jaipur,

Mumbai, Madurai, Cochin, Trichur, Calicut, Chandigarh, Ludhiana.

The Reliance Fresh supermarket chain is RIL’s 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. Reliance Fresh stocks fresh

fruits and vegetables, staples, fast moving consumer goods and dairy products. The stores are already

selling over 1,000 tonnes of fresh produce daily and also 250 categories of commodities.

The company is approaching farmers directly for the procurement of produce, seeking to reduce the

40% wastage that occurs through the traditional supply chain. Besides, the stores 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 Reliance Fresh stores are convenience stores with an area of about 1000 to 4000 sq ft. In Reliance

Fresh stores, the commodities are classified into various categories like Staples, Fruits and Vegetables (F

n V), Dairy, Processed Foods (PF), Food and Beverages, House ware, Personal Care etc. Few stores have

apparel section also which has very low priced range and good quality clothes.

CONCEPTUAL FRAME WORK

Reliance's understanding of the retail market in India, in terms of clear understanding of:

• The primary sources of procurement of products

• Average inventory (retail and warehouse) that is normally maintained at retail stores across

various categories

• Seasonal sales variation in categories across different regions in the country

• Shrinkage and wastage of products and percentage of returns thereon

• The number of SKUs across brands and categories

• The credit details (in terms of the number of days and cash) that retailers normally get from

their supplier across various product categories; and

• The average gross margin (percentage of MRP) that the retailer generally gets on its products.

Apart from food and grocery, which will contribute 40 percent to total sales, the company

is strongly looking at apparel, lifestyle, consumer durables, and leisure and entertainment

operations as its major drivers of business. It is considering the establishment of both multi-

brand as well as exclusive brand outlets for certain categories of operations.

While most of outlets will be company-owned, the convenience-store format could

possibly be the only exception to be operated through a franchisee route in collaboration with

mom-and-pop kirana shop-owners, which in itself is a novel concept that could work very well in

the Indian context.RELIANCE FRESH

The study of consumers helps firms and organizations improve their marketing strategies by

understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different

alternatives (e.g., brands, products, and retailers);

The psychology of how the consumer is influenced by his or her environment (e.g.,

culture, family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome; 

How consumer motivation and decision strategies differ between products that differ in

their level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing

strategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products, services,

experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer

and society."

Although it is not necessary to memorize this definition, it brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends

influence what kinds of clothes a person wears) or an organization (people on the job

make decisions as to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of how

they are purchased. Product use is often of great interest to the marketer, because this

may influence how a product is best positioned or how we can encourage increased

consumption. Since many environmental problems result from product disposal (e.g.,

motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at

landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products.

The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have

serious repercussions for the national health and economy.

There are four main applications of consumer behavior:

The most obvious is for marketing strategy—i.e., for making better marketing campaigns.

For example, by understanding that consumers are more receptive to food advertising

when they are hungry, we learn to schedule snack advertisements late in the afternoon.

By understanding that new products are usually initially adopted by a few consumers and

only spread later, and then only gradually, to the rest of the population, we learn that (1)

companies that introduce new products must be well financed so that they can stay afloat

until their products become a commercial success and (2) it is important to please initial

customers, since they will in turn influence many subsequent customers’ brand choices.

A second application is public policy. In the 1980s, Accutane, a near miracle cure for

acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by

pregnant women. Although physicians were instructed to warn their female patients of

this, a number still became pregnant while taking the drug. To get consumers’ attention,

the Federal Drug Administration (FDA) took the step of requiring that very graphic

pictures of deformed babies be shown on the medicine containers.

Social marketing involves getting ideas across to consumers rather than selling

something. Marty Fishbein, a marketing professor, went on sabbatical to work for the

Centers for Disease Control trying to reduce the incidence of transmission of diseases

through illegal drug use. The best solution, obviously, would be if we could get illegal

drug users to stop. This, however, was deemed to be infeasible. It was also determined

that the practice of sharing needles was too ingrained in the drug culture to be stopped.

As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that

encouraged the cleaning of needles in bleach before sharing them, a goal that was

believed to be more realistic.

As a final benefit, studying consumer behavior should make us better consumers.

Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry

detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In

practice, however, you often pay a size premium by buying the larger quantity. In other

words, in this case, knowing this fact will sensitize you to the need to check the unit cost

labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust in this course is

the consumer. However, we will also need to analyze our own firm’s strengths and weaknesses

and those of competing firms. Suppose, for example, that we make a product aimed at older

consumers, a growing segment. A competing firm that targets babies, a shrinking market, is

likely to consider repositioning toward our market.

To assess a competing firm’s potential threat, we need to examine its assets (e.g., technology,

patents, market knowledge, awareness of its brands) against pressures it faces from the market.

Finally, we need to assess conditions (the marketing environment). For example, although we

may have developed a product that offers great appeal for consumers, a recession may cut

demand dramatically.

Reliance Industries has stunned India's Retail Sector by announcing a gigantic investment

of over Indian Rupees 25,000 Crores (roughly equivalent to USD $ 5.5 Billion) in their

proposed Reliance Retail greenfield project in India. 

This will also entail an investment of half a million people and have a physical presence in

more than 1,500 geographic locations spread across India.

In Indian business newspapers, Mr. Mukesh Ambani , theReliance Chairman has been

quoted saying that "... Reliance Retail will partner with farmers, logistics operators,small

shopkeepers and traders... "

Industry experts are sensitive to the point that local markets have an edge over the retail investors

in India as they have unique advantages such as an understanding of local needs and extended

service like home delivery. As the FDI influence on the Indian retail sector sets in, the total size

of the retail trade is expected to grow extensively in the coming years and the consumer

segments patronizing the big malls will create frenzy for organized retailing predicting a growth

of 25-30 per cent per annum over the next decade. Moreover, Indian retail chains would get

integrated with global supply chains since FDI will bring in technology, quality standards and

marketing thereby, leading to new economic opportunities and creating more employment

generation.

Industry trends for retail sector indicate that organized retailing has major impact in controlling

inflation because large organized retailers are able to buy directly from producers at most

competitive prices. World Bank attributes the opening of the retail sector to FDI to be beneficial

for India in terms of price and availability of products as it would give a boost to food products,

textiles and garments, leather products, etc., to benefit from large-scale procurement by

international chains; in turn, creating jobs opportunities at various levels.

As foreign investors exploring their potentials in the retail sector, are keen on developing malls

in India, the size of organized retailing is expected to touch $30 billion by 2010 or approximately

10 per cent of the total. This has initiated market-entry announcement from some retailers and

has signaled to international retailers about India’s seriousness in promoting the sector. While

there are reports of international retailers like Wal-Mart analyzing business opportunities in

India; Reliance, the largest Indian conglomerate is investing $3.4 billion to become India’s

largest contemporary retailer. There are also reports of investments for ‘Hypercity Retail’ by

K.Raheja Group to establish 55 hypermarkets by 2015. All these factors will contribute in taking

Indian retail business to unexpected growth based on the consumer preference for shopping in

congenial environs and also availability of quality real estate.

Business Strategies for Retail Stores

1. Business Strategies for Retail Stores

o Retail business strategies are a reflection of your personal retail philosophy.

Generic solutions to your strategic issues may not be appropriate for your particular store. This

checklist provides a general framework for addressing the more important strategic issues

confronting retail stores. Using the framework, you have the flexibility to develop your business

strategies to grow loyal customers and achieve competitive advantage within the parameters of

your retail philosophy.

Advertising Strategies

o 1. Customer Profile. Build a profile of your target customer before you develop

strategies for that customer. The content of your appeal should be specific and relevant to your

target customer.

2. Advertising: Few retail stores survive without advertising. Relying on word-of-mouth to drive

store traffic is risky. New store advertising should focus on creating store awareness. Shift your

advertising to promotional advertising as soon as you are satisfied you've established a presence

in the market.

3. Best ways to advertise: Use media that effectively reaches your target audience for the least

amount of expenditure. Mass media could be useful during the start-up phase of your campaign.

It helps to achieve broad reach and build awareness with a mass audience. Use more targeted

media for continuity advertising that will allow you to zero in on your customer base with

messages relevant to your base.

Include the Yellow Pages phone books in you media mix. This is the go-to source for shoppers

looking for specific types of stores. Consider using the online edition of your local newspaper. It

is inexpensive. Pop-up banner ads are annoying because they alienate more than they promote.

Place your ads in the news,sports or leisure sections. You get more mileage for the dollars with

far less clutter.

Consider having your own website. Your website gives you an ongoing way to communicate

with your customers. Keep your website content fresh to keep your customers coming back to

see what's new; nothing is worse than a website with stale content.

4. When to advertise: Schedule your advertising to start two to three weeks prior to a scheduled

promotional event. This gives your customers sufficient time to plan ahead. Do not push the

advertising out too far as it will lose the sense of immediacy and customers tend to be forgetful.

Do not start you advertising too late because that increases the likelihood your customers will not

see your ad before it's too late to react.

It makes good sense to schedule your promotions to coincide with gift-giving and

seasonal holidays. If considering monthly sales events, beware of the wear-out factor!

Promotions should be special events. When you train your customers to accept you are always on

promotion, they may not react with any sense of urgency. Many retailers schedule their

promotions to coincide with paydays and tax refunds when customers have money to spend.

5. How much should you spend on advertising? Many experts in the industry use a rule of thumb

figure of between 5 and 10 percent of annual sales. Another approach is based on affordability. It

uses a formula that takes into consideration your fixed rent expense. The affordability approach

drives your ad budget closer to the 5% figure rather than the 10%.

Your advertising investment ultimately resolves around your retail philosophy. Check your

industry averages to see what your competitors are spending.

Merchandising Strategies

o 1. Pricing strategy. Pricing is a function of your retail philosophy relative to what

your competitors will allow. Your options are to price to yield profit margins below, at or above

the competition. Regardless of your retail philosophy, you have no choice but to generate profit

margins sufficient to cover your operating expenses. Temper your retail philosophy with an

awareness of the reality of your competitive position in the market. Given a strong competitive

position, you can pursue the low price option to harass your competitors; or the high price option

to maximize profit.

Many retailers with strong competitive positions and a view toward the long term opt to harass

their competitors. When your competitive position is average to weak, avoid the high price

option altogether as you run the risk of having no customers. The exceptions are unique items

(impulse items) that defy comparison but yet are not your main attraction. Price these items at

whatever the market will support

Determine and independently confirm the strength of your competitive position and the demands

of your market prior to executing a pricing strategy that may not be appropriate.

2. Managing your inventory: Typical retail store inventory should turn over an average of 5 to 6

times a year. This general average will vary by industry. Check to see what the average turnover

rate is for your industry. Take active steps to clear out slow-moving stock when your turn rates

are lower than your industry average. This requires a good inventory control system and an

effective strategy for stock rotation.

Lower the prices on slow movers on a gradual basis until the inventory is gone. For example, if

the normal retail on a slow mover is $5 and your cost is $2.50, lower the price to $4.25 for a

month. After a month, reduce the price further. Then, keep reducing until the item is finally sold.

Calculate your 12-month inventory turnover with the following formula:

Cost of Goods Sold/Current inventory = Inventory Turnover

Example: Cost of Goods Sold = $1,000; Current Inventory = $175; Inventory Turnover = 5.7.

3. Sales per square foot: Average sales per square foot of retail selling space will vary by

industry. Check to see what your industry averages are and use these as guides to keep score on

your performance relative to your industry averages.

4. Space allocation: Store layout and design is as much a science as it is an art. When done

poorly, it will hasten the death of your retail store. If you are unsure of your merchandising

abilities, consult with a professional merchandiser. This could be the best investment you make.

The following are a few merchandising basics to guide your thinking: 1. Security: strategically

install video cameras and fish-eye mirrors to prevent shoplifting. Keep small and expensive

items in glass cases under lock and key. 2. Most important items: give these items prime store

locations. 3. High margin impulse items: give these items high-traffic locations. 4. Related items:

promote coordinated purchases by displaying related items next to each other. 5. Related

departments: group related departments together to promote coordinated purchases. 6. Store

atmosphere: considerations such as store décor, lighting and fixtures, music and scent should

come together as a unified whole to make the shopping experience invigorating and delightful; to

encourage return visits.

Retail pricing strategies

There are many outside influences that affect profitability and a retailer's bottom line. Setting the

right price is a crucial step toward achieving that profit. Retailers are in business to make a

profit, but figuring out what and how to price products may not come easily.

Before we can determine which retail pricing strategy to use in setting the right price, we must

know the costs associated with the products. Two key elements in factoring product cost is

the cost of goods and the amount of operating expense.

The cost of goods includes the amount paid for the product, plus any shipping or handling

expenses. The cost of operating the business, or operating expense, includes overhead, payroll,

marketing and office supplies.

Regardless of the pricing strategy used, the retail price of the products should more than cover

the cost of obtaining the goods plus the expenses related to operating the business. A retailer

simply cannot succeed in business if they continue to sell their products below cost.

Retail Pricing Strategies

Now that we understand what our products actually cost, we should look at how our competition

is pricing their products. Retailers will also need to examine their channels of distribution and

research what the market is willing to pay.

Many pricing strategies exist and each is used based on particular a set of circumstances. Here

are a few of the more popular pricing strategies to consider:

Mark-up Pricing

Markup on cost can be calculated by adding a pre-set (often industry standard) profit margin, or

percentage, to the cost of the merchandise.

Markup on retail is determined by dividing the dollar markup by retail.

Be sure to keep the initial mark-up high enough to cover price reductions, discounts, shrinkage

and other anticipated expenses, and still achieve a satisfactory profit. Retailers with a varied

product selection can use different mark-ups on each product line.

Vendor Pricing

Manufacturer suggested retail price (MSRP) is a common strategy used by the smaller retail

shops to avoid price wars and still maintain a decent profit. Some suppliers haveminimum

advertised prices but also suggest the retail pricing. By pricing products with the suggested retail

prices supplied by the vendor, the retailer is out of the decision-making process. Another issue

with using pre-set prices is that it doesn't allow a retailer to have an advantage over the

competition.

Competitive Pricing

Consumers have many choices and are generally willing to shop around to receive the best price.

Retailers considering a competitive pricing strategy will need to provide outstanding customer

service to stand above the competition.

Pricing below competition simply means pricing products lower than the competitor's price. This

strategy works well if the retailer negotiates the best prices, reduces costs and develops a

marketing strategy to focus on price specials.

Prestige pricing, or pricing above competition, may be considered when location, exclusivity or

unique customer service can justify higher prices. Retailers that stock high-quality merchandise

that isn't available at any other location may be quite successful in pricing their products above

competitors.

Psychological Pricing

Psychological pricing is used when prices are set to a certain level where the consumer perceives

the price to be fair. The most common method is odd-pricing using figures that end in 5, 7 or 9.

It is believed that consumers tend to round down a price of $9.95 to $9, rather than $10.

Other Pricing Strategies

Keystone pricing is not used as often as it once was. Doubling the cost paid for merchandise was

once the rule of pricing products, but very few products these days allow a retailer to keystone

the product price.

Multiple pricing is a method which involves selling more than one product for one price, such as

three items for $1.00. Not only is this strategy great for markdowns or sales events, but retailers

have noticed consumers tend to purchase in larger amounts where the multiple pricing strategy is

used.

Discount pricing and price reductions are a natural part of retailing. Discounting can

include coupons, rebates, seasonal prices and other promotional markdowns.

Merchandise priced below cost is referred to as loss leaders. Although retailers make no profit on

these discounted items, the hope is consumers will purchase other products at higher margins

during their visit to the store.

As you develop the best pricing model for your retail business, understand the ideal pricing

strategy will depend on more than costs. It also depends on good pricing practices.

It is difficult to say which component of pricing is more important than another. Just keep in

mind, the right product price is the price the consumer is willing to pay, while providing a profit

to the retailer.

E-mail Strategy

Email marketing can be a very effective tactic for today’s retail store. In an economy where

competition is intense, email marketing can give you the extra boost you need to get people into

your store and increase sales. Best of all, it is simple to add into your ‘marketing mix’. Email

marketing is highly cost effective, and there is very little to learn. A little bit of brainstorming is

required, but once you’ve done that, you’re ready to go!

This article will assist you in deploying an email marketing strategy for your retail store. As you

acquire more experience with email marketing you will be able to adjust your strategy to make

sure you always get the biggest possible benefit.

Step 1: Start Building Your Mailing List

The entire process starts with building your mailing list. This is a vital step because the results

you achieve will heavily be based on the quality and size of your mailing list. Remember, you

don’t want to be labeled a spammer, so make sure you get permission to email them before they

are added to your mailing list.

There are several ways you can get people to share their email address to help build your contact

list.

Many retail stores will ask customers for their email during the check-out process. Simply

having your staff at the cash say: “Can I have your email address so we can occasionally email

you special promotions?” can really go a long way! Consumers usually respond positively to

special offers and most will be willing to give their email address to you if you are willing to

give something back (coupons, invites to exclusive in-store events, other special promotions,

etc).

Many retail stores also stage contests where people can win a prize. The prize can be anything

you think will entice your customers, from store items, to a free give-a-way, to anything else you

can imagine. On the ballot that people fill out enter the contest, you can ask for their email

address. Make sure you have a check-box on the ballot asking customers if it is ok to send them

emails. Then, you just type everyone’s email address from all the ballots and bingo! You’ve got

a lot of new people to add to your contact list.

Building your mailing list for email marketing is not something that will be accomplished

overnight, so don’t be worried if it takes a little bit of time to really build up a substantial list

size. So, while you may be super excited to send your message out to thousands of people,

remember that building your mailing list is an ongoing process, and it may take several days or

weeks or months to get your mailing list to that size.

Step 2: Blast Out Your Email Marketing Campaign

One of the most important parts of setting up your email marketing campaign is to determine

what your goals are and what specifically you want to promote. After all, if you do not have

defined goals, then it will be very difficult to know whether anything has been accomplished.

Do you want to encourage people to visit your store in person? Do you want to get people calling

into your store? Do you want people to be purchasing a specific item? Do you want people to

talk to their friends about your store? Etc.

There are a variety of goals you can have, but once you have determined what you want to

achieve, you can start taking steps towards setting up your email marketing campaign. One quick

suggestion is that the top performing email marketing campaigns are the ones that have one

specific objective. Don’t try to do everything at once, as that will hurt your email’s success.

Most retail stores have the objective of generating traffic in their store, which makes sense, since

patrons in your store can lead to new sale. Assuming that is the case, then you can ask yourself,

“What would make someone visit my store?”

The answer for a lot of retail stores is to include coupons or other discount offers in their email

marketing campaign. By sending out an email coupon, you are encouraging your customers to

print the coupon at home, and then bring the coupon into your store to redeem it. The important

thing is that your email marketing campaign is giving your customer a reason to come back into

your store.

Many retail stores also benefit from the viral nature of email marketing, which helps spread the

word even more.

Step 3: Do An Analysis Of Your Email Marketing Results

After you’ve sent out your campaign, it is important that you analyze the results. This will allow

you to be better at email marketing down the road because you will have a good understanding

of what works better with your specific audience and what is not as effective.

With most email marketing software packages, you can see who specifically opened your email,

who clicked on one or more links, who forwarded it to their friends, and more. These numbers

will help you measure the effectiveness of your campaign.

By using your reporting numbers you can answer questions like “Are my campaigns more

effective when I send them Wednesday morning or Friday afternoon?”, “Do more people open

my campaign when I mention a specific discount in the subject?”, “Do more people come into

the store if my email has an offer that only lasts a limited-time?”, Etc. There are a wide variety of

questions you can ask. And, with the reports at your fingertips through your email marketing

software, you can actually create highly scientific answers pretty easily.

A little bit of studying the reports can go a long way towards boosting your future email

marketing efforts.Tons of retail stores across the planet have started using the power of email

marketing to help achieve their goals. With it’s low price tag, ease of use, and high ROI, it is no

surprise that many stores have stopped traditional paper mailings altogether in favor of email. So,

prepare to take the plunge and boost your retail store’s marketing to the next level.

Effective marketing strategy in retail

The retail sector is one of the most competitive in the business world, and so effective marketing

strategy is needed in order to be successful. However, many retailers get caught up in the day-to-

day running of their companies and don't use all their business strategy expertise to push their

business forward. If you are in the retail business, then you need to wake up and think carefully

about your current marketing strategy. If you don't you could find yourself trailing behind the

competition and losing business to other retailers. If you want to improve your retail marketing

strategy, then here is some advice to get you started.

Use the Internet

With the Internet increasing in popularity all the time, it is extremely important to use Internet

marketing as a way to improve market share. In order to improve your access to customers,

create a web site where customers can view your merchandise and possibly buy products online.

Selling your products online is a great way of expanding your business without having to spend

lots of money on new premises or retail locations. However, if you don't want to develop online

business, then you can still advertise your business online. Effective marketing strategy should

use all mediums available to improve business exposure, and with online advertising a low cost

and effective medium it makes sense to take advantage of the opportunity.

Offer a promotion

Retail business is extremely competitive, and so even the smallest of promotions can give you an

edge over your competitors. Your business strategy should be to come up with regular and

innovative promotions to entice customers into your store. These promotions can range from

offering a free gift with certain products to a competition entry when certain items are purchased.

If you keep your marketing strategy fresh with new promotions then you will definitely remain

competitive and will attract customers to your products.

Signage and storefront are important

Although you can use plenty of complex marketing strategy techniques to attract customers,

nothing is simpler and more effective than having a bold and effective storefront and signage. If

you have a shop window, then keep the displays up to date and imaginative. Change the display

each season and alter your sign every few years to keep things looking good. However, make

sure that you keep the signage them constant so that your brand and store are easily recognisable.

Make sure your sign can be seen from as far a distance as possible. Sometimes, the simplest

marketing strategies are the best, and keeping your store bright and attractive is one such

method.

Ask customers what they want

Your marketing strategy ideas might be great, but if you really want to improve your business

then you need to ask the people that matter most - the customers. Effective marketing strategy

should always begin by asking customers what sort of products, services and promotions they

want. This will give you a better idea of how to market your products and improve your

customer base. If there is one thing you should learn about effective business strategy, it is to

listen to your loyal customers and then cater to their needs through effective marketing strategy.

How To Build A Great Retail Business Marketing Strategy

This is something that you will already have an idea about when you write your business plan.

Nothing is better for an emerging retail business than a really good marketing strategy. This is

when all of your research will work to your advantage. In order to build a good marketing

strategy you must first:

Correctly assess your competition and what they are doing to market their businesses.

You have to offer your consumers something that is fresh and different if you want to get

their attention.

Survey your potential market beforehand so that you can establish what your consumers

are missing in their current needs as consumers. You want to know what they need and

give it to them.

Learn what types of advertisements work best in your business’ locale. Sometimes

commercials are best whereas other area get a better response by utilizing the local

newspaper or pennysaver.

Begin your promotion before you plan to open so that you can garner an interest in your

merchandise before you open. Building up some interest ahead of time can help to ensure

a good grand opening.

Promotions and discounts are a necessity to running a successful retail business. You

must make sure that you are in a position to compete in this manner. Your “grand

opening” will run a lot better if you begin with a special promotion.

The key to successful marketing will be your ability to meet the basic supply and demand

of your community. Be sure to stay on top of this because these things are always

changing.

You should be able to keep up with market changes and try to anticipate them beforehand

because it keeps you a step ahead of the average consumer. This will prove invaluable to

you later.

 

How To Incorporate Your Retail Business

There are three basic types of business structures that you will have to choose from when you are

considering the start of your own retail store. They are as follows:

Sole Proprietorship

A sole proprietorship is a business that has only one owner. There can be many benefits and

pitfalls to running your business as a sole proprietor.

The Benefits:

You can keep more of your businesses money’s earned.

There are less hassles than there might be with other proprietors.

You can run the business in any manner that you please.

It is the least costly way of starting a business.

It is easier to get your business started and apply for your permits, licensees etc.

Dealing with the issue of taxes is less complicated and cheaper.

Pitfalls:

It is more costly when the business is faced with losses.

All responsibility falls solely upon the proprietors shoulders.

All of the costs that go along with maintaining the business keeping it running smoothly

are solely the owner’s.

All decisions are made at the owner’s discretion.

Basically, everything is the owner’s responsibility.

There are many reasons why you should consider running a business on your own. However, you

do have other options.

Partnership

There are many types of partnerships that you can delve into. The most commonly chosen are

general partnerships and limited partnerships. General partnerships can be entered into with a

mere oral agreement or you can have lawyers draw up legal and binding partnership documents.

If you are considering the idea of having a partnership you should know that signing a legal

partnership agreement is the best way to go about it. The legal fees for these documents are more

costly than a sole proprietorship, but not as expensive as in a corporation.

When you decide to enter into a partnership, you should be certain to add only the specifics of

the agreement that you can both agree to. Here is a list of some of the other things that you

should have placed in a partnership agreement.

The type of business that you plan to run.

The correct amount of equity that both parties will invest.

How you will divide your profits and losses.

How much you will each be compensated.

How you will divide your profits and losses.

How long will plan to be in business together.

Set up provisions for any changes made and closing down.

Dispute settlement clause.

Restriction of authority and expenditures.

A reasonable settlement in case one partner dies or is incapacitated.

As you can see, there are a great many things to consider when starting a partnership. As with

running a sole proprietorship, there are a lot of benefits and pitfalls as well. I have listed them

here for you.

Benefits:

The cost of investing in the business is cheaper since they are divided among two people

instead of one.

The money needed to process legal fees and everything else that requires money is

cheaper.

There is assistance in dealing with the everyday tasks like, merchandising, employee

issues, general dealings with the public, and all general business concerns.

With two people running the business, each can have more time with their families and

friends.

Legal matters are cheaper for both.

A partnership generally makes the profits and revenue much higher.

Losses are shared by both and are thus actually easier to deal with.

Pitfalls:

Complications may arise if both parties are not in agreement about decisions.

Profits must be divided among the two and are therefore may be lower for each if sales

are sluggish.

One partner may wish to be let out of the business if things are not running smoothly (this

can be a problem if you are only using an oral agreement).

Partners may not agree on when to end the business.

Compensation problems can occur if one partner puts up more equity in the business and

the other wants to be compensated in the same manner.

Corporation

A corporation can make the start of a new business very much easier, but it also takes a great

deal more money and much more paperwork in order to make it happen. Generally, it is best

when beginning a retail business to avoid starting up as a corporation.

Usually corporations do not run with any specific person claiming themselves as the owner. In a

corporation, control generally depends on whoever owns the most stock. It is most common that

you must own at least 51% of the stock in the corporation in order to have control of the

company.

There are also many more rules that you must follow in order to run any business as a

corporation as well. In a corporation you must hold regular meetings of the board of directors

which generally consists of 10 people. All of whom are to make decisions regarding the

business.

You must also host stockholder’s meetings as well and keep viable records of all the decisions

that are made. There can be any number of stockholders present for these meetings.

Corporations are best left for extremely large retail business ideas because of the complications

that can arise in running a corporation. Some of these problems can be as follows:

Constant battling over stocks.

Backbiting is always a problem when so many people are involved in a business deal.

People are often trying to buy out other stockholders so as to gain control over the

businesses decisions; especially if it is successful.

As corporations are generally formed with the intent on becoming a chain of retail outlets

or franchises, it can be a very costly venture to take for the average business owner.

3 Common Mistakes New Retail Businesses Make

At least 80% of new businesses fail within their first year of being open. There are many reasons

why businesses tend to fail, and it is best to list them here so that you can try to avoid making

these common mistakes when you open your retail business.

Advertising

Many new businesses fail to advertise properly. It wouldn’t occur to most business owners that

insufficient advertising might cause a problem with keeping their business afloat, but during

tough times, advertising might be your best weapon.

When the economy is running badly, you should have enough money put aside to advertise

special promotions and sales to your customers. When you do advertise, you should try to be

everywhere. You want people to see your businesses name no matter where they turn. Here are

some of the ways that you can advertise to ensure that you cannot be forgotten.

Newspaper and magazine ads

Newspaper, and direct mailbox inserts

Flyers and posts

Commercial and media ads

Websites, complete with online store

You should know that these do not have to cost you an arm and a leg. Commercials can be

costly, but these others don’t have to be. Running a website can be free or cheap, and the

software to host your own online store can also be cheap or free. You just need someone that can

keep track of orders for you.

Improper advertising can leave the community not knowing that your business exists; especially

during hard times. You want to stay available to all of your customers because if you disappear

from view, so will your customers.

Improper bookkeeping

It doesn’t matter what you do to keep your business running at its best. If you do not keep proper

track of your money’s coming and goings, you will eventually be left with none.

If it is at all possible, do your own bookkeeping so that you know exactly where your money is

going. If you do not know much about it, you should hire someone that does, but also someone

that you can trust. If you must, hire someone just to watch the bookkeeper so that you don’t get

ripped off.

As the business owner, you need to know exactly how much money that your business has. You

should know exactly how much profit that you are bringing in each month so that you can use

your money wisely. It is not always easy to keep track of all of your money, especially if you are

generating a lot of business, but it doesn’t have to be impossible.

Even with a good bookkeeper, you should look into popular accounting software like

Quickbooks and Microsoft Money because they do most of the work for you. All you really have

to do yourself is add the right numbers and let the software add and subtract for you.

Every year many businesses go under due to bad bookkeeping. They spend money they don’t

have or they make errors processing payroll deposits. Don’t let that happen to you.

Credit Problems

The worst thing that a business owner can do is to run it on too much credit. Each day it gets

easier and easier for new businesses to gain credit accounts and credit cards from various

companies. All too often, these companies run up more credit than they can repay.

It just goes to say that you have to live and run your business within your means. All too often

business owners find themselves buying things that the business simply doesn’t need. They also

buy things for themselves on company credit. This is a big no-no in the business world.

Once a business spends too much money on credit, they learn all too late that the interest rates on

credit cards can force hundreds of extra dollars in expenses. New and small retail businesses just

can’t afford to pay them. There is also the fact that over buying supplies and merchandise can be

a far bigger problem than businesses expect.

Over paying employees can run any business into the ground if they are not keeping up with

their regular expenses properly. Any successfully run business owner knows that you start off

small, and hopefully build your way up. That is impossible if you are living and running your

business above your means.

 

DATA INTERPRETATION

Frequency of customers' visit at store

Interpretation:

I was mainly concerned about those customers who come at the store often. So, according to my objectives I asked them first how frequently he/she visits the store.

In response I got this statistics- 30% of the customers come at least once in a week. 29% of them come twice in a week or more frequently. 21% come once in every month. 14% come twice in a month. 6% come thrice in a month.

How customers get to know about Reliance Fresh

Interpretation:

Next I asked them how they got to know about Reliance Fresh and I saw that-

53% of the respondents live in the same locality and so they automatically get to know about Reliance Fresh as they share the same locality.

22% of them have come to know through their friends and relatives. 18% have come to know from news papers. 5% have got to know through brochure. Very few people got to know through mail and other sources, i.e. 1% each.

Satisfaction regarding display of products

Interpretation:It is very important to make a proper display of the product. Display of the

product means presenting the product in an attractive way. A planogram of the store comes from the office but it is the duty of store to give it a good look and to set a good display of the store.

When I asked customers whether they are satisfied with the display of products, I got the following replies-

55% of the customers are satisfied. 14% are highly satisfied. 25% think they are moderately satisfied. 5% are dissatisfied. And a very negligible number of people, i.e., 1% are highly dissatisfied.

Satisfaction regarding availability of daily needs

Interpretation:

It is necessary to know that whether the customers are satisfied with the availability of the products at the store. Availability of the products means all variety of products which the store sells.

When I asked customers whether they are satisfied with the availability of products in the store, almost half of the respondents fall in satisfied category (both satisfied and very satisfied) and thus I got-

41% are satisfied. 10% are highly satisfied. 33% are moderately satisfied. 15% are dissatisfied. 1% is highly dissatisfied.

Satisfaction regarding price & offers

Interpretation:

According to the survey, majority of the respondents are satisfied with the price and offers available at store. I got-

43% are satisfied. 10% are highly satisfied. 35% are moderately satisfied. 10% are dissatisfied. 2% are very dissatisfied.

No. of customers availing basket offers

Interpretation:

First I need to know what basket offer actually is. Basket offer actually means combo offers. This includes some specific combination products at a discounted price, like 5kg Pillsbury Atta, 3 liters Nature Fresh Actilite Soybean oil and 2 kg R-value Sugar can be bought for Rs. 349/-, but the MRP is more than Rs. 400. This is a basket offer.

When I asked how many customers avail basket offers I observed- most of them do not avail these offers.

60% of the respondents don’t avail it. 40% of them avail basket offers.

Satisfaction regarding combination of basket offers

Interpretation:

Now the question comes if customers are satisfied with combination of products of basket offers.

Almost half of them, i.e., 48% are satisfied. 33% are dissatisfied. But 19% of the respondents are not aware of the combinations offered.

Satisfaction regarding price & quality of Reliance Private Label products

Interpretation:

Earlier it has been mentioned what Reliance Private Label products are.

When I asked if customers are satisfied with Reliance Private Label products regarding price and quality-

39% said they are satisfied. 7% are highly satisfied. 20% are moderately satisfied. 15% are dissatisfied. A very few are highly dissatisfied, like 2%. But almost 1/5th, i.e., 17% are not aware of it.

Satisfaction regarding billing speed during rush hour

Interpretation:

From the survey it can be said that customers are very satisfied with the billing speed during rush hour. More than half of them fall in satisfied category-

42% are satisfied. 20% are highly satisfied. Whereas 23% think it is moderate. 12% are dissatisfied. 3% are highly dissatisfied.

The problem with Reliance is that it has two cash tills, but only one till is working and the other is not working for a long time.

Satisfaction regarding home delivery system

Interpretation:

Reliance also offers home delivery facility free of cost. But the chart says that 50% of the respondents do not avail home delivery facility. This may be because of two reasons- first, customer has to shop for at least Rs. 700 and second, it offers home delivery within 2 km distance.

Among those who avail this facility-

20% are satisfied. 10% are highly satisfied. 6% say it’s moderate. 10% are dissatisfied. 4% are highly dissatisfied.

Satisfaction regarding customer service

Interpretation:

Reliance Fresh scores good in terms of customer satisfaction.

50% of them are satisfied. 23% are very satisfied. 18% are moderately satisfied. 4% are dissatisfied. 5% are very dissatisfied.

Closest competitor of Reliance Fresh

Interpretation:

When I asked the customers who they think is the closest competitor of Reliance Fresh, I got to know that-

Majority of the customers almost 39% think that Spencer is the closest competitor.

Followed by Big Bazar (28%). Food Bazar (15%). A very few respondents supported Spinach and More (1% each).

Some of them voted for two, like-

3% voted for Food Bazar and Spencer. 2% for Big Bazar and Spencer. 4% for Big Bazar and Spencer. 1% of them supported all three of Food Bazar, Big Bazar and Spencer. But some of the respondents (6%) could not answer the question as they are

not aware of other stores well.

FINDINGS

53% of the customers who come to Reliance Fresh (DP) are mainly local people. It means local people are very much aware of this store rather than outside of the locality.

59% of the customers prefer to visit the store once in a week or twice in a week. That means they prefer to visit the store frequently. They buy their products on weekly basis.

51% of the customers are satisfied with the products available, though 48% of total customers fall on the dissatisfaction category and they need more variety of brands.

69% of the customers are satisfied with the display of products. That means they find their products very easily when they visit the store.

53% of the customers are satisfied with the price and offers provided by the store, though 45% of total customers are not satisfied fully. They think more discounts should be provided on products.

60% of the customers don’t avail basket offers. But those who avail it are satisfied with the combination of products. Some customers are not aware of the combinations offered.

39% of the customers are satisfied with the price and quality of Reliance Private Label products. But 17% of the customers are not availing it. Many of the customer said that the price of private label product is high compared to other brands.

50% of the customers don’t avail home delivery facility. One reason is that, reliance provides home delivery facility within 2km around the store. So, the customers who do not live within 2km of radius from the store can’t avail

this facility. Another reason is, if customers shop for at least Rs. 700/- then only they can avail this facility. But 36% of total customers are satisfied with this facility.

62% of the customers are satisfied with the billing speed and check out time.

SUGGESTIONS

According to the findings I want to suggest some recommendations.

Reliance Fresh should increase their store awareness among the existing customers and try to attract new customers by doing different types of promotional activities, like competitions, game shows, distributing leaflets etc.

Store should introduce more discounts & offers, as 45% of the customers think they should have more discount and offers. Store can introduce offers on those products that have high profit margin. It will attract more customers.

The store can offer good combination of products and make customers aware of basket offers by more promotion and display of it, as19% of the customers are not aware of the combinations of products in a basket offer. I have seen many people do not avail basket offers as they do not like the combination offered. Store can observe which products are high in demand and make basket offers with those products so that more customers buy it.

Earlier I have mentioned that during rush hour customers have to stand in a queue and it creates dissatisfaction among customers. The closed till should be repaired immediately to make the billing speed faster and reduce check out time.

Store can again start to sale those products which were available earlier but not available now.

Store can talk to Local Bazar to start selling non-veg items in store.

Store can provide more tele calling and sms to make the customers aware of the offers going in the store.

Planogram and position of bays should not be changed frequently.

Some staffs of the store need more training on customer service and push selling. Each staff should be made aware of the offers and prices available at the store to provide better customer service.

Staffs should be motivated by frequent praises and appraisals.

Store can try to sale fresh fruits and vegetables as customers often complain about the quality of fruit and vegetable.

Reliance Fresh can keep the price at par with local market to gain competitive advantage over local stores.

Reliance Fresh can introduce more variety of products to satisfy customers’ need.

CONCLUSION

There are some products which were available in the store earlier but it is no more available now, like Dosa rice, Dudheshwar rice etc. Though these products still has demands.

Many Customers want non-veg products at the store. There is a high demand for non-veg food product.

Many customers are not aware about the offers which are going on at the store. They want more tele calling and sms from the store, so that they can know about the offers.

Customers face problem if the planogram are changed frequently and they complain for this.

Customers often complain about the quality of fruits and vegetables. Fruits and vegetables are often not fresh and rotten.

Customers often complain that price in Reliance Fresh is higher compared to local market and other organized retails provide more discounts than our store.

According to the customers local market and other organized retail have more variety of products.

73% are satisfied with the overall customer service at the store.

BIBLIOGRAPHY

WEB SITES:-

http://en.wikipedia.org/wiki/Reliance_Fresh

http://www.reliancefresh.info/

NEWSPAPERS:

o Times of India

o The Hindu

BOOKS:

o Marketing Management, Dr. S.L. Varshney and

Dr. R.L. Gupta, Third Revised Edition,

Sultan Chand and Sons.