Reli elianc ance e Fresh Giant corporations like Wal-Mart and Reliance have started to try and take over the Indian retail sector. The entry of the giant corporate retail in India's food market will have direct impact on India's 6! million farmers farmers and "! million people employed in tiny retail. More than 66!! mega stores are planned with Rs"!#!!! crore $y %!&&. (r case is intended to cover two primary o$)ectives which are* +irst# when e,perts and giants like f(t(re gro(p WalMart and Reliance they are ready to start operations in retail what kind of strategies and str(ct(re they wo(ld $e having to get the competitive edge over each other and esta$lished small and (norga (no rgani nied ed retail retailers ers.. econd# econd# wha whatt kind kind of impact impact has $een on other other retail retailers ers incl(d incl(ding ing (norganied ones with the opening of Reliance +resh stores. In the following case findings a$o(t Reliance +resh were /(ite awakening and e,emplary. 0ven after recent sh(tdown of Reliance fresh stores from 12 and (nwelcoming vi$es from states like 3erala# West 4engal# rissa and 5harkhand for its retail format which was allegedly capt(ring the (norganied sector and leaving tho(sands of self employed people )o$less7 Reliance was not in any mood to hamper its %!!! crore plan. Reliance responded with s(per$ strategy in which it shifted its foc(s from retailer to $eing a s(pplier i.e. targeting hawkers# vendors# 2(sh cart wheelers instead of c(stomers. 4ig retailers like Reliance have h(ge reso(rces and network which directly impacted many of the retailers some of whom are planning to /(it. In o(r sample sie of 8 retailers more than 9! agreed to have lost as m(ch as !: of their sales. This case also disc(sses pros and cons of contract farming which on one part ass(res farmers of price for their crop and knowledge a$o(t fertiliers and seed $(t on other side has some o$vio(s o $vio(s draw$acks like monopoly of $ig retailers. ;s a $ig market in which organied sector is poised to grow with %: - 9!: ann(ally ann(ally o(r government government m(st come with appropriate appropriate reg(lations reg(lations to save small retailers retailers and o(r agric(lt(ral sector.
4;<3GR1=> + R0T;I? India is a land of retail democracy- h(ndreds of tho(sands of weekly haats and $aaars are located across the length and $readth of o(r co(ntry $y people's own self-organiational capacities. (r streets are $aaars - lively# vi$rant# safe and the so(rce of livelihood for millions. India has the highest shop density in the world# with && o(tlets per &!!! people. This does not incl(de the village haats. (r retail democracy is characteried $y* &. @igh levels of livelihoods in retail with nearly "! million employed which acco(nts for A: of the employment and ": of the entire pop(lation. %. @igh levels of self - organiation. 9. ?ow capital inp(t ". @igh levels of decentraliation Retail in India has started with the concept of weekly markets# where all the traders gather at one $ig place to sell their prod(cts every week. The people come to these weekly markets to $(y the ho(sehold items for the ne,t one week. Billage fairs and melas were also common as it had more of an entertainment val(e. nce the people started getting $(sy with their lives and when they t(rned entreprene(rial# there emerged the mom and pop shops and the kiranas in the neigh$o(rhood. ;fter independence# came into e,istence the system of 2($lic distri$(tion of foods thro(gh the ration shops# where food grains# s(gar and oil for the daily cons(mption were distri$(ted at s($sidied rates thro(gh the government ration shops. The modern corporate retail formats are of the e,cl(sive $rand o(tlets# hypermarkets and s(permarkets# departmental stores and shopping malls. 4(t still the Indian cons(mer depends on the self-organied retail shops for their daily needs. This is largely d(e to the e,cellent food retailing system that was esta$lished $y the kiranas mom and-pop7 stores that contin(e meet with all the re/(irements of retail re/(irements al$eit witho(t the convenience of the shopping as provided $y the retail chains. The @awkersClari galla vendors and the local kiranas are the two main forms of (norganied retail in the co(ntry# which almost acco(nt for D8: of the total retail trade. Giant corporations like WalMart and Reliance have started to try and take over the Indian retail sector. <(rrently the val(e of
the retail market is estimated at aro(nd E %8! $illion with a growth rate of .8 per cent per ann(m according to the Indian retail report. The sie of small retail is $ig# the sie of $ig retail is small# a mere Rs. %! $illion in %!!" or 9: and Rs. "A $illion or ".8: per cent of the retail market in %!!6. @owever# the large scale corporate retail is pro)ected to grow at the rate of %A: to 9!: per ann(m# reaching Rs. &!!! $illion or E 8! $illion $y %!&! from the c(rrent sie of 1 E A.8 $illion. The tenfold increase in corporate retail will $e at the cost of small scale retail# which employs nearly &!: of India's pop(lation. The strategy here is to define the small scale selforganied retail as F(norganiedF and the large scale corporate retail as ForganiedF. The real difference is however not (norganied vs organied. 4(t it is Fself-organied vs. corporateF Reliance +resh is the convenience store format which forms part of the retail $(siness of Reliance Ind(stries of India which is headed $y M(kesh ;m$ani. Reliance plans to invest in e,cess of Rs %!!! crores in the ne,t " years in their retail division. The company already has in e,cess of 6! reliance fresh o(tlets across the co(ntry. These stores sell fresh fr(its and vegeta$les# staples# groceries# fresh )(ice $ars and dairy prod(cts. ; typical Reliance +resh store is appro,imately 9!!!-"!!! s/(are. feet and caters to a catchment area of %-9 km.
@istory 2ost la(nch# in a dramatic shift in its positioning and mainly d(e to the circ(mstances prevaling in 12# West 4engal and rissa# it was mentioned recently in news dailies that# Reliance Retail is moving o(t of stocking fr(its and vegeta$les. Reliance Retail has decided to minimise its e,pos(re in the fr(it and vegeta$le $(siness and position Reliance +resh as a p(re play s(per market foc(sing on categories like food# +M
When the first Reliance +resh store opened in @ydera$ad last cto$er# not only did the company said the store's main foc(s wo(ld $e fresh prod(ce like fr(its and vegeta$les at a m(ch lower price# $(t also spoke at length a$o(t its Ffarm-to-fork'' theory. The idea the company spoke a$o(t was to so(rce from farmers and sell directly to the cons(mer removing middlemen o(t of the way. Reliance +resh# Reliance Mart# Reliance >igital# Reliance Trend# Reliance +ootprint# Reliance Wellness# Reliance 5ewels# Reliance Timeo(t and Reliance (per are vario(s formats that Reliance has rolled o(t. In addition# Reliance Retail has entered into an alliance with ;pple for setting (p a chain of ;pple pecialty tores $randed as itore# starting with 4angalore.
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tho(sands of farmers from villages thro(gh
irectly from the farmers th(s offering them /(ite reasona$le prices for their prod(ce as now no intermediaries are involved. In ret(rn Reliance is giving farmers information a$o(t how can farmers improve their prod(ctivity. They have centers in villages who apart from providing information make farmers aware of market rates of different crops so that farmers can choose crops they want to sow to $ecome profita$le. farmers are provided technical help as well like information a$o(t /(ality of seeds and fertiliers.
ervice marketing environment ervice marketing environment of reliance fresh can $e scanned $y considering the si, ma)or environment forces like demographic# economic# socio-c(lt(re# nat(ral# technological# and political legal. ;s the demographic environment consists of the age mi, of pop(lation# literacy and ed(cation level. 0conomic level consists of income distri$(tion of different people. The rich grew $y "!!: in (r$an areas and %!!: in r(ral areas. ocio- c(lt(ral environment consists of infl(ence of religion# lang(ages and c(stomer that shapes the val(es and attit(des of c(stomer preferences# ha$its and $ehavio(r. ervices Marketing and Marketing Mi, ; service is the action of doing something for someone or something. It is largely intangi$le i.e. not material7. ; prod(ct is tangi$le i.e. material7 since yo( can to(ch it and own it. ; service tends to $e an e,perience that is cons(med at the point where it is p(rchased# and cannot $e owned since is /(ickly perishes. ; person co(ld go to a cafH one day and have e,cellent service#
and then ret(rn the ne,t day and have a poor e,perience. o often marketers talk a$o(t the nat(re of a service as* Insepara$le - +rom the point where it is cons(med# and from the provider of the service. +or e,ample# yo( cannot take a live theatre performance home to cons(me it a >B> of the same performance wo(ld $e a prod(ct# not a service7.
Intangi$le - and cannot have a real# physical presence as does a prod(ct. +or e,ample# motor ins(rance may have a certificate# $(t the financial service itself cannot $e to(ched i.e. it is intangi$le. 2erisha$le - in that once it has occ(rred it cannot $e repeated in e,actly the same way. +or e,ample# once a &!! metres lympic final has $een r(n# there will $e not other for " more years# and even then it will $e staged in a different place with many different finalists. Baria$ility- since the h(man involvement of service provision means that no two services will $e completely identical. +or e,ample# ret(rning to the same garage time and time again for a service on yo(r car might see different levels of c(stomer satisfaction# or speediness of work. Right of ownership - is not taken to the service# since yo( merely e,perience it. +or e,ample# an engineer may service yo(r air-conditioning# $(t yo( do not own the service# the engineer or his e/(ipment. o( cannot sell it on once it has $een cons(med# and do not take ownership of it. Western economies have seen deterioration in their traditional man(fact(ring ind(stries# and a growth in their service economies. Therefore the marketing mi, has seen an e,tension and adaptation into the e,tended marketing mi, for services# also known as the 82's - physical evidence# process and people.
Reliance +resh Marketing Mi, 8 2's7 ;fter segmenting the market# finding the target segment and positioning itself# each company needs to come (p with an offer. The 8 2's (sed $y Reliance +resh are*
&. 2rod(ct
%. 2lace 9. 2rice ". 2romotion . 2eople 6. 2hysical 0vidence 8. 2rocess
Target egment what is Reliance fresh for me ; +amily with children# a p(rchase place to $e for the children. 1r$an c(stomer on the move Great taste# /(ick service witho(t affecting the work sched(le. 4(t keep it afforda$le.
2rod(ct* How should the company design, manufacture the product so that it enhances the customer experience?
2rod(ct is the physical prod(ct or service offered to the cons(mer. 2rod(ct incl(des certain aspects s(ch as packaging# g(arantee# looks etc. This incl(des $oth the tangi$le and the non tangi$le aspects of the prod(ct and service. Reliance fresh has intentionally kept its prod(ct depth and prod(ct width limited. Reliance +resh st(died the $ehavio(r of the Indian c(stomer and provided a totally different men( as compared to its International offering. India is the only co(ntry where reliance +resh serve vegetarian. 0ven the sa(ces and cheese (sed in India are &!!: vegetarian.
2lace* Where should be the product be available and the role of distribution channels?
The place mainly consists of the distri$(tion channels. It is important so that the prod(ct is availa$le to the c(stomer at the right place# at the right time and in the right /(antity. =early !: of 1..; is within a 9 min(te drive from a Reliance +resh o(tlet. There is a certain degree of f(n and happiness that a c(stomer feels each time he dines at. There are certain val(e propositions that reliance fresh offer to its c(stomers $ased on their needs. Reliance fresh offers hygienic environment# good am$ience and great service. =ow Reliance +resh have also started giving internet facility at their centres and they have $een playing m(sic thro(gh radio instead of the normal m(sic. There are certain dedicated areas for children where they can play while their parents can have some /(ality time together.
2rice* What should be the pricing strategy?
2ricing incl(des the list price# the disco(nt f(nctions availa$le# the financing options availa$le etc. It sho(ld also take into the consideration the pro$a$le reaction from the competitor to the pricing strategy. This is the most important part of the marketing mi, as this is the only part which generates reven(e. ;ll the other three are e,penses inc(rred. The price m(st take into consideration the appropriate demand-s(pply e/(ation. Reliance fresh came (p with a very catchy p(nch line FGrowth Thro(gh Bal(e
2romotion* What is the suitable strategy and channels for promotion of the product?
The vario(s promotion channels $eing (sed Reliance fresh to effectively comm(nicate the prod(ct information are given a$ove. ; clear (nderstanding of the c(stomer val(e helps decide whether the cost of promotion is worth spending. There are three main o$)ectives of advertising for Reliance fresh are to make people aware of an item# feel positive a$o(t it and remem$er it. The right message has to $e comm(nicated to the right a(dience thro(gh the right media. Reliance fresh does its promotion thro(gh television# hoardings and $(s shelters. They (se print ads and the television programmes are also an important marketing medi(m for promotion.
2eople* How to converge the benefits of internal and external marketing?
Reliance fresh (nderstands the val(e of $oth its employees and its c(stomers. It (nderstands the fact that a happy employee can serve well and res(lt in a happy c(stomer. Reliance fresh contin(o(sly does Internal Marketing. This is important as it m(st precede e,ternal marketing. This incl(des hiring# training and motivating a$le employees. This way they serve c(stomers well and the final res(lt is a happy c(stomer. The level of importance has changed to $e in the following order the more important people are at the top7* &. <(stomers %. +ront line employees 9. Middle level managers ". +ront line managers
2hysical evidences -;ct(al 0,periferal evidence -; good time entry. -ign $oards. -0ssential eminence of service. -Good parking place
2rocess 2rocess 0,ist are comple, on railways like some processes are* -ref(nd process C claim process. -etraining 2rocess.
The service segmentation Reliance +resh has segmented their service to all class of people like rich# poor $y providing standards of facility in different ways# for e,ample - yo( can find different itemsC$(get packs for them these are the service segmentation of Reliance +resh $y which they are serving different categories of people. In all these service segmentation Reliance +resh is providing different facilities and charging same money. 'Items at a Glance' timeta$le# I have always (sed these on $ooking and have never had a pro$lem# write the a$$reviation in which yo( want to p(rchase# ne,t to the word on the p(rchase form. rganiations are taking an interest in the international marketing of services $eca(se of low cost factors and the a$ility to compete in near$y co(ntry markets 4radley &DD7J however# international
services pose special challenges for marketing managers as a res(lt of the intangi$ility of services# the e,tent of c(stomiation# and differences in preferences across c(lt(res. Research on international service offerings has foc(sed on entry-mode choices technology growth # geographic roles# service infl(ences on national competitive advantage and strategic differences across services . et the marketing literat(re has not investigated several key components of service strategy# partic(larly in the international domain.
<(stomers
Re/(irements
and
<(stomer
0,pectations <(stomers 0,perience after visiting the store can $e said to $e not m(ch satisfactory. ;fter this entire $( it seemed to $e a damp s/(i$ to me. &.
;s they go thro(gh the reviews $y the mem$ers# they o$serve that the same points they have /(oted a$ove are $othering them too. ome more reading# $rowsing and research made me (nderstand some of the aspects related to it# which I want to share with yo(. &. <(stomer is the last person in the minds of these s(permarket chains. Tho(gh it might $e s(rprising# that's the fact straightly p(t. What matters the most is the n(m$er. The more the n(m$er of stores opened# the more is the n(m$er of people visiting them# the more the chances of s(ccess. %. The commission they get for selling a prod(ct. They are least $othered a$o(t providing a range of goods and $rands to the <(stomer. In contrary# the companies that pay them the highest commission get to sell their goods from them. When they have the n(m$ers# companies cannot afford to ignore them co(rtesy# the large n(m$er of c(stomers visiting them. 4(t why are the <(stomers visiting them# when they are not getting what they want 9. The feel good factor. The goods we $(y here can $e easily $o(ght at any other grocery store ro(nd the corner. Then why do we flock to them 5(st $eca(se# we feel good. We feel happy $ecoming a part of another India# which looks great m(ch (nlike the India we have grown in. We love the am$ience. We like $eing greeted. ". 4y making a right $alance $etween the n(m$ers and the feel good factor# they achieve their targets some times m(ch $eyond the e,pectations they have set. We are )(st part of the market grind that is happening right nowL
ervice recovery strategies -Improving the after sales services. -;dmit and apologies. -rectification of any error -
(ality concern (ality means watching the services from c(stomer prospective. The main /(ality concern of Reliance +resh is* To provide hygienic condition inside the stores. ;voiding as m(ch as possi$le the delay in the sched(le. +reshness is also one of the concern for Reliance fresh. Improving the infrastr(ct(re to world class level of standards.
Integrated gap model of service /(ality The central foc(s of gap model is the c(stomer gap# the difference $etween c(stomer e,pectations and perceptions. G;2-& =ot knowing what c(stomer e,pect i.e. what are the e,pectation of c(stomer of Reliance +resh which can $e d(e to inade/(ate marketing research. G;2-% =ot selecting the right service design and standards. Reliance +resh have a good service design $(t not reached to that level of standards to meet all c(stomer e,pectations. G;2-9 =ot delivering to service designs and standards. This can $e d(e to deficiency of h(man reso(rce policy of Reliance +resh. ;nd may $e d(e to fail(re in meeting s(pply and demand. 4eca(se of the h(ge pop(lation of India. G;2-" =ot matching performance to promises. This can $e d(e to lack of integrating services marketing comm(nication and ineffective management of c(stomer e,pectation $y Reliance +resh. In this way the gap $etween e,pected /(ality and perceived /(ality can $e calc(lated $y Reliance +resh.
4l(eprint of Reliance +resh near 2atel chowk7 0ntering path Tracks for p(rchase of goods Tracks for p(rchase of goods 4illing co(nter Gate keeper 0ntrance to Reliance +resh This is the $l(eprint of reliance fresh. <(stomer when comes to this store firstly the gate keeper will check it and keep the $ag if he has with him. The $illing co(nter is first right of entrance. When c(stomer enters it the tracks whether for seeing of goods and if he liked something than he can p(t it in trolley and then he can go the $illing co(nter. If he needs some help than he also can ask for it $(t telling the nearest salesman. ;fter selecting the good he can go to $illing and go $ack to gate keeper. Gate keeper now demand for the receipt for )(st the sec(rity p(rpose.
2ricing trategies $y Reliance +resh ->isco(nt pricing strategy -Wide price range of each items -
