A STUDY ON

“THE DEVELOPMENT OF TURNAROUND PLANS FOR

THE SICK UNITS OF RELIANCE FRESH”

A PROJECT REPORT

Submitted in partial fulfilment of the Requirement for the award of degree in

BACHELOR OF BUSINESS ADMINISTRATION

MAHATMA GANDHI UNIVERSITY, KOTTAYAM

SUBMITTED BY

Mr. CRATTO TONY

REG. NO: SDAA10201414

UNDER THE GUIDANCE OF

Mr. JOGY GEORGE

DEPARTMENT OF BUSINESS ADMINISTRATION

MARIAN COLLEGE KUTTIKKANAM, PEERMADE

IDUKKI (DIST), KERALA

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DEPARTMENT OF BUSINESS ADMINISTRATION

MARIAN COLLEGE KUTTIKKANAM – 685 531

PEERMADE, IDUKKI

Certificate

This is to certify that the project entitled “A STUDY ON THE DEVELOPMENT

OF TURNAROUND PLANS FOR THE SICK UNITS OF RELIANCE

FRESH” submitted to Mahatma Gandhi University in partial fulfilment for the

award of the degree of Bachelor of Business Administration (BBA) is a record of

original work done by Mr. Cratto Tony, Register No. 201414 during the year 2012-

2013 in the department of Business Administration under my supervision and

guidance.

Mr Jojy George Mr Jojy George

Head of the Department Faculty Guide

Date: Date:

Viva voce Examination held on..............................

Signature of the Signature of the

External Examiner Internal Examiner

Date: Date:

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Declaration

I, Cratto Tony, Reg. No.201414, hereby declare that this project work entitled

“A study on the development of turnaround plans for the Sick units of

Reliance Fresh” is my original work.

I further declare that this report is based on the information collected by me and

has not previously been submitted to any other university or academic body.

Date : Cratto Tony

Regn No: SDAA10201414

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Acknowledgement

The Successful completion of this dissertation owes to the inspiration and constant

support of many persons.

I wish to extend my sincere thanks to the organization, Reliance Retail; Cochin, for

giving me the opportunity to share in their unmatched experience in the industry.

I’m very much obliged to Mr. Riju Antony, GM-HR, Reliance Retail Kerala for

giving me the permission to carry out my dissertation and for his valuable guidance

and help. I express my sincere gratitude to Mr. Sreejith Damodar, Marketing

Manager, Reliance Retail, Kerala for sharing his knowledge and experience with

me. I also thank all the store managers and supervisors in Vazhakkala, edappally

and girinagar stores who supported me during the project work.

I wish to extend my profound gratitude to Mr. Jogy George, HOD, Department of

Business Administration, Marian College Kuttikkanam for his guidance and

valuable suggestions. I am highly indebted to Dr. K V Thomas, Department of

Commerce, Marian College Kuttikkanam for his valuable help and timely

encouragement in completing this study.

Last but not least, I thank God for his blessings which has helped in the endeavor.

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Executive Summary

A study on the development of turnaround plans for the sick units of reliance fresh was

conducted for a period of one month in the three reliance fresh outlets Edappally,

Girinagar and Vazhakkala ; Cochin; Kerala.

The subject was taken for study because Reliance fresh is the frontrunner in the retail

industry and the investments made by the firm in developing the standard of quality and

for the promotional mix is too high. Even though huge investments are made, some

outlets are recording constant decline in the customer footfall. Finding the root causes for

this decline in customer footfall is the area of my study and developing turnaround plans

for bringing back these stores into profit is the objective of my study.

Following are the root causes for the low customer footfall.

Firstly, the customer loyalty program of reliance fresh is not in the right track. Customers

have not yet felt that redeeming points collected in the reliance one card is beneficial to

them. They are least interested in discounts and something else has to be experimented as

benefits of redeeming points.

Secondly, Reliance Fresh is offering poor staff assistance. Customers often complain that

they don’t find adequate number of staffs required in the store. In this era of huge

competition in retail Industry. Customers prefer stores with quality and friendly service.

Thirdly, poor parking facilities has been identified as a big problem. Even though not

much can be done in rectifying this problem, security staffs should be trained to properly

manage the available parking lots and help the customers to park their vehicles.

Fourth is the poor billing counter efficiency which is the most prominent among all the

problems. What customers value the most in this era is their time. They hate waiting for

long in the queues in front of the billing counters. Proper allocation of experienced staffs

and scientific management of billing is the only way to rectify this problem.

Lastly, customers depend a lot upon competitors in the poor performing localities.

Reliance fresh has to curb this by making available more products and providing a very

customer friendly atmosphere which induces the customers to come back to the store for

more purchases.

Therefore, with the implementation of the above suggestive measures which management

has promised to take into consideration, reliance fresh will be able to gain what it has lost

to gain the market leader position in the grocery retail format, which thereby meets the

objectives of the study that leads to the success completion of the project study.

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CONTENTS

Chapter Title Page No.

Introduction 07

1 Literature Review 08

2 Company Profile 14

3 Research methodology 20

4 Data Analysis and 25

Interpretation

5 Findings and Suggestions 53

Conclusion 57

Appendix 1 58

Appendix 2 62

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Introduction

The retail industry is one of the fastest growing industries in India over the last few

years. Though initially, the sector was mostly unorganized, however with the

change of taste and preference of customers, the industry is getting more popular

and organized as well. With the growing demand, the industry is expected to grow

at a pace of 25-30% annually in the next five years. And not to forget, FDI to be

opened to 100% to 50% in single branded and multi branded is also an added

attractive feature in the scenario.

The huge growth potential has led many top notch national players like Reliance,

Birla, Tata and many others to take a big foot down in the industry that has led to a

tough head to head competition. Reliance fresh is a front runner in the retail

industry and it is performing very well in the present scenario. Even though the

total performance of reliance fresh is very well, certain stores are not performing

very well. These stores are called underperforming stores or sick stores. They are

called so because the customer footfall of those stores are very low.

The aim of this project is to find the reasons for the sickness of these stores and

develop certain turnaround plans for the revival of these stores.

Turnaround management is a process dedicated to corporate renewal. It uses

analysis and planning to save troubled companies and returns them to solvency.

Turnaround Management involves management review, activity based costing,

root failure causes analysis, and SWOT analysis to determine why the company is

failing. Once analysis is completed, a long term strategic plan and restructuring

plan are created. Turnaround management does not only apply to distressed

companies' it in fact can help in any situation where direction, strategy or a general

change of the ways of working needs to be implemented. Therefore turnaround

management is closely related to change management, transformation

management.

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CHAPTER-1

REVIEW OF LITERATURE

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Turnaround management is a process dedicated to corporate renewal. It uses

analysis and planning to save troubled companies and returns them to solvency.

Turnaround Management involves management review, activity based costing,

root failure causes analysis, and SWOT analysis to determine why the company is

failing. Once analysis is completed, a long term strategic plan and restructuring

plan are created. These plans may or may not involve a bankruptcy filing. Once

approved, turnaround professionals begin to implement the plan, continually

reviewing its progress and make changes to the plan as needed to ensure the

company returns to solvency.

The three key elements of any turnaround are financial restructuring, operational

restructuring and stakeholder management.

A turnaround practitioner will use skills in insolvency/corporate finance/audit;

management consulting/CFO; project management; negotiation & stakeholder

management; HR skills; financial modeling; as well as lateral thinking ability and

the ability to stay calm under pressure.

The key is to critically assess the troubled entity’s business plan and review profit

and loss to determine the causes of underperformance such as rising production

costs, loss of customers or increased competition. The work focuses around

improving cash flow, stabilizing operations, communicating with key stakeholders

to re-build their support, exploring all strategic options and developing a

comprehensive turnaround strategy.

The turnaround specialist will undertake strategic, financial and operational

reviews to identify areas of underperformance and then work with management to

implement strategies to improve the overall performance of the business.

Stages of Turnaround process

The various stages of the turnaround process are discussed in detail below as per S.

Chaudhary-

STAGE 1: DECLINE

Decline starts from firm equilibrium and reaches a nadir. Two theoretical

perspectives-

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K-Extinction- It suggests macro or external factors are responsible for the

decline.

R-Extinction- It suggests the decline in the firm is due to a reduction in

resources within the firm.

STAGE 2: RESPONSE INITIATION

Response Initiation is the stage where the firm’s performance reaches its nadir and

the management begins to take corrective actions. Categorization of Responses-

Strategic Responses involve changing or adjusting the businesses the firm is

currently involved in, like diversification, vertical integration, etc. It is used when

the decline is due to structural shift. Operating Responses focus on the way the

firm conducts its businesses like cost cutting, revenue generation, etc. It is used

when the decline is due to inefficiency.

STAGE 3: TRANSITION

According to S.Chowdhury, “a substantial amount of time has to pass before the

results of turnaround strategies show”. At this stage the firm experiments with

different strategies, structures, cultures and technologies. Also a turnaround is

undertaken with a definite purpose. According to some researchers, on an average,

performance improvement takes place after or around 7 years. For example, Ford

took four years to introduce its successful Sable line in response to its declining

market share.

STAGE 4: OUTCOME

At this stage, turnaround activities continue for a number of years. Here the

outcome of the activities undertaken during the third stage is realized. The fourth

stage involves determining whether a turnaround has been accomplished. The

measures used to determine the outcome are the same as those that are used to

identify the decline at the first stage of the turnaround.

Techniques used for Turnaround.

There are different techniques that can be applied to cause a repositioning. The

four main techniques are known as Retrenchment, Repositioning, Replacement and

Renewal.

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Retrenchment

The Retrenchment strategy of the turnaround management describes wide-ranging

short-term actions, to reduce financial losses, to stabilize the company and to work

against the problems, that caused the poor performance. The essential content of

the Retrenchment strategy is therefore to reduce scope and the size of a business

through Shrinking Selective Strategy. This can be done by selling assets,

abandoning difficult markets, stopping unprofitable production lines, downsizing

and outsourcing. These procedures are used to generate resources, with the

intention to utilize those for more productive activities, and prevent financial

losses. Retrenchment is therefore all about an efficient orientation and a refocus on

the core business. Despite that many companies are inhibited to perform cutbacks,

some of them manage to overcome the resistance. As a result they are able get a

better market position in spite of the reductions they made and increase

productivity and efficiency. Most practitioners even mention, that a successful

turnaround without a planned retrenchment is rarely feasible.

Repositioning

The Repositioning strategy, also known as entrepreneurial strategy, its main focus

is to generate revenue with new innovations and change in product portfolio and

market position. This includes the development of new products, entering new

markets, extrapolating alternative sources of revenue and modifying the image or

the mission of a company.

Replacement

Replacement is a strategy, where top managers or the Chief Executive Officer

(CEO) are replaced by new ones. This turnaround strategy is used, because it is

theorized that new managers bring recovery and a strategic change, as a result of

their different experience and backgrounds from their previous work. It is also

indispensable to be aware, that new CEO’s can cause problems, which are

obstructive to achieve a turnaround. For an example, if they change effective

organized routines or introduce new administrative overheads and

guidelines. Replacement is especially qualified for situations with opinionated

CEO’s, which are not able to think impartial about certain problems. Instead they

rely on their past experience for running the business or belittle the situation as

short-termed. The established leaders fail therefore to recognize that a change in

the business strategy is necessary to keep the company viable. There are also

situations, where CEO’s do notice that a current strategy isn’t successful as it

should be. But this hasn’t to imply, that they are capable or even qualified enough

to accomplish a turnaround. Is a company against a Replacement of a leader, could

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this end in a situation, where the declining process will be continued. As result

qualified employees resign, the organization discredits and the resources left will

run out as time goes by.

Renewal

With a Renewal a company pursues long-term actions, which are supposed to end

in a successful managerial performance. The first step here is to analyze the

existing structures within the organization. This examination may end with a

closure of some divisions, a development of new markets/ projects or an expansion

in other business areas. A Renewal may also lead to consequences within a

company, like the removal of efficient routines or resources. On the other hand are

innovative core competencies implemented, which conclude in an increase of

knowledge and a stabilization of the company value.

Necessity of turnaround management in Retail sector.

Retail sector is one of the most booming sectors of the world economy. Retail is

the sale of goods and services from individuals or businesses to the end user.

Retailers are part of an integrated system called the supply chain. A retailer

purchases goods or products in large quantities from manufacturers directly or

through a wholesaler, and then sells smaller quantities to the consumer for a profit.

Retailing can be done in either fixed locations like stores or markets, door to

door or by delivery.

Retailing done in fixed locations is now the biggest business in the world

economy. The sentence mentioned before is not an exaggeration because the

biggest corporate firm in the world in terms of revenue is ‘Wal-Mart’, a retail

business house.

Retail sector is booming in Indian economy also as giant players like Reliance and

Birla came out with their stores all over the nation. The whole process of retail

management is so complicated and there are possibilities that certain stores may

not be performing as well as other stores. And that is the greatest uncertainty of the

retail business as uniform performance from all the stores is not guaranteed. For

each store, there may be unique problems and challenges.

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Common Problems faced by Retail Stores.

Organized sector has only recently emerged from its nascent stage and yet has to

become a preferred career option for most of India’s educated class. The

roadblocks in the success of organized sector are:-

1. Talent shortage & lack of trained manpower.

2. Supply chains are not yet so efficient and the kind of quality that customers

demand is not being provided yet.

3. Inadequate infrastructure, such as roads, electricity, cord chains and posts,

hampers going for a pan-India network of supplies. Due to this, retailers have to

resort to multiple vendors for their requirements which are raising their costs and

prices.

FOOTFALL

According to Pietersz, “footfall is referred to the number of people visiting a shop

or a chain in a period of time.” It is an indicator to gauge the success of a

company’s marketing, brand and format, which brings people into its shops. If

studied the pattern of footfall, potential customers can be tracked and over time,

indication of their demand patters and trends can be analyzed so that business

process can be empowered to target with better focus and clarity in marketing and

tap in maximum sales potential. The key is to understand the customer behavior in

capturing the “buying opportunities” through footfall study to increase profits.

The reasons to determine and thereby study the footfall, as it aid in the following

crucial means which heads directly to the destination of increasing revenue and

sales:

Measuring the share of profits against buyers by site.

Analyzing visitor counts against conversion rates over time to identify

patterns.

Customer Relation Management.

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CHAPTER-2

INDUSTRY AND ORGANISATION PROFILE

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Industry Profile

Retailing is one of the biggest sectors and it is witnessing revolution in India. The

entrant in retailing in India signifies the beginning of retail revolution. Retailing

involves all activities incidental to selling to ultimate consumer for personnel

family and household use. It does this by organizing their availability relatively

large scale and supplying them to customers on a relatively small scale. Retailing

is any person/organization instrumental in reaching the goods or merchandise or

service to the end users. Retailer is a must and cannot be eliminated. The Indian

retailing industry is becoming intensely competitive, as more and more players are

targeting for the same customers. The major retail players are Pantaloons retail,

Shoppers stop and Reliance.

UNORGANIZED RETAILING IN INDIA:

In India, the most of the retail sector is unorganized. In India, the retail business

contributes around 11% of GDP. Of this, the organized retail sector accounts only

for about 4% share and the remaining share is contributed by the unorganized

sector which is mostly a family owned business in India. The main challenge

facing organized sector is the competition from unorganized sector. Unorganized

retailing has been there in India for centuries, these are named as mom and pop

stores. The main advantage in unorganized retailing is consumer familiarity that

runs from generation to generation. It is a low cost structure; they are mostly

operated by owners, has very low real estate and labour costs and has low taxes to

pay.

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ORGANIZED RETAILING IN INDIA:

In late 1990’s the retail sector has witnessed a level of transformation. Retailing is

perceived as a beginner and as an attractive commercial business for organized

business. I.e. the pure retailer is starting to emerge now. Organized retail business

in India is small but has tremendous scope. Organized retailing will grow faster

than unorganized sector and the growth speed will be responsible for its high

market share, which is expected to be $25 billion by 2015. Retailing will show

good prospects in cities like Mumbai, Delhi, Chennai, Kolkata, Bangalore and

Kanpur. After Dubai, Singapore and Hong Kong, in India Delhi will be the next

big retail destination, according to confederation of Indian industries whose

findings have shown that Delhi has the good resources and good conditions for the

retail sector. Out of the total earnings of the government of Delhi which is Rs.

11,000 crore, Rs. 6500 crore is achieved from Retail sector.

COMPANY PROFILE

RELIANCE RETAIL LIMITED

With a vision to generate inclusive growth and prosperity for farmers, vendor

partners, small shopkeepers and consumers, Reliance Retail Limited (RRL), a

subsidiary of RIL was set up to lead Reliance Group’s foray into organized retail.

Since its inception in 2006, Reliance Retail Limited (RRL) has grown into an

organization that caters millions of customers, thousands of farmers and vendors.

Based on its core growth strategy of backward integration, RRL has made rapid

progress towards building an entire value chain starting from the farmers to the end

customers. Reliance Retail continued to expand presence of its value and specialty

formats. During the year, Reliance Retail opened 90 new stores spanning across

‘value’ and ‘specialty’ segments. In store initiatives wider product choice and

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value merchandising enabled the business to achieve good growth during this

period.

Reliance is gearing up to revolutionize the retailing industry in India. Towards this

end, Reliance is aggressively working on introducing a pan-India network of retail

outlets in multiple formats.

A world class shopping environment, state of art technology, a seamless supply

chain infrastructure, a host of unique value-added services and above all,

unmatched customer experience, is what RRL is all about.

RRL has embarked upon an implementation plan to build state-of-the-art retail

infrastructure in India, which includes a multi-format store strategy of opening

neighborhood convenience stores, hypermarkets, and specialty and wholesale

stores across India. Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer and supplier.

RRL launched its first store in November 2006 through its convenience store

format ‘Reliance Fresh’. Since then RRL has rapidly grown to operate 590 stores

across 13 states at the end of FY 2007-08. RRL launched its first ‘Reliance Digital’

store in April 2007 and its first and India’s largest hypermarket ‘Reliance Mart’ in

Ahmadabad in August 2007. RRL has also launched its first few specialty stores

for apparel (Reliance Trends), footwear (Reliance Footprints), jewellery (Reliance

Jewels), books, music and other lifestyle products (Reliance Timeout), auto

accessories and service format (Reliance AutoZone) and also an initiative in the

health and wellness business through ‘Reliance Wellness’. In each of these store

formats, RRL offers a unique set of products and services at a value price point

that has not been available so far to the Indian consumer.

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RELIANCE FRESH

Reliance fresh is the convenience store format which forms part of the retail

business of Reliance Industries of India which is headed by Mukesh Ambani.

Reliance plans to invest in excess of Rs. 25000 crores in the next 4 years in their

retail division. The company already has in excess of 560 reliance fresh outlets

across the country. These stores sell fresh fruits and vegetables, staples, groceries,

fresh juice bars and dairy products. A typical reliance fresh store is approximately

3000 – 4000 square feet and caters to catchment area of 1- 2 km.

Reliance fresh falls under Reliance Industries. It is the first retail venture of the

group. Reliance industries has invested nearly Rs. 3,000 crores to expand the

reliance fresh stores. Reliance fresh directly buys stock from the farmers to cut

down on the wastage. The stores work on the ranger format which means selling of

fresh vegetables to the road sellers. Besides, the stores would provide direct

employment to 5 lakh young Indians and indirect job opportunities to a million

people, according to the company. The company also has plans to train students

and housewives in customer care and quality services for part-time jobs.

VISION, MISSION AND QUALITY POLICY

Vision: To generate inclusive growth and prosperity for farmers, vendor partner,

small shopkeepers and consumers.

Mission: Growth through value creation

Quality Policy: To deliver the best quality to the customer at lower price

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Ownership Pattern

Till Year 2002 reliance Limited was owned by Late Dirubhai Ambani but now it is

owned and governed by his elder son Mukesh Ambani. Thus it is a private limited

company.

Product range of Reliance Fresh.

The product range of reliance fresh is as follows: fruits and vegetables, household

items, confectioneries and beverages, groceries, dairy products, refrigerated

products, non-food FMCG.

SERVICES OFFERED

Customer loyalty program: Reliance has introduced a customer loyalty program

called R-One. This is a free membership card given to reliance fresh customers.

For each hundred rupee purchase the customer gets one point and one point equals

to 70 paise. And these points will be added into his account. For this he has to

swipe the loyalty card during billing. And after crossing a minimum limit of points

he will get gift vouchers from reliance.

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CHAPTER-3

RESEARCH METHODOLOGY

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Research methodology is a way to systematically solve the research problem. It

may be understood as a science of studying how research is done scientifically.

So every project should have a research methodology.

RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of

data in the manner that aims to combine relevance to the research purpose with

economy in procedure.

The data is collected from the three underperforming stores of reliance fresh in

Ernakulam viz. Vazhakkala, Girinagar and Edappally.

TITLE OF THE RESEARCH

“A study on the development of turnaround plans for the Sick units of

Reliance Fresh”.

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE:

1) To find out the reason for the poor footfall and sales in certain Reliance

Fresh Outlets.

Reliance fresh is one of the leading grocery store in India even though it

made the giant foot into the retail foray recently. Less than a decade, it

proved itself in being a market leader in terms of sales and profits.

Unfortunately some stores in kerala like the Reliance fresh in Edappally;

Girinagar, Kadavanthara; and Vazhakkala were not doing great because of

poor footfall that has pulled the store in achieving to its maximum potential

in terms of sales, which led my study into this direction.

2) Development of turnaround plans for stores with low customer footfall.

Finding out the reason is not the only object of my study. This project also

aims at developing feasible and effective turnaround plans to revive the sick

stores and bring them back into profit. My project insists on following the

repositioning strategy to bring changes in the operational aspects of the store

to improve the customer footfall.

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SECONDARY OBJECTIVEs:

To study the functioning of Reliance fresh outlet.

To know the consumer behavior towards stores of reliance fresh format.

To find out the influence of various promotional activities among customers.

To find out the level of satisfaction on overall quality of products in reliance

fresh

To study various ways to influence customer purchase and convert them into

sales.

Research Methodology

Nature and Population

The population consists of the residents of the nearby locality of the stores under

study and due to time constraints, only 325 customers from various outlets were

used for the study.

Sampling Technique

The method of sampling technique which I would like to use in this is structured

interview.

A structured interview (also known as standardized interview or a researcher –

administered interview) is a quantitative research method commonly employed

in survey research. The aim of this approach is to ensure that each interview is

presented with exactly the same questions in the same order. This ensures that

answers can be reliably aggregated and that comparisons can be made with

confidence between sample subgroups or between different survey periods.

The reason why I selected structured interview as my sampling technique is

because it provides less distorted information from the mind of the common

people. After all, retail industry is all about people and their satisfaction.

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Sample size

Location

Sample Size

Reliance Fresh, Edappally

100

Reliance Fresh, Girinagar

100

Reliance Fresh, Vazhakkala

100

Reliance Fresh, Kalamassery

25

Total

325

SOURCES OF DATA:

Data collection is a decisive step in the research process. Primary and secondary

data has been used in the course of study. The primary data are those data collected

fresh and for the first time and thus being original in character. The first hand data

need for the study was obtained from the Reliance customers and residents from

the nearby localities of the store

Secondary data is data collected by a third person and which already been passed

through the statistical tools. Secondary data have been collected from books,

magazines, reports and internet.

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LIMITATION OF STUDY

1. The sample size is 325, which is too minor compared to the large customer

base of the company. A higher sample size would have given a more

accurate picture due to the limitation of the time.

2. The consumer behavior is dynamic. Their responses can change from time to

time.

3. Customer’s response cannot be 100% reliable because of inaccurate

information caused due to vague memory.

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CHAPTER-4

ANALYSIS AND INTERPRETATION

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Table 1: Awareness of the customers about Reliance Fresh

Store Branches

yes

No

total

Edappally

100

00

100

Girinagar

100

00

100

Vazhakkala

90

10

100

Total

290

10

300

Interpretation

The survey clearly indicates that a complete positive reply was fetched for the question about

awareness. This shows that marketing strategies of reliance fresh has been fruitful and the brand name

Reliance fresh has reached to everyone. Awareness of existence is a big advantage for any retail store.

100% of the respondents replied yes for the question in edappally and girinagar but 10% of the

respondents were not aware of reliance fresh in vazhakkala. This is a different case from the other two

stores under the experiment group in which majority of the respondents were above middle class. So,

this shows that reliance fresh has some problems in reaching to the common man.

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Table 2: Customer loyalty

Store Branches

yes

no

total

Edappally

77

23

100

Girinagar

92

08

100

Vazhakkala

60

40

100

Total

229

71

300

Interpretation

Positive response was collected by the respondents for the question about customer loyalty 77%, 92%

and 60% of the respondents replied yes for the question about customer loyalty. In this question also,

vazhakkala is lagging a bit and the reason may be because of the financial differences of the residents of

vazhakkala. This chart gives an affirmation to the previous assumption that reliance fresh has some

problems in reaching to the common man.

Even though majority of the respondents were loyal to reliance fresh, most of them used to visit other

stores too. Even the loyal customers had complaints about reliance fresh.

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Table 3: Availability of leaflet

Store Branches

yes

no

total

Edappally

62

38

100

Girinagar

81

19

100

Vazhakkala

62

38

100

Total

205

95

300

Interpretation

Most of the respondents said that they are receiving the leaflets. The negative response may be because

they are not caring the leaflets. But the positive respondents had an opinion that the leaflets are not so

regular nowadays. Even though an average of 70% of the respondents are receiving the leaflets and still

the customer footfall is too low. This shows that the promotional mix of Reliance Fresh which unduly

concentrates on leaflets is not working properly. It is high time to think differently.

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Table 4: Awareness of ‘Reliance One Loyalty Card’

Store Branches

yes

no

total

Edappally

92

08

100

Girinagar

96

04

100

Vazhakkala

80

20

100

Total

268

32

300

Interpretation

Almost all the respondents were aware about the reliance one loyalty card and the meager portion of

respondents who were not aware of the reliance one card were the customers who were not so

frequent in visiting the store. This shows that the customer loyalty programs of reliance fresh are

successful and reaching to the customers. Even in the midst of very high positive responses regarding

the awareness of the customer loyalty program of reliance fresh, vazhakkala offered only 80% of

awareness which is a bit low compared to 92% and 96% of Edappally and Girinagar respectively. This

confirms that residents of vazhakkala lags a bit in the awareness part and new promotional techniques

has to be implemented to capture the attention of residents of vazhakkala who are financially

backwards comparing to the another two localities.

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Table 5: Possession of ‘Reliance One Loyalty Card’

Store Branches

yes

no

total

Edappally

62

38

100

Girinagar

85

15

100

Vazhakkala

80

20

100

Total

227

73

300

Interpretation

Most of the respondents possessed a reliance one card and majority among those who don’t possess

lost their cards. Even though majority of the respondents have a reliance one loyalty card, the customer

footfall is declining, this points on the fact that the Loyalty program of reliance fresh is not influencing

the customers to come back to the store.

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Table 6: How often points are redeemed?

Store Branches

Very Frequent

Frequent

Somewhat Frequent

Less Frequent

Total

Edappally

00

04

19

77

100

Girinagar

00

14

45

41

100

Vazhakkala

00

09

27

64

100

Total

00

27

91

182

300

Interpretation

Survey reports show that the customers are not so concerned about redeeming the points and

collecting the offers. More attractive offers should be announced for the collected points or else the

importance of Reliance one cards in the minds of the customers will lose. Girinagar is the only locality in

which frequent redeeming has come up to at least 2 digits i.e. 14%. This shows that the interests of the

customers has deviated from offers and discounts as benefits of collecting points. Other interests of the

customers should be satisfied and only this can make the customer loyalty program more active.

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Table 7: Awareness of offers and discounts

Store Branches

yes

no

total

Edappally

63

37

100

Girinagar

69

31

100

Vazhakkala

64

36

100

Total

196

104

300

Interpretation

Awareness of offers and discounts have a very similar graph line throughout the three localities

under experiment. Most of the respondents here were aware of the different offers of reliance

fresh but the respondents generally were less concerned about the offers.

They were more concerned about facilities offered by the store.

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Table 8: Need for door delivery system

Store Branches

yes

no

total

Edappally

33

67

100

Girinagar

35

65

100

Vazhakkala

10

90

100

Total

78

222

300

Interpretation

Majority of the respondents were not interested in introducing door delivery system and they had the

opinion that the shop is near and accessible. So it is affirmative that the location of the store is not the

reason for its low customer footfall. Only an average of 26% has opted for door delivery system

combining the three localities while the rest of the respondents had the opinion that the location of the

store is convenient and accessible.

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Table 9: Product identification and ease of purchase

Store Branches

yes

no

total

Edappally

63

37

100

Girinagar

77

23

100

Vazhakkala

91

09

100

Total

231

69

300

Interpretation

Even though majority of the respondents replied positively for the question about product identification

the customers were not fully satisfied about the comfort of identifying products in the store. Constant

changes in the planogram of the store is considered as a drawback. This along with the congestion of

the store is making problems for older customers which is the majority in edappally and girinagar region.

91% of the customers have responded that purchasing is easy in Vazhakkala region. Only 63% and 77%

have responded positively for ease of purchase in edappally and girinagar. When this is viewed along

with the fact that vazhakkala store is bigger than the others, it is affirmative that store size is an

important determinant of “ease of purchase”.

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Table 10: Quality of Products

Store Branches

Excellent

Satisfactory

Poor

Total

Edappally

74

26

00

100

Girinagar

88

12

00

100

Vazhakkala

80

10

10

100

Total

242

48

10

300

Interpretation

Excellent response was collected from the respondents for the question about Product quality. Majority

of them rated the product quality of reliance fresh stores as excellent. 74%, 88% and 80% of the

respondents respectively in edappally, Girinagar and vazhakkala localities rated the product quality as

excellent. So, product quality is not a reason for the underperformance of these stores.

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Table 11: Staff assistance

Store Branches

Excellent

Satisfactory

Poor

Total

Edappally

48

22

30

100

Girinagar

88

08

04

100

Vazhakkala

27

18

55

100

Total

163

48

89

300

Interpretation

Mixed results have been obtained for the question about the quality of staff assistance. Very high

positive response for the girinagar store is a contradictory to the negative response in vazhakkala store.

In depth analysis shows that there is an inverse relationship between shop size and quality of staff

assistance. This may be because as the floor space increases, customers might have felt a lack of

adequate staffs. Many of the customers had the complaint that there is not enough staffs in the store

and they find difficulties in weighing staples like sugar.

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Table 12: Parking Facilities

Store Branches

Excellent

Satisfactory

Poor

Total

Edappally

11

30

59

100

Girinagar

08

24

68

100

Vazhakkala

25

33

42

100

Total

44

87

169

300

Interpretation

Poor parking facilities has been identified as one of the major reason for the underperformance of the

reliance fresh store. Majority of the respondents are with the opinion that the parking facilities of

reliance fresh are below par. This issue is one among the major reasons for the low customer footfall in

the stores.

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Table 13: Billing Counter Efficiency

Store Branches

Excellent

Satisfactory

Poor

Total

Edappally

04

67

29

100

Girinagar

04

50

46

100

Vazhakkala

00

27

73

100

Total

08

144

148

300

Interpretation

Billing counter inefficiency is the major problem of all the three stores. Most of the customers were

complaining too much about the time they are losing in the long Queues in front of the billing counters.

Many of the customers said that they are reluctant to purchase from reliance fresh in fear of waiting a

lot. Billing counter delay is extreme in vazhakkala as 73% of the customers rated the billing counter

efficiency of reliance fresh as poor. Only a meagre 3% of the total sample size rated the billing counter

efficiency as excellent.

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Table 14: Dependence on other stores

Store Branches

yes

no

total

Edappally

63

37

100

Girinagar

60

40

100

Vazhakkala

70

30

100

Total

193

107

300

Interpretation

63% of respondents in edappally, 60% of respondents in girinagar and 70% of respondents in vazhakkala

depend on other stores too for purchases. This is a clear indication that reliance fresh has failed to

obtain a clear market position in these localities and the promotional mix of reliance fresh has some

faults. These store are in need of some turnaround plans to bring back them into profit.

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Table 15.1: Major Competitors in Edappally

Stores

Preferred customers

Koya’s store

25 (40%)

Mithra Mart

22 (35%)

Big Bazaar

6 (10%)

Other local stores

10 (15%)

Total

63 (100%)

Interpretation

The survey points that majority of the respondents, i.e. 40% depend upon a local organized store named

koya’s store in edappally. The store is established years ago and many of the respondents have an

emotional attachment to that particular store. The second biggest competitor is Mithra mart with a

market share of 35% who outruns reliance fresh in respect of size and number of staffs. The

respondents from edappally also depended upon other local stores and Big Bazaar.

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Table 15.2: Major Competitors in Girinagar

Stores

Preferred customers

Spencers

26 (44%)

Supplyco

10 (17%)

Ashis

8 (13%)

Other local stores

16 (26%)

Total

60 (100%)

Interpretation

The survey points that majority of the respondents i.e. 44% depend upon spencer's which is a bigger

store in Girinagar. The store is bigger and offers faster billing facilities. Residents of girinagar then

depend upon other local kiranai shops than any other super markets. They said that they get their

products faster in these small stores even though they have to sacrifice in the quality part.

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Table 15.3: Major Competitors in Vazhakkala

Stores

Preferred customers

Priyom Mart

18 (26%)

Run 4 U

6 (09%)

Fathima’s Store

10 (13%)

Margin free market

12 (17%)

Other local stores

24 (34%)

Total

70 (100%)

Interpretation

34% of the customers are depending upon the local stores which are plenty in number in vazhakkala.

These local unorganized stores are having the major market share of vazhakkala. Local stores are

followed by Priyom Mart which has more availability of products and offers and better staff assistance.

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Figure 1: Major problems suggested by respondents in Edappally

Interpretation

Among the major drawbacks suggested by the respondents, congestion in the store and billing counter

delay occupied prominent places. Many customers had the suggestion to increase the shop space and

employ more staffs in billing counters on peak time.

Conclusion

Edappally is a location with lot of apartments and residential colonies. Majority of the respondents were

above middle class. Such that they are not concerned of the offers and discounts of reliance fresh. Most

of them are very busy employees who don’t have enough time to compare the offers of different stores.

What they prefer is quality service. They give great value for time and comfort. Faster billing and an

increase in shop space can make the Edappally store profitable.

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Figure 2: Major problems suggested by respondents in Girinagar

Interpretation

Among the major drawbacks suggested by the respondents, congestion in the store, Poor parking facility

and non-availability of products occupied prominent places. Many customers had the suggestion to

increase the shop space and employ more staffs in billing counters on peak time. More availability of

products was recommended by the respondents.

Conclusion

Girinagar is a residential hub of Cochin City. Most of them reside in independent houses. Majority of the

respondents were rich and old aged couples. They prefer better facilities and more space than offers

and discounts. They are least concerned about loyalty card, points and other facilities. They require

more availability of products and quick and easy service.

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Figure 3: Major problems suggested by respondents in Vazhakkala

Interpretation

Staff assistance is identified as the only major problem of the reliance fresh store in vazhakkala. Even

though poor parking facilities, and constant changes in planograms were raised as problems. Staff

assistance was the major complaint. 80% and 70% of the customers were having complaints about lack

of adequate staff and billing counter inefficiency respectively. Non acceptance of sodexo, a discount

pass for employees was also pointed out as a drawback.

Conclusion

Vazhakkala is a region of residents with variety of natures and characteristics. Most of them requires

more customer friendly atmosphere in the store. Residents are satisfied and happy about the facilities

offered by vazhakkala store but they complain about staff assistance. It is also identified that the

exclusive offers provided by the local kiranai shop owners are a threat to the business of vazhakkala

store of reliance fresh.

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Common Problems Identified

In all the three stores, few customers are concerned about redeeming points. If the customer

loyalty program has to be effective, more customers should feel the importance of redeeming

points and the passion to collect points bring them back to the store.

Programs like elite club members, Special prizes for high points earning customers, Attractive

benefits for maximum redemption etc… should be introduced.

Staff assistance is a problem except for girinagar store. Lack of adequate staff is a common

complaint of the customers. More number of staffs should be appointed in the stores and

unique tasks should be entitled to each staff.

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The problem is that the existing staffs do not have a clear idea of their task. Each employ should

be assigned with a particular task and other employees should be trained take the customer to

the particular employee who can meet their requirement.

Poor parking facilities is identified as a major and common problem for all the sick stores. In a

city like Cochin, parking facility is a limitation which can’t be avoided. The only thing we can do is

to use the available space effectively. Staffs should be appointed to manage the car parking

facility. This allows more vehicles to be parked and reduces the inefficiency in parking facility.

Billing counter inefficiency, is identified as the most prominent among the drawbacks of the

reliance fresh stores. Most of the customers are reluctant to purchase from reliance fresh due to

the time they are losing in the long queues for billing.

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Experienced staffs should be appointed in the billing counters, and all the counters should be

working all the time. Express counters should be introduced for those customers with less than

5 or 10 items. Billing should be treated more scientifically and seriously, or else reliance fresh

will lose their valuable customers.

Majority of the respondents from the stores under experiment group are depending on other

stores too. Since the competition is too high. Reliance fresh will not be able to capture the major

market share without market positioning.

Customers are generally in need of better facilities, quality service and best products. Retail

stores generally are more concentrating on promotional mix and discounts. Instead of this,

experimenting on increasing the quality of service can bring more customers to the store.

49 | P a g e

Control Group Comparison

Interpretation

It is clear that Kalamassery store is way ahead of vazhakkala and edappally stores

in the case of staff assistance. This confirms that in edappally and vazhakkala

store, staff assistance is one among the many reasons for the low customer

footfall. Better staff assistance has lead kalamassery store into a profitable

position.

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Interpretation

Customers have very good opinion about the parking facilities of kalamassery

store. This may be the reason why customers residing in edappally also take pain

to ride to kalamassery and purchase items from there. So, the comparison

confirms that offering better parking facilities can improve the customer footfall

of the stores under experiment.

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Interpretation

The survey reports of kalamassery store very well describes why the customer

footfall of kalamassery store is way ahead of the three underperforming stores. It

is hereby proved that offering better billing facilities can improve the

performance of the store. Even respondents from edappally had the opinion that

they prefer kalamassery store than the store in their locality because of the faster

billing.

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Interpretation

Kalamassery store has less percentage of customers depending upon other stores.

This shows that the above mentioned problems are the real reasons for the low

customer footfall in edappally, girinagar and vazhakkala. When compared with

kalamassery store, respondents gave a comparatively positive response for many

aspects including dependence on other stores.

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CHAPTER-5

FINDINGS, SUGGESTIONS &

CONCLUSION

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Findings

After the survey and detailed explanation of the reasons for the low customer footfall in the edappally, girinagar and vazhakkala stores of reliance fresh. The major findings of the survey is that:

1. Customers are more interested in better and quality service than

offers and discounts.

2. Customer loyalty program of reliance fresh through the reliance

one card is not much effective.

3. Reliance one card has not yet become a major reason for the

customers to come back to reliance fresh.

4. Staff assistance of reliance fresh stores are not up to the

expectations of the customers.

5. Poor parking facilities is also a reason for the low customer footfall

in the sick stores.

6. Billing counter inefficiency is identified as the major and most

common reason for the low customer footfall in all the three stores

under the study.

7. Congestion has made the customers reluctant to purchase from the

edappally and girinagar store.

8. Reliance fresh has not yet been able to establish clear monopoly in

any of the localities under study.

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SUGGESTIONS

(TURNAROUND PLANS)

For bringing back the sick stores into profit, reliance fresh has to layout some

turnaround plans immediately. Following are some of my suggestions based on my

findings:

1. Market Positioning

Retail industry in India is filled with giant players. It is a business with lot of

competition, the customers are having variety of options in front of them.

Customers prefer those stores who give them quality service. The contradictory

factor is that almost all of the retail stores are concentrating more on promotional

mix like leaflets, sms, special offers, discounts etc… huge amount is spend by

reliance fresh also on this. Since all the stores are offering the same, this kind of a

promotional mix is not giving any specialty to reliance fresh. Instead of spending

more on the promotional mix, reliance fresh should concentrate more on ‘market

positioning’. The survey clearly points that the customers are more interested in

better and faster service. If reliance fresh can position themselves in the market as

a retail store with faster billing, better and friendly staff assistance and enjoyable

shopping experience, it can bring in more customers to reliance fresh. After all in

this era of ‘caveat vendor’ (seller beware- Marketing concept). Business is all

about satisfaction of customers.

2. Satisfying the Esteem needs of customers. According to Maslow’s theory of motivation, the fourth need of a human being is

Esteem Need. Even after introducing lot of offers on the customer loyalty points,

collecting points and redeeming it has not yet become so important for the

customers. The major reason for it is that the customers are not interested in getting

a few amount as discount after collecting so many points. All human beings like

being accepted and valued, i.e. esteem need. Reliance fresh has to exploit this

esteem need of human beings. Instead of giving discounts on points, customers

who collected more points should be made felt that they are being valued.

Introducing programs like elite club membership for high point collectors, offering

up gradation to VIP cards for customers with high points. Sending personalized

greeting letters to loyal customers on festivals etc… make the customers feel that

they are valued and this satisfies their esteem need. This can attract the customers

to the store and probability of customers becoming more loyal increases.

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3. Using Express Counters for faster billing

In order to avoid one of the major drawbacks of reliance fresh i.e. the billing

counter inefficiency, what can be done is implementing a structurally arranged

billing procedure. Express counters should be implemented for those customers

with less than 10 items. This will prevent the drain of customers who fear of losing

time. Experienced staffs should be appointed in the billing counters and their task

should be exclusively billing only. In peak hours the store manager should be

always position him selves near the billing counters to meet any kind of

emergencies. Separate counters should be installed for different amount of

purchases. For e.g.: express counters for less than 10 items, counter for 1 box,

counter for more than 1 box etc…

4. Task fragmentation

Poor staff assistance has been identified as a problem in the stores especially in

edappally and vazhakkala stores. Appointing adequate number of staffs should be

the immediate response but the available staffs should be used more scientifically.

Task fragmentation should be implemented in the store i.e. each employee should

be assigned with a particular task. Customers should never feel the lack of staff and

the employees should be trained to guide the customer to the staff who can meet

his requirement. Offering good staff assistance can make the customers feel to

come back to the store.

5. Manage parking lots

Poor parking facility is a limitation which can’t be avoided in a city like Cochin.

The only thing that can be done is managing the parking facilities more effectively.

Security staffs should be trained to manage the available parking lots properly such

that maximum number of vehicles can be accommodated.

6. Zero space wastage

Another big problem of the low performing stores is congestion. The problem do

not have standing solutions for small stores such as edappally and girinagar other

than increasing the shop space. The only thing that can be done is reducing the

space wastage to the maximum extend. Unnecessary items like cartons and other

wastes should be immediately removed from the shop floor and a feel of

congestion should be avoided to the maximum extend.

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Conclusion

The three underperforming stores i.e. edappally, girinagar and vazhakkala were

considered as the experiment group and the better performing kalamassery store

was taken as the control group. The common problems identified earlier were

compared with the results obtained from the survey in kalamassery locality. The

control group comparison has given firm and proved results that Poor Quality of

Staff assistance, poor parking facilities, Billing counter inefficiency and

dependence on other stores are the major reasons for the low customer footfall in

the stores under the experiment group.

The project work has given an insight about the interests and expectations of the

customers of a retail store. It is identified that the marketing strategies of Reliance

fresh has certain flaws. The present promotional strategy of over concentration to

price mix should be changed and importance should be given to the facilities

offered in the store. A new kind of market positioning is inevitable and blindly

believing that people need lower prices will affect the business. Because the

customers in the new era are ready to pay for service and convenience.

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Appendix I

A Survey on the reasons for the sickness of Reliance Fresh Stores

Name: Place of residence:

Age: Family Members:

Sex: Employed Family members:

Monthly income: Occupation:

Awareness

1) Are you aware about the Reliance Fresh store near your locality?

Yes No

2) How do you know about reliance Fresh?

Press ads Leaflets Word of mouth others

3) Are you a loyal customer of Reliance fresh?

Yes No

4) Are you getting the leaflet regularly on Wednesday, Saturday and Sunday?

Yes No

5) Are you aware of the Reliance One Loyalty card offered in Reliance stores?

Yes No

6) Do you possess a Reliance One Loyalty card?

Yes No

7) How often do you redeem your points in Reliance One Loyalty card?

Very frequent frequent somewhat frequent Less frequent

8) Are you aware of the different offers provided by reliance fresh?

Yes No

9) Do you try to grab the opportunity when special offers are announced?

Yes No

Accessibility

1) Do you often visit the reliance fresh store near your locality?

Yes No

2) If yes, how often do you make purchases from reliance fresh?

Always Weekly Monthly Occasionally

3) Do you think a door delivery system is to be adopted by reliance fresh?

Yes No

4) Are you ready to pay a little amount extra as a fee for door delivery?

Yes No

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5) Is the Reliance fresh store near you located in a convenient and accessible location?

Yes No

Store Performance

1) Is product identification and purchasing easy in Reliance fresh store near you?

Yes No

2) Is it easy to read the product promotion hoardings kept in Reliance fresh?

Yes No

3) How do you rate the quality of the products in the Reliance fresh store near you?

Excellent Satisfactory Poor

4) How do you rate the staff assistance of Reliance fresh in your locality?

Excellent Satisfactory Poor

5) Do they possess required knowledge of products and other facilities of the store?

Yes No

6) Are they ready to help you?

Yes No

7) How do you rate the parking facilities of the Reliance fresh store near you?

Excellent Satisfactory Poor

8) How do you rate the billing counter efficiency of Reliance Fresh?

Excellent Satisfactory Poor

9) Which category of products in reliance fresh is you most attracted?

Vegetables FMCG Stationary Staples

Competition

1) Do you depend upon any other stores for your purchases than Reliance fresh?

Yes No

2) If yes, which store do you depend more?

More 4 U Big Bazaar Margin free markets

Local Stores (organized) Local Stores (unorganized) others

3) Why do you prefer that particular store than reliance?

………………………………………………………………………………………………

……………………….............................................................................................................

....................…………………………………………………………………………………

……………………………………………………………………………………………….

.

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4) How do you rate the offers and discounts in Reliance fresh compared to others stores in

your locality?

Excellent Satisfactory Poor

Mind set of customers

1) Are you comfortable with the facilities offered by reliance fresh?

Yes No

2) If no, what all are the shortcomings?

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

3) Do you think reliance fresh is a better replacement for the nearby mom and pop store?

Yes No

Unique problem of sick store

1) Do you prefer any other reliance fresh store than the store in your locality?

Yes No

2) If yes, why do you prefer the other one than the store in your locality?

………………………………………………………………………………………………

………………………………..……………………………………………………………

…………………………………………………………………..…………………………

…………………………………………………………………………………………….

3) What do you think is the major drawback of the reliance fresh store in your locality?

………………………………………………………………………………………………

………………………………...……………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

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Customer response

1) Please provide your suggestions and expectations to help Reliance fresh function better.

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

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………………………………………………………………………….

*****************************THANK YOU*******************************

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Appendix II

Kotler Philip; Armstrong Gary (2006). Principles of Marketing (6th

edition ed.). Dorling Kindersley Pvt. Ltd.

http://www.tenzor.co.uk/topic/corporate-turnaround/

Saunders M Lewis & Thornhill A (1999). Research Methods for

business studies (3rd Edition ed.). Financial Times/Prentice Hall.

Tom Lenahan (January 2, 2006). Turnaround, Shutdown and

Outage Management: Effective Planning and Step-by-Step

Execution of Planned Maintenance Operations

http://www.amazon.com/Managing-Maintenance-Shutdowns-

Outages-Levitt/dp/083113173X/ref=pd_sim_b_1/184-4506131-

9471524

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

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