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Reliance Fresh vs more Final

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Reliance Fresh vs more Final

  1. 2. Agenda <ul><li>Merchandising </li></ul><ul><li>Retail Mix </li></ul><ul><li>Importance of retail mix </li></ul><ul><li>Retail Mix: Reliance Fresh v/s more. </li></ul><ul><li>Conclusion </li></ul>
  2. 3. What is merchandising? <ul><li>Merchandising is the methods , practices and operations used to promote and sustain certain categories of commercial activities. </li></ul><ul><li>It means maximizing merchandise sales using product design, selection, packaging, pricing and display that stimulates consumers to spend more . </li></ul>
  3. 4. CHOOSING THE RETAIL MIX Target Market Product Price Promotion Place Personnel Presentation
  4. 5. Importance of retail mix <ul><li>Placing products at the right place gives them higher visibility </li></ul><ul><li>Good customer service is very important in order to retain a customer </li></ul><ul><li>Store location is an essential factor as if the store is at an inconvenient location, it may reduce the number of customers visiting it </li></ul><ul><li>Good promotion and pricing of products increases the volume of sales </li></ul>
  5. 6. PRESENTATION (COMMUNICATION) OF THE RETAIL STORE Employee Type & Density Merchandise Type & Density Fixture Type & Density Sound Odors Visual Factors Factors in Creating Store’s Atmosphere
  6. 7. How many How knowledgeable How helpful / invasive Fit the image of the product Good personal sellers Factors in Personnel decisions PERSONNEL OF THE RETAIL STORE
  7. 8. RETAILING STRATEGY-PRICING <ul><li>Use Everyday Low Pricing </li></ul><ul><li>Benchmark or Signpost Items – </li></ul><ul><li>items used by consumers as an index </li></ul><ul><li>of overall price level of the store </li></ul><ul><li>I.e. – “How much do they sell T shirts for?” </li></ul><ul><li>Allow for Shrinkage and discounting </li></ul><ul><li>OR </li></ul><ul><li>How much mark-up? </li></ul>
  8. 9. RETAILING STRATEGY - LOCATION <ul><li>Central Business District </li></ul><ul><li>Regional Shopping Centers </li></ul><ul><li>Strip Location </li></ul><ul><li>Multichannel Retailers </li></ul><ul><li>Anchor Stores </li></ul><ul><li> Parasites </li></ul><ul><li>Destination stores </li></ul><ul><li>Power centers </li></ul>Freestanding Store Shopping Center Tenant Mall Tenant
  9. 10. Important terms <ul><li>Variety: It represents the number of merchandise categories a retailer offers. It is also referred to as breadth of merchandise </li></ul><ul><li>Assortment: It is the number of different items in a merchandise category </li></ul><ul><li>SKU (stock keeping unit): It is each different item of merchandise </li></ul>
  10. 11. Breadth versus depth of merchandise lines
  11. 12. Retail Mix <ul><li>Reliance Fresh </li></ul><ul><li>v/s </li></ul><ul><li>More </li></ul>
  12. 13. Reliance Fresh <ul><li>Reliance Retail Limited (RRL), a subsidiary of the Indian conglomerate Retail Industries Limited, launched its first convenience store in November 2006. </li></ul><ul><li>RRL has grown rapidly and operates over 900 stores across 80 cities in 14 States, which include over 750 Reliance Fresh stores. </li></ul><ul><li>Reliance Fresh is the convenience store format which forms part of the retail business of Reliance Industries of India . </li></ul><ul><li>It is positioned as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT and wellness , with food accounting for the bulk of the business. </li></ul>
  13. 14. Place <ul><li>Generally located in small commercial complexes close to 3-4 big residential areas </li></ul><ul><li>Observation: found close to ‘Crossroads’ </li></ul><ul><li>Enjoy a clear view from the road </li></ul>
  14. 15. Promotion <ul><li>The main idea behind every effort is to make a bulk purchase </li></ul><ul><li>Saturday and Sunday are considered as discount and scheme day </li></ul><ul><li>Two types of offer: </li></ul><ul><ul><li>BOGO </li></ul></ul><ul><ul><li>BXGY </li></ul></ul><ul><li>Rebates and Premiums focusing on bill value </li></ul><ul><li>Audio visual tools been employed </li></ul>
  15. 16. Product <ul><li>Strictly vegetarian </li></ul><ul><li>Product Mix consists of Fresh Fruits, Vegetables, Dairy products, Frozen Items, Groceries, cosmetics and Daily Use products </li></ul><ul><li>Less Assortment but focus on specific product categories like vegetables, dairy products, detergents, fruits and daily use items </li></ul>
  16. 17. Presentation <ul><li>The pure foods convenience store model of Reliance Fresh requires far less space than a full-fledged supermarket </li></ul><ul><li>Most of these outlets need around only 2,000-5,000 sq. ft </li></ul><ul><li>Simple, colorful but cramped </li></ul><ul><li>Separate entry and exit point </li></ul><ul><li>Chocolates and other kids items were nearby cash counter </li></ul><ul><li>Vegetables and Fruits items were in display near entry gate </li></ul>
  17. 18. Pricing <ul><ul><li>Low prized Private labels </li></ul></ul><ul><ul><li>Discount on bulk buying </li></ul></ul><ul><ul><li>Measures taken to reduce the length of Supply Chain thereby purchase directly from farmers, which is in turn sent to distribution centre. </li></ul></ul><ul><ul><li>Two times supply of vegetable and fruits daily to ensure “fresh” </li></ul></ul>
  18. 19. Personnel <ul><li>2 shift staff for small stores and 3 shift staff for larger ones </li></ul><ul><li>5 to 6 sales persons per shift </li></ul><ul><li>Staff uniform: red, green and blue </li></ul><ul><li>1 week training given to staff </li></ul><ul><li>Amiable staff but poorly informed </li></ul>
  19. 20. Private labels <ul><li>Reliance Fresh: </li></ul><ul><li>Reliance Fresh’s shelves provide an indication that the group is looking for higher margins. Most of the staples are under its own private label brand — ‘ Reliance Select’. </li></ul><ul><li>Excepting a few packets of Nestle’s Maggi, or MTR’s masalas or Pepsi’s Lays chips, there is very little shelf space given to the big brand owners in the country. </li></ul><ul><li>Reason: private labels offer far better profit margin to the retailer than branded products of FMCG companies. </li></ul>
  20. 21. more. <ul><li>Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, a USD 28 billion Corporation. The Company ventured into food and grocery retail sector in 2007 with the acquisition of a south based supermarket chain. </li></ul><ul><li>more.  supermarkets cater to the daily, weekly and monthly shopping needs of consumers. </li></ul><ul><li>Currently the group has a national presence </li></ul><ul><li>The store, has been aptly named more. As it promises to change the everyday shopping experience for consumers </li></ul>
  21. 22. Place <ul><li>Generally more. is located in a series of conveniently located neighbourhood supermarkets </li></ul><ul><li>Currently it has 18 stores in Ahmedabad </li></ul><ul><li>Located in areas of high footfalls like movie theatres, shopping malls, restaurants, etc. </li></ul>
  22. 23. Promotion <ul><li>Large size promotional offer banner at the entrance </li></ul><ul><li>Special offers on private labels displayed near the entrance </li></ul><ul><li>Audio – visual promotion of private label products </li></ul><ul><li>New concept: </li></ul><ul><ul><li>Color Slips based on product pricing </li></ul></ul><ul><ul><li>Introduction of $ store concept </li></ul></ul><ul><ul><li>Promotional schemes combined with vodafone </li></ul></ul><ul><ul><li>Mobile store kiosk - parasite </li></ul></ul><ul><ul><li>Attractive offer names like ‘July mein Dhulai’ </li></ul></ul>
  23. 24. Product <ul><li>The product offerings of the more supermarkets include a wide range across fresh fruits and vegetables, groceries, personal care, home care, general merchandise and a basic range of apparels </li></ul><ul><li>Hypermarket stores also have a strong emphasis on general merchandise and apparels </li></ul><ul><li>more. also has a range of products from its own stable available across value, premium and select ranges </li></ul><ul><li>Variety is a promise delivered across the store </li></ul>
  24. 25. Price <ul><li>Private label products were marked down by a substantial margin </li></ul><ul><li>Intelligent pricing strategies for private labels were defined so that customers could not compare with usual goods </li></ul><ul><li>promises best in market pricing. Linking up directly with farmers to source fresh fruits, vegetables and staples ensure great quality as well as great price </li></ul><ul><li>the membership program Clubmore., which provides convenience, customised shopping solutions and savings </li></ul>
  25. 26. Presentation <ul><li>bright and clean stores, at convenient locations with layouts that allow ease of navigation </li></ul><ul><li>The product display is well organised and facilitates ease of choice </li></ul><ul><li>The stores have been designed by Fitch, the leading international retail design firm </li></ul><ul><li>Separate entry and exit points </li></ul><ul><li>Higher air conditioning levels at the front end of the store </li></ul>
  26. 27. Personnel <ul><li>2 staff shifts: 7am to 4pm & 1pm to 10:30pm </li></ul><ul><li>Staff density higher in first shift = 11 as compared to 20 in the second shift </li></ul><ul><li>Co operative and well informed </li></ul><ul><li>Staff uniform- orange and black </li></ul>
  27. 28. Private Label <ul><li>Aditya Birla ‘More’ strategy to offer budget and high value private label offerings under brand names Value, Select and Premium ensure that more </li></ul><ul><li>Product name: Feasters </li></ul><ul><li>Packaging: very similar to the branded counterpart </li></ul><ul><li>Placement: alongside the branded counterpart to confuse the customer </li></ul><ul><li>Pricing: significant price difference </li></ul><ul><li>Promotion: color slips promotions strategized to indulge customer in private label purchase </li></ul><ul><li>Audio video promotion done only for private labels </li></ul>
  28. 29. Conclusion <ul><li>Both the retail giants do not vary much in their offerings and image </li></ul><ul><li>It may be possible in the near future that they are left with no differentiation but still create a loyal customer base for themselves </li></ul><ul><li>According to analysts, in the long run, this would develop niche markets for them </li></ul>

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