ASSIGNMENT 2

(GROUP)
Study on
Customer
Relationship
Management
towards Reliance
Retail Ltd
CUSTOMER Kreepa Shankar Chowrasia
(A-36)
RELATIONSHIP MBA – General, Section A

MANAGEMENT
Submitted To: Dr. Garima Malik
 INTRODUCTION

1.1 BACKGROUND

The CRM is a new technique in marketing where the marketer tries to develop long-term

relationship with the customers to develop them as a lifetime customer. CRM aims to

make the customer climb up the ladder of loyalty.

The company first tries to determine who are likely prospects i.e. the people who have a

strong potential interest in the product and ability to pay for it. The company hopes to

convert many of its qualified prospect into first time customers and then to convert those

first-time customers into repeat customers. Then the company tries to convert these repeat

customers into clients – they are those people who buy only from the company in the

relevant product categories. The next challenge for the company is to convert these clients

into advocates. Advocates are those clients who praise the company and encourage others

to buy from it.

The ultimate challenge is to convert these advocates into partners where the customers

and the clients work actively together to discover ways of getting mutual benefit. Thus, in

CRM the key performance figure is not just current market share but share of lifetime

value by converting customers into partners.

In CRM, a company tries to identify that small percentage (20%) of key account holders

whose contribution to the company revenues is high (80%). Therefore, from this point of

view, CRM can also be called as Key Account Management.

1.2 INDUSTRY PROFILE

Indian market has high complexities in terms of a wide geographic spread and distinct

consumer preferences varying by each region necessitating a need for localization even

within the geographic zones. India has highest number of outlets per person (7 per

thousand) Indian retail space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world

Indian retail density of 6 percent is highest in the world. 1.8 million households in India

have an annual income of over 45 lakh (US$91,260).

Delving further into consumer buying habits, purchase decisions can be separated into

two categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators,

washing machines, dishwashers, microwave ovens and DVD players fall in the status

category. Indulgence-oriented products include plasma TVs, state-of-the-art home theatre

systems, iPods, high-end digital cameras, camcorders, and gaming consoles. Consumers

in the status category buy because they need to maintain a position in their social group.

Indulgence-oriented buying happens with those who want to enjoy life better with

products that meet their requirements. When it comes to the festival shopping season, it is

primarily the status-oriented segment that contributes largely to the retailer’s cash

register.

While India presents a large market opportunity given the number and increasing

purchasing power of consumers, there are significant challenges as well given that over

90% of trade is conducted through independent local stores.

Challenges include: Geographically dispersed population, small ticket sizes, complex

distribution network, little use of IT systems, limitations of mass media and existence of

counterfeit goods.
1.3 RETAILING FORMAT IN INDIA

Malls:

The largest form of organized retailing today. Located mainly in metro cities, in

proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They

lend an ideal shopping experience with an amalgamation of product, service and

entertainment, all under a common roof. Examples include Shoppers Stop , Lifestyle and

Pantaloon.

Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword,

RPG’s Music World and the Times Group’s music chain Planet M, are focusing on

specific market segments and have established themselves strongly in their sectors.

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP

through selling in bulk reaching economies of scale or excess stock left over at the season.

The product category can range from a variety of perishable/ non-perishable goods.

Department Stores:

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs.

Further classified into localized departments such as clothing, toys, home, groceries, etc.

Departmental Stores are expected to take over the apparel business from exclusive brand

showrooms. Among these, the biggest success is K Raheja’s Shoppers Stop, which started

in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and

even has its own in store brand for clothes called Stop.

Hyper marts/Supermarkets:
Large self-service outlets, catering to varied shopper needs are termed as Supermarkets.

These are located in or near residential high streets. These stores today contribute to 30%

of all food & grocery organized retail sales. Super Markets can further be classified in to

mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging

from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal

sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residential areas. They

stock a limited range of high-turnover convenience products and are usually open for

extended periods during the day, seven days a week. Prices are slightly higher due to the

convenience premium

Major Indian Retailers

Indian apparel retailers are increasing their brand presence overseas, particularly in

developed markets. While most have identified a gap in countries in West Asia and

Africa, some majors are also looking at the US and Europe. Arvind Brands, Madura

Garments, Spykar Lifestyle and Royal Classic

1.4 INDIAN MARKET SIZE

India's retail sector is worth US$ 350 billion and is growing at a compound annual growth

rate (CAGR) of 15 per cent to 20 per cent at present, as per a PricewaterhouseCoopers

(PwC) research report titled, 'Winning in India's retail sector: Factors for Success'.

Mass grocery and apparel are the two most favoured segments for foreign direct

investment (FDI) in multi-brand retail in India, according to a study titled 'Indian Retail

Market-Opening More Doors' by Deloitte Touche Tohmatsu India.

The FDI inflows in single-brand retail trading during April 2000 to December 2012 stood

at US$

42.70 million, as per the data released by Department of Industrial Policy and Promotion

(DIPP).

1.5 COMPANY PROFILE

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

The company offers fresh fruits and vegetables, staples, groceries, fresh juice bars,

FMCG products and dairy products and non-vegetarian items. Reliance Fresh Limited

operates food retail outlets. The company was incorporated in 1999 and is based in Navi

Mumbai, India. Reliance Fresh Limited operates as a subsidiary of Reliance Industries

Limited.

Reliance Retail started its journey in 2006 with the opening of its first Reliance Fresh

store. Today Reliance Retail operates 584 Reliance Fresh and Reliance Smart stores and

sells over 200 metric tonnes of Fruits and over 300 metric tonnes of Vegetables every

day.

Reliance Fresh is India’s leading neighborhood retail chain, synonymous with freshness

& savings. With the three core promises of Fresh Hamesha, Available Hamesha and

Savings Hamesha, Reliance Fresh is a one-stop-shop for fresh shopping, fresh savings

and fresh happiness.

From fresh fruits & vegetables to dairy, cereals to spices, processed food & beverages to

home & personal care products, we have the entire gamut of your grocery needs covered.
Across our stores, we retain a strong customer centric approach to meet all your shopping

needs - be it routine or seasonal, well known brands or popular local products.

Continuing Reliance’s hallowed tradition of backward integration, Reliance Retail

directly partners with a large number of farmers and small vendors in a farm-to-fork

model. The linkages with the farm has brought about transformational changes in the

quality of life of the farmers as also enhancing the quality of produce, reducing wastage

by shortening the time to move fresh produce and reducing intermediaries in the value

chain thereby benefiting all.

2. REVIEW OF LITERATURE

2.1 REVIEW OF THE EXISTING LITERATURE

With the available literature we can summarize CRM in the words of various authors
(citations) as follows-

According to Shani and Chalarani – Customer Relationship Management marketing can

be defined as “ an integrated effort to identify, maintain and build up a network with the
individual customers and to continuously strengthen the network for the mutual benefit of
both parties, through interactive, individualized and value added contracts over a long
period of time.

In the words of Lekha “CRM aims at delivering better products and value to the
customers through better understanding of his needs.”
 2.2 CONCEPTUALIZATION

A firm in the industry has to maintain good relations with its customers. They have to

retain the customers for a long time to avail the benefit of their relations. The customer

relationship management is one of the effective tool to identify, establish and maintain

relationship with the customers.

2.3 FOCUS OF THE PROBLEM

Through this study, we are going to identify the importance of CRM in the retail industry.

How it benefits from CRM? Is there any relevance of implementing CRM? In addition,

what role does information technology can play in CRM?

There are many aspects of CRM, which were mistakenly thought to be capable of being

implemented in isolation from each other.

CRM is the philosophy, policy and coordinating strategy connecting different players

within an organization so as to coordinate their efforts in creating an overall valuable

series of experiences, products and services for the customer (Chang, 2007)

The different players within the organization are in identifiable groups:

 Customer Facing Operations - The people and the technology support of

processes that affect a customer's experience at the frontline interface between the

customer and the organization. This can include face to face, phone, IM, chat,

email, web and combinations of all media. Self-service kiosk and web self-service
 are doing the job of vocals and they belong here.

 Internal Collaborative Functional Operations - The people and technology support

of processes at the policy and back office which ultimately affect the activities of

the Customer Facing Operations concerning the building and maintaining of

customer relationships. This can include IT, billing, invoicing, maintenance,

planning, marketing, advertising, finance, services planning and manufacturing.

 External Collaboration functions - The people and technology support of

processes supporting an organization and its cultivation of customer relationships

that are affected by the organization's own relationship with suppliers/vendors and

retail outlets/distributors. Some would also include industry cooperative networks,

e.g. lobbying groups, trade associations. This is the external network foundation

which supports the internal Operations and Customer facing Operations.

 Customer Advocates and Experience Designers - Creative designers of customer

experience that meet customer relationship goals of delivering value to the

customer and profit to the organization (or desired outcomes and achievement of

goals for non-profit and government organizations.

2.4 Technology the key to Relationship Marketing Process

CRM Technology tools:

2.4.1 INTEGRATION OF CRM WITH ERP:

An ERP (Enterprise Resource Planning) system allows to integrate engineering, customer

service, planning materials, manufacturing, finance and human resources across a single
 facility or across multiple locations.

2.4.2 NEED TO INTEGRATE CRM WITH ERP SOLUTIONS:

There are number of reasons why business should integrate CRM and ERP solutions.

Companies with high volumes of sales transactions see almost immediate benefits in

order-to-cash process. Specifically, the cost savings come from reducing errors in order

entry, implementing approval workflows for discounts, and reducing the manual labour

required to enter orders in both CRM and ERP. Even organizations with relatively low

order volumes can experience significant cost reductions through improved order

accuracy.

There are several marketing benefits associated with integrating CRM and ERP, such as

greater insights into customer base. ERP systems store customer’s financial relationship

with the company. CRM solutions store their buying patterns and marketing

demographics. Unifying these two stores of customer data can help organizations ensure

that their sales, marketing and service expenditure are targeting their most valuable

customers and prospects.

To make integration successful, it is important to work with business-solution expert who

will provide the company with the insight needed to select an integration architecture and

development plan, based upon functional needs and technical suitability.

2.4.4 USING THE INTERNET IN CRM:

The Internet is already being used to great advantage in CRM. It is indeed an ideal

medium for effective customer contact and customer care/service in several businesses.

Many companies in these businesses thrive by opting for the Net in handling customer

relations and providing service to the customers.

 2.4.5 FULL-FLEDGED E-CRM:

While practically all the firms use Internet in CRM to some extent, and some also promote

appropriate virtual customer communities, some of them go further step and carry out

their CRM entirely electronically, as their business lend for such an approach. Electronic

CRM (e-CRM) simply

3. REQUIREMENT ANALYSIS

In most companies, the business focus, organization structures and related business

metrics are the biggest inhibitors of CRM initiatives. All areas of the organization will

have to change, in order to truly support and foster CRM initiatives.

The CRM Business Transformation Map below shows the various aspects of that change.
There are five inter-related areas. These include:

 Business Focus

 Organisation structure

 Business Metrics

 Marketing Focus

 Technology

Business Focus:Product Sales Channel Marketing Service Customer

Organization
structure: Place Promotion Channel Contact Customer
Management Management Management management Management
Product Management
Customer
Business Metrics: Customer
Place Program Customer Lifetime value
Patterns &
performance Performance Revenues &
Product performance Profitability
Loyalty
 Integrated
Marketing Focus: Segmentatio Customer
Sales Marketing Marketing
n Specific Relationship
Promotion Campaigns Communic
Mass Advertising Marketing Management
ation

3.2 LIMITATIONS OF THE STUDY

1. Time constraint is unavoidable limitation of my study.

2. Financial problem is also there in completing this project in a proper way.

3. As no work has been done earlier in this regard so scarcity of secondary data is also

there.

4. Inadequate disclosure of information is also the problem.

4 RESEARCH METHODOLOGY

A. Type of research is descriptive research by survey method based on secondary data.

B. Data is collected from the Reliance fresh CRM published reporst and secondary
data from company profile, brochures.

4.1 RESEARCH DESIGN:

The research is primarily both explanatory as well as descriptive in nature. A well-

structured questionnaire was prepared and personal interviews were conducted to collect

the customer’s requirements, through this questionnaire.

4.2 OBJECTIVES OF THIS STUDY

1. To study the current practices of CRM.

2. To find out the impact of CRM on the profitability of the organization.

3. To study the factors affecting the CRM practices.

4. To study the role of information technology in CRM

 5 SUGGESTIONS

 There should be more and more emphasis given by the company for satisfying
the customer up to a apex limit and by providing the utility of every penny of
his money.
 There should be more use of information technology.
 The company should be flexible to bend its rules and procedures in the clients
favour.
 The company can communicate and develop stronger customer bonding by
providing social and financial benefits.

6 CONCLUSION

From this study it can be concluded that the customer relationship management in Company

is satisfactory. The company is using various CRM practices like customization of the

product, maintaining interaction with the customers regularly and providing good quality

product etc. Customer relationship management has a certain impact on the profitability of

the company. Average sale per customer has increased 15% over the last two years.

Customer response rate towards marketing activities is also improving. There are various

factors affecting the customer relationship management like working environment of the

company, support from top management and coordination among the departments of the

company. Information technology is not used as much as it should be. The company is using

traditional tools of CRM like quantitative research, personal interviews. The company should

modern tools like data mining, contact center, e-CRM and web based survey tools.