Do Names Matter ? Case Study for Apparels

Please read this article and then come back to answer the following questions:

1. Do you think that name really matters when you are a startup.

2. How name can be a differentiator of the quality.

3. Do you think that unusual name has the power to attract potential clients.

4. You are a business manager of an MBO. You are given an assignment to look into the business prospects of an upcoming brand. Would name matter to you. Why ? Why Not.

5. Can names have the power to accentuate quality in the minds of the potential clients.

6. What are your conclusions.

Retail Trends- Happy Hour Discounts

Retailers are Offering Discounts for customers purchasing on odd hours.

Examples:

1. OKaidi: Children's apparel and accessories offering 20% discounts on the purchase of its usual T-shirts, Chemises and other items between 10 am and noon- Monday through Thursday. Okaidi registered a 200% Hike in sale.

2. Fashionandyou.com, an e-commerce site selling premium brands, let customers win free luxury gifts every 15 minutes between 5pm and 8pm

3. Cinemax introduced "3 Idiots" with 28 shows daily in some places, the first would start at 6 am. Audience number pushed up by 100%.

4. Candies, a restaurant, offers 25% discount on food between 8pm and closing time. Their unsold inventory has reduced from 15% to 2% at the end of the day.

5. Big Bazaar offers deep discounts every Wednesday, otherwise a lean day.

Benefit to the Comapnies

1. Boosts revenues
2. Eases seasonal and peak-time customer load
3. Improves manpower utilisation
4. Attracts new entry-level customers which otherwise might not have come.
5. Customers for such promotions also tend to buy at full prices.

Dangers

It might wean away customers willing to buy at full price.

The objective is to  increase the sale, assuming that the peak hour sale remain the same. However, this assumption may not be valid.

Read Full Article Here

Unorganised Retailing in India - Making Big Bucks

Local Brands are doing more business than any of the multi brand outlets.

1. RMKV is a 100, 000 sq feet department store in Tiunelveli. It does a annual sales of Rs. 115 crore. This is more than any single Lifestyle, Central or Shoppers Stop store in the country.

2. Kalyan Silk, in Trissur has a 85000 sq feet, reportedly doing a business of 100 crore per annum. Also they have 125000 sq feet ninelevel megastore in Ernakulum, Kochi. It does more than 150 crore.

3. Pothy's in Panagal Park Chennai does 150 crore.

4. even a smaller 12000 sq feet Mysore Saree Udyog store in Bangalore does close to 100 cr per annum.

5. A collection of the 4-5 Alfa stores in Irla in Vile Parle (West ) in Mumbai does an annual sales of well over 200 cr.

6. Compaing the largest Lifestyle or Shoppers stop is still below 80000 sq ft.

7. Also highest selling Central barely manages Rs. 100 cr, Lifestyle is under 95 cr and Stopper's stop is under 75 cr.

8. Comparing return to realitors, a 40000 sq ft Pothys store after doing 100 cr, with 4.5% revenue share, the landlord gets a rent of Rs. 93.75 per square foot per month on carpet area.

9. On the other hand a 40000 sq feet store of a Lifestyle even at 7.25% revenue share, after doing a business of 45 cr will yield 67.97 sq. ft.

Thus there is a lot of way that the organised retailing has to cover to compete with their non organised counterparts

Read Full Article at

http://economictimes.indiatimes.com/features/financial-times/Big-retail-brands-skipping-profitable-markets/articleshow/5936070.cms

Retail Trends: Taking Advantage of Auspicious Days

1. Future Group made Rs. 150 Cr. in Additional sales on Akshay Tritiya.

2. FG is focussing on Panchang - Hindu Almanac- to target their promotions.

3. About 30% of the total sales of modern retailers come from promotions around festivals.

4. FG is targeting 1/3rd of 150 auspicious days in the Hindu Calendar.

5. FG consulting with Mumbai based Salgaonkar Family, publishers of Kalnirnay, Indias largest selling Almanac ,with 10 m copies a year.

6. 60-70% of shopping of customers happen during festivals.

7. At least 40-50% takes place during the peak festival season, between September and November

Please read the full article here

Below the Line Marketing and Advertising

Below the Line (BTL) Marketing and Advertising

Wikipedia says it all

"...while ATL ( Above the Line) promotions are tailored for a mass audience, BTL promotions are targeted at individuals according to their needs or preferences. Thus BTL sales promotion is an immediate or delayed incentive to purchase, expressed in cash or in kind, and having short duration.While ATL promotions can establish brand identity, BTL can actually lead to a sale. ATL promotions are also difficult to measure well, while BTL promotions are highly measurable, giving marketers valuable insights into their return-on-investment. ".

 There is another strategy called TTL ( Through the Line) which is an optimum mix of BTL and ATL.

Please refer to this article to understand how Jeans companies in India are using BTL to promote some of their products.

Company Profile: Reebok

Reebok

1. Globally Fourth after Adidas, Nike and Puma

2. Number 1 in India- 53% share of branded sports footwear market ( estimated size 3500 cr per annum)

3. Its lowest price point is less than 1000 ( Rs. 999 for a pair of jogging shoes.

4. Has 1000 stores in 325 cities.

5. About 300 outlets cater to lower end of the market.

6. It offers 80 SKUs under 2590.

7. About 70% of the sales volume come from low end product. In terms of value it constitutes 50% of the revenue. 

8. Over 80% of the footwear is manufactured in India.

9. Reebok India MD- Subinder Singh Prem.

10. Yard stick to open a store: Any location which has a population of 10000 to 15000 can sustain a Reebok store.

11. Cost of Opening a Reebok Store in a semi urban market is not more than 2 lakh. 

12. Even if a franchisee, who owns the place sells three to four pairs a day, there is a profit of 30000 to 40000 per month.

13. Also shoes are sold to company on a consignment basis so company is only paid when it sells.

14. Reebok is thinking of leveraging social networking websites- by opening Reebok clubs across websites where people can exchange notes on fitness and Reebok products.

15. Middle class buyer change their footwear every three months and at lower end, the customers are changing once in 15 months. 

16. How Reebok is Segmenting to take advantage of both the class- and mass- market

a. Segment for Health and Figure conscious women- Easytone 

b. Fashion Conscious- Manish Arora collection of Fish Fry shoes.

c. Offering Free Reebok shoes with annual subscription of mail today.

d. Mass Market- Extended its sponsorship with KKR. opened a store in Kolkata- selling KKr merchandise.

At least nine players in Indian cricket team uses Reebok Bat.

Apparel Exporters Looking at Home Markets

Apparel exporters have started either to supplying the domestic companies or set up their own retailing units. 

Examples:

1. Bangalore Based Indian designs supplying to H & M and Old Navy now trying to open 30 new stores with their western casual brand Identiti. Presently they have 12 stores. ( Naseer Humayun- MD of Indian Designs). At present 5% of the revenue is from domestic market.

2. Forbes Brands, a division of Gokak Textiles, have launched a youth focussed innerwear brand recently called Facit. ( Nischal Puri- CEO of Forbes Brands).

3. Integra Apparels and Textiles of Ashok Piramal Group- supplying to brands such as Dockers, Levi's and Benetton. The revenues of the company from domestic markets have increased from 15% to 40%. The company supplies to Madura Garments, Reid & Taylor and Arrow.

4. Gokaldas Exports, India's biggest exporter- now increased their sales from 4% to 8% in the domestic markets. 

5. Go Go International, supplying to brands such as VF Corp, Lee and Marks and Spenser is exploring in domestic markets.

Reasons for entering into domestic Markets

1. To offset the losses arising from economic slowdown in the US and Europe.

2. Rupee fluctuation is becoming a concern.

3. Increase in yarn rates are making exports uncompetitive. While consumers in India have been able to absorb  a 10-15 percent hike in prices of garments. 

Challenges

1. Brand Building and Marketing are the most crucial factor for a company who want to establish their retail presence in India.

Case Study: Stars Turning Fashion Designers

Film Stars Turning Fashion Designers

Please read the full case here. Please try to answer the following questions:

1. What type of ethical issues are involved

2. Why a film stars want to create their own fashion label.

3. Why people will buy those brands.

4. You are the manager of an apparel retail organisation having luxury apparel retail store. Would you like to keep such range in your store. Why ? Why Not ?

5. You are an upcoming fashion designer from NIFT. Would you welcome such a trend ? Why ? Why Not

6. Think from the Perspective of Marketing Mix ( Product, Price, Place, Promotion). Does it make a sound business sense? Why ?

You can also read the related Article: When celebrities co-create brands

Trends in Apparel Retail

1. Ethnic Wear is the flavour of the season

Fact-File

1. For Max, the value retail arm of Landmark group, women's Indian wear account for 25% of their revenues.

2. Planning to introduce saris in their next store in Chennai.

3. For Landmark premium department store, Lifestyle, the ethnic wear accounts for 20% of their sales. the ratio of western and ethnic wear has improved from 70:30 to 50:50.

Fusion Wear: Combining Indian and Western Outfits.

4. Lifestyle Indian wear Label, Melange.

5. Shopper's Stop has introduce a new fusion wear label, Haute Curry. For them Indian wear account for 25% of their sales.


2. Big Brands are heading for North East


3. European Brands continue to Coming in India


4. Concept of Family Stores gaining Popularity

5. Hyper Markets are gaining Popularity

Fact File

1. Spenser's Retail plan to open 15 Hypermarkets in FY11.

2. Franchise Tie-ups with three international Apparel brands- Ecko Unlimited, UK Based kid Brand Ladybird and premium casual wear brand Beverly Hills Polo Club.

3. Planning to open 20 exclusive Beverly Hills Polo Club  stores in the NCR region, Punjab and Mumbai.

4. planning to raise the contribution of apparel business from 10 per cent to 30 per cent.

5. They have shut down 100 super stores last year

Company Profile: Diesel

Diesel

1. Founder- Renzo Rosso

2. Diesel Started the concept of distressed Denim

3.  Diesel was created in 1978

4. Presence in 80 countries

5. 5000 outlets

6. Turnover- 1.3 b Euro ( 7570 Cr.)

7.  Partnered with Reliance Brands Ltd in 2010

8. First Flagship Store in Mumbai-7500 square ft.

9.  Latest Advertising Campaign "  Be Stupid"

10. No two stores of Diesel in any part of the world can look the same- the displays and merchandise are different.

11. Diesel and Reliance hope to open seven stores in India this year and 22 within five years.

Case Study: Replay Planning for New Partners in India

Please read this article first

Questions

You are the business manager of a major apparel company. There is a proposal before you to join hands with this company. What will you decide and why ?

Analysis

Your answer will depend upon your response to the following and many other questions:

1.  Why would you like to join hands with Replay? Think about product, price, placement and promotion and of course profitability.

2. Why Replay wants to have its presence in India ? Think about the five factors as mentioned in 1.

3. Why companies like Replay want to tap India through direct route than indirect route ?

4. As a customer why would you like to buy Replay Jeans ? Think about product, cost, availability and brand value

Now you can decide, I guess. Please post in comments about your decision and the reasons for the same.

Knowledge Primer- Private Labels

Private Labels are those brands which are owned by the retailers themselves.

Normally in an MBO ( Multi Brand Outlet ) you can see many brands which are external to the store.

However the store also offer their own brands. For example 'STOP' is a private label by Shopper's Stop.

Private labels work better in categories where there is a poor brand recall. For example in cereals category only two brand names come to the mind.

Private labels are recent phenomenon in India. According to an estimate private labels account for nearly 40 per cent of Wal Mart sales globally.

Buy why retailers keep private labels. The answer lies in margins. The margins are much higher in keeping private labels. They range from 15-20 per cent in FMCG, around 20 % in electronic goods and 30-70 per cent in apparels. The other reasons are differentiation and increase in consumption.

But why customer buy private labels ? The answer could be that store labels spell trust and savings.

The key concerns for retailers are inducing the first trials. It is seen that once used, customers have a very good brand loyalty.

Private labels work best in low-involvement category. For high-involvement categories, such as apparel, it is the name of the store that matters the most.

S Kumar Inks Deal with DKNY men's Line

1. Deal between SKNL ( S Kumar Nationwide) with DKI ( Donna Karan International), a part of LVMH Moel Hennessy Louis Vitton.

2. The deal : SKNL will source, design produce and distribute full range of DKNY menswear globally except Japan.

3. MD and VC of SKNL: Nitin S. Kasliwal.

4. CEO, LVMH and chairman and CEO, DKI: Mark Weber

5. Benefits: To SKNL: An alliance with one of the world's best known brands and an entry into European Markets.

To DKNY: SKNL's expertise in the men's business.

6. Brands with SKNL: Reid and Taylor, Belmonte.

GD Case Study for MFM: Discount Coupons

Please read the full case here.

Now try to answer the following questions:

1. You are an apparel retailer having 50 stores all across the country. Would you like to avail of such services. Give Reasons. 

2. You are a customer of apparel retail. Would you like to go to such websites and avail yourself of such service. 

3. What type of apparel retail do you think such services are applicable; formal, casual, ethnic, mens, womens or kidswear. Why ?

4. You want to become such a service providers. What all you have to take care before launching such venture. 

Retail Alliance between Future Group and Carrefour

Facts

Carrefour SA: Europe biggest retailer.

Origin: France

Plans to open 150-300 Carrefour branded hypermarkets in India .

Carrefour India Head: Jean Noel Bironneau

Future Groups currently runs 125 Big Bazaar Hypermarkets.

Carrefour stores will occupy between 50000-80000 sq. ft.

The first independent cash-and-carry store of Carrefour: Delhi's eastern suburb of Seelampur.

Cash-and-Carry Stores: The stores that sell products only to retailers and other business establishments.

Some Definitions of Stores

You would do well, if you keep these definitions of store in mind.

Please remember, however, that Indian stores are more or less a combinations of each of these (and size is much smaller). So to categorize a store in purely one category would be a disaster.

Mass Merchandiser

a retailer or retail store that seeks to sell large quantities of goods quickly through such means as discounting, customer self-service, or unadorned display and packaging, as in a warehouse.

Source: http://dictionary.reference.com/

Destination Store

Giant retail store combining the attributes of several categories of stores: the size of a mass merchandiser, the variety and scope of a department store, and the low prices of a discount store. So called because consumers are willing to travel a good distance to shop in it.

Department Store

Large retail establishment with an extensive assortment in variety and range of goods, organized into separate departments. All departments are housed under the same roof to facilitate buying, customer service, merchandising, and control.

Discount Store

A department store which offers its items at a lower price than many other retail stores. Discount stores are often able to drop their prices due to efficient distribution methods. Many of the largest discount stores are also chain stores, and include Wal-Mart, Target, and K-Mart. Furthermore, many of these discount stores could also be categorized as big-box stores, as they grow to include more and more products, sometimes even including a large grocery section.

Source: http://www.businessdictionary.com

Case Study: Concept of "360-degree" lifestyle store

Please read the full article here. 

Questions (Any of these situations can be asked in a GD):

1. You are the brand manager of an apparel retailing company having 12 stores all over the country. Your Boss gets excited about the concept. Would you recommend ? Would you not, why ?

2. You are business manager of a cafe chain in India. Your boss gets excited about the concept. Would you  recommend ? Would you not ? why ?

3. You are a store manager of an apparel company. The company management is asking your recommendation towards giving a space for opening of a cafe. Would you recommend ? Would you not ? Why ?

4. You are a customer coming for shopping in an apparel retail store. You spot a cafe inside the store. Would you welcome such a change, be indifferent or dont like it at all .Why ?