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45087758-Marketing-Plan-for-Fabindia-Ahmedabad

45087758-Marketing-Plan-for-Fabindia-Ahmedabad

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11/17/2011

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Presented By: NIKITA SANGHVI

FLOW OF PRESENTATION
Introduction Current Marketing Situation Threats and Opportunities Analysis Objectives and Issues Marketing Strategy Action Program Recommendations

Batch 2009-2911

Stevens Business School

Marketing Plan

INTRODUCTION

‡ India's largest private platform for products that are made from traditional techniques, skills and hand-based processes ‡ Initially commenced as a village based industry in 1960 by John Bissell ‡ Links over 40,000 craft based rural producers to modern urban markets ‡ Promotes inclusive capitalism, through its unique COC (community owned companies) model

Batch 2009-2911

Stevens Business School

Marketing Plan

wool. upholstery fabric and curtains. ‡floor coverings. hair oils. soaps. grass. cane baskets moisturizers. pulses.INTRODUCTION Fabindia Products TEXTILE BASED ‡ready-to-wear garments ‡accessories for men. ‡bed. utility face packs. items coffee. silk. women. furniture. tableware. ‡Cotton. stationery. hair conditioners fruit preserves special skin care products herbs Marketing Plan Batch 2009-2911 Stevens Business School . grains. spices. teenagers and children. selection of handcrafted body scrubs. tea. shampoos. lighting. linen and jute are the basic fibres used NON. bath. sugar. honey.TEXTILE BASED Authentic Personal care products Organic Food Products (July 2004) ‡Home Products (October 2000) (March 2006) cereals. table and kitchen linen. pure oils.

40 crore. Annual Report (2008-09) ‡ Annual turnover of the company is in the range of Rs 500 crore ‡ Profit ranges between Rs 35. Got Designer Promoting Indian Craft or Technique award as Hall of Fame reward. 2004 by The Economic Times of India. ‡ Registered a CAGR of about 58% in the period 2006-2008 Batch 2009-2911 Stevens Business School Marketing Plan .INTRODUCTION Awards for Fab India Awarded Best Retail Brand.

Dubai.INTRODUCTION Fabindia Store locations ‡ 108 stores in 40 major cities of India. Bahrain. Italy and Rome. ‡ 6 stores in international places including UAE. ‡ Online Shopping & Exports to 34 countries Batch 2009-2911 Stevens Business School Marketing Plan .

FabIndia Sana 2004 >Food products range launched.1000 crore by 2011 Batch 2009-2911 Stevens Business School 7 .Fab India: timeline John Bissel starts FabIndia as a whole sale export company 1960 Early 80 s Added ready to wear garments to the retail offering Marketing focus shifts from exports to local Indian retail 1990 s 1999 William Bissel takes over as MD. >20 stores across the metros. an d start expanding to Tier 2 and 3 2006 2010 108 retail stores across India and 6 stores at internat ional Has 6 stores in metros 2001 Vision:200 stores and a turnover of Rs. FabIn dia Body care product range launched.

mobile marketing. William Bissel. with 58% being highly satisfied with the brand and its offerings SOURCE: Interview of Mr. Jun 2009 Batch 2009-2911 Stevens Business School 8 Customer Profile 15% 85% . in-store posters  Mystery Shopper Program: to check the customer satisfaction level ‡Motivating factor for the customer: quality and consistency of product and the service ‡Over 83% of Fabindia s customers go back satisfied.CURRENT MARKETING SITUATION  A delighted Customer is our Best Brand Ambassador  USP : quality of the fabric and the cultivated image of Indianness  Does not follow any customer acquisition strategy: focuses on customer retention  Key element: word of mouth publicity ( Zero advertising except print ads during promotions ). MD. Fabindia published in The Economic Times. advertorials.

Batch 2009-2911 Stevens Business School Marketing Plan . ‡The exclusive jewellery counter is also kept in the fronts.CURRENT MARKETING SITUATION FabIndia Store Format Full fledged stores ‡Metros ‡Posh locality ‡All product lines Concept stores ‡Tier II cities ‡Specific products retailing ‡It has designed the stores decor and ambience keeping this in mind ‡The layout usually keeps clothes section at the back of the store and the entrance area is utilized for home products.

Biba. Cottage Industries Emporium. and Stand alone stores like Batch 2009-2911 Shristi. W and Good Things. Anokhi Stevens Business School 10 . ‡Regional -Law Garden Market for buying handicraft and Gujarati outfits Ethnic wear retailers like Khadder.COMPETITION ‡Garments Based (Shoppers Stop. Reliance Trends. Globus) ‡Government Handloom Initiatives (Khadi Gramodyog. State Government departments) ‡Designer Boutiques Organized Sector Unorganized sector ‡Local tailors who provide customised garments to the customers at reasonable prices ‡Local NGOs selling wares. West side. Pantaloons.

STRENGTHS ‡ Quintessential Indianness in fabric through the years ± Popular for authenticity of hand-woven fabric ‡ Sourcing system from rural India ± Strong supplier relationship ± Provision of capital loans (in agreement with banks) ± Leniency on order fulfilment & no-return policy ± 100% use of supplier s capacity ‡ Sustainable employment opportunities to rural skilled poor ‡ Employees are given autonomy and hence inducing accountability ‡ Focus on customer retention instead of generation ± Large chunk of buyers are repeat purchasers ± Product quality improvement done keeping this in mind ‡ Word-of-mouth strong enough not to require any advertising .

WEAKNESSES ‡ Delays in delivery from artisans ± Opportunity losses due to irregularity ± Difficult to predict quantity and time of thaan coming from weaver ± Also arises as different stores are encouraged to order different stock ‡ Insignificant spend on marketing communications ± Losing out on attracting new customers instead of depending only on repeat purchase ‡ Not enough personnel to push Fabindia to greater growth ± Unavailability of people experienced in retail sector ± Unavailability of people believing in the same mission ± More formal processes would face resistance from existing employees ‡ Untimely delivery of products ± Transport. storage and shelf-life issues of organic foods ± Suppliers were spread pan-India .

increasing likelihood of sales ± Use of Fabindia home furnishings in modular flats of buildings ‡ If consumer buys this flat or any other. will use Fabindia furnishings ‡ Leveraging Web 2.OPPORTUNITIES ‡ Latent potential of organic foods market ± Leveraging changing consumer tastes & perceptions ± Awareness generation of merit in these foods ‡ Utilize multi-brand retail outlets and construction groups ± Display of Fabindia products in MBOs and department stores ‡ Leverages footfalls of the store.0 tools and techniques ± Tying up with matrimonial sites for designer fancy wedding wear ± Interactive website for designing as per individual requirements ‡ Customization level is high ‡ Lead time between fixing of occasion date and event can be used for delivery . and is impressed.

THREATS ‡ Unorganized local operators ± Handloom retail shops/chains in regional pockets ± Souvenir shops providing indigenous products at lower prices ‡ Entry of organized brands and companies into retail ± High expected growth & entry of business houses in large ways ± Competitors access funds from conglomerate partners or markets ‡ Tilt of Indian consumers towards foreign brands ± Foreign brands alter lifestyle choices of the target market ± Imported or designer home furnishings have greater flaunt value vis-a-vis Fabindia ‡ Development of government co-operatives ± Boost in future to KVIC and state handloom units ± Improvement in their ambience and shopping experience ‡ Rising prices of real estate could hamper growth ± Opening new stand-alone stores will be tough ± Experimenting with formats and markets may not be advisable .

MARKET SURVEY Objective: To explore: ‡ The affective responses Fabindia s consumers ‡ Cognitive responses of Fabindia s consumers ‡ Purchasing behavior of the consumers for products of apparel category Sampling Design ‡ Sampling Unit ‡ Sampling techniques ‡ Sample size : : : Customers of Fabindia Convenience Sampling Customers -30 Batch 2009-2911 Stevens Business School Marketing Plan .

MARKET SURVEY Demographics 70% of respondents were above 30 years of age 60% . 40% .Word of mouth 10% . only half of them had purchased online from Fabindia According to experts this trend is set to change with increasing internet penetration and e-retailing Stevens Business School 16 Batch 2009-2911 .Females Contact of Information 90% .Print Media Online Spending Behavior Only 30% shopped online Out of 30%.Males.

Traditional Affective Responses 53% .Authentic 20% .Comfortable 17% .Appreciation 14% .MARKET SURVEY Fabindia For You 30% .Satisfied 33% .Natural 33% .Good Batch 2009-2911 Stevens Business School 17 .

Linen) 17% 17% Location of the Store Service provided by staff Display of the Garments at Store Store Ambience Batch 2009-2911 Stevens Business School 18 . Respondents(in %) 3% 7% 17% 3% 3% 33% Quality of Fabrics Range of Garments Available Price of the Garments The Fabindia brand Traditional work Natural Fabric ( eg.MARKET SURVEY Which of the following do you think was the instrumental in your choosing to buy the garments? Rank them on the scale of 1 to 5 with 1 being the most important. Cotton.

MARKET SURVEY Rate your experience at Fabindia in terms of your satisfaction level for the following: (Highly Satisfactory. Unsatisfactory. Satisfactory. Highly Unsatisfactory) Respondents(in %) 10% 10% 13% 7% 17% 17% Range of Garments Available Price of the Garments Quality of Fabrics Location of the Store Designs/Colors of Garments 13% 13% Service provided by Staff Store Ambience Display of the Garments at Store Batch 2009-2911 Stevens Business School 19 . Average.

Linen) Location of the Store Service provided by staff Display of the Garments at Store Store Ambience Batch 2009-2911 Stevens Business School Marketing Plan SATISFACTION Range of Garments Available Price of the Garments Quality of Fabrics Location of the Store Designs/Colors of Garments Service provided by Staff Store Ambience Display of the Garments at Store .SUMMARY OF MARKET SURVEY PRIORITY FACTORS Quality of Fabrics Range of Garments Available Price of the Garments The Fabindia brand Traditional work Natural Fabric ( eg. Cotton.

18-35 years Create fully fledged retail market online First mover advantage in their segment Connect with the customer to customize Focus on discovering the methods to improve the quality and life of the fabric Unravel the issues related to supply chain management Batch 2009-2911 Stevens Business School 21 .OBJECTIVES Capitalize the potential to expand the Target Segment from 25+ years to 18+years Fabindia does not advertise. depends on word of mouth. This essence will be taken away with the help of social media campaign and broadcasting and print media tools Take advantage of the perfect overlap of Fabindia target segment Profile and the internet user profile.

though long term membership benefits Increase preference n brand recall in foreign countries n NRIs Lock in % of wallet as Indians increasingly shop online Batch 2009-2911 Stevens Business School 22 . Ranbir Kapoor & Deepika Padukone Convenient country specific format Online space.for more visibility Online marketplace integrated into operations Aspiration value .STRATEGY Expand average basket size of target segment which coincides with internet Promotion optimization Endorsement: Shabana Azmi .

TACTICS Launch online activities with the Summer collection Online Trial Room: mix n match clothes and design a new look on a 3D simulated trialroom w/ a model as per physical specification High search ranking: Google Adwords Exhibition + workshops on ground Diwali make ur own gift bag for your family/friend buy them a new look and get it home delivered ! CSR weekend promotion: showcase craftsmen and tie up with Breakthrough Batch 2009-2911 Stevens Business School Marketing Plan .

FABINDIA: 2011 60th year anniversar y Initiates CRM activity Create an e-market place Revamping website Early 80 s Build social media presence Launch summer collectionprint ads given in newspaper s Link online sales to supply chain On ground promotion s to compleme nt ecampaign Batch 2009-2911 Stevens Business School 24 .

it represents the Indian Retail Industry very well ‡ Financials for its direct competitors such as Anokhi. restricting comparison ‡ This assessment contrasts the performance of Fabindia with respect to the biggest retailer of India ‡ Hence. were not available. Khadi Gram Udhyog etc. we get a sense of the feasible options available with Fabindia to raise funds .FINANCIAL COMPARISONS ‡ Financial aspects of Fabindia have been compared with Pantaloons ‡ Though not a direct competitor.

27 5. Batch 2009-2911 Stevens Business School Marketing Plan .15 2.41 9.54 10. raising funds through debt is not a big challenge.27 4.INTEREST COVERAGE RATIO 18 16 14 12 10 8 6 4 2 0 16.51 3.08 Year 2006 Year 2007 Year 2008 Fabindia Pantaloons Year 2005 The interest coverage ratio of Fabindia is far higher than that of Pantaloons.75 8. Hence.

Hence.96 0.08 The interest cost as a percentage of sales for Fabindia is far lesser than that of Pantaloons.49 1.09 2.14 1.5 1 0.INTEREST COST AS % OF SALES 2.5 2 1.69 Pantaloons 2. Batch 2009-2911 Stevens Business School Marketing Plan .14 Fabindia 0.5 0 Year 2005 Year 2006 Year 2007 Year 2008 1. raising funds through debt is again not a big challenge.25 2.

78 6.63 2. Though retail industry works at low margins.41 3.71 Fabindia Pantaloons 5. Hence.66 5.27 3.PROFIT MARGIN RATIO (IN %) 7 6 5 4 3 2 1 0 Year 2005 Year 2006 Year 2007 Year 2008 3. raising funds through debt is not a big challenge. Batch 2009-2911 Stevens Business School Marketing Plan .3 6.02 The PAT as a percentage of sales of Fabindia is higher than that of Pantaloons. Fabindia¶s margins are quite high.

5%-2. hence can stick to their mission ‡ Healthy current ratio (around 2:1 throughout years) ‡ A very healthy interest coverage ratio (as high as 16 times) which is quite higher compared to Pantaloons.OPTIONS AVAILABLE ‡ DEBT FINANCING ± Pros ‡ The decision authority stay with them. Shoppers Stop etc. (1.006%) ‡ Family owned ± Cons ‡ Debt acquired may not be huge ‡ Loose out on the expertise of other organisations which can be brought in through JVs or investments .5%) ‡ A very healthy debt to equity ratio ‡ Interest cost as a percentage of Sales is very low (0.

OPTIONS AVAILABLE ‡ PRIVATE INVESTORS/ JVs ± Pros ‡ Huge investments can be brought in ‡ Professional expertise can be brought in ± Cons ‡ Decision authority gets diluted ‡ Emphasis may shift to profit maximisation and hence Fabindia s mission may get diluted .

Batch 2009-2911 Stevens Business School 31 . for the customers. Kalamkari.CULTURAL EVENT (ON GROUND ACTIVATION) ‡ The FabIndia Website gives information about the various fabric crafts like Chikankari. ‡ It will also have a regional food festival at the same time to make it an overall fun and enriching experience. Batik etc. ‡ We will bring this art on ground for them to experience it first hand and also learn it. workshops (for more knowledge and interest) for keen audience. ‡ It will be called Know what you wear ‡ This makes the customers more aware of the work put in for their fabric and helps them with their association with brand FabIndia. ‡ Every metro will have a 2 day workshop cum exhibition where these artists will put up stalls about these crafts and exhibit the work along with Live Craft Workshop .

‡Viral video to be launched in association with Breakthrough ( along the lines of Mann ke Manjeere) ObjectiveThe passion group identifies with the theme customer acquisition Women of Today and results in new Batch 2009-2911 Stevens Business School 32 . for their cause of empowering women. Jagori etc.³WOMEN OF TODAY´ ‡ As an extended activity. and get x% off ‡ FabIndia will tie up with various NGOs like Breakthrough. on weekends FabIndia will have weekend promotions with special focus on Women of Today . ‡Men can be encouraged to increasingly visit the stores with the women in their lives with offers like bring your mom/sis/wife/ girlfriend to shop.

RECOMMENDATIONS AT A GLANCE ‡ Heavy investments in back-end of value chain ± Supply chain development for efficiency and quality management ‡ Expansion aiding strong regional presence ± Outlets to counter regional competition ± Sourcing from local suppliers for outlet and other regions will be easier ‡ Growth through harnessing new customers ± Cannot depend on existing customers to counter competition ± Must create new customers in all segments ‡ Tie up with different types of graduate schools for talent ± Rural management graduates for managing supply chain and rural initiatives ± Management graduates for helping growth in front-end and retail arms .

THANK YOU Batch 2009-2911 Stevens Business School Marketing Plan .

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