TABLE OF CONTENTS

L.S.R. Fab Private Limited

LSR FAB Home fabric is a leading Indian Business as India's largest manufacturer and exporter of curtains and upholstery fabric for last five years. Fabrics and Furnishings International crowned it as Indias Third Largest Producer of Curtain and Upholstery. Its head office is located in Andheri, Mumbai. The manufacturing unit is in Daman (180 kms north of Mumbai). With nearly a decade of export experience, the company now has become one of India's largest exporters of synthetic furnishing fabrics. It exports to around 18 countries such as Belgium, Italy, Spain, Mexico and many more. It has copyrights and ownership to more than 1,000 designs thus bringing innovation to more than 1,000 homes a day. All the designs are made in Italy. LSR FAB is a proud employer with a family of more than 700 committed employees. After proving their excellence in the international market, they are now focused on the Indian growth story. The key products of the company at present are curtains, upholstery, furnishing fabric, bed sheets and embroidered fabric. Some of the important clients of LSR FAB are IKEA, Raymonds, Reliance and Welspun,India.

MANAGEMENT DILEMMA

What should be the next expansion strategy ?

MANAGEMENT QUESTIONS
Should we move to B2C operations ? Should we shift base online? Should we create a single brand store or have our chain of stores ?

RESEARCH QUESTIONS
What is the expected return on creating a new brand? Does brand preference depend on income of customers? How many people purchase fabrics online? Percentage of urban population that buys homefurnishing fabrics of popular brands

INVESTIGATIVE QUESTIONS
How frequently do you buy home furnishing fabrics? - Once a year - Once in two years - Once in three years What percentage of yearly income do spend on home furnishing? - 0-5 % - 5-10 % - > 10% Are brands important in home furnishing fabrics? - Yes - No Do prefer such brands? - Yes - No Do you prefer to buy home furnishing fabrics from malls? - Yes - No Would you prefer a specialized retail store for home furnishing fabrics? - Yes - No

 Would you consider buying home furnishing fabrics online? - Yes - No What is your yearly income? - Less than 3 lakhs per annum - 3-10 lakhs per annum. - Above 10 lakhs per annum.

SAMPLING
Type of data : Quantitative Period : One time study Setting : Field Sample Size : 131 Sex : Mostly women of urban areas Mode : Online, Field Sampling type : Random, Stratified

FINDINGS AND OBSERVATIONS

100 80 60 40 20 0

Do you prefer brands ?

Yes
100 80 60 40 20 0 Yes

No

No

The others were not instrumental in further discussions, observations and conclusion.

STATISTICAL ANALYSIS BASED ON SURVEYS

Objective 1
We want to launch LSR fab brand store for home furnishing products. With this test we intend to check the feasibility of the same. Key point: Do people prefer brands while buying a home furnishing product and is it related to the income of the consumer. Questions 1. What is your yearly income? a. Less than 3 lakhs per annum. b. 3-10 lakhs per annum. c. Above 10 lakhs per annum. 2. Do you look for brands while buying a home furnishing product a. Yes. b. No. What we intend to do? Perform chi square test with the following test hypothesis with 5 % level of significance. H0: Brand preference and income are in We want to check before launching the brand store for LSR fab that does preference of brand in home furnishing products depend upon income of the customer. We have selected Chi- Square test for checking the independence of the same with 5 % level of significance.

Establishment of Hypothesis H0: Brand preference and income are independent. H1: Brand preference and income are not independent.

Observed Values In our research we sent a questionnaire to different groups of people and observed the following data for brand preference and income in home furnishing products.

Income

Brand preference 11 49 10 70

YES 14 27 14 55

NO

Total 25 76 24 125

Less than 3 lakhs 3- 10 lakhs Greater than 10 lakhs Total

Expected Values

Income

Brand preference 14

YES

NO 11 33.5 10.5 55

Total 25 76 24 125

Less than 3 lakhs 3- 10 lakhs Greater than 10 lakhs Total

42.5 13.5 70

Chi- square statistics Chi- square = (observed * frequency expected * frequency) 2

(Expected * frequency)

LEVEL OF SIGNIFICANE To determine the significance level we need to know the "degrees of freedom." In the case of the chi-square test of independence, the number of degrees of freedom is equal to the number of columns in the table minus one multiplied by the number of rows in the table minus one.

In our test, there were three rows and two columns. Therefore, the number of degrees of freedom is: dF= ( 3-1) * (2-1) = 2

RESULTS From the chi square test we found that, 2 = 0.55287. The degrees of freedom are 2 (as calculated earlier) and the level of significance is 0.05. Thus we have 20.05 (2) = 5.99 We found that 2 < 20.05 (2) So we cannot reject H0.

So we find the value of 2 at 0.05 level of significance and degrees of freedom 2.

INTERPRETATION Thus we can conclude that brand preference in home furnishing products and income are dependent to each other. So while opening a brand store for LSR fab we should consider places where the footfalls of high income people is more dependent. H1: Brand preference and income are not independent.

Objective 2: We plan to setup an online retail shop for home furnishing products of LSR fab. Key points: Do people prefer buying home furnishing products online? We want estimate the population of people willing to buy home furnishing products online. Questions: 1. Would you buy home furnishing products online? a. Yes b. No What we intend to do? We will perform Estimation for single population with 95 % confidence interval. N: Total number of consumers (large) A: Number of consumers buying online. (Unknown) P- Proportion of consumers buying online. (Unknown) Our objective is to estimate the population of people who will buy home furnishing product online. We have collected a random sample of 100 people and found that 59 people prefer buying home furnishing product online. We will form a 95% confidence interval for the true proportion of online buyers.

Observation Let, N: A: P: Total number of consumers (large) Number of consumers buying online. (Unknown) Proportion of consumers buying online. (Unknown)

For our Sample, n: Total number of consumers sampled (125) a: Number of consumers buying online. (76) : Proportion of consumers buying online. (a/n) where, =a/n = 0.608

Confidence Interval

follows bell shaped curve that means it is normally distributed. So, (

For 95 % level of confidence,

RESULT n=125 =0.608, Hence q=0.392 Estimated Standard Error = (pq/n)^1/2 = (0.608*0.392/125)^1/2 = 0.043

P [-1.96 < z < 1.96] = 0.95 P [-1.96 <p-P/0.043< 1.96] = 0.95 P [-1.96*0.043<p-P< 1.96*0.043] = 0.95 P [-0.084< p-P<0.084] = 0.95 P [p-0.084< P <p+0.084] = 0.95

95% Confidence Level for P = p 0.084 = 0.608 0.084 = 0.524 and 0.692

INTERPRETATION

Thus we are 95 % confident that the true percentage of online buyers of home furnishing is between 52. 4 % to 69.20 %. .