FABINDIA CASE ANALYSIS PROBLEM ESSAY The key problem that Fabindia management faces is that consumers are

unaware of the underlying social mission in their business plan because of which there is a mismatch in sustaining growth while maintaining commitment to rural development. The consumers should be able to identify with its ideology and be proud of using the products. Senior management of Fabindia plan to grow revenues to Rs. 8.6 billion in 2011 from Rs. 1.3 billion in 2006. This is possible only if the consumer base of the Fabindia products grows proportionately. The retail sector in India is increasingly getting organised and the Western brands are also entering the market. Therefore there is an urgent need to further differentiate itself from them and to strengthen its niche. The major challenge confronting William Bissell is to keep the growth trajectory aligned with their primary commitment to rural development. By making the consumers aware of this commitment, the Fabindia management will be bound to work within this framework. Fabindia is in a business where its suppliers are from rural India and are highly fragmented. To ensure smooth functioning of this supply chain, it is essential to gain the trust of the village artisans and fabricators. To gain this trust, the Fabindia management has to be sensitive to the socioeconomic context in which the suppliers operate. Sometimes it will have to take decisions that seem uneconomical, like accepting delayed delivery. By building the brand image around social commitment, the management will increase their sensitivity to the suppliers’ problems. This will also empower the rural suppliers economically, which is also Fabindia’s ideology. Not only this, Fabindia’s growth is directly linked with the economic empowerment of their suppliers. One major issue that the management faces is the supply side bottleneck. This is due to the fact that most of its suppliers are fragmented rural artisans who work on individual basis and produce in small quantities. As they grow economically, they will become more organised and increase their efficiency. Thus the problem of supply side bottleneck will also be resolved in the long term. Fabindia also faces an indirect challenge from the opening of foreign single- brand stores in the apparel segment. In 2006, garments accounted for seventy percent of Fabindia’s revenue. The major consumers of Fabindia’s products are upscale middle class people who enjoy the Fabindia experience. The Western brands entering the Indian market will also target the growing upscale middle class population. Thus it needs to differentiate from the other products. This it can do by building a brand image that generates pride in consumers from using its products. Thus Fabindia should increase awareness in the consumers about its social mission. It has to take steps to become attractive to the customers so that the demand increases. The projected revenues can be achieved only if the demand increases.

By creating awareness about this in general public. For this it needs to advertise its products and the different buying experience it offers. It should create a brand image that finds resonance with the upwardly mobile middle class youth. primarily the youth. This will also make it clear to the management that their growth is directly related to the growth of their suppliers i. . It is able to differentiate itself from other similar Government funded khadi outlets by giving the customers a different buying experience. it will help resolve the dichotomy that the management is facing. Their target customers are also the trendy middle class. As a result.DECISION ESSAY To make the customers aware of its social mission. Another reason to build its brand image around the social commitment is that. The senior management feels that a high growth rate will dilute their founding commitment to rural development. Its customers enjoy the Fabindia experience and become repeat buyers of its products. Nevertheless. it will generate a sense of pride in using its products. Fabindia has been a small company that could do with a word-of-mouth publicity. the senior management will be able to find means of sustaining the growth rate in a more focussed way. Uptill now. This is possible by advertising its products and differentiating from its competitors. it has to create awareness about its products.e. After all. majority of the public have dealt with the government funded khadi outlets and may wrongly associate Fabindia as another such khadi outlet. Therefore to attract customers it will have to stimulate interest in the Fabindia products. the rural artisans and fabricators. Therefore it has to create awareness about the different buying experience at its outlets. To increase the customer base. the differentiating factor from its competitors and substitute products would be the message of social inclusiveness that their product conveys. By building a brand image which leverages on their commitment to social cause. The product of Fabindia is such that it generates employment in the rural India and also helps to sustain the traditional Indian crafts-art. These retail shops are funded by foreign brands or large Indian business conglomerates and have deep pockets. This is also proved by its organization chart as it does not have any marketing department. who are fashionable and will appreciate the social cause directing Fabindia’s ideology. Fabindia is looking forward to increasing its revenue by around seven times in the next six years. This will increase the customer base which is essential to meet the projected growth rate. The major competition to Fabindia comes from the opening of organised retail shops in the apparel and home furnishing sector. Fabindia has never advertised its products. Fabindia should start to invest in advertising and brand building around its social commitment.

Up-till now being a small company.Finally to sustain the growth. They will give the direction to the marketing department. The marketing managers should develop a brand building plan that fulfils the above stated goals. This can be done by publishing the success stories of the rural artisans who have done well because of Fabindia in the print media. The investors would know that unique selling proposition of Fabindia is its commitment to rural development. Thus people would become aware of the good cause inherent in the Fabindia’s products. The advertisements should also bring out the social commitment of rural development Fabindia. A positive brand image will prove helpful to attract the investors. But now to expand substantially it will have to invite outside investors. It should hire an advertising firm that would advertise the Fabindia products while keeping the enjoyable buying experience in a Fabindia outlet in focus. These advertisements can be made both for the print as well as the tele-media. For this the first step that it needs to take is to hire marketing managers. and therefore will support the Fabindia mission. The marketing managers should have an exposure of the retail sector. Some of the marketing posts should be filled by the current staff from other departments who know the culture and the working of Fabindia. The fact that Fabindia is working to revive the waning interest in the traditional Indian crafts-art. The buying experience at a Fabindia outlet is enjoyable and customer friendly. it is clear that Fabindia should start advertising and build a brand image that portrays:    Their commitment to bring about rural development. it was self sufficient. ACTION PLAN From the above discussion. it may need outside funding in the future. They can also hold trade fairs with some of the artisans directly selling the products there. Submitted by: Ravi Pandey 037/1 . The current organisational chart of Fabindia is devoid of any marketing management post.

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