Introduction:

A pair of Baly Keds was the most sought after shoe among children and youngsters. It became
hard for parents to console their crying children when they failed to get the right-sized keds
during their shopping trips. The demand for Baly Keds almost always outstripped the supply.
"Parents asked to stop television commercials, saying they could not stop their children from
crying," said Abdus Sattar, one of the two founders of Baly Keds enterprise, sitting at his office
in the Baly Complex in Uttara. To meet the demand, the Baly Keds company brought in more
machines and boosted the supply. "I managed to fulfil the market demand to some extent after
that," he added.   In the 1990s, Baly Keds became the most popular sports shoe in the country,
with a 70% market share However, by the 2000s, it had all but disappeared. 

Product Standards
 The Baly Keds name has been and will continue to be known for products which offer
above average value.
 This applies to high priced items, value priced items and all items in between.
 It applies to footwear, apparel, accessories, handbags, sundries and so on. The execution
relative to the price must represent above-average value among options available to the
customer.
 Any product which does not represent above value will not be included in the product
mix offered in stores that are part of the Baly Keds Organization.
 When it is considered that 60 – 80% of consumer purchase decisions are made at the
store level, brand policy and product standards are as much the concern of retail
personnel as of product developers, marketers and manufacturers.

Promotional Plan
 As part of the strategic business plan, the company will develop a promotional calendar
that identifies the various events and sales actions necessary to achieve the company’s
sales and profit objectives.
  The buyers will develop various sub-categories and themes of merchandise that will
create the excitement necessary to attract the consumers’ interest and satisfy a specific
need and want for the particular event.
 A promotional Calendar should have a innovative ideas for each season and not to repeat
every year unless they are of an annual event that the consumers are waiting for.
 It is important to create activities that will differentiate you from your competitors.

Advertising Planning Frequency Strategies

 The diagram on the right illustrates 12 different strategies for planning and spending the
advertising budget in the most efficient manner over a given time period depending on
the desired impact.
 For example: the Bata promotion will be over a span of 2 weeks (concentrated) with 10
radio spots on the first day and rapidly phased down to 1 shot during the last few days
(decreasing frequency) of the promotion.

Markdowns

 There are two kinds of markdowns:

Promotional

 To generate traffic and store excitement by marking down the slow movers and aged
inventories through a cash desk discount or reduction on the retail price of the inventory.

Liquidation

 To liquidate poor sellers and end of line articles.

 Stocks that are for Liquidation have to have a sellout rate of 95%.
Reasons For Markdowns
 Incorrect planning resulting in having the wrong merchandise at the wrong time and in
the wrong quantity.
 Overbuying of merchandise
 Slow stock turn of the merchandise
 Poor supplier selection resulting in late deliveries
 Poor inventory balance: too many line, too many similar articles
 Not identifying slow moving articles
 Incorrect size assortment
 Poor article selection: design, style, color, material
 Over pricing of merchandise
 Special events / promotions
 End of season liquidation

Solutions to Minimize Markdowns

 Study customers’ buying habits and behaviors
 Familiarize yourself with and learn to forecast fashion trends
 Select top, reliable suppliers
 Carefully balance your inventory – lines, style, colour, material
 Test new product / fashion trend cautiously
 Follow up on competition so that merchandise is not over priced
 Make inter-store transfers / regrouping in due time
 Do not accept late deliveries unless to be sure article can still be sold
 Monitor your order commitments in order not to be over budget
 Adjust selling price after 3 to 4 weeks if slow moving article
 Analyze sales and inventory on a weekly basis

Every buyer has markdowns; a good buyer quickly realizes when markdowns need to be taken
and will take them early so that the merchandise can be sold at less of a markdown
 Sourcing versus Shoe Line Building
 Sourcing is one of a number of inter-related activities, which ultimately results in the
collection of footwear delivered to our stores.
 The creation of a collection has two distinct inputs, which can be broken into a series of
processes. These require two different sets of skills. One must focus on the product and
the other the supplier. A successful collection is also dependent on a series of activities
that are customer focused. These different activities must work in harmony and not
independent of each other.
 There are different processes of these activities. Product development and Sourcing on
one side, and range building or merchandising on the other side.
 The process must bring together the two different skills and activities and must always be
seen as part of the whole buying cycle when the collection is finally put together.

Sourcing Channels

 When working with a factory we have three choices, each having advantages and
disadvantages. The difference is the relationship with the person we are working with
and ultimately the factory.
1. Direct: Working with a factory directly has advantages in that you are able o influence
the design and quality by direct visits to the factory and working closely with the
designers.
2. Indirect: This indicates a route to a supplier through a third party, or independent agent
who may be working for one or more factories. Generally, this sales person has a
specific or limited collection depending on the number of factories he works for.
3. Importer: These sales people often have a wider collection form a variety of factories
from different parts of the world and at varying price levels for similar articles. These
people often work with factories that have their own product development an design
teams and can offer new fashions but this may also add to the costs.
 In most cases, a combination of all three may be useful to have the best collection and
product mix.
Sourcing from Importers
For imports, the choice of country and which factory are important. Factors to consider are:
 Country political climate or stability, which may threaten the promised delivery, dates.
 Trade restrictions and possible new quotas and duties, which will affect the costing and
deliveries.
 Manufacturing skills and experience of a particular type of product.
 Lead times for ordering are important if you wish to reorder the article during the selling
season.
 There are various risks and costs to be considered such as labor, pricing, rates of
exchange, letters of credit requirements and the impact on cash flow.
 Under no circumstance must you deal with a factory that engages children in production.
Quality Standards are critical for the satisfaction to our customers and the reputation of the
company’s name. A visit to the factory should be made with every new supplier of volume
orders. On this visit, the buyer should be looking for conditions that may affect the quality of the
product, delivery and service.

 Old or new machinery

 Level of supervision of production
 Quality control inspection procedures
 Sources from which the materials are acquired and their quality inspection of this
material
 Skill level and experience of the production people
 Good relationship of management and workers with minimal disputes
 Who are the major quality retailers that buy from this factory
 The product development and attention to comfort and fit.

These and other considerations make the decision of sourcing very critical to ensure that the
product will be received as ordered, when requested and in quality of the sample.

Sourcing is not just accepting a sample from a visiting sales person and placing an order. It is a
specialized skill requiring knowledge of production, economics, negotiating, costing, raw
materials and the understanding of the different countries economic situation versus other
countries in a similar economic environment.

Advantages of an Integrated Company

 Regular guaranteed supply of merchandise on a preplanned schedule
 Opportunity to place repeat orders for best sellers in short notice (2-3 weeks from
delivery)
 Cost saving compared to purchases from an outside supplier
 Short order lead times particularly as compared to importers
 In-house product development with exclusivity
 No supplier to our retail distribution centre costs
 Savings from not tying up capital for 3 – 6 months lead time with L/C
 Improved stock turn and GMROI
 Not required to take total stock of full season sales in one receipt
 Lower initial stock receiving and less space required in DC
 Less risk with less stock if the article is not accepted by the consumer as expected

Planning Considerations
 Country economics and future trends
 Last season performance overview
 New stores openings, renovations and closures.
 Category sales, margin, markdowns, inventory / stock turn objectives
 Breakdown OTB, sales & stock by Selling Period
 Shoe line configuration by Category & Price Points
 Weekly estimates Stock Planning – Prs & Value
 Order record & delivery schedule
Planning Document #1 - Season Sales by Categories and Margins
 Planning Document #1 (PD#1) is to help the buyers plan their sales estimates for the next
season.
 As the complete planning from shoe line, distribution and inventory are all dependent on
sales estimates,
 PD#1 helps the buyers to just focus on that aspect of the business while meeting margin
objectives.
 PD#1 provides the buyers with historical results to serve as a guide when they plan their
sales estimates.
 These historical results can either be downloaded from the RIMS system or manually key
in by the buyers.
 The contribution % of turnover per category is calculated for the buyers' reference as
well.
 The keying in of net margin for Anticipate Current Season and Estimate for Next Season
help to track if it is in-line with the company's margin objectives.
 The net margin estimates for the next season also allows the buyer to calculate the OTB
at cost value in Planning Document #2 as these two documents are interlinked.
 PD#1 also forces the buyers to plan their markdown objectives against the company’s
benchmark.
Conclusion
Usually a winning product has multi dimensions so that it can serve customers from various
spectrums. A product must possess three levels of identities. The first level is the essence of a
product—how well it satisfies the customer’s needs. The second level is the physical product,
should it be a good or a service. The third level is the product’s shell. It includes all the
additional products and services offered with the product to exceed customer expectations
(Viardot, 2004: 155). If customer satisfaction exceeds the expectation level then the customer is
delighted and only then it is possible to retain that customer. Otherwise, there is a probability of
switching.

Today’s consumers are becoming more aware of product value, quality and fashion than ever
before. It is essential that a buyer have the latest fashions, but equally important that the
merchandise is of the best quality and value available. Knowledge of the product materials and
construction that will be bought and presented to our customers in the stores is a skill that every
buyer must have. This is particular important in respect of pricing the product. The different
materials and quality levels that may be used in a shoe are considerable. All buyers must know
the basics of materials and construction. This knowledge will assist the buyer in quality
upgrading of different articles while having a good appreciation of the incremental material cost.