Submitted by Rajeev Nair Roll No :

eMEP-10-023

Matrix Footware India Matrix Position in 1989: Strengths: Market leaders with 17% market share. The company was built around Value-for-money (V-F-M). Focus was to cater to economic segment. The strategy was low-value, high-volumes. Quality and affordability were strengths. Primary audience were Growing Indian middle class. Issues: Matrix changed his product line from Economy brand to Premium brand owing to the competition from the other companies who shifted their focus from utility marketing to lifestyle marketing. Matrix focused on High-value, Low-Volume mantra. Change in product line caused the company to feel that they were selling Fashion accessories more than their flagship product footwear. Indian middle class people were betrayed and created dissonance in their mind. Competitors took advantage of the situation and rushed to fill in the void left by Matrix in the economic segment and new entrants came in to take advantage of the premium segment. Matrix didnt have the expertise to tackle premium segment. Key Product Decisions : Matrix was into Mass-marketing and didnt have the skills to build premium brands. Moving to premium brand caused operational problems. Alliance with top of the line footwears added to the inventory. Sales people were not capable of selling. Outcome: 1991 Matrix recorded its first loss in 43 years which amounted to 8 crores and in 1992, sales fell by 7% and the loss rose to 9 crores. Matrix position in 1992: Key decisions: Ended alliances with Transnationals. Changed their product-mix strategy to focus only on footwear and removed fashionaccessories. Product line was refoucesd on economy segment and shelved the premium segment.

 Revisited the incentive program. Segmented their retail chain into 3 categories and focused majority on economy segment and rest on premium and top end stores. Slashed the production of premium products which caused the raw material bill to fall by over 45% Upgraded the logistics and computerized their inventory management systems. Slashed the ad-budget into half and offered a 25% discount to ensure people flocked the stores again. Matrix position in Future: Issues: Stevens noticed that the sale of Matrix footwear is declining as they have become outdated in fashion and is not attracting the youths. People as well as companies are moving towards premium offerings. People are ready to pay more for their footwear these days.

Should Matrix foray into youth market/fashion accessories market? Why? Product-Line analysis: Premium segment is growing at a rate of 30% even though the it accounts just a mere 12% market. Premium products have high margins. Youth are interested in new styles. In view of the above, Matrix should do Line modernization . It is very important for Matrix to do continuous modernization in line with the technology offered . This will keep the company in the competition and as well . Again Matrix can use a piecemeal approach and test the waters by going to the Premium segments. Also it is good for Matrix to widen their Product mix by including fashion accessories . This will help the company in earning profits, but the primary focus should still stay with Footwear. Does the product policy impact the value proposition of Matrix store? How? Yes the change in product policy will definitely has an impact in the value proposition. Matrix footwear is always known for Value-for-Money offerings and not premium offering. Premium offering will target only the Youths. The premium offerings make the product high priced. But according to Stevens, the middle class people are willing to pay more for their footwear. By stretching the product line and modernization will definitely benefit Matrix with the population of Youths are more than the older generation. How can Matrix diversify into unrelated areas like fashion accessories without impacting the mistakes of the past? Matrix already has a foothold in the footwear segment. With the peoples midset shifting and since the Youths demand more of the fashion , which is a lifestyle change can help in a big way for Matrix . They need to still keep their footwear as their core segment and branch out with fashion accessories starting with what goes along with the footwear.

One of the concerns would be regarding manufacturing and distribution which can be addressed by starting the fashion accessories in a small way. Advertisement needs to have a second look to market both the premium and economy brand and the fashion accessories. Modernization and stretching of Matrix product line and product-mix is definetly a need keeping the youth and future in mind.