You are on page 1of 51

Footwear Industry

INDIAN FOOTWARE
INDUSTRY
 The Indian footwear retail market is  As footwear retailing in India
expected to grow at a CAGR of over remain focused on men's shoes,
20% for the period spanning from 2008
to 2011. there exists a plethora of
 Footwear is expected to comprise opportunities in the exclusive
about 60% of the total leather exports ladies' and kids' footwear
by 2011 from over 38% in 2006-07.
segment
 Presently, the Indian footwear market
is dominated by Men's footwear  The Indian footwear market
market that accounts for nearly 58% of
the total Indian footwear retail market. scores over other footwear
 By products, the Indian footwear markets as it gives benefits like
market is dominated by casual low cost of production, abundant
footwear market that makes up for
nearly two-third of the total footwear raw material, and has huge
retail market. consumption market.
 The footwear component industry
also has enormous opportunity
for growth to cater to increasing
production of footwear of various
types, both for export and
domestic market.
Business environment
Athletic footwear industry
Just do it
The Journey
 1960s-Phillip Knight(CEO) & William Bowerman
partnered to
sell running shoes to athletes.
Headquarters- Washington

 1978- BRS, Inc. officially renamed itself to Nike

 2008- revenue in excess of $18.6 billion USD.


Marketing Strategy
 Nike's marketing strategy is an important
component of the company's success.
 Nike is positioned as a premium-brand, selling
well-designed and expensive products.
 Nike lures customers with a marketing strategy
centering around a brand image which is attained
by distinctive ‘swoosh’ logo and the advertising
slogan: "Just do it". 
 Nike promotes its products by sponsorship
agreements with celebrity athletes, professional
teams and college athletic teams.
Nike's marketing mix
contains many
elements besides
promotion.

1. Advertising

2. Beatles song

3. Horror ad

4. Pretty ad
Brand
Ambassadors
STRENGTHS WEAKNESSES

•Competitive •Major income source-


• Self confidence footwear
•Employs more than 30,000 people
worldwide
•Belongs to Fortune 500 companies •Exploit cheap workforce
which 2007 total revenue
exceeded 16 b. USD •Employees child labor
•Large scale operation occasionally
•Strong and innovative marketing
strategy
OPPURTUNITIES THREAT

    •Financial crisis may lead to job


•There is also the opportunity to shortages in a number of Nike’s
develop products other than shoes worldwide subsidiaries;
such as sportswear, jewellery,
clothing, etc. Such higher value • The market for sports shoes and
items tend to bring higher profits.  clothing is very competitive

•  Nike is vulnerable to the


international nature of trade
NEW MODELS
COMPANY PROFILE
 Adidas Ltd is a German sports apparel manufacturer and part of
the Adidas Group, which consists of Reebok sportswear company,
TaylorMade-adidas golf company, and Rockport.
 The company is the largest sportswear manufacturer in Europe
and the second largest sportswear manufacturer in the world.[2]
 The company revenue for 2006 was listed at €10.084 billion, or
about US $13.625 billion and the 2007 figure was listed at
€10.299 billion, or about $15.6 billion.
 MISSION: Our mission is to become the best sports brand in the
world. To that end, we will never equate quantity with quality.
Products Of Adidas Group
Adidas
Footwear, apparel, and hardware such as bags and
balls
Reebok
Footwear, apparel and hardware
Rockport
Footwear
TaylorMade-adidas Golf
Golf Equipment: metalwoods, irons putters, golf balls,
footwear, apparel and accessories
Operating Regions
More than 170 subsidiaries guarantee
marketplace presence for adidas products around
the world.

Sales and distribution of adidas products is


grouped in four regions worldwide:
Europe/Emerging Markets, North America,
Asia/Pacific and Latin America.

Today, adidas is Europe’s biggest supplier of


athletic footwear and sports apparel.
STRENGTHS WEAKNESSES
Adidas is popular in Europe amongNegative image portrayed by poor
soccer and athletic fans . working conditions in its overseas
Reebok appeals to US fans offactories
basketball and football. It hasE-commerce is limited to USA
become the biggest rival to theThe direct sale to consumers is
world leader NIKE. creating conflicts with its own
They have has global presence. resellers
Adidas focuses on performance
development and technology
development while Reebok is purely
sales driven

OPPORTUNITIES THREAT
 Increasing demand in the industry Economic downturn in North
for products available online America and Asian Countries
Increase female participation in Increase in the price of providing
athletics technological solutions (e-
E-commerce will reduce the cost of commerce)
goods sold thus improving the Strong competition from some of
"bottom line" its major challengers in all branches
New technology and innovation to of the business
stay on top of market need. Increase in the Price of Raw
Collaborate with other online materials
retailers to offer Adidas products Nike's strong reputation in the
Marketing Strategies of
Adidas
 Adidas believes that
marketing is much more  Cooperate with
important because shoe is reference groups
in the “shopping goods”
category.
 Cooperate with
 Adidas outsources its famous designers
production and focuses on
marketing  Change the
traditional image of
 Adidas launched several
campaigns like in 2004
sport
IMPOSSIBLE IS NOTHING
CAMPAIGN’,MATCH  It also partnered with
CENTRE CAMPAIGN
MTV.
4P’s OF ADIDAS
PRODUCT PRICE

Attracting competitors' customers. Increasing present customers' rate


of usage.
Sharper product differentiation. Increasing the units of sales.
Special price
Finding other products' uses. packages/cross‑selling products
Reduction in price.
Increasing promotional effort. Price incentive for increased use

PROMOTION PLACE

Attracting other market segments. New geographical markets.

Seeking other distribution National market expansion.


channels.
Regional market expansion.
Advertising in other media.
  Export market expansion.
CONTD. FROM THE 4 P’S
 P3 = PLACE
-locations
-logistics
-channels
-channel  motivation
-market  coverage

 P4 = PROMOTIONS
-advertising
-public  relations
-messages
-direct marketing
-sales
Bata Shoe Organization
Bata Industrials
Worldwide Bata India Limited
 Bata Industrials is a specialized  Incorporated as Bata Shoe Company
division of the World’s largest shoe Private Limited in 1931, the
manufacturer: the Bata Shoe company was set up initially as a
Organization (BSO) small operation in Konnagar (near
Calcutta) in 1932.
 Today, Bata Industrials is one of
world’s largest manufacturer &  Bata India is the largest company
marketer of Safety footwear The
company headquarters is located for the Bata Shoe Organization in
in Best, the Netherlands. terms of sales pairs and the second
largest in terms of revenues.
 Bata Industrials has operations and
production facilities in most of the  Bata India Limited is the largest
Countries worldwide. footwear retailer in India.

 Bata India has more than 1250


 Bata Industrials Footwear stores across the Country.
incorporates more than 100 years
of experience.
BATA – Wrong Target

 In the early 1990s, Bata decided to embrace the high-end segments of


the Indian shoe market as a part of its target market.
 The segment constituted a mere 5 to 10 per cent of the footwear
market in India.
 This segment was not sizable for a company like Bata and the
segment did not gel with Bata’s distinctive competence.
 The top end of the market suddenly became the main focus of the
company and it forgot its bread-and-butter shoes that had given the
company its identity.
 The year 1995 saw the company running a loss of Rs. 42 crores.
 After learning the lesson the hard way, Bata did an about-turn from its
adventure with high-end segment and returned to the mass segment.
Marketing Strategy
 Bata is reinventing itself and has
introduced the concept of flagship stores
to provide complete and unique shopping
experience at par with their stores abroad.
 International trends, relaxed ambience,
great products, and courteous staff at the
new-look Flagship store are all a part of
Bata’s new marketing strategy.
 Reposition brand 'Bata' - High brand recall
for consumer lead to higher footfalls and
better conversions
 Target new market (ladies and kids) -
Filling the missing 45% pie of footwear
market
 Improving shoe line - Launching
international brands, focus on style will
attract new young customer class
95 Paise Price Tags
 It was a strategy to begin sales talk
with buyers curious about price like
Rs 299.95.
 It would automatically create
interest in the product. And from
there salesmen can start their talk.
 The Bata price also had a
psychological impact on the
prospective buyers as it fell short
of an amount that might have
looked like a high price.
 The price tag was devised to
communicate to customers that
Bata values even their five paise.
Bata Overview
Market segment low to medium priced footwear
for the common person across
the globe

Local Strategy Bata runs semi-autonomous


companies targeted at the low
to medium end of the scale.

Marketing Approach Bata clusters countries


geographically into groups; the
expatriate would build regional
specialization & training
activities would be more
relevant on a regional basis for
similar counties

International strategy Bata follows a multi domestic


strategy. It stands for low
Bata’s Offerings
History
 Established in the year 1954 by Mr. D P Gupta,
Mr. P D Gupta and Mr. R K Bansal

 Liberty Shoes Ltd. is a leading leather shoes


brand and is engaged in the manufacturing,
supplying and exporting of the same.

 It is the only Indian leather shoe brand that


occupies fifth ranking among the top shoes
manufacturing companies in the world
Liberty-Quality Footwear
 Liberty has been awarded several  The products are quality tested
times by prestigious awards and it also has management
such as: systems and tools in place such
 2005 – 2006 Export Award as :
 Golden Peacock Innovation  In the year 2000, KAIZEN was
Award in the year 2005&2007  implemented and is practiced
 It has a patented technology throughout the organization.
"HUMANTECH" which states the  The concept of 5S was
company’s philosophy of the introduced in the company in
optimum utilization of human the year 2001 and presently it
craftsmanship and technological is in matured stage and is
excellence. followed religiously.
 SAP was used first time in Indian
 It have received ISO
footwear Industry by “Liberty”.
9001:2000 certification
Marketing Strategy
Liberty has an  The company is broadening their product range from need
extensive based shoes to lifestyle shoes.
distribution  Liberty Shoes is increasing their presence in the high end
channel which has market through concept stores called "Revolutions”.
enabled them to  Revolutions’ strategy is to target women and children to
develop a firm grip increase footfalls.
over the market.  Apart from having presence in malls, Revolutions is also
02 Overseas expanding its reach through the Shop in Shop concept.
Offices  In September 2005, Liberty Shoes and Pantaloon
14 Branch Offices
Retail entered in to a joint venture for the business of
footwear retailing.
20 Overseas  Another significant market that Liberty Shoes addresses is
Showrooms the institutional market. They manufacture safety shoes
300 Liberty for industrial workers. 9% of their revenues came from this
Exclusive segment
Distributors  ‘Sapne Hue Apne’ the entire look of the campaign was
thoughtfully stylized to strike a chord with the upmarket,
375 Retail Stores fashion centric youth.
(10 outside India)
Sales through different channels of distribution
PRICING STRATEGY
 Liberty’s strategy is to scale up in all  Liberty's strategy of introducing various
directions, i.e.to widen customer price points to cater to different income
base by introducing products for all groups will help them in garnering a
categories of customers, through greater market share.
different channels of distribution.  Moving up the value chain by introducing
 Liberty wants to create foothold in the brands to cater to higher income groups
domestic and export market. as well as putting up retail shops in malls
will auger well for the company.
 With the implementation of VAT at a
 This strategy will help establish their
flat rate of 12%, the company has
brands as well as increase margins.
taken a long term view of their pricing
 Another interesting aspect is the
strategy which has been revised from
company's change in focus from men's
the April 2005.
shoes to concentrating on shoes for the
entire family.
SCALING IN ALL DIRECTIONS
Action Shoes
 Action is headquartered in Delhi.

 Quality shoes for the whole family-ranging from


casuals to formals.

 Most Action offerings are in the mid - range price


segments.

 COMPLETE FAMILY FOOTWEAR

 A backward integration strategy

 A forward integration strategy


Action Shoes
 Quality commitment.
 Manufacturing excellence.
 Quality people.
 Quality customers.
 Social responsibility.
 "Lala Muni Lal Mange Charitable Trust" since
1977. Today it is engaged in various kinds of
charitable activities.
 Marketing strategy.
 Wide consumer base.
 Wide price products.
RELAXO
Relaxo
 Relaxo stepped into the footwear industry in 1976 .

 It started off with the manufacture of Hawaii slippers and


subsequently diversified into manufacturing casuals,
joggers, school and leather shoes.

 From a modest sale of around Rs. 1 million in the year


77-78, it has today crossed the Rs. 2000 million+ figure.

 Relaxo has the capacity to manufacture over 100 million


pairs, per annum.

 customer base of around 100 million people.


The
Relaxo Quality
advantage

Respo
Producti
nse
on
assura
capacity
nce
Marketing strategy
 Economies of scale.

 Outsourcing for many


companies.

 Hitting customer base in


lower and middle class.

 Slippers & School shoes

 Low price products with


good quality
COMPARISON OF
COMPANIES
COMPANIES AVERAGE GROWTH
RATE (2005 – 2008)
NIKE 10.7 %

ADIDAS 22.46 %

BATA 7.8 %

LIBERTY 11.16 %
COMPARISON OF THE COMPANIES
(PORTER’S MODEL)
BASIS OF NIKE ADIDAS RELAXO ACTION BATA LIBERTY
COMPARIS
ON
BARRIERS ABSENT ABSENT ABSENT ABSENT ABSENT ABSENT
TO ENTRY

BARGANIN LOW LOW HIGH HIGH HIGH HIGH


G POWER
OF BUYERS

BARGAINP LOW LOW HIGH HIGH HIGH HIGH


OWER OF
SUPPLIER
THREATS OF HIGH HIGH HIGH HIGH HIGH HIGH
SUBSTITUTES

RIVALRY HIGH HIGH HIGH HIGH HIGH HIGH


AMONG THE
EXISTING
COMPITITORS
COMPANIES TARGETING THE CONSUMERS BASED ON INCOME
PER ANNUM

RICH CLASS
PUMA, NIKE
ADIDAS

UPPER MIDDLE
ACTION, LIBERTY,
CLASS
NIKE, ADIDAS

LOWER MIDDLE
BATA, ACTION, LIBERTY,
CLASS
NIKE, ADIDAS, RELAXO

BATA, ACTION, RELAXO


LOWER INCOME
GROUP
REVENUE COMPARISON

0.25

0.2
REVENUE (BILLION US $)

0.15

BATA
LIBERTY

0.1

0.05

0
2005 2006 2007 2008
YEARS
Got your Choos?
Premium pricing (as in the case of luxury items)
ensures that the item is not available to a wide
market segment.
Jimmy Choo shoes are a fine example of a
successful premium priced item
Premium pricing not only implies good quality but
also ‘exclusivity’
Choos are also known for their uniqueness
Jimmy Choos are priced so that not many people
can afford them – only a certain ‘segment’ of the
market wears them
This patented pair costs £44

Approx 99, (approx Rs. 31,300)


800

This one costs a mere £465.00

(approx Rs. 33,000)


THE MOST EXPENSIVE
SHOES
THE CINDERELLA
SLIPPERS
How much could a pair of
shoes cost?

Well, the world's most


expensive pair of women's
shoes costs a cool $2
million!

The one-of-a-kind 4½-inch


stiletto sandals are studded
with 565 platinum-set Kwiat
diamonds (which include 55
GROUP 5
NAVEEN
NAKUL
KRANTI
MILAN
NEHA GULATI