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FLOW OF PRESENTATION Introduction Current Marketing Situation Threats and Opportunities Analysis Objectives and Issues Marketing Strategy Action Program Recommendations Batch 2009-2911 Stevens Business School Marketing Plan
INTRODUCTION FABRIC OF INDIA India's largest private platform for products that are made from traditional techniques, skills and hand-based processes Initially commenced as a village based industry in 1960 by John Bissell Links over 40,000 craft based rural producers to modern urban markets Promotes inclusive capitalism, through its unique COC (community owned companies) model Marketing Plan Batch 2009-2911 Stevens Business School
INTRODUCTION Fabindia Products Batch 2009-2911 Stevens Business School Marketing Plan TEXTILE BASED
furniture, lighting, stationery, tableware, cane baskets selection of handcrafted utility items NON- TEXTILE BASED Organic Food Products (July 2004) cereals, grains, pulses, spices, sugar, tea, coffee, honey, fruit preserves herbs NON- TEXTILE BASED Authentic Personal care products (March 2006) soaps, shampoos, hair oils, pure oils, moisturizers, body scrubs, face packs, hair conditioners special skin care products
INTRODUCTION Awards for Fab India • Awarded “Best Retail Brand, 2004” by The Economic Times of India. • Got “Designer Promoting Indian Craft or Technique award” as Hall of Fame reward. Annual Report(2008-09) Annual turnover of the company is in the range of Rs 500 crore Profit ranges between Rs 35- 40 crore. Registered a CAGR of about 58% in the period 2006-2008 Batch 2009-2911 Stevens Business School Marketing Plan
INTRODUCTION FabindiaStore locations 108 stores in 40 major cities of India. 6 stores in international places including UAE, Dubai, Bahrain, Italy and Rome. Online Shopping & Exports to 34 countries Batch 2009-2911 Stevens Business School Marketing Plan
Fab India: timeline Early 80’s 1990’s 1999 2001 2004 2006 2010 1960 7 Batch 2009-2911 Stevens Business School Vision:200 stores and a turnover of Rs.1000 crore by 2011
Regional -Law Garden Market for buying handicraft and Gujarati outfits
10 Batch 2009-2911 Stevens Business School
STRENGTHS Quintessential Indianness in fabric through the years Popular for authenticity of hand-woven fabric Sourcing system from rural India Strong supplier relationship Provision of capital loans (in agreement with banks) Leniency on order fulfilment & no-return policy 100% use of supplier’s capacity Sustainable employment opportunities to rural skilled poor Employees are given autonomy and hence inducing accountability Focus on customer retention instead of generation Large chunk of buyers are repeat purchasers Product quality improvement done keeping this in mind
Word-of-mouth strong enough not to require any advertising
WEAKNESSES Delays in delivery from artisans Opportunity losses due to irregularity Difficult to predict quantity and time of thaancoming from weaver Also arises as different stores are encouraged to order different stock Insignificant spend on marketing communications Losing out on attracting new customers instead of depending only on repeat purchase Not enough personnel to push Fabindia to greater growth Unavailability of people experienced in retail sector Unavailability of people believing in the same mission More formal processes would face resistance from existing employees Untimely delivery of products Transport, storage and shelf-life issues of organic foods Suppliers were spread pan-India
OPPORTUNITIES Latent potential of organic foods market Leveraging changing consumer tastes & perceptions Awareness generation of merit in these foods Utilize multi-brand retail outlets and construction groups Display of Fabindia products in MBOs and department stores Leverages footfalls of the store, increasing likelihood of sales Use of Fabindia home furnishings in modular flats of buildings If consumer buys this flat or any other, and is impressed, will use Fabindia furnishings Leveraging Web 2.0 tools and techniques Tying up with matrimonial sites for designer fancy wedding wear Interactive website for designing as per individual requirements Customization level is high Lead time between fixing of occasion date and event can be used for delivery
THREATS Unorganized local operators Handloom retail shops/chains in regional pockets Souvenir shops providing indigenous products at lower prices Entry of organized brands and companies into retail High expected growth & entry of business houses in large ways Competitors access funds from conglomerate partners or markets Tilt of Indian consumers towards foreign brands Foreign brands alter lifestyle choices of the target market “Imported” or designer home furnishings have greater ‘flaunt value’ vis-a-visFabindia Development of government co-operatives Boost in future to KVIC and state handloom units Improvement in their ambience and shopping experience Rising prices of real estate could hamper growth Opening new stand-alone stores will be tough Experimenting with formats and markets may not be advisable
MARKET SURVEY Objective: To explore: The affective responses Fabindia’s consumers Cognitive responses of Fabindia’s consumers Purchasing behavior of the consumers for products of apparel category Sampling Design Sampling Unit : Customers of Fabindia Sampling techniques : Convenience Sampling Sample size : Customers -30 Batch 2009-2911 Stevens Business School Marketing Plan
MARKET SURVEY 16 Batch 2009-2911 Stevens Business School
MARKET SURVEY 17 Batch 2009-2911 Stevens Business School
MARKET SURVEY 18 Batch 2009-2911 Stevens Business School Which of the following do you think was the instrumental in your choosing to buy the garments? Rank them on the scale of 1 to 5 with 1 being the most important.
MARKET SURVEY 19 Batch 2009-2911 Stevens Business School Rate your experience at Fabindia in terms of your satisfaction level for the following: (Highly Satisfactory, Satisfactory, Average, Unsatisfactory, Highly Unsatisfactory)
SUMMARY OF MARKET SURVEY Batch 2009-2911 Stevens Business School Marketing Plan
Batch 2009-2911 Stevens Business School Marketing Plan
FABINDIA: 2011 Early 80’s 24 Batch 2009-2911 Stevens Business School
FINANCIAL COMPARISONS Financial aspects of Fabindia have been compared with Pantaloons Though not a direct competitor, it represents the Indian Retail Industry very well Financials for its direct competitors such as Anokhi, Khadi Gram Udhyog etc. were not available, restricting comparison This assessment contrasts the performance of Fabindia with respect to the biggest retailer of India Hence, we get a sense of the feasible options available with Fabindia to raise funds
INTEREST COVERAGE RATIO Batch 2009-2911 Stevens Business School Marketing Plan The interest coverage ratio of Fabindia is far higher than that of Pantaloons. Hence, raising funds through debt is not a big challenge.
INTEREST COST AS % OF SALES Batch 2009-2911 Stevens Business School Marketing Plan The interest cost as a percentage of sales for Fabindia is far lesser than that of Pantaloons. Hence, raising funds through debt is again not a big challenge.
PROFIT MARGIN RATIO (IN %) Batch 2009-2911 Stevens Business School Marketing Plan The PAT as a percentage of sales of Fabindia is higher than that of Pantaloons. Though retail industry works at low margins, Fabindia’s margins are quite high. Hence, raising funds through debt is not a big challenge.
OPTIONS AVAILABLE DEBT FINANCING Pros The decision authority stay with them, hence can stick to their mission Healthy current ratio (around 2:1 throughout years) A very healthy interest coverage ratio (as high as 16 times) which is quite higher compared to Pantaloons, Shoppers Stop etc. (1.5%-2.5%) A very healthy debt to equity ratio Interest cost as a percentage of Sales is very low (0.006%) Family owned Cons Debt acquired may not be huge Loose out on the expertise of other organisations which can be brought in through JVs or investments
OPTIONS AVAILABLE PRIVATE INVESTORS/ JVs Pros Huge investments can be brought in Professional expertise can be brought in Cons Decision authority gets diluted Emphasis may shift to profit maximisation and hence Fabindia’s mission may get diluted
The FabIndia Website gives information about the various fabric crafts like Chikankari, Kalamkari, Batik etc. for the customers.
We will bring this art on ground for them to experience it first hand and also learn it.
Every metro will have a 2 day workshop cum exhibition where these artists will put up stalls about these crafts and exhibit the work along with “Live Craft Workshop”, workshops (for more knowledge and interest) for keen audience.
As an extended activity, on weekends FabIndia will have “weekend promotions” with special focus on “Women of Today”.
Men can be encouraged to increasingly visit the stores with the women in their lives with offers like “ bring your mom/sis/wife/ girlfriend to shop, and get x% off”
FabIndia will tie up with various NGOs like Breakthrough, Jagori etc. for their cause of empowering women.
Viral video to be launched in association with Breakthrough ( along the lines of Mann keManjeere)
Objective- The passion group identifies with the theme ““Women of Today” and results in new customer acquisition 32 Batch 2009-2911 Stevens Business School
RECOMMENDATIONS AT A GLANCE Heavy investments in back-end of value chain Supply chain development for efficiency and quality management Expansion aiding strong regional presence Outlets to counter regional competition Sourcing from local suppliers for outlet and other regions will be easier Growth through harnessing new customers Cannot depend on existing customers to counter competition Must create new customers in all segments Tie up with different types of graduate schools for talent Rural management graduates for managing supply chain and rural initiatives Management graduates for helping growth in front-end and retail arms
THANK YOU Batch 2009-2911 Stevens Business School Marketing Plan