BoConcept a danish manufacturing is entering India.

2. How can BoConcept expand its market by understanding this buying behaviour?

4. To analysis the business and consumer trend in India. So that BoConcept can run its business through this perspective.

5. BoConcept assesses the factors that influence the buying behaviour of the target group for example decision maker who influences the buying decision.

6. To analysis and find out how to promote BoConcept products.

7. The determine the price levels in Indian local market.

10. Fast growing company more than 216 stores in 51 markets

11. Good service and innovative products

12. Every year new collection

13. Ambitious targets: to be no. 1 brand in urban design and interior.

14. The campaigns reach the consumers in every market with help of marketing-employee on each market

15. The promotion is developed in Denmark and shown in the whole world

16. Wide selection, which suits every home

17. Direct & targeted dialogued with the customers

18. Professional webpage to sell their products with local languages and developing webpage over the next years

19. Good and modern designing and good positioning on market

20. Same target group all over the world

21. Franchisee is more involved in Franchise conference.

22. Trained and educated employees

23. Bigger market share, better than expectation

24. Three distributions centres in secure and modern countries: Ølgod and Herning (Denmark), New Jersey (USA) and Tokyo (Japan) and opening next Shanghai (China)

25. Home delivery gives better service and delivered on time

27. To many costs connected to the value chain

28. To many medias to reach target group

29. Expensive logistic cost

30. Geographically distance between stores and distribution centres which is costly

31. To depended on the internet

32. Franchise contracts is difficult to cancel

33. 3 – 5 million kroner to open a BoConcept Franchise

34. If the stores franchise does not sell enough BoConcept lose money.

35. Different price level in every country

36. Little collection

38. 1/3 of those who visit the homepage has searched on ”design sofa”, and got aware of BoConcept

39. More and more invent on design and quality

40. New investors are ready to open new BoConcept stores in new markets

41. Focused on e-commerce, where India is also far behind on IT technology

43. Well established local competitors such as: Bombay swadeshi store, Bombay dyeing, Godrej, Welspun, Style spa

44. Threats from new foreign competitors who are entering into Indian market such as: from China, Malaysia, Italy, Germany, Singapore

46. Centralized branding and marketing platform – Catalogue and web-site (decoration and trend inspiration)

47. Store design and planning

48. Events and campaigns

49. Ads and newsletters

50. PR and communication platform

51. Yearly retail conference (BiC) with introduction of new product range, new concepts, marketing activities, workshops etc.

52. Continued training and education of sales staff via BoConcept University

53. Full IT platform

55. Based on English common law; judicial review of legislative acts; accepts compulsory ICJ jurisdiction with reservations; separate personal law codes apply to Muslims, Christians, and Hindus.

56. The political Situation in the country is more or less stable.

57. India is fighting several times with Pakistan for the reason of geography and terrorism. That is not impressive in order to attract new foreigner markets. This led foreigner trade not investing in business.

58. Low access to banking facilities.

59. Government is facing pressure to liberalize the duty structure.

60. India still involves more legal fulfilments.

61. Changes in laws and regulations, including changes in accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax law interpretations) and environmental laws in domestic or foreign jurisdictions.

62. Without limitation, competitive product and pricing pressures and their ability to gain or maintain share of sales in the global market as a result of action by competitors.

63. Political conditions, especially in international markets, including civil unrest, government changes and restrictions on the ability to transfer capital across borders.

65. Stable macroeconomic policies

66. Improved relationships with Europe and North America

68. Rate of inflation in India is an important economic indicator. As of financial year 2008, projected rate of inflation in India is lower than financial year 2007, when an inflation rate of 5.77 percent had been predicted. As per wholesale price index, rate of inflation in India was 8.75 percent in 2007. (CIA)

69. During 2005 the country's unemployment rate stood at 6%. Unemployment rate in 2007 as estimate is 7.2%. (CIA)

70. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China.

71. There is a continuous growth in per capita income; India’s per capita income is 797 dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian consumers. There is a continuous growth in inflation. It was 6.4% in 2007 and 8.3% in 2008. Consumer expenditure is significantly increasing each year. (earthtimes)

72. The Indian economy witnessed robust growth during 2007–08 and this was the third year in succession when the Indian economy grew by 9% or above. However, the global economic downturn has caused GDP growth to decline to 7.1% in 2008–09. (rbi.org- Reserve Bank of India)

73. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. (The new work times:nytimes)

74. The government of India imposes an income tax on the taxable income of individuals, Hindu Undivided Families (HUFs). Income is taxed at a flat rate of 30% for Indian companies, with a 10% surcharge applied on companies with gross turnover of more than Rs10 million. Foreign companies pay 40% of their gross turnover.

75. The country is unequal in infrastructure and development. Some cities are very rich and some town are very poor. There is huge percentage of unemployment in the country.

76. Despite the unequal economic balance, India has improving economic factors and its growth rate.

77. Increasing GDP and PPP, rise in employment, education, income, consumer consumption power and expenditure.

78. Imports of furniture were liberalized in April 1998 and importers in India require no license or prior permission to import furniture.

79. Income distribution: gap between rich and poor

81. Largest working age population pool in the world

82. Highly favoured FDI destination

83. Higher demands for various products

84. Markets are more attractive

85. Unemployment

87. Approximately 72% of the population lives in rural areas, a major proportion of this population migrates to urban areas to look for job opportunities. India’s population is young, with a median age of 25.3 years.

88. Growth in dual income – due to more and more women working today

89. Changing tend – use of luxury products, more clothing, expensive services

90. Unequal social class- rich becoming richer, poor are still poor.

91. Public health investment comparatively low. India ranks a poor 66th among 88 developing and transitional countries on the 2008 Global Hunger Index.

93. Rapid urbanization

94. Improving literacy rate

95. Poor health care

96. Weak social security

98. A strong knowledge base and low costs well supported by government policies making India an attractive R&D destination.

99. The government is flexible on the contents of growth in the technology sector. Government policy on technology has been pro-development, with a significantly higher allocation for the development of the technology knowledge base and industries.

101. Cost advantage

103. Constitutes 0.5% of the total GDP

104. Employs 300,000 people

105. Highly unorganised – only about 15% in organized sector

106. Organised sector growing at 30% CAGR

107. There are about 5000 firms in the domestic organised sector, and nearly 10500 importers of furniture. Products are classified based on material used, and consumer segment. Wooden Home furniture is the biggest segment. Household furniture designs are region-specific. The trend of import furniture is increasing in prosperous households.

109. Manufacturing competitiveness in several sectors

110. Regulations and laws are progressively more open and business friendly

112. Tax laws

113. Infrastructures

114. Reduced availability of manpower for retails operations

117. Extend existing product lines

118. Product replacement annually

121. Well known local market, huge market

122. Availability of large varieties quality wood made products

123. Cheap labor and raw materials

124. Availability of young and productive labor

125. Small restrictions from government compare to restrictions to foreigner companies

128. Weak rupee against other strong currencies

129. Lacking to generate economies of scale

131. One of the largest consumer marked and increase in the number of house holds

132. Growing urbanization and greater awareness about designed and styled household goods and brand sensitivity.

133. Increased disposable income and purchasing power of Indian customer opens new market development .

135. Growing foreign investors

136. High risk and uncertainty of future

137. High cost of imported products

138. Need to improve working conditions

139. Competition in Domestic Market and international market, especially China.

140. Geographical disadvantages.

141. International labor and environmental laws.

143. How do they buy?

144. When do they buy?

145. Where do they buy?

146. Why do they buy?

147. How often they buy?According to euro monitor consumer report; over the years, the expenditure on non-food items has grown faster that the expenditure on food items. India is witnessing a great change in the lifestyles and buying patterns of consumers. Convenience foods like instant coffee and noodles are now very popular. The number of modern gadgets like washing machines in the number of house holds is now on the increase. Yesterday’s luxuries are now becoming today’s necessities. The Indian consumer has more money and is now using it more liberally than ever before. Food and drink have acquired a greater fun image. Because of the TV and the booming media, even the economically lower class of the Indian population craves for a lifestyle like the well-to-do people they see on the TV.<br />To understand those patterns, we focused our research on understanding consumer behaviour. According to our primary and secondary research, we found that the consumers were really aware on brand and extra value of the products. The people often buy furniture whenever they needed, they use television, internet, and newspaper as media tools, and friends and relatives are also big influencer, young people and who have good income they spend on buying, <br />By the reason of rapidly increasing urbanization and modernization, liberated political policies, changing social lifestyle, increase of youth forces, increase in ratio of working women, increase in jobs, urban India adopting a global lifestyle, increase in technology, intellectual resources etc.<br />OT ------> PEST<br />(Opportunities, Threats vs PEST India)<br />Opportunities are abundant. As BoConcept focuses on specific areas to pursue those opportunities where effectiveness is possible. Weaknesses of competitors are also opportunities for BoConcept.<br />External threats arise from political, economic, social, technological (PEST) factors. Technological developments may make offerings obsolete. Market changes may result from the changes in the customer needs, competitors' moves, or demographic shifts. The political situation determines government policy and taxation structure.<br />Along with the opportunities and threats for the BoConcept, they have difficulties on growth stage. They need to be patient to accumulate their potential customers by appropriate promotion. <br />By exploiting opportunities and adopting threats in new market makes competitiveness. Mainly the situation of country plays a big role. If there are obstacles from the rivalry in industries, company cannot growth easily. But by analyzing the current situation in India, there are opportunities to gain competitiveness throughout differentiation. <br />Evaluation<br />Industry competition<br />Environment: <br />Regarding the Macro environment; a foreign company entering in a new market can affect my policy, economy, socio cultural and technology factor. Those factors can affect to develop new market and penetrate. By evaluating Indian market, we can find there are always opportunities for the marketers who wants establish business. The economic growth, improved political situation and legal factors, increasing social welfare, invention of new technologies directly affect to the business. Hence the improving Indian situation makes positive opportunities and encourages investment in the country. <br />Internal factor including; motivations, communication of the company also can affect the quality of services. To strength those factors; BoConcept management, company policy, marketing strategy, which are superior resources sustain the quality of products and expand market shares. <br />Competition:<br />As big giants are involving in furniture industries can increase threats for BoConcept. Pantaloon, Shoppers’ Stop, Trent, RPG, Vishal Retail, Reliance and Tata group are also joining in the furniture retailing. Others included is Godrej & Boyce manufacturing Co Ltd, Style Spa, Furniture Concepts, Furniturewala, Bombay deying, Bomboy store have high competition in the market. <br />These players along with some regional players have been advertising through billboards, cinema halls, print and even some television advertisements as in the case of Nilkamal and Godrej among others. Hyper-malls and chains too have been advertising some of the discounted and special offers on furniture by way of city specific print ads, handouts and billboards.<br />By analysing micro environment; competitors can affect BoConcept´s policy but product value, design and quality level still can be out of their access. <br />Consumer behaviour<br />By analysing primary and secondary Data, we can evaluate the consumer behaviour as follows:<br />Age- Age between 24-50 is the highest spending on furniture. This age group prefer modern, mix and casual furniture styles. Since the country is follows its traditions and culture. The consumers are highly family orientated. <br />Brand- Respondents usually prefers to have branded products available in the market; Respondents choose the brand for the value of product and comfort level. <br />Quality- All the respondents were keen about the quality. Respondents were aware about quality than price. <br />Price- Price level must be negotiable and affordable to get consumer. As respondent rate shows very low percentage of people are rated western furniture as expensive price. <br />Income: It was observed that the respondents` average income is Rs 45955 and their average spending on furniture is Rs 29622. This means the consumers are spending money to the furniture merrily. <br />Family values: It was observed that for the Indian consumer family is the most important thing. Their family value and lifestyle is observed by social prestige and status. For this reason they are changing their trends. They were very close to the family and seek advice for their purchasing. A huge percentage of consumers make decision according to their family´s needs. <br />Media: All the respondents were taking their purchase decisions based on the brand presence in media either in electronic media / Print media/ TV. They all were very keen about the new arrival of the brand presence in the media. Also respondents impressed by their friends and society and their lifestyles. <br />BoConcept Indian market (A perceptual map)<br />Throughout all the perspectives we analysed, we can place BoConcpet in Indian market at the beginning stage. The perceptual map shows the BoConcept in Indian market. <br />High PriceLow PriceHigh ImageLow ImageMassmarketMiddlemarketAffordablemarketAff. LuxarymarketLuxarymarket<br />Figure SEQ Figur ARABIC 15 Source: researcher analysis<br /> Suggestions for solutions<br />Marketing strategy to adopt in the future <br />´´no limits in colours. no limits in size. no limits in taste. no limits in cool design. no limits in customisation. no limits in BoConcept´´.<br />BoConcpet in India, can use marketing mix strategy for the future prosper. By keeping their current image, they even can offer more extra value to the costumers. For example: by reducing distributions cost, haring Indian cheaper manpower, segmenting customers as their status, and by making segment of their product lines etc. They can adopt following strategy.<br />Product strategy:<br />With increasingly (expect financial downturn duration) annual revenue more than 1 billion; producing full product range comprising furniture and lifestyle products for private homes. BoConcept products are including these features: quality, features, options, style, brand name, packaging, sizes, after-sales services, warranties, returns, etc. BoConcept products are really strong brand with high quality. The products are convenient which are based on urban design. The products are in different colors, different design and different size so that consumer can choose as their wish with wide selection. BoConcept products are multi functional as well for example: sofas can use for seat and bed which indicates uniqueness. Products are environmental friendly with awareness with environment and climates. By using BoConcept product, consumer can feel pleasure and luxury of lifestyle. BoConcept products are innovative and satisfactory. <br />Although India has traditional heritage and cultural country, time led Indian huge development in information technology and increasing literacy and employment rate. As people becoming more sophisticated and wishing luxury life in city areas. More than 50% people in India are wishing modern, qualities and sophisticated furniture. Hence BoConcpet can use its premier product strategy for the smart customers. That leds to product differentiate on the market. <br />Price strategy:<br />Pricing is basically setting a specific price for a product or service offered. The pricing strategy depends on its product position in the market. The company may use various pricing strategies such as penetration, skimming, competitive pricing, psychological pricing, price wars, etc. Normally company uses penetration prices if its product is entirely new to the market so it may charge low prices to increase market share. <br />Setting a price is not something simple. The general law that a low price will attract more customers. If the franchisee or retailers will sets the price too high, that does not attract customers. If the price sets too low , company can`t reach its profit and may customers can think negative; like it is low quality product. Hence setting the price is very essential. The price should be affordable according to quality of product by considering consumer income status and their buying behaviour. So BoConcept has to set up its competitive pricing strategy to attract consumer in Mumbai market. <br />BoConcept has to attract its middle and high class people by setting appropriate price, it must not be like lower than local retailers and not higher than those targeted customers could not purchase. That keeps brand image as always standard. <br />Promotion strategy:<br />Once the communication objective is identified, then it is imperative to analyse the message and the promotional mix that is used by the company including advertisement, sales promotion, publicity and personnel selling. <br />For instant India is very communicative country with huge percentage of IT sector. There are several option to promote BoConcept products. By advertising on TV-channels is most effective, newspapers, magazines and posters are mostly common way. E-commerce and M-commerce is highly increasing, that means BoConcept can offer and promote its services through those means. <br />In Mumbai there are several public places where business can promote through PR (Public relation). BoConcept can held different programme and events to promote company’s image. Press relations, public relations, events, exhibition centres are also common means in Mumbai. <br />Personal selling is also one of the reputed media in India. Face to face interaction with customers (oral communication), sales consultants, sales assistant, sales by phone can use to prompt products. <br />Direct marketing where BoConcept can select some potential customers in the area and start direct mails, internet marketing and telemarketing. <br />Place (Distribution) strategy<br />Since Mumbai is a big financial city of India which is overcrowded and with high traffic area. Mumbai driven by high trading volumes for equities and good presence of global banking and financial services firms, Mumbai has grabbed a place in the world's top 10 financial flow hubs list. Mumbai is the centre city for shipment as well. <br />BoConcept products Denmark to Mumbai will deliver through shipment. The products will shipped from the European Distribution Centre (EDC) located in Ølgod, Denmark as it is a international collection which is being QC'ed by BoConcept. It is a far way to reach. <br />But the good thing is by the end of next year the Asia Distribution centre (ADC) will be opened, which is located in Shanghai. It will make easier to distribute products to Asia Pasific, this will make shorter lead-time for the customers in India. It will minimize the cost of distribution as well. Hopefully it will be success.<br />Conclusion<br />In this research we have found out that India has had one of the consistently highest GDP growth rates of the last few years and further liberaliza