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Business plan for nash & omie apparels
1. Nash & omie business plan.
Executive Summary
Nash & omie is a recent manufacturer of a Casual clothing line targeted at males between the
ages of 18 and 35. Nash & omie not only develops the clothing line, but supports it with
advertising and promotion campaigns. The company plans to strengthen its partnership with
retailers by developing brand awareness. Nash & omie intends to market its line as an alternative
to existing clothing lines, and differentiate itself by marketing strategies, exclusiveness, and high
brand awareness.
The key message associated with nash & omie line is Casual, funky, versatile, and expensive
clothing. The company's promotional plan is diverse and includes a range of marketing
communications. In the future, the company hopes to develop lines of clothing for women, and
children. Also, extend the range by adding add-ons and accessories for Men, Women and
Children. These accessories will include Ties, Shoes, Belts, Scarf’s, cologne/perfume, jewelry,
eyewear, watches, etc.
Mission
The mission of the company is to provide a nash & omie for consumers, based on style and
quality.
Legal Business Description
Nash & omie is founded as a Private label under the Parent company, The NRK Co. with
principal office located in Mumbai, India. All operations, from administration to marketing
strategies, take place at this Head office location of approximately 7500 square feet.
Strategy
The Nash & omie strategy is to aggressively develop and market a full range collection to
consumers. The company intends to market its line as an alternative to existing clothing lines and
differentiate itself through its marketing strategies, exclusiveness, and brand awareness. Nash &
omie intends to build on its core portfolio of products and overcome any obstacles by using the
company's expertise in the clothing industry.
The company's goal in the next year is to make an overwhelming impact on the fashion industry
and create a large consumer demand for the product. The company's goal in the next 2-5 years is
to venture into women's and children's clothing. It plans to also license a line of cologne and
perfume, bedding, underwear, small leather goods, jewelry, and eyewear.
2. Strategic Relationships
The company has strategic alliances with the Entertainment Group. These alliances are valuable
to Nash & omie because they provide the needed exposure for its line and the association of its
products with celebrities. Celebrities are valuable assets because they receive free clothing for
interviews, concerts, and Events.
Keys to Success
1. Seek out feedback from our customers to develop a successful clothing line that meets
their needs and tastes
2. Develop a niche market for our unique apparel
3. Maximize profits by selling through the Internet
4. Maintain low overhead costs by monitoring and scheduling production
5. Implement a successful marketing campaign to inform the existing clientele and the
public of our new image
6. Build brand image and brand equity through marketing and promotions.
nash & omie products will be priced at the high end to reflect the quality and exclusiveness
associated with the brand. The company will use high-end materials such as China Linen, 60s
Poplin, Eco- Friendly Cotton and high gauge denim. When a mark up is placed on nash & omie
products, customers are willing to pay the premium because of the perceived value and quality
guarantee that comes with all products. The nash & omie line is targeted at males between the
ages of 18 and 35.
Market Analysis Summary
Market Description
Apparel sales are driven by economic conditions, demographic trends, and pricing. Fashion,
while important for an individual company, plays a limited role in overall market demand.
India's retail sector is worth US$ 350 billion and is growing at a compound annual growth rate
(CAGR) of 15 per cent to 20 per cent at present,as per a PricewaterhouseCoopers (PwC) research
report titled, '(Winning in India's retail sector: Factors for Success)'.
Of the total Indian retail market, 8% constitutes the organised retail segment which is estimated
to grow at a rate of almost 30% by 2015. Clothing & Apparel make up almost a third of the
organized retail segment.
The domestic apparel industry has 3 segments, viz Men’s wear, Women’s wear and Kid’s wear.
Menswear accounts for 40% of the total market.
3. The Apparel Industry
The Indian Apparel Industry has an overwhelming presence in the economic life of the country.
It is one of the earliest industries to come into existence in the country. The sector has a unique
position as a self'reliant industry, from the production of raw materials to the delivery of end
products, with considerable value'addition at every stage of processing
Apart from providing one of the basic necessities of life, the apparel industry also plays a pivotal
role through its contribution to industrial output, employment generation, and the export earnings
of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the
GDP, and 17 percent to the country’s export earnings. It provides direct employment to over 35
million people.
The Indian apparel industry is estimated to be worth Rs. 3,270 billion in 2011'12 and is expected
to grow at a compounded annual growth rate of 8.7 per cent till 2016. The growth would
primarily be driven by the surge in demand for readymade apparels in semi'urban areas, rising
income levels and youth population and increasing preference for branded apparel.
Market Segmentation
The market segmentation of Indian apparel market for nash & omie is done below
1. Segmentation by user category: The domestic apparel industry has 3 segments, viz Men’s
wear, Women’s wear and Kid’s wear.
a.) Mens wear: Men’s wear market in India fastest growing apparel segment The entire
apparel industry (2011'12 estimates), including domestic and exports, is pegged at Rs
3,270 billion and is expected to grow by 11% to Rs 10,320 billion by 2020. Currently
menswear is the major segment of the market (Rs 720 billion) and is growing at a
compounded annual growth rate (CAGR) of 9%. Gucci, Hugo Boss, Salvatore
Ferragamo, Armani, Versace, Brioni, Ermenegildo Zegna, Canali, Corneliani, Alfred
Dunhill, Cadini, are all present in India men’s wear market.
b.) Women’s wear: With more women expected to enter corporate world, this segment is a
good opportunity because of the market size. Historically, the men’s apparel market in
India has been significantly larger than the women’s apparel market. The number of
career women in the 20 to 40 years age group is estimated to grow four-fold to 45-50
million. Now, women are more willing to dress differently when they venture beyond the
home—to shop, for example, or visit a school or office.
c.) Kids wear: Kids wear is a major category with few established players – viz., Lilliput,
Gini and Jony, Catmoss, Benetton, Disney, Barbie etc. It still holds a large opportunity
which is clearly untapped. The Indian kids wear retail market is expected to touch Rs 580
billion by 2017. At present, the size of kids wear market in India is estimated at about Rs
380 billion.
4. 2. Segmentation by Use: A rough estimate of the segmentation by use is depicted in the pie
chart below. Casual apparel dominates and account for more than 50% by value.
27%
15%
5%
3. Segmentation by Geography:
53%
Sales
Casual Wear
Sports Wear
Formal Wear
Ethnic Wear
a) Tier 1 Cities: Metros, People in metros are the highest spenders on branded products.
b) Tier 2 Cities: Semi’Urban, People in this geography have become brand conscious and
with spare income they are now spending on organized retail and branded products
c) Tier 3 Cities: Rural, The rural areas have most of their spending done on unorganized
retail sector. This geography is ruled by regional and local players.
The Nash & omie customer is a versatile man who can fit into any environment and is willing to
pay a high price for quality clothing.
5. Competition
The Apparel industry is growing at the rate of atleast 18% per annum out of which, the private
label market makes up 4% and is growing at 20% per annum. There is a significant increase in
sale of Casual wear due to more and more organizations making their dress code as semi-casual
and smart casuals. Furthermore, Customers now have options to choose due to the increase in the
number of Malls and organized E-market players. This is encouraging more and more medium
and large players to extend their product line, geographic presence and Sales channel.
Here enlist are some of the brands that are into Casual wear are
Online Brands:
Zovi
American Swan
Nord 51
Basics
Yepme
Brick and Mortar Store Brands:
Being Human
Blue Tonic
Provogue
Z3 (Zodiac)
Louie Philippe Sports
Arrow Sports
US Polo
United Colors of Benetton
Some Brands which have a dual presence (Web and Retail Store)
Z3 (Zodiac)
Competitive Edge
In a market where consumers are barraged by advertising and marketing campaigns delivering an
onslaught of lifestyle and fashion messages, a brand name is a powerful weapon. Brands have
become an increasingly significant factor in apparel. Many consumers have less time to shop and
are spending their disposable income more carefully. Established brand names, with their quality
image, make the shopping experience easier and faster for many consumers. For manufacturers,
brands build consumer loyalty, which translates into repeat business.
6. The company's name, nash & omie, is a competitive advantage in itself. The name is not attached
to any particular group of customers and it allows entry into different segments of the industry.
Another competitive advantage is the company's marketing strategy. Through the use of
celebrities, advertising, promotion, and giveaways, the company is able to develop its presence
in the market.
Strategy and Implementation Summary
Marketing
Nash & omie not only develops the clothing line but supports it with advertising and promotion
campaigns. The company plans to strengthen its roots by establishing a Website and retail
presence and partnership with LFRs and E-Market by developing brand awareness.
Marketing Communications
The key message associated the nash & omie line is Casual, funky, versatile, and expensive
clothing. The company's promotional plan is diverse and includes a range of marketing
communications:
Popular and Mass marketing: The company plans to announce its market presence
through mass communication channel such as Television and Radio
Sponsor Events: Act as Title sponsors, Co-Sponsors of prominent events which will
make nash & omie’s presence evident.
Print advertising: The company's print advertising program includes advertisements in
magazines such as Filmfare, and Busines today.
Internet: Nash & omie plans to establish a presence on the Internet through its website,
www.nashandmomie.com, from which sales will be generated worldwide. this is one of
the company's primary marketing channels.
Other. The company also plans to use various other channels including billboards, In-store
promotions, road shows, mall events and product placement in movies.
7. Sales Strategy
Sales and Distribution Strategy
Nash & omie intends to build a sales team that will be tasked with generating sales leads on a
regional and national basis. They will also be responsible for establishing connections with retail
outlets.
A key factor in the success of nash & omie will be its distribution. The company plans to use the
following retail distribution channels:
Nash & omie will have the following channels of distribution.
1. Domestic and international retail sale through website, www.nashandomie.com.
2. Marketing and Selling through E-Market channels like Amazon.in, Flipkart.com,
Snapdeal.com
3. Selling in LFRs Large Format Retail stores such as Shoppers Stop, Lifestyle etc
4. Set-up of Retail Store across major cities in the country.(Tier 1 and Tier 2 Cities)
Nash & omie may adopt the below channels in the future.
1. Telephone based Sales.
2. Cataloging.
3. Enlist on international e-market places like Amazon.com.
4. Bulk sales through B2B Tie-ups.
Consumers buy apparel from a variety of retail outlets. In 2012, discount, off-price, and factory
outlet stores accounted for 22% of apparel sales, specialty stores accounted for roughly 14%,
department stores for 27%, and major chains for 34% and 3% for others. The Online sector is has
its divide as 54% of the apparel sales through major E-retail stores, 32% through self own
website, 12% through Online bulk sale, off-price sale websites and 2% as others.
The distribution channel that has received the most attention recently is the Internet. Although it
now represents only a small portion of apparel sales, this distribution channel has the most
potential for growth. With the growth of mobile / smart phones, Consumers like the convenience
of being able to shop from anywhere and at anytime they wish. Manufacturers with Internet sites
use them for marketing and informational purposes. With the technological advances in
hardware, software, and data pipelines, shopping for apparel online has gained popularity.
Currently, however, due to technological and infrastructure limitations, consumers are not fully
satisfied with the speed, quality, and security of Internet shopping. Another hindrance to wider
acceptance is the fact that consumers cannot see and touch the product. Although some
manufacturers have started to sell directly to consumers on the Internet, many of them are being
cautious not to alienate their retail (brick-and-mortar) customers.
8. Nash & omie would to capitalize on both the mediums, making it one of the very few Brands
which are Omnipresent.
End of Season Sale (EOSS)
Nash & omie will be operating on season-wise collection and at the end of the season, a Sale will
be held on the nash & omie website and nash & omie Stores marking the end of the season and
launch of the new collection. The sale dates will remain the same for nash & omie owned
channels, December and January for Autumn/Winter EOSS and May and June for
Spring/Summer EOSS. However, for the LFRs the sale date will be as defined by their EOSS
calendar. For E-Market places the Sale is usually all year long, nash & omie will participate in
some E-Market sales that coincide with the EOSS dates of nash & omie owned channels.
Marketing Channels
Television
TV advertisement has become the easiest medium to reach a larger population surpassing all age,
gender, geographical location and other demographics.
There are two main components of cost associated with advertising through television:
- Cost of film making and
- Cost of advertising.
Here we have taken a real example of a television commercial. The cost may vary depending
upon products or services, leading actors involved and type of commercials.
Cost of Film Making:-
The cost of making a TV advertisement is explained in the following figures:
Equipment – Around INR 25,000 per day (Most shootings are completed in a day.)
Crew – INR 80,000
Production – INR 1,50,000
Miscellaneous(Travel,etc) – INR 50,000
The Onetime cost of making a TV commercial may range from a few lakhs to a few crores. For
nash & omie, we have kept the cap at Rs. 6 Lakhs.
Generally, the cost of making a commercial should be around 10-20% of the total cost of
advertising. So many brands tend to spend more on the frequency of ad impressions than on
commercial creation.
9. Cost of Advertising:-
There’s another cost that the advertisers have to incur. That is, the cost values of per 10 second
advertisement show on TV. The Cost of Advertising is influenced by the following factors:
Time – The airtime on Weekdays are more affordable than weekends, while, the prime
time slots are more expensive than late night slots. For that matter, the airtime becomes
more expensive during seasonal periods like Christmas, Holi, Diwali, New Year, etc.
Channel – The highly selective target audience can be reached with the help of the
selective digital channels. A little bit of research based on the channel figures helps the
advertisers to book their slots and the difference in cost exists on the basis of popularity
of the channel and the TV shows.
There are basically two types of commercials – Branding and Immediate Response. Branding
commercials are more expensive to produce and needs to be broadcasted frequently, while, an
immediate response commercial encourages quick action from its viewers in terms of calling on
a number which is generally slotted for late nights.
Nash & omie will target audience on channels like Bindass, Channel V, M Tv, and also channels
like CNBC, NDTV and NDTV Profit. This will make sure that the entire age group of 18 to
almost 40 is covered. Also, the cost of airing a 10 second commercial on these channels is much
less compared to the popular TV channels. Nash & omie plans to accrue around Rs. 50 Lakhs a
year with an incremental expenditure of 25% Year on year (YOY) for airing of its TV
Commercials.
SEM, Adwords:
This is the most effective form of marketing when it come to Online sales. SEM or Search
engine marketing, helps customer to reach the right website by tying keywords related. Nash &
omie plans to make the most of this marketing channel by marking the correct keywords and
spending wisely on Cost per click (CPC) and Cost per acquisition (CPA) rather that Cost per
impression (CPI) and ‘follow trail’ marketing.
Social Media:
The strongest and the most powerful way of reaching the masses in recent times, Social Media
marketing (SMM) is not just engaging but also an essential tool to market and make a brand
presence. The SMM has shown results that cannot be avoided. Nash & omie will have its
engaging activities through the Social media websites like, Facebook, Twitter, Instagram, Linked
In. This channel may not yield fruitful in generating expected sales, however, it will make nash
& omie’s presence inevitable on the internet.
10. Sponsor Events
Nash & omie plans to sponsor college events, sports events and also be official wardrobe
sponsors for reality TV shows. All these events will be carefully chosen to enhance the image of
nash & omie and also create a brand presence.
Road Shows / Participate in Social awareness drives
Nash & omie will participate in road shows and social awareness programs. We will also
distribute products with nash & omie’s logo to establish our image as an organization supporting
Social causes.
Mall Events
Nash & omie will organize events inside prominent Malls where we will have our products
launched or our store opened.
Sales Forecast
Crisil forecasts “Branded apparels would grow at a much stronger pace, driven by increased
presence of organised retail, rising disposable incomes, changing demographics and increasing
brand consciousness,” it says. The research estimates the domestic apparels market to be around
Rs 1,250 billion in 2015, of which branded apparels (defined as brands having a strong national
or regional presence) contribute about 40 percent. A decade ago, the corresponding percentage
would probably have been closer to 25 percent.
The company's extensive advertising campaign will be used to create product awareness. The
Sales forecast is on the assumption that the economic conditions are stable and the growth of the
Apparel industry is steady at 20% per annum.
We feel that our sales forecasting is realistic. We will steadily increase sales as our advertising
budget allows. See Attached.
Financial Plan
The company is seeking a substantial long-term business loan for the purpose of developing the
clothing line. This funding will cover operating expenses and product development leading to the
Omni-channel launch in 2015.
Important Assumptions
The important assumptions which the company will use to ensure its success, the primary
assumption is that the economy will remain in its present upturn. The funds will be available as
required and the management will support all marketing and operations up-scaling.
11. Projected Profit and Loss
Nash & omie is in the early stage of development, thus initial projections have only been made
on accounts that are believed to most drive the income statement.
Returns and Refunds
As nash & omie will be operating through Omni-channel, the returns from the customers will be
re-sold through the same channels. In case of refunds too, the product will be re-utilised by being
sold. In-case of manufacturing or garments that cannot be sold will be offered at a huge discount
during End of Season sale (EOSS). If still the garment is not being sold, it will be added to the
books as defect debts and cleared after 2 EOSS.
Management Summary
The company's management philosophy is based on responsibility and mutual respect. Nash &
omie has an environment and structure that encourages productivity and respect for customers
and fellow employees.